Making bureaucracies work

As anyone who’s ever suffered a medical misdiagnosis can tell you, it’s very hard to fix a problem when you’re mistaken about its cause. Get the diagnosis wrong and you will get the treatment wrong. Get the treatment wrong and, odds are, things won’t improve.

In recent decades much aid has been devoted to curing broken bureaucracies in developing countries. This is a worthy endeavour: bureaucracies intersect with almost everything that matters in development.

But while there’s a good case for making bureaucracies work, aid is often not very effective at eliciting sustained improvements. For example, John Eyers’ post on the review of AusAID’s Government Strengthening work in PNG notes the review found positive impacts from aid funded work but also found it “difficult to establish how much… [the work]  has strengthened the agencies’ capacity to sustain this performance without support”. And in surveying international evidence Roger Riddell notes (on p208) of ‘Does Foreign Aid Really Work?‘, “major difficulties….with few initiatives pointing to significant successes, and most being judged as having failed in a number of key areas and objectives.”

My hunch is that part of the problem here is that we too often misdiagnose what ails bureaucracies and therefore apply the wrong ‘treatments’. What follows is my take on a taxonomy on the potential causes of dysfunctional bureaucracies, offered as an attempt to improve the way that we think about aid and bureaucratic failure.

The Low Staff Capacity Lurgy

Sometimes bureaucracies don’t work simply because their staff lack the skills required to undertake the tasks they need to undertake. This is a real ailment and can be ‘treated’ with aid. For example, in this [pdf] 2004 paper Lisa Chauvet and Paul Collier provide some evidence to suggest that Technical Assistance (a component of aid that ought to build staff capacity) leads to better development outcomes in some circumstances (specifically countries where there is already a tendency towards better governance).

Yet, while the problem is real and sometimes treatable, Low Staff Capacity Lurgy is over-diagnosed: too much bureaucratic strengthening aid acts as if the problems at hand are purely issues of low staff capacity, when often the problems lie elsewhere. And when this is the case there is little reason to expect staff capacity building will be helpful. Indeed, in the aforementioned Chauvet and Collier also found that where overall governance is deteriorating, technical assistance appears to have no positive effect and may even make things worse, while a 2005 review of World Bank public sector strengthening work found that “[t]he Bank’s traditional tools—technical assistance and training—have often proved ineffective.”

Dislocated Incentives

As any economist will tell you, incentives matter. This is every bit as true in the public sector as it is in the private sphere. For example, imagine a ministry in a developing country government where the minister has been appointed, not on the basis of skills or mastery of the portfolio, but because their support is necessary for the government to have a majority in parliament. What’s more, imagine that the polity in question is strongly clientelistic — voters cast their votes in exchange for direct personal benefit, not in search of desired policies. Under these circumstances performance is not important in determining whether the minister keeps their job or whether they are re-elected. What matters is playing the game of national politics astutely and delivering pork to key supporters. This means our hypothetical minister will have little by means of incentives to focus their concern on the functioning of their ministry. Indeed, the main incentives they’ll likely be operating under will be ones associate with using the ministry as a means of disbursing patronage.

Incentives of this sort at the ministerial level will trickle down. Senior staff won’t be under any pressure to deliver results, and so they won’t apply this pressure to junior staff. And promotions will be awarded on the basis of who people know not what they know. Junior staff members won’t be rewarded for working hard. Work won’t get done.

Those seeking real world examples of dislocated incentives of this nature contributing to broken bureaucracies need only look to Papua New Guinea and Solomon Islands, where it is easy to trace the chain of cause and effect that I have just outlined from clientelist politics to poor bureaucratic performance. (Outside of Melanesia, for a general overview of the impacts of recipient country politics on aid work see Sue Unsworth’s excellent article in the Journal of International Development.)

The problem for aid agencies is that dislocated incentives are a product of systemic issues in the political arena, where aid agencies have very little influence.

And yet, even if there are few easy cures for dislocated incentives, it is still important that donors acknowledge when they are central to problems of bureaucracies. If for no other reason than the fact that some problems are beyond our ability to fix ought to let us target our work better, and be realistic about what can be achieved.

Bruised Norms

Incentives matter, but they aren’t everything. There are other more subtle forces that affect the health of collective endeavours like civil service work: social rules and beliefs about what is right and fair – norms (for an entertaining introduction into the importance of norms see chapter 4 of behavioural economist Dan Ariely’s book Predictably Irrational). As aid workers we don’t often think about norms. Yet in a bureaucracy that is impeded by poor political governance, norms offer some hope. Even if little can be done to get ministers to care about the performance of the government departments that they sit atop, it may still be possible that good work will be done because the civil servants themselves believe in it, and believe that contributing to a functioning organisation is the right thing to do. In Solomon Islands I observed government departments, or parts of government departments, that shone despite political malaise and as best I could tell, this occurred because the people involved were part of normative communities (themselves and their colleagues) where the work was valued and a source of pride. In a similar vein, the apparent high levels of provincial government staff motivation described by Colin Wiltshire in his recent blog post on Papua New Guinea sounds like a similar example of norms in action.

Unfortunately, as outside actors we in the aid world may not be able to do much to promote healthier normative environments in developing country government departments. Norms, almost by definition, arise within groups and aren’t something that is easily imparted from outside.

Is there a Cure?

For an aid worker the above may seem to be a counsel of despair. The one thing we can easily do, raise staff capacity, often isn’t the real solution to bureaucratic under-performance. And it is often beyond us to cure problems associated with incentives and norms. Yet all is not lost. Even when transformation is impossible, small incremental improvements may often still be within reach. Particularly if we are careful and appropriately analytic when trying to identify the source of the problems we seek to treat. This may not seem like much, but our own countries didn’t end up with good bureaucracies overnight — things got better slowly. Which is par for the course in the miracle-cure free world of development.

[Update: Those interested in this discussion may find this [pdf] summary of a thematic review of AusAID work on organisational capacity building in the law and justice sector a worthwhile read.]

Terence Wood is a PhD student in the State Society and Governance in Melanesia Programme at ANU. Prior to commencing study he worked for the New Zealand government aid programme.

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Terence Wood

Terence Wood is a research fellow at the Development Policy Centre. His research focuses on political governance in Western Melanesia, and Australian and New Zealand aid.


  • 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.

    • Thanks Dimitri,

      I guess the Greek case shows that conditionalities (assuming they are the right conditionalities) are another tool donors have to promote reform. However:

      1. My reading of the research on aid conditionality is that it often isn’t very successful in prompting reform except when the recipient is on the edge of crisis (the Greek situation). And yet unfortunately times of crisis are often the worst times to try and reform for other reasons (while there’s a good case to be made for trying to trim Greece’s civil service, the last thing Greece needs right now is more unemployed people.
      2. Even when conditionality might be a tool which we can use to bring about high level change it probably lacks the reach to bring about low level change (to organisational culture, for example).

      That being said, while it’s track record isn’t great, and while there are limits to what it can do, it is worth mentioning as a potential tool. Thanks for raising it.


  • ‘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?)

    • Hi Paul,

      Thanks for your comment. I’m a snowed under PhD student at present and while I’ve been meaning to reply to your original comment, I’ve struggled to find the time. The other comments were easier replies for me – not because they were esoteric or nebulous – but rather because it was clear to me from a quick read how I might respond to the comment. This wasn’t the case with your comment, which I’ve been mulling over ever since.

      Speaking as a former bureaucrat I don’t think it is completely true to say that bureaucrats are unaccountable to their political masters. This certainly wasn’t my experience in New Zealand. In Western Melanesia on the other hand there is a problem to do with the interface between the political realm and the bureaucratic. It’s not quite so simple as 0 accountability though, although in instances it may be close. This is what I was getting at with my dislocated incentives.

      There are feedback loops in the aid world: specifically monitoring and evaluation processes. They are imperfect, however. Often, not necessarily for anyone’s fault, they tend to provide somewhat ambiguous messages — and clearly can’t tell us that much about sustainability into the future.

      Some aid agencies do quite a good job of publishing these evaluations too, which suggests to me that the problem of people in the aid ‘game’ wanting to avoid the spotlight is not true everywhere all of the time, although it can be true in instances.

      Rather, I think perhaps problems with the way aid agencies approach civil service reform stem from two key areas:

      1. This is hard work with no clear solutions.
      2. We’re still learning as we go along.

      This doesn’t mean we can’t do better. But I do think there are often reasonable excuses for less than perfect progress to date.

      Thank you for a thought provoking comment.


      • Hi Terence,

        thank you for your response and I appreciate the time you have taken out of your studies.

        I draw on nearly 40 years experience as a former bureaucrat in a number of departments and service in areas like PNG and Cocos Is.

        I have endeavoured to keep up to date with events in PNG and to a lesser extent in the Pacific. The essence of the problem is I suggest, its complexity but it is also essentially one of culture. That very aspect provides a rather grey and obfuscated vision and can allow those who wish to excuse sub optimal performance, an ideal environment to escape close scrutiny and clear responsibility.

        In his book, ‘Minnows of Triton’, former AFP Assistant Commissioner John Murray expounds of his first hand experience over many years of dealing with fluid Pacific concepts of malfeasance, law and order and accountability.

        There is a responsibility to the Australian taxpayers to spend our overseas aid in the most expeditious and effective manner. I suggest that even if the general public are blissfully unaware of the practicalities and relevant detailed information, the accountability and responsibility of aid workers and departmental staff are in no way lessened from the standards used in Australian operations.

        There is one more aspect that should be actively considered in the aid equation. Whenever we supply aid and support, we provide an excuse to the government we provide aid to, to spend their revenue in other areas. This is the harsh reality and it behoves all aid programs to then be absolutely transparent and ancillary to the local programs. It is reported that some ‘developing’ nations elsewhere are pleased to have large numbers of very poor people as an incentive to illicit continuing aid money.

        As one educated PNG person said some time ago: ‘We need less aid and more trade!’ Are we in danger of not listening or being subject to industrial deafness?

        Don’t get me wrong. I support Australia’s aid program. I just want to see the program better perform and achieve results, not just ever increasing expenditure figures that provide an excuse for some to quote how much we are doing without ever actually working at the coal face.

        Best wishes with your studies,


        • Hi Paul,

          Thanks for an interesting comment. Just a couple of quick thoughts in response.

          I agree with you about the need for aid transparency and think that aid doors could do more to educate publics in recipient countries as to how much money their governments receive (I even wrote a blog post on this on this site a couple of years back.).

          It’s more or less true that PNG would be a better place with more trade (more or less because some forms of trade – the arms trade; logging – aren’t beneficial) but the trouble is the country simply isn’t at a level of development where more (good) trade is an easy ask. Plausibly aid has a role to play in helping overcome this. Even if it doesn’t, other than a slight possibility of Dutch Disease, there is no good reason to think that aid impedes PNG’s very wobbly path towards pro-poor export industries.

          I’d like to see the OECD countries give more aid, but definitely agree with you that quality is of critical importance.

          Thanks again


  • 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 ( 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?

  • 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.

    • Thanks MJ,

      I sort of agree with the direction of your comment, but wouldn’t necessarily take it so far.

      I agree that it can be hard for donors to tackle malpractice or corruption head on, because this jeopardises relationships with partner governments. Yet at the same time there’s reasonably good evidence to show that well intended aid reduces corruption, so it’s not as if we get nothing for our buck here. I suspect though that most of this reduction, along with many of the improvements that we do sometimes see as a result of aid funded public service strengthening only occurs as a result of aid functioning as a countervailing force pulling against the destructive forces of local politics, which has a positive impact while it’s there, but little by means of a positive legacy (with rare exceptions) after it is gone.

      I also agree that there are times when donors really do need to abandon efforts to ‘strengthen partner systems’ and try alternate mechanisms of service delivery, and that we don’t do this enough. On the other hand I’d want to add to that statement that such alternatives are always second best: in the medium to long run there’s no alternative to having the state provide health and education services and *if* we can use aid to achieve this, even if it’s painfully slow an inefficient in the short term it’s still a long term win. Whereas alternate delivery mechanisms are only really band aids. That being said, when you’re bleeding a band aid is a very helpful thing. And in circumstances where we’re achieving nothing or next to nothing through our strengthening partner system work then I’m all for abandoning this and then doing our best to make sure our aid delivers welfare benefits to the poor by finding alternate means of delivery.

      Thanks again for an interesting comment.

  • 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

  • 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.

  • 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.

    • Hi Tobias,

      Thanks for a very good comment. I agree that capacity is a significant problem in many cases, and I certainly wouldn’t want to be seen to be downplaying it. And yet at the same time I think that if there are also serious problems with the incentive structure that trickles down from the political sphere improving capacity still won’t change things that much, at least if we’re not doing what we can to improve the incentive environment at the same time too. Surely if capacity building was a magic bullet would would have seen better sustained results from our work in this area?

      On the case of structures – excellent point. I wrote a post on Andrews and Pritchett’s paper on this a couple of years ago:

      And I agree entirely with: “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.”

      Thanks for adding considerably to my original post.

  • 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.

  • Thanks Tess. I agree entirely with your comment. Thanks for posting it, I think it’s a useful partial counter to my post which could be read as being overly pessimistic. The only caveat I’d add is that identifying and supporting normative champions requires an adroitness and soft touch which, through no fault of their own, is often very hard for govt. aid agencies (and even NGOs). Hard, but not impossible though, and definitely worth doing.

  • 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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