Good Governance vs. collective action

It’s time for donors to get out of their addiction to Good Governance! No country has ever implemented the current donor-promoted Good Governance agenda before embarking on social and economic development. This was true for rich countries before they became rich, and it is true for the rapidly ‘catching up’ countries of Asia today. Countries in sub-Saharan Africa are no exception.

They are therefore not helped to get out of poverty by donor insistence on prior achievement of Good Governance, meaning adoption of the institutional ‘best practices’ that emerged in much richer countries only at a later stage in their development.

This is a main message of the Joint Statement of five research programmes, which has just been published. You may also like to see the PowerPoint presentation of the Joint Statement.

The other main message is that development outcomes in poor countries depend fundamentally on incentives. The political incentives facing elites and leaders are the key to possible change at national level. Within particular economic and social sectors, other actors and their incentives help to shape what can and cannot be done.

If aid is to help, it has to be based on a good understanding of what these incentives are, how they work and where they come from.

We argue that incentives which work against progressive change are often the result of unresolved collective-action problems. Fragmentation among political elites and among sector actors makes collective action in the pursuit of shared long-term goals difficult. So, at all levels, vital things that are in everyone’s interest – from clearing the drains, or enforcing crop standards, to reforming the civil service – don’t get done.

The fact that the actors are fragmented makes things difficult, but not impossible. Sometimes, the timely intervention of a third party is what the various players need to stimulate the necessary agreements. We ask: cannot aid be used, in careful ways, to identify and help to address such blockages? Would this not be more useful and relevant than funding NGOs to promote Good Governance?

With this blog, we invite those interested in these issues to join a discussion of the messages in the Joint Statement.

To set the ball rolling, we suggest a discussion about the idea of collective-action problems as an alternative way of understanding and responding to governance challenges in Africa.
Can we identify more examples of collective-action problems that explain the political incentives blocking development? In cases where solutions have been found, how this was achieved? Was a useful role played by aid?

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18 Responses to Good Governance vs. collective action

  1. Seth Kaplan says:

    What role does ideology or social cohesion play in your model?

  2. Tim Kelsall says:

    Hi Seth

    Thanks for your question. The first thing to say is that the bloggers on this site represent a number of different research programmes, sharing some common interests and insights, but not with a single ‘model’. Thus we don’t have a univocal response to your question about ideology or social cohesion. I can, however, say a couple of things based on some of the work done by the Africa, Power and Politics Programme, which is the programme with which I have been involved.

    The first is that ideology and social cohesion are not terms that we used a great deal. We did sometimes use the word ‘culture’ (cautiously), and we did hypothesize that development policies were more likely to work when they went ‘with the grain’ of existing socio-cultural realities, or when they were ‘anchored’ in local realities. Some of our design work looked at the role of ethnicity, religion, and (neo) tradition as possible bases for development policy, and one sees that reflected in some of our reports, eg the work on town chiefs in Malawi (http://www.institutions-africa.org/filestream/20090618-appp-working-paper-no3-june-2009-town-chiefs-in-malawi-diana-cammack-edge-kanyongolo-tam-o-neil). It is also evident in some of the ways the Rwandan state has used neo-tradition to strengthen bureaucratic accountability mechanisms, as through the imihigo oath (http://www.institutions-africa.org/filestream/20120312-appp-research-report-04-safe-motherhood-in-rural-rwanda-by-v-chambers-and-f-golooba-mutebi-march-2012). Also, in the work we did on business and politics, in particular in the case of Tanzania, ideology and culture are invoked in the conclusion to help explain some of the specificities of the Tanzanian case (http://www.dfid.gov.uk/R4D/PDF/Outputs/APPP/20110606-appp-research-report-01-cooksey-kelsall-june-2011.pdf).

    In general, I think APPP researchers would agree that social cohesion is important to the solution of collective action problems. Societies which have a pre-existing ‘stock’ of social cohesion, other things being equal, have a head start; but societies that lack this can potentially create it through ideology and institutional innovation.

    Other bloggers may disagree.

    Tim

  3. I was no quite sure what Seth was asking or getting at. There was no single unified and agreed ‘model’ in the statement, indeed ‘models’ did not feature at all. Each research group has attacked these key questions about African (and other) development from a different angle. However, we all explored the diverse ways in which political and policy choices, elites, leaders, informal institutions, incentive structures, coalitions and democratization processes have shaped development trajectories in different contexts. In a nutshell we all sought to move our focus from governance to politics, and our findings overlapped on enough common ground to enable the groups to agree the Joint Statement. The Developmental Leadership Program (DLP) (www.dlprog.org) line on this has been to focus on the critical role of leaders, elite and coalitions in the politics of development. Like the APPP (see Tim Kelsall’s contribution above) we did not focus on either ideology/ideas or social cohesion as variables of interest, and I’m assuming Seth meant social pluralism.However what our research does show is that societies with more (Mauritius) or less (Botswana) pluralism are equally capable of designing developmental policies and practices that produce positive growth outcomes, irrespective of natural endowments. What matters crucially is the design of appropriate and locally legitimate institutions, formal and informal, that make this possible, and the role of leaders, elites and coalitions are fundamental to these outcomes. By contrast, Zimbabwe and Yemen (two other cases analysed in the DLP research) show the consequences of the failure to shape or sustain growth-inducing institutions. The debate about the role of ideas and ideology in politics and development is a jungle from which no traveller returns without being battered and bloodied, as it is often very difficult to disentangle ideas from interests, and interests from ideas. But it is clear that ideas – about justice, fairness, freedom, equality (no to mention free markets or the role of states) – often fuel the passions and choices of politics. Moreover, in our work it was at least noticeable that elites in Botswana all drew on strong liberal/Christian values, whereas those in Mauritius were more attuned to social democratic principles in their choices, institutional arrangements and policies.

  4. Seth Kaplan says:

    When I say model, I am referring to the framework with which you are analyzing the problems of governance. It includes certain factors of analysis while excluding others. Although the five programs have different emphases and cover a great deal of material (very well — I am an avid reader of many of the reports), they seem to make certain assumptions about human behavior that excludes some possible drivers of governance outcomes.

    Social cohesion does not necessarily correspond to diversity or social pluralism. Indonesia is much more cohesive than Nigeria, but it is no less (and probably more) diverse on many levels. Mauritius is probably more cohesive than most African states despite its diversity.

    The ideology of elites is hard to pin down (and quantify), but certainly does play a role in what policies they take.

    Incentives certainly matter but may be influenced by these two elements. It is impossible to disentangle them all, but that does not mean that some do not matter.

    I asked my initial question because social cohesion and elite ideology played critical roles at formative points in many of the successful developmental states (Japan, China, etc.) and certainly help explain why many leaders in Africa and elsewhere act the way they do.

  5. Seth Kaplan writes above that “the ideology of elites is hard to pin down (and quantify), but certainly does play a role in what policies they take.” He also states that elite ideology “certainly helps explain why many leaders in Africa and elsewhere act the way they do.”

    I agree. I also agree with Adrian Leftwich above that the “debate about the role of ideas and ideology… is a jungle from which no traveler returns without being battered and bloodied.” Nevertheless, let me enter this jungle based on insights from the Elites, Production, Poverty (EPP) research programme.

    We argue that political and public office holders are motivated primarily by interests in domestic political survival and advancement. Having political power helps to accumulate private wealth, to gain individual or factional benefits, and/or “to shape or change the direction of government policies based on ideas and visions of what should be done.” We also posit that the need to stay in power trumps all else and that this affects how policies are actually implemented – if at all. See http://diis.dk/sw111255.asp

    Indeed, our case-based research on policy-making and implementation in productive sectors shows that some political leaders do launch major policy initiatives based on ideas. Visions of a modern country based on modern agriculture and modern industry are examples of such ideas. But initiatives based on such visions do not survive the political realities on the ground unless their implementation also helps to win elections or to strengthen the coalition that supports the political leadership in power.

    Ideas certainly matter but so do interests. How they interact is context-specific and this is an analytical jungle to disentangle.

  6. Vathanak says:

    Isn’t it the vested interests among elites that intentionally or unintentionally contribute to fragmentation? In most LICs the ball is in the hand of elites who or their cronies control the engines of the country economy. Good governance sets rules of the game and makes progress only when accorded with the elites’ interest. Nevertheless, it must be there to ensure minimal damages.

    I find that excluding one and embracing another is a bit too extreme an approach while we know that the former does have good things to contribute.

    • As I have discussed with Ole at some length, I find much of this discussion about aid and donor intentions significant. But the chicken and egg question of good governance seems wrongly focused. To my thinking, there can be no significant development without prior periods of positive governance. Good governance precedes growth. All of Africa and Asia’s now comparatively wealthy and successful countries grew rapidly only after years of good governance. There are now prosperous places that are or were badly governed. The syllogism I promote and write about is: effective leaders create a participatory and consultative political culture (or ethos). When that exists good governance spreads and a government performs well for its people across many dimensions. Then institutions are nurtured in the healthy soil of a positive political culture amid good governance. And the institutions, which do not as yet exist in many developing countries, permit or foster economic growth. (Admittedly, some of the existing difference of views may stem from variant understandings of what “governance” is. In my view its existence is measurable and is not an “approach” or an administrative “attitude.” Governance describes performance on behalf of a citizenry.)

  7. Robert, thank you for your comment. We certainly agree that governance is important, but perhaps we do have different views of what ”governance” means. This inspires me to ask you two clarifying questions:

    You write that governance describes performance on behalf of a citizenry. Does that imply that the ends justify the means in your concept of governance? South Korea, for example, lifted many people out of poverty, increased levels of education and health rapidly, but initially did so under very brutal regimes.

    My second question can also be exemplified by South Korea. You write that “effective leaders create a participatory and consultative political culture (or ethos).” I think that Rhee and especially Park were effective leaders in many developmental respects but none of them fit you definition of good leaders. I suspect that this is not just a matter of ‘technical definition’ on your part, but an insistence that good things should – and do- go together?

    • Ole: No, ends do not justify means. Rhee and Park were autocrats, but just as Deng did in China,
      they paved the way for a transition to embryonic and — ultimately — measurable good governance.
      They were precursors and, in a very tentative sense, enablers like Gorbachev. Their presidential successors had to do the heavy lifting.

      I don’t understand the “good things” part of your question. Nor do I fully understand the technical definition part of the question.

  8. Robert, you actually answer both of my questions: Rhee and Park were ‘enablers’ who did some dirty work that helped successors to perform. Without the work of the former, the latter could not have delivered. Seen over a longer time period that interpretation, it seems to me, makes the notion of good leadership rather broad.

    • Ole: I don’t mean it to be broad. Good leadership is a bundle of specific abilities and approaches. Park and Rhee readied S Korea for responsible leadership.

  9. Tim Kelsall says:

    Dear Robert

    Forgive me if it seems as though we’re ganging up on you, but given Ole’s comments, can you revisit your statement: ‘Good governance precedes growth. All of Africa and Asia’s now comparatively wealthy and successful countries grew rapidly only after years of good governance’? It seems to me that this simply isn’t true – or have I misunderstood you?

  10. David Henley says:

    ‘Speaking from the perspective of my own work within the Tracking Development project, I would say that social cohesion and elite ideology have indeed been important factors in development success. Actually this conclusion flows more or less automatically from our key finding – I believe on the basis of pretty clear empirical evidence – that the most important single difference between African and Southeast Asian development strategies is that the latter were, from the outset, much more concerned than the former with raising the productive capacity of the millions of peasant farmers who made up the bulk of the population. The governments which did this successfully were governments that were genuinely committed, at the highest level, to the goal of reducing poverty on a massive scale; the fate of the poor mattered to them. In all cases the reasons for this were partly ideological, relating to a recent history of popular nationalism, and in some degree also to a cultural idealization of village life. Social cohesion played an important role too, although in real terms it was often present initially only within an established political elite that felt itself threatened by radical forces. With respect to the nation as a whole, cohesion was usually more a political goal of the developmental state than a precondition for its emergence. The successful developmental states of Southeast Asia were either counter-revolutionary states facing, or recently having faced, a serious communist threat (Thailand, Malaysia, Indonesia), or liberalizing post-revolutionary states concerned to avoid alienating their mass support base (Vietnam).’

  11. John Ellis says:

    There seems to be some confusion relating to the rejection of “good governance” in the joint statement. The statement defines “good governance” as the supply-driven imposition of alien “best practices” (often associated with the “Washington Consensus”). But this is a fairly narrow definition of a term that does not have a well-established technical meaning. Some readers may define the term differently and respond to this discussion on the basis of their own definitions.

    In the circles I work in, “good governance” is normally understood to be associated with institutional transparency, accountability, inclusiveness, and responsiveness to “stakeholders'” interests (however that may be defined). These attributes are characteristic of institutions that are more conducive to collective action and less conducive to competitive clientelism. When viewed through this lens, the million dollar question for donors is whether assistance can be instrumental in insinuating these attributes into systems dominated by competitive clientelism (or other “extractive institutions,” to use the term coined by Acemoglu and Robinson in “Why Nations Fail”). The Joint Statement’s fairly positive stance on that question is encouraging.

    While it is often good to be provocative (the Joint Statement itself is a case in point), the blanket rejection of “good governance” and flirtation with “centralized rent management” makes me uncomfortable. As Acemoglu and Robinson point out, centralized state power is critical to the protection of individual rights, and was important to England’s development of inclusive institutions. However, centralized rent management can go in different directions, and has not been particularly beneficial in, say, North Korea or Zimbabwe. I suspect that some degree of centralized rent management can be conducive to development transformation when it allows for a degree of political and economic competition at the center (i.e., some degree of inclusiveness), but perhaps not otherwise.

    None of this is to contradict the Joint Statement’s point about blind advocacy of “best practices” (which Lant Pritchett esoterically describes as “isomorphic mimicry”). Dani Rodrik’s “One Economics, Many Recipes” is also very compelling on this subject. It is nice to see this broad convergence.

  12. Tim Kelsall says:

    John,

    Thanks for your comments. I take your point that ‘good governance’ is susceptible to different definitions, and need not be identical with the kinds of institutional mimicry promoted by most donors.

    However, even using your own broader definition, and whatever Acemoglu and Robinson say, it is a simple fact that the most remarkable economic transformations in history, such as Japan, S Korea, Taiwan, China, Singapore, Indonesia, and Malaysia, have taken place under regimes that were inclusive in the sense of having a real commitment to broad-based development, responsive to stakeholders in the sense of recognizing that certain interests (not necessarily interest groups) had to be placated, but only (formally) politically accountable in a much narrower sense, and not really transparent at all.

    They had ‘growth-promoting’ governance, not ‘good governance’.

    At the same time, you are right to be wary of centralized rent-management, since it can indeed be used for good or ill, as APPP’s contrasting papers on Rwanda and Zimbabwe demonstrate (http://www.institutions-africa.org/filestream/20111110-appp-working-paper-19-anti-developmental-patrimonialism-in-zimbabwe-dawson-and-kelsall-nov-11; http://www.institutions-africa.org/filestream/20111110-appp-working-paper-19-anti-developmental-patrimonialism-in-zimbabwe-dawson-and-kelsall-nov-11).

    Nevertheless, because of most African states’ ethnic heterogeneity, technological backwardness, and weak indigenous capitalists, there are reasons to think that development under decentralized arrangements will be inordinately difficult.

  13. John Ellis says:

    Thanks much for your response, Tim. As I understand it, the primary objective of the joint statement is to point out to “northern” donors (presumably including the Aussies) that there is no “silver bullet” that can guarantee development progress. I completely agree, and very recent experience drives home the importance of the point.

    But noting that countries need to find the “best fit” is of pretty limited practical use to the countries themselves, and begs the questions: “what is best” and “fit for what?” In answering those questions, I support Robert Rotberg’s assertion that “there can be no significant development without prior periods of positive governance” (his post of June 12, above).

    Robert’s association of development with “governance” recognizes that it is the nature of a country’s institutions (as opposed to its geography, culture, history, etc.) which largely determines its development progress. “Governance” is just a way of describing how countries’ political and economic institutions work (or don’t work). Robert’s reference to “positive governance” also is useful, in that it puts a stress on relative differences as opposed to absolutes. I might prefer the term “better governance,” although the distinction may not be great. But this still leaves us with the really hard part — defining what is “positive” or “better.”

    The joint statement is helpful in underlining that what is better (or even “best”) is not inherent in any particular approach or model, but in the results of an approach or model in a particular context. It is remarkable how seemingly small “tweaks” to bad governance can produce much better development results.

    China continues to provide wonderful examples of this. One of my Philippino heroes likes to shock his compatriots by pointing out that, in some important respects (e.g., land rights), the citizens of “communist China” have more “instrumental freedoms” (to use Amartya Sen’s term) than most of the citizens of his own nominally democratic country. These “freedoms” are not the result of democratic “best practices,” of course, but of the CPC’s incremental relaxation of what initially were very harsh restrictions on Chinese citizens’ individual and collective choices. The household responsibility system was not a gold standard practice in anyone’s book, but it clearly was instrumental in the greatest poverty reduction success story in human history. If the CPC had not allowed farmers to market their own produce or township enterprises to compete with state-owned factories, I doubt if its investments in improved education and health services (which also enhanced instrumental freedoms) would have had the same impact on poverty. In that scenario, I suspect Guangdong would still look more like Kerala than Taiwan, and Shanghai more like Delhi than Hong Kong.

    One of my concerns with the Joint Statement is that it tends to focus on the “Asian model’s” rejection of democratic best practice, rather than on the positive direction of three decades of freedom-enhancing reforms in economic governance (as well as some much more modest “tweaks” to political governance). It seems to me that the latter point is much more important to a country looking for the “best fit,” in that it shows that the direction of incremental change is critical even if the “best practice” is not achieved within our short attention spans.

  14. Tim Kelsall says:

    John, I agree with a lot of what you say, but I also think it’s important to realise that for most Western donors and development observers, ‘good governance’ (and Robert Rotberg equates ‘positive governance’ with ‘good governance’) implies a very specific package of reforms based on the kinds of institutions Western liberal democracies enjoy now. If we can sever the ideational link between ‘positive governance’ and ‘good governance’, and encourage donors to be more open to the kinds of unconventional approaches to stimulating economic growth found in China and elsewhere, then the Joint Statement will have served one of its main purposes. Beyond that, we at APPP/DRA are trying to put some flesh on the bones of what a ‘best fit’ approach entails, firstly by grouping developing country regimes into different types, and then by suggesting ways of working in these country-types that maximise the scope for local solution of collective action problems. For example, the strategies a donor employs in developmental patrimonial states, competitive clientelist states, and anti-development patrimonial states, should all be different.

    I sense that you and I are not terribly far apart on this.

  15. John Ellis says:

    Tim: Yes, I think we’re pretty much on the same page. I’ll be interested in what you come up with for “best fit” approaches. Since each country is unique, I doubt if there are standardizable technical solutions to replace the “gold standards” you associate with “good governance.” I suspect process is an important part of the solution — essentially incremental problem solving. Then the question becomes, whose problem is being solved? Privileged elites who have captured political and economic systems in order to control distribution of rents often will not perceive the same problems as the disenfranchised poor with whom the rents are not shared. The institutional problem is to persuade those in control to support (or at least not resist) changes that do not serve their individual interests. Entrepreneurship can be another way forward, but it requires that entrepreneurs have the freedom and protection to compete with and destroy existing systems.

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