16 Responses

  1. Dimitri Hantas
    Dimitri Hantas January 18, 2013 at 3:17 pm

    Terence, a wonderful article, especially after having spent the past four months living in Bosnia where the public service in dire need of reform.

    What is your take on a country such as Greece, whose recent bailout packages (aid) have been conditional to it’s own (painful) institutional reform? Greece seems to be the exception rather than the norm (at least in Europe) as far as the conditionality of aid is concerned.

    Again, thanks for a wonderful read.

  2. Paul Oates
    Paul Oates January 16, 2013 at 9:28 am

    ‘Perhaps to make bureaucracies work better we need reform of the way we do public sector reform in the Pacific, more than we need another public sector reform program in the Pacific?’ Marcus P.

    I agree with you Marcus P. and the real problem is encapsulated in your statement above. To quote the aphorism constantly circulating the internet at the moment, ‘The real definition of insanity is to keep doing that which doesn’t work.’

    I note that my recent previous comments on this subject have elicited a thundering silence whereas other far more esoteric and nebulous motherhood suggestions seem to be endlessly debated. Can it be that the simplistic enunciation of the problem doesn’t resonate with the accepted view that often appears to be; ‘If you keep hitting a square peg hard enough, it’s eventually going to fit a round hole.’

    Billions of aid dollars have been wasted by continuing to pour funds into the ‘black holes’ of overseas government services in so called developing countries due to the wonderful rosy glow it appears to give those who feel they are achieving practical results without anything tangible and long lasting ever actually happening in practice.

    Government bureaucracies are by their very nature, not held accountable by those who themselves are not able to be held accountable. The CEO’s of these bureaucracies are appointed by governments and ministers who have their own agendas and know the voters neither have the ability nor opportunity to hold them and their appointed minions responsible and accountable.

    The essence of the debate should be simply one of logic. No aid program should be funded without first ensuring there is a practical and operational feedback loop to ensure the predicted objectives and achievement benchmarks are being met and maintained. Progress payments and a policy of ‘No results, no money’ might ensure we see ‘bang for our buck’. Reams of subsequently glowing reports of platitudes, motherhood statements and hyperbole are just a waste of paper.

    Understandably however, such a ‘results based policy’ might also reduce and restrict the operations of those in the overseas aid game who presumably don’t wish to have an objective spotlight turned on their own endeavors.

    Husat ilaik toktok nauya? (Anyone care to comment?)

  3. Marcus P
    Marcus P January 15, 2013 at 11:19 am

    Thanks Terence for another thought-provoking blog. Perhaps a suitable analogy that helps us understand why public sector capacity building in the Pacific performs sub-optimally is the Soviet tractor gearbox factory? This factory produces tractor gearboxes of a type and number because it had been planned in Moscow to happen this way, many years ago. As it has occurred, the factory ends up with more gearboxes than it can dispose of, yet the workers are so badly paid that they cannot survive. So they trade gearboxes on the black market for milk and bread from the state dairy producer and state bakery. The state wheat farm that gets the tractors that use the gearboxes is grossly inefficient because the gearboxes are not the right type for the farm, and they break down regularly anyway due to poor quality assurance in the factory. And the bread queue for ordinary citizens in Moscow gets longer and longer every day.

    In short, the incentives for individuals working within the system are poorly aligned with outcomes for ordinary people who depend on the system to work.

    The intellectual framework that supports a different, nuanced, flexible and demand-driven approach in the public sector reform business model of donors, now largely exists. However there is a great deal of institutional inertia at an operational level that resists the operational implications of the adoption of these principles. This inertia is based around norms and incentives – precisely what is discussed in this blog. Tobias rightly points out (in this blog and his paper) that capacity constraints in the Pacific are often closely linked with a small population base. But most efforts in the past to regionalise, outsource or externalise capacity have hit walls built of passive and sometimes outright resistance. It is difficult to escape the proposition put forth by Acemoglu & Robinson (http://whynationsfail.com/) last year that endemic capacity challenges are a political problem, and not a technical problem.

    I don’t think this means that donors can’t do anything about public sector capacity in developing countries. For example, in Solomon Islands, Australia has about A$240 million of influence to play with through its agencies. That’s a fair degree of influence in Honiara. But how it is allocated is far more important than how much is allocated. If we think the Solomon Islands Ministry of Health has the right conditions and incentives to deliver public goods, then directing many more tens of millions into that organisation will nurture and support the dominant paradigm within that organisation, and deliver exponentially more of what is already being delivered. Or alternatively if it is riddled with malfeasance and maladministration, and delivers very little in the way of public goods, then we should expect that we will further nurture that culture by directing more funds in that direction.

    Consequently donors need a far greater and nuanced understanding of how institutions change, and more importantly they need to follow up with the will to alter how they allocate resources, if they are to play a positive role in making bureaucracies work better in the Pacific.

    Perhaps to make bureaucracies work better we need reform of the way we do public sector reform in the Pacific, more than we need another public sector reform program in the Pacific?

  4. MJ
    MJ January 13, 2013 at 10:59 pm

    Nice typology. I would add two points to the general analysis. Firstly, in my experience developing country bureaucracies love to highlight the lack of capacity because they can then get lots of perks along side the capacity building that follows, and, moreover, because it implicitly gets them off the hook for corruption and apathy. Since in the development industry we spend a lot of time having to cooperate with the bureaucracies we often go along with this. It is one of the great euphemisms of international development, and one of the most unhelpful.

    Secondly all the big donors operate primarily through the local government as the implementing agency. So with huge dollops of cash to spend they throw a lot of money at the one thing that (almost) everyone can agree is a problem, without considering whether it is the primary constraint to improvements. At least some donor representatives around here recognise this problem, but any attempt to introduce competition in service delivery through the private sector or NGOs rarely gets anywhere for all the obvious reasons. And without local government agreement their hands are tied by head office’s rules.

    Better not to spend the money, then, imho, but with domestic constituencies focused myopically on 0.7% GDP etc the tap stays open, pouring cash into the least effective pipe of them all.

  5. Gadema K. Quoquoi
    Gadema K. Quoquoi January 13, 2013 at 1:35 am

    The International Donors and Clients Community (especially in Africa) must deployed ICT and provide the appropriate Training, and used ICT like the business community has, to be able to have Return On Investments -ROIs.

    Gadema K. Quoquoi

  6. Tess Newton Cain
    Tess Newton Cain January 12, 2013 at 2:54 pm

    You are absolutely right Terence – it is very hard for aid agencies, advisers, NGOs etc to do not least because it does not fit easily if at all into project design and delivery plans and it is also very hard to quantify. If and when it does happen it is almost always because the stars have somehow self-aligned rather than having been project-managed into it. I guess it is about remembering the importance and value of this and then having your (individual and institutional) antennae attuned in order to be able to contribute when the time is right.

  7. Tobias Haque
    Tobias Haque January 12, 2013 at 2:40 pm

    Terrence – Thanks for another thought-provoking blog.

    I think most people would agree that problems with bureaucracies in developing countries can’t be reduced entirely to capacity constraints (the huge political economy literature, for example, supports your points about incentive compatibility). At the same time, I think there’s a logical problem with citing evidence that we aren’t good at building capacity as proof that we make too much of the problem. To me, capacity constraints are a problem especially because we aren’t particularly good at addressing them.

    In my experience, the severity of capacity constraints varies hugely by country and even by institution within countries (as you note) – so blanket conclusions about their relative importance are probably difficult to sustain. While of course never the only problem, I think there’s a lot of evidence (including our recent World Bank Policy Research Working Paper) that capacity constraints are a significant issue in many Pacific countries, given the inherent problem of finding enough people in small populations and small public sectors (in absolute terms) with the specialized skills required to support all of the various technical functions that states are expected to perform (provision of public goods, demonstrated compliance with fiduciary norms in management of public funds, maintenance of a sound macroeconomic and business environment, participation in various international fora, coordination of and reporting to donors). Some of the Pacific Island countries only have one or two qualified accountants in the whole country – this inevitably creates binding capacity constraints to implementing public financial management systems that meet international standards, for example.

    I’d also add another item to your typology of causes of bureaucratic dysfunction. This is the common donor insistence that developing countries adopt the same institutions that operate in the same ways and do the same things as institutions in developed countries, too-often without consideration of the appropriateness of these institutions given available capacity, political-economy context, affordability, or fit with existing, local institutions. Matt Andrews at the Kennedy school has written a lot about this in relation to PFM, and Rodrik also talks about the dangers of “blueprint” approaches when it comes to both policies and institutions. One approach that might help avoid both capacity problems and some political economy issues is ensuring that bureaucratic reform is informed by what can work to achieve the relevant outcome within constraints, rather then attempting to impose hugely ambitious imported models (accompanied by endless capacity-building programs) regardless of their appropriateness.

  8. Paul Oates
    Paul Oates January 12, 2013 at 1:35 pm

    The obvious impasse between the stated intention of achieving stated national objectives and the ensuring they are met is the curse of many nations. In Melanesia, the root causes of the problem is well known.

    Firstly, from a cultural perspective, the imperative to meet deadlines and targets can be fluid and flexible when it comes to enforcement. Responsibility and accountability are nebulous terms that often don’t translate. They are culturally disconnected from reality.

    Secondly, when overseas aid and stated expertise is constantly made available, local incentive to achieve results often is ameliorated to the point where any personal responsibility is dissipated and watered down as to be virtually ineffectual.

    Lastly, unless there is political will and the power to make it happen, it simply won’t.

    The real problem is that no one is really prepared to face reality.

  9. Tess Newton Cain
    Tess Newton Cain January 12, 2013 at 7:26 am

    Thanks for this Terence, it is a great piece. In relation to norms, I agree that they cannot easily be imported from outside and neither should they be. However, they can be supported and strengthened. Where normative champions are identified they can be supported as they develop normative communities, normative communities working in different areas of the bureaucracy can be encouraged to form supportive and developmental linkages and partnerships…

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