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Order&Violence(PoliticalEconomyofDevelopment)

Week8:StatebuildingwithoutwarmakingChrisBlattman

Week8objectives

1. Withthenearendofinternationalwarfareandriseofinternalwars,statesnolongerhavethesameselectivesurvivalmechanismpushingthestatetobecomemorecapableandextenditsreach– Wemusthopethetechnologyofstatebuildinghasadvanced

2. Unfortunately,thewayforeignassistancehasbeendesignedhasunderminedstatecapabilityismanyways:– Flowshaveexceededstates’capacitytoabsorbfundsefficiently– Reducedincentivesfortaxcollection– Weakenedaccountabilitydownwardtocitizens– Encouragedsuperficialmimicryofstateforms,unrealisticgoals,and(inweak

states)prematureloadbearing

3. Itisimportanttorememberthatthecapacitytoimplementisthescarcestresourceinastate,especiallyweakstates

Week8objectives

• Still,foreignassistancehascontributedtoeconomicallyandpoliticallyfreestatesinunappreciatedways,bytippingthebalancetomoreopensocietiesatcriticaljunctures

• Futureforeignassistancecould(intheory)helpmakestatesmoreaccountabletocitizens– e.g.Cashondeliveryaid,migrationandremittances,etc.

• Intryingtobuildstatesandreformpublicsectors,remember:– Institutionswethinkofascausesofdevelopmentwereconsequences– Statecapacitytakesalong,longtimetodevelop– Statesshouldbestrategicinhowtheyspendtheirlimitedcapacity– Somestatecapacitiesareeasiertodevelopthanothers– Solutionstothehardestproblemscannotbeimported– Don’tforgetthateliteshaveincentivestostymieorcapturereforms

Whatexactlyispromoting”goodgovernance”?

“Goodgovernance”:Sobroadit’salmostmeaningless

Avaguetermusedininternationaldevelopmenttotalkabouteverythinginthiscourse:

• Theefficiencyandeffectivenessofthestate– Theabilitytoimplementpolicy– Thedegreeofcorruptionandpatrimonialism

• Theprocessofdecisionmakingor“whodecides”insociety– Thedegreetowhichpoororminoritygroupsareincludedindecision

making– Thedegreetowhichcivilsocietyisorganizedandenfranchised– Thedegreetowhichthepowerfulareboundbytheruleoflaw

Whyaredevelopmentorganizationstalkingaboutgoodgovernanceandinstitutionsatall?

• Failingtoseeseeminglysensiblepoliciesimplemented,naturallypeopleininternationaldevelopmentaskwhy– e.g.vandeWalle’s diagnosisoffailedstructuraladjustmentinAfrica

• Achieving“goodgovernance”isseenasaprecursortogoodpolicies

• Slightlycynicalview:It’sawayfordevelopmentactorstotalkaboutpoliticaldevelopmentwithoutnecessarilyhavingtousetheword“politics”orunderstandhowpoliticsworks– MostUNagencies,includingtheWorldBankandIMF,donothavethe

mandatetotalkaboutpolitics

• Verycynicalview:IfIwantedtomakeagoalhardtoachieveIwouldmakeitthisvague

Wehavebeentalkingaboutinterventionstoachieve“goodgovernance”inthreemorespecificways

• Lastweek:endingviolenceandestablishingbasicorder

• Thisweek:Buildingthecapabilityofthestate

• Nextweek:Promotingdemocracyandegalitarianinstitutions

Inweek3wetalkedabouthistoricalforcesthatledtomorerule-governed,depersonalizedstatesthathadthe

capabilitytoimplement

“Stateless”Chiefdoms,

bands,andothersmallpolitical

units,oftenwithinformalsystems

ofrule

“Earlystates”Larger,morehierarchical,

patrimonial,oftencoercivepoliticalauthority(ies)thatmayonlylooselycontrolthepeople

“Modernstate”Morecentralized,rule-governed,bureaucratic,

depersonalized,politicalorgani-zations withmoresocialandsovereignterritorialcontrol

OlsonHerbst

Mukhopadhyay

TillyWeber

Fukuyama

Today:SomeoftheideasthathaveshapedhowIthinkaboutstatebuildinginthe21st century

1. Howhasthechangingnatureofwarfarechangedstatedevelopment?Aretherepeacefulwaystostatebuild?

2. Howforeignassistancecouldhaveunderminedthedevelopmentofmorecapablestates

3. Amoreoptimisticviewofaid:Tippingthebalancetowardsmoreopeneconomiesandpolitics

4. Principlesforincrementalstatebuilding

I.Warandstatedevelopmentinthe20thand21st century

RecallTilly’sexplanationofhistoricalstatedevelopmentfromWeek2:Internationalwarfareasaselective

survivalmechanism

Threatofwar:Rulersforcedtodefendborders

Increasetaxcollectionandmilitaryrecruitment

Expandrepresentative

ruleandbureaucracy

Strongstatessurvive, theweakperish

Butsince1945weliveinaworldofmostlylow-scaleinternalconflictsthatdonotthreatensurvivalofthestate

Thepessimisticview

WhilethereislittlereasontobelievethatwarwouldhaveexactlythesamedomesticeffectsinAfricatodayasitdidinEuropeseveralcenturiesago,itisimportanttoaskifdevelopingcountriescanaccomplishintimesofpeacewhatwarenabledEuropeancountriestodo.

Iconcludethattheyprobablycannotbecausefundamentalchangesineconomicstructuresandsocietalbeliefsaredifficult,ifnotimpossible,tobringaboutwhencountriesarenotbeingdisruptedorundersevereexternalthreat .

—JeffreyHerbst,“WarandtheStateinAfrica”

“

Reasonswhycivilwarsarestate-underminingratherthanstatebuilding

• Skilledleaders,bureaucratsandbusinessmenflee

• Cleavagesbetweencompetinggroupsmaywidenandbecomemorepoisonous– Moredifficulttoreachstablebargains?

• Theopportunitycostofwarcouldbeenormous– e.g.Bates,Coatsworth &Williamson:Whatdidwarandautocracydoto

19thcenturyLatinAmerica?• Waroccupiedmostgovernmentspendingandbankruptednations• Missedoutonanunprecedentedboominglobaltradeandindustrialization

• Thussacrificedmoderneconomictransformationandgrowth

Nonetheless,therearesomeexamplesofstrongstatesandleadersemergingoutofcivilwar

1962-86 1986-20??

JeremyWeinstein:Ugandaasanexampleof“autonomousrecovery”

Specialconditionsunderlying“Autonomousrecovery”:ATilly-likeaccountofincidentalinstitutions

Needforrevenue

Statebuilding

Stateundermining

War Noexternalresources Termination

Raisetaxesbybuildingpopularsupport

Decisivemilitaryvictory

Negotiatedpeace

Raisefundsfromnaturalresources

Buildacoalitiontoconsolidate

power

Receivefundingfromexternalsources

Existentialthreat

Onlythestrong

organizationssurvive

Weakorganizations

muddlethrough

Iftrue,thisimpliesthatmostoftheinterventionstocreateorder(discussedlastweek)couldthwart

historicalprocessesofstatebuilding

• Negotiatedpeaceanddistributionofrents

• Peacekeeping

• Trusteeship

But“autonomousrecovery”impliesaslow,violent,andgloballycostlyprocessofstatebuilding

• Impliesweshouldexpectrepeatedcyclesofwarandineffectiveautocracybeforestronggroupscanconsolidatepowerandbuildamoreeffectivestate

• Becauseofinternationalpreservationofborders,thishastobeaninternalgroup– Strongneighborscannottake

overweaklygovernedterritory

• Also,therecouldbelargenegativeexternalitiesforothercountries

– Forsterinsurgents,pirates,andterrorists

– Scaresawayinvestorsandtourists

ForeveryEthiopia,Uganda,orRwandathereisaSouthSudan,DRC,orSomalia

Reasonstothinktherearepeacefulpathstostatebuilding

• The“onlywardevelopsstates”viewlooksattooshortatime– Africanstateshavemadereasonableprogressinjust50years– Mighttheyalreadyhavereachedthelevelsofbureaucraticfunctioning

ortaxationofmany18-19th centuryEuropeanstates?

• Beinganimitatorisdifferentfrombeingaleader– Today’sweakstateshavemodels,andcitizenexpectationsarehigh– Theirelitesandpopulationsseemtowanttoemulatedevelopedstates

• Thereareotherincentivestomodernize– Intense,non-spatialeconomicandpoliticalcompetition– Gainsfromindustrializationandtrade– Citizenswhovotewiththeirfeetandmigrateout(andreturnricher)

• Today:Dowehaveabettertechnologyofstatebuilding?

II.Howforeignassistancecouldunderminestatecapability

Manypeopleindictaidbasedononecorrelation

Foreignaidandgrowth1994-2004

Asithappens,thebalanceofevidencesuggeststhataidisassociatedwithgrowth

Arndt,Channing,SamJones,andFinnTarp."Whatistheaggregateeconomicrateofreturntoforeignaid?." TheWorldBankEconomicReview(2015).

Aidhasalsobeengenerallygoodatdeliveringcertainoutcomes,suchasbetterhealthorlowermortality

• Healthgainscouldreducetheaid/percapitaGDPcorrelation,ifitincreasesthepercapitafasterthanGDP(thisdoesn’tmeanaidisabadidea)

Estimated#ofpeoplereceivingAnti-RetroviralTreatment(ART)therapy

Andalargefractionofaidisessentiallypatronagefromrichnationstoclientstatesinreturnforimplementingcertainpolicies,andithasbeen

largelysuccessfulinthoseaims

IndeedfewoftheMillenniumDevelopmentGoals(MDGs)weredesignedtobegrowthpromoting

1. Eradicateextremepovertyandhunger

2. Achieveuniversalprimaryeducation

3. Promotegenderequalityandempowerwomen

4. Reducechildmortality

5. Improvematernalhealth

6. CombatHIV/AIDS,malaria,andotherdiseases

7. Ensureenvironmentalsustainability

8. Developaglobalpartnershipfordevelopment

Thus“Doesaidwork?”isonlyasensiblequestionifyouevaluateitbyitsobjectives

Mostdefendersandcriticsofaidfailtomaketheiraimsexplicit

• Relieffromnaturalandhumandisasters?

• Decreaseworstformsofpovertyandoppression?

• Redistribute?

• Spureconomicgrowth?

• Promotesecurityandstability?

• Promotenationalself-interest?

Onlysomewhatrecentlyhaveaiddonorsstartedthinkingaboutstatecapabilityasanobjective

Inthemeantime,poorlydesignedaidsystemshavehelpedtounderminepoliticaldevelopment

1. Assistanceexceedsabsorptioncapacity

2. Lowerincentivesfortaxation

3. Weakensaccountabilitytocitizens

4. Encouragesmimicry,unrealisticgoals,andprematureloadbearing

Waysthatpoorlydesignedaidsystemscanunderminepoliticaldevelopment

1. Assistanceexceedsabsorptioncapacity




Easterly, William. 2008. "Can the West Save Africa?" NBER Working Paper 14363.

ODAasa%ofnationalincome

Howmuchaidcanastateabsorb?

Somepossibleimplications

• Inmanyofthelowest-incomecountries,aidismorethanhalfofallgovernmentexpenditure

• Shouldweexpectthemarginalaiddollartobeeffectivelyspentinthisscenario?

• Suchlargeaidflowscouldactuallyreducethequalityofgovernmentbudgetingandspending,encouragingfiscalindisciplineinthefullbudget

• Especiallyifgiversfailtorecognizethestateasafragilelimitedaccessorder

• Likeoil,extremelyhighvolumesofaidturnmaythoseflowsintoarenttobedistributed– Encouragingthepatrimonialstatemorethanwouldbethecasewith

otherformsofrevenue,suchastaxation


1. Exceedsabsorptioncapacity




Aidandtaxcollectionareslightlynegativelycorrelated

• Anextra$1ingrantsisassociatedwith$0.10lowertaxes

• Wedonotseethiscorrelationwithsubsidizedloans

• Bynomeansisthisnecessarilycausal

– Theevidenceisscarceandsurprisinglypoor

• Nonethelessthecorrelationisconsistentwithatheoreticallogic

Benedek,Dora,etal."Foreignaidandrevenue:Stillacrowding-outeffect?." FinanzArchiv:PublicFinanceAnalysis 70.1(2014):67-96.

AsimpletheoreticallogicBesley andPersson (2013)“TaxationandDevelopment”

• Fiscalcapacity—theabilityofastatetoenforcecompliancewithtaxes—requirescostlyinvestments– Requiresup-frontinvestmentinabureaucracyandcollectioncapacity– Increasedtaxationwillalsofacesteeppoliticalresistance

• Analternativesourceofrevenueinfuture(aidorresourcerents)willreducethemarginalvalueoftaxrevenueinfuture,reducingtheincentivestoinvestinstatecapacity

• Someformsofassistancewillnothavethesamedisincentive– Loansandtherequirementtorepay– Shorttermaid

• Sadly,wehaveyettoseeverystrongevidenceonewayortheother,andarelefttoworkwithprovocativecorrelations

Poorercountriestodaytendtocollectalowershareofnationalincomeintaxes

Besley & Persson (2013), “Taxation and Development”

Besley & Persson (2012), “Public Finance and Development”

Althoughlevelsoftaxationinlow- andmiddleincomecountriestodaymaynotbesodifferentfromhigh-

incomenationsacenturyago






Aidcouldmakestatesaccountableupwardstodonorsnotdownwardstosociety

• Insomeeconomies,aidhasbecomethebiggestsectorintheeconomyandtheprimesourceofrevenue

• Oneofthescarcestthingsinadevelopingstatecanbethetimeandattentionofqualified,high-levelpublicofficials

• Theproliferationofdonorsandprojectsisamajorburdenforthesmallnumberofqualifiedpublicofficials,whocanspendmuchoftheirtimeattendingtodonorconcernsandmanagingaidactivities

• Theseofficialshaveincentivestogetmoneyfromdonorsratherthanfocusontheircoredevelopmentalfunctions,includingthedevelopmentofstatecapacity

Moss,ToddJ.,Gunilla Pettersson Gelander,andNicolasVandeWalle."Anaid-institutionsparadox?Areviewessayonaiddependencyandstatebuildinginsub-SaharanAfrica."(2006).

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Howwouldmassiveaidflowsaffectthis

equilibrium?

Extractfromcitizens

Donotextractfromcitizens

WhattypesofpoliciesintheWestwould…

• ReduceC?

• IncreaseE?

• IncreaseV?

• IncreaseL?

Whatifaidbehaveslikeoil?

Someaidmakesstatesmoreautonomous• Nottiedtosizeorneedof

populationortopolicies

• Notaffectedbyexit– Fromtheformaleconomy– Fromoutmigration– Fromtaxevasion

• Impervioustovoice– Supportforclientregimes– Supportforanti-Communistor

anti-terrorefforts– SupportforUNvotes

Otheraidcouldmakestatesmoredependentoncitizens• Makingvoicecheaper

– Supportingelectoralprocesses,– Trainingoflegislatorsand

judiciaries– Supportforcivilsociety

organizations– Supportforfreepress

• MakingLdependentoncitizens– Assistancetofirms– Cashtransfers– Cashondeliveryaid

• Emigration?

e.g.“Cashondelivery”aidAccountabletooutcomes,evenifnotcitizens

Birdsall,N.,Savedoff,W.D.,Mahgoub,A.,&Vyborny,K.(2012). Cashondelivery:anewapproachtoforeignaid.CGDBooks.






Mimicry

• Mimicryor“isomorphism”:theprocessbywhichoneorganismmimicsanothertogainanevolutionaryadvantage

• Sociologistshaveappliedthistoorganizationslikebusinesses,whichmightbegintoimitateformratherthanfunction

• e.g.ImagineyouwereastartupseekingventurecapitalinSiliconValley

Mimicryofformratherthanfunctionindevelopingcountriesiscommon

• Politiciansandagenciescansymbolicallymimicastateorinstitutionalformformanyreasons:– Aspirationally– Toattractdonordollars– Toavoidinternational

condemnationorpenalties– Tofoolcomplacentcitizens

Andrews,Matt,Lant Pritchett,andMichaelWoolcock."BuildingStateCapability:Evidence,Analysis,Action." OUPCatalogue (2017).

Thephenomenonofautocraticelections:Highratesofvoterparticipationwithnomeaningfulcontestation

Miller,MichaelK."Democraticpieces:Autocraticelectionsanddemocraticdevelopmentsince1815." BritishJournalofPoliticalScience 45.03(2015):501-530.

Whymightmimicrybeproblematic?

1. Whatifrich-country“bestpractices”aresuboptimal– Mimicrysuppressesinnovationandexperimentation

2. Formcouldbegintodistortfunction– E.g.Mossetal(2004)describingthegrowinggapbetweentheofficial

Ghanaianbudget(tosatisfydonors)andactualpatternsofspending

3. Encouragesprematureloadbearing– Setoverlyambitiousgoals– ”Fail”evenifyouachieverelativesuccess– Maybestatefailsforrealbecausetookontoomuch– Orcrowdsoutcorefunctionsofthestate


Donornationsalsotendtounderestimatehowlongchangesinstateandinstitutionaldevelopmentcantake

• Evenhugeimprovementsinreducingcorruptionorstatepatrimonialismaresetuptofailwithzerotoleranceexpectationsandprograms

Thesettingofoverlyambitiousgoalsisapersistenttheme

1960s:~2.5%

1970s:~3.5%

1980s/90s:~4.5%

GrowthrequiredtoattainMDG1:~5.6%

Actual growth versus goalsUN goals over time

Clemens,M.A.,C.J.Kenny,andT.J.Moss."ThetroublewiththeMDGs:confrontingexpectationsofaidanddevelopmentsuccess." Worlddevelopment 35.5(2007):735-751.

WhatittakestomeetMDG2:Universalprimaryeducation

Clemens,M.A.,C.J.Kenny,andT.J.Moss."ThetroublewiththeMDGs:confrontingexpectationsofaidanddevelopmentsuccess." Worlddevelopment 35.5(2007):735-751.

Theseareallimportantgoals,butevenifrealisticgoalsareset,whatistheconsequenceofhavingaweakstatepursueallofthem?

MillenniumDevelopmentGoals:









Capacitytoimplementisthescarcestresourceinaweakstate

• Theproliferationofdonorsandprojectsstrainsthecapacityofthesmallnumberofqualifiedpublicofficials

• Manydonorobjectives—freeeducation,primaryhealthcare,etc—arehugeleapsforstatesthatcanbarelyprovidebasicorder

• Theseprogramsandfundsareoftenrunbyorthroughthestatebecauseofconcernsaboutsettingupparallelsystems

• WhataboutconcernsaboutNOTsettingupparallelsystems?

• Whatbusinessdoesastatethatcannotrunthepolicehaverunningaschoolsystem?

Moss,ToddJ.,Gunilla Pettersson Gelander,andNicolasVandeWalle."Anaid-institutionsparadox?Areviewessayonaiddependencyandstatebuildinginsub-SaharanAfrica."(2006).

Whatisstrikingiswhatisnot anMDG:Protectionfromcrimeandviolence,oraccesstodisputeresolution,propertyrightsandjustice

MillenniumDevelopmentGoals:









Seldomdoyouseeprioritizationofthingsonlyastatecando:likepolicingorjusticesystem

• Manysocialservicescanbeoutsourcedorleftuptocivilsociety– Education– Healthservices– Povertyrelief

• Certainpublicgoodscanonlybeprovidedbythecenter– Nationaldefense– Criminaljustice– Policing

Asimplerexample:Cashforworkprogramsafterconflict

• Imagineagrantfor$5milliontoputyoungmentoworkbuildingroadsfor6monthsafterawar

• Bigenoughtoinvolvedonorandfinanceandplanningministrystaff

– Aspecialbureaucracymaybesetuptodealwiththis

• Intheendmaybe5000menget$600inwages

• Buthowmuchpoliticaltimeandbureaucraticattentiondidthistake

– Whatwastheopportunitycostintermsofotherreformsnottaken?

– Therearedozensorhundredsoftheseprogramsatanytime

– Whynot bypassthegovernment?

III.Amoreoptimisticviewofaid:Tippingthebalancetowardsmoreopen

economiesandpolitics

Lant Pritchett:Thinkoftheinternationalaidapparatusasreallybadballet,beingdoneallovertheworldbadly

everyday

Butallthisbadballetisnecessarytoproducethevirtuosoperformance

Avirtuosoperformance:Indiain1992

• Crisisin1992(acriticaljuncture)

• Governmentundertookaliberalizationoftheeconomyinfluencedbyinternationalaid/financepracticeandresearch

• Thegainsfromthesereformsarguablyexceedtheprevious20yearsofaid,plausiblybyanorderofmagnitude

• Lesson:aidcanworkevenifitmostlyfails

Manyexamplesofaidimprovinggovernancefeaturepathdependenceandcriticaljunctures

Pre-existingconditions:

Relativepowerofkeyactors

“Criticaljuncture”Strategicchoiceoractiontaken

Persistentstructures:These

choicesoractionstakeformandpersist

Conflict:Responseand

counter-responsebyeliteand

subordinategroups

Resolution:Ofconflict

andcreationofnewregimes

RecallMahoney’sexplanationoftheseconcepts:

Example:TheMarshallPlan1948-51“History’smostsuccessfulstructuraladjustmentprogram”?

• UStransferred$13billioninaidtoEurope

• FolkwisdomattributeEurope’srecoverytothisaid

• Butthisamountwastinycomparedtothecostofrecoveryandsizeofeconomies

• Rather,“conditionality”encouragedskepticalcountriestoorientthemselvestowardsthemarket

• Itwasanincentiveandcushiontomakereformpossible

DeLong,J.Bradford,andBarryEichengreen. TheMarshallPlan:History'smostsuccessfulstructuraladjustmentprogram.No.w3899.NBER,1991.

Anotherexample:Uganda1986

• Astrongrebelgroupandleadercometopower

• ThenewPresidentMuseveniisdeeplyskepticalofamarketorientedeconomy

• Heispersuadedbothbyaidbutalsoeconomicexpertisetopursuearelativelyfreeandoneeconomy

• Ugandahassincesustainedalmost30yearsofcontinuouseconomicgrowth

Wecouldalsoviewpeacekeepinginterventionsasseekingtotipthebalanceatcriticaljunctures

Indeed,thisisthemostcharitablewaytoviewpostconflictstateanddemocraticinstitutionbuilding

• Thereisnowafairlystandardmenuofpost-conflictinterventions(inweakstates)– Demobilization,disarmament

andreintegration(DDR)– Reconciliation/transitional

justiceprocess– Restorethecentralstate

bureaucracy– Organizingelectionswith

multipartycompetitionanduniversalsuffrage

– Makecommitmentstocombatcorruption

Congoleseyouthwiththeirvotingcardsaheadofthefirstfree

electionsheldintheDRCinover40years,Kinshasa,June2006

Onehypothesis:Supportforpost-conflictelectionstipthebalancetowardspoliticalfreedominthelongrun

• Alegitimateworryisthatfragilepost-conflictcountriesarepushedtoosoontodemocratize

• Or,cynically,thiscreatesonlya“ritualofdemocracy”– “Givingaiddonorsanelection

barelycleanenoughtoreceivealowpassinggrade,butdirtyenoughtomakeitdifficultfortheoppositiontowin.”—MarinaOttaway

• Butconceivablythesetipthebalancetowardsopenpolitics

However,relativelyseldomdoesthisstatereconstructioneffortconsidertheformaldecentralizationofpower

• Sometimestherearepower-sharingagreementsthatleadtoopposinggroupscontrollingdifferentarmsofthegovernment

• Andthereistypicallysomesupportforafreepressandcivilsocietyorganizations

• Butmoreseldomisthereanefforttostrengthentheindependentpowerandresourcesoflocalgovernments,bureaucracies,legislativeandjudicialbranchesofgovernment

• Suchadecentralizationofpoweris,inpart,aninvitationtocorruption,whichdonorsdetest

• Decentralizeddecision-makingwillalsointerferewithrapidreformsandplannedreconstruction,ordonorabilitytoworkwithacentralactorsuchasaPresident

Oneinterestingexperimentcurrentlyunderway:Kenya’sdevolution

• Electionviolencein2007/08helpedledtoanewpowersharingagreement

• AConstitutionalconventionledtoanewsetofformalrulesprovidingfor:– Morechecksandbalances

withinthegovernment– LargerroleofParliament– Independentjudiciary– AprogressiveBillofRights– Devolutionofsometaxand

spendingtoregions

IV.Statebuildingonestepatatime

Recallthatonlyrecentlyhaveaiddonorsstartedthinkingabout“governance”reforms

Thelistofreformsbecameunhelpfullylongandbroad

Grindle,MerileeS."Goodenoughgovernance:povertyreductionandreformindevelopingcountries." Governance 17.4(2004):525-548.

Justanotherformofprematureloadbearing?

Oneapproachtakenbydonors:Focusaidononstateswithhighqualitypublicinstitutionsandotherdemonstratedabilitytouseresourceswell

• e.g.TheMCC– NewUSaidagencystartedin2004

independentfromStateDept andUSAID– Countriesmustmeetasetofpolicy

indicators– Theninprinciplesettheirownplansand

leadimplementation

• Inprinciple,getsincentivesright

• Butbydefinitionthisisnotasolutionfortheworld’sfragileandslowestgrowingstates

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Asecondapproachistothinkaboutwhatforceswouldstrengthenthebargainingpowerof

citizens

Extractfromcitizens

Donotextractfromcitizens

Whatmeasuresmightstrengthenexitandvoiceamongthecitizenry?

Somepossibleexamples

• Supportfortertiaryeducation

• Encouraging(temporary?)migration– Newideas– Remittances

• Encouraginglocaltaxcollectionandpublicgoodsprovision– Thisisrare– Closestweseeare“communitydrivendevelopment”orCDDprograms

thathavelocalcommunitiesdeterminehowtospendaidgrants– Randomizedtrialssuggestthatthesehavelittlepersistenteffecton

localcapacity,butaone-timegrantdecisionisdifferentthanongoingtaxation/spendingauthority

AfinalapproachistotrytodirectlyreformstatesBlum&Rogger 2016

• TheWorldBankhassupportedmanyhundredsoflargeprojectsaimedatpublicsectorreforminpoorandfragilestates,e.g.– Centralizedsystemsofpublicemploymentandpayrollcontrol– Promotingmerit-basedcivilservicesthroughpayandgradingreforms– Developingprocurementandpaymentsystems– Capacitybuildingthroughtraining

• It’sdifficulttosayhoweffectivetheseeffortsare,especiallyinpoorerandmorefragilestates

• Sohowtodothiswell?

Someprinciplesforbuildingstatecapability,incrementally

1. Manyoftheinstitutionswethinkofasprecursorsfororderanddevelopmentemergedrelativelylate

2. Statecapacitytakesavery,verylongtimetodevelop

3. Statesshouldbestrategicinhowtheyspendtheirlimitedcapacity

4. Somestatefunctionsareamenabletobestpractices,butsolutionstothehardestproblemscannotbeimported

5. Don’tforgetthateliteshaveincentivestostymieorcapturereforms

1.Manyoftheinstitutionswethinkofasprecursorsfororderanddevelopmentemergedrelativelylate

• CentralizedmunicipalpolicedepartmentsdonotemergeinUSandUKuntilthemidandlate19th century– Priortothispolicewere

largelycommunityvolunteers

– IntheUSSouth,policehadtheiroriginsinslavepatrols

• Thesebureaucraticstructuresappearedoncetheyweredemandedbycitizensandcitiescouldformandsupportthem

Manchesterpolice,1840s

Intoday’srichcountries,manystatecapabilitiesaroseasaconsequenceofdevelopment

• “Goodgovernance”emergedslowlyandhaltinglyintoday’sdevelopedcountriesandwasoftentheworkofgenerations

• Someexamples:– Universalmalesuffragedidnotemergeuntilthe20thcentury– Bureaucracieswerecorruptandforsale– Judgesdidn’tnecessarilyknowthelaw– In1820,theUKwasslightlymoredevelopedthanIndiatodaybutitdid

nothavemanyofthethingsIndiahas:universalsuffrage,acentralbank,incometax,corporatelaw,etc

• Ingeneralwedon’tknowmuchabouttimingandsequencing

Grindle,M.S."Goodenoughgovernance:Povertyreductionandreformindevelopingcountries." Governance 17.4(2004).Chang,Ha-Joon. Kickingawaytheladder:developmentstrategyinhistoricalperspective.AnthemPress,2002.

2.Historically,statecapacityhastakenavery,verylongtimetodevelop


Donornationstendtounderestimatehowlongchangesinstateandinstitutionaldevelopmentcantake

3.Neverforgetthesearelimitedaccessorders

• BlumandRogger (2016)reviewattemptstoreformthecivilserviceinpost-conflictcountries

• TheynotehowinAfghanistan,SouthSudan,andotherplaces,ministriesandtheabilitytoappointpublicservantsweregivenasspoilstoarmedfactionsaspartofapeacebargain

• Publicemploymentisapowerfulpatrimonialtoolcommonlyusedinevenfairlysophisticatedstates

• Asaresult,reformsthattrytoprofessionalizethebureaucracyorpromotemerit-basedappointmentsandpaywillencounterresistancefromelites

• Reformsthatignorethisbargainingandpatrimonialincentiveswillbelesslikelytosucceed

• Therealquestionofreformsshouldbe:howtoimproveprofessionalismandmeritocracyonthemargin?

4.Statesneedtobestrategicinhowtheyspendtheirlimitedcapacity

• Whatwouldhappenisgovernmentsanddonorsbegantotreatstatecapabilityasthescarceresourceandthebindingconstraintondevelopment?

• Oneanswermightbetofocusonfunctiononlythestatecanperform,suchasorder,justice,taxationandsomepublicgoods

• Anotherwouldbetoprovokeadiscussionaboutoutsourcingnon-strategic,non-essentialfunctions– WhatcanbeprovidedbyNGOs?Theprivatesector?– Whatreformscanwaitadecadeandwhichareurgent

• Thisisawhollydifferentmotivationfor“privatization”– Basedoncapacityofaveryweakstate,notanyinherentinefficiency

• Currentlytheoppositeistrue:donorsworryaboutbuildingparallelsystemsforrunningsocialservicesthroughNGOs


Ahighlycontroversialexample:BridgeInternationalAcademiesinKenya,Liberia

• Hyperlowcostprivateschoolingwhereteachersteachbyrote/tablet

• Intheory,intendedtogiveparentsanalternativechoice

• InLiberia,governmenthasdecidedtorunsomepublicschoolsviathismodel

• Tosometheideaisabhorrent,butthisassumestheLiberianstateiscapableofdeliveringpublicschooling

• InLiberia,thismightbeunderminedifBridgegetsadefactolocalmonopoly—abigproblem

• Butthiskindofexperimentationwithprivateandnon-profitchannelsseemslikeagoodideaforaweakstate

5.Somestatefunctionsareamenabletobestpractices,butsolutionstothehardestproblemscannotbeimported

e.g.The“2017problem”Andres,Pritchett&Woolcock (2015)

The“1804problem”

Whatcharacteristicsofataskmakeitmorelikea2017versusan1804problem?


Whatkindofstatecapabilitiesaredemandedbydifferenttypesoftasks?


Complexityand

degreeofcapabilityre

quire

d

Andrewsetal:Mostreformsandpolicieshaveamixof2017problemsand1804problems

• Thewellmapped,predictable,routine2017problemsaremoreeasilysolvedandmoreamenabletobestpractices

• Thelesscertain,idiosyncratic,anddifficult1804problemsarenotamenabletoimportingbestpractices– Indeed,importingbestpracticescouldmakethesituationworse

• Theserequirepersistentexperimentation(inthegeneralsense,notrandomizedcontroltrials!)

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