Taking politics seriously
The idea political incentives play a powerful role in development—creating opportunities for change in some contexts, frustrating efforts in others—is not a new one. For many years now, academics and aid agencies have acknowledged that the uptake and impact of best practice reforms depends, in part, on the incentives of leaders and citizens, on formal and informal institutional arrangements, on historical legacies and structural drivers. And as a result, many aid agencies have made efforts to “take politics seriously.”
political economy analysis
Taking politics seriously
Spent an enjoyable couple of days last week with the ‘thinking and working politically’ (TWP) crew, first at a follow up to the Delhi meeting (nothing earth shattering to report, but a research agenda is on the way – I’ll keep you posted), and then at a very moving memorial conference for the late Adrian Leftwich (right), who is something of a founding father to this current of thought.
Regular readers of this blog will know that I’m a big fan of this line of thinking: understanding and engaging with the underlying issues of power and politics should be the heart of any serious work on development.
But based on last weeks exchanges, I’ve got some concerns too – here are some reflections:
First some choice quotes:
Businesses generally stand little chance of doing well when politics is not stable. Political stability is a necessary condition for an enabling business environment. What can the business community do to help achieve sustained political stability? Experience shows more often than not they fail to do so. What keeps the private sector divided even when both their collective and personal interests are directly at stake? Such an apparent puzzle can be explained by the soft budget constraint syndrome interacting with cronyism.
The term “soft budget constraint” (SBC) was originally conceived by the economist, Janos Kornai. The concept has since been regularly invoked in the literature on economic transition from socialism to capitalism. Now the concept is increasingly acknowledged to be pertinent well beyond the realm of socialist and transition economies. A host of capitalist phenomena, ranging from the collapse of the banking sector of East Asian economies in the 1990s and the business rescue packages seen in the midst of the recent global financial crises can be usefully analyzed in SBC terms.
The syndrome is at work only when organizations can expect to be rescued from trouble, and those expectations in turn affect their behavior. The more frequently financial problems elicit support in any part of the economy, the more organizations will count on getting support themselves. The government may from time to time announce they will break with past practice and refrain henceforth from bailouts. But such announcements have little effect unless combined with some institutional change that lends credibility to their claims.
SBC syndrome alone cannot explain why business groups do not react collectively to political adversities. The divisive force in this process comes from cronyism.
Cronyism normally means some of those close to political authorities receive large economic favors. The most visible ones usually entail ownership of a business or its operation, such as the privatization of state-owned enterprises (SOEs). More frequently, however, economic entitlements are provided through privileged access to governmental favors. The most valuable are the provision of monopoly or quasi-monopoly positions and the extension of domestic credit at highly subsidized terms. Favoritism in awarding government contracts is also important and may be as significant as the others.
Yesterday Chris Roche and Rosalind Eyben set out their concerns over the results agenda. Today Chris Whitty (left), DFID’s Director of Research and Evidence and Chief Scientific Adviser and Stefan Dercon (right), its Chief Economist, respond.
It is common ground that “No-one really believes that it is feasible for external development assistance to consist purely of ‘technical’ interventions.” Neither would anyone argue that power, politics and ideology are not central to policy and indeed day-to-day decisions. Much of the rest of yesterday’s passionate blog by Rosalind Eyben and Chris Roche sets up a series of straw men, presenting a supposed case for evidence-based approaches that is far removed from reality and in places borders on the sinister, with its implication that this is some coming together of scientists in laboratories experimenting on Africans, 1930s colonialism, and money-pinching government truth-junkies. Whilst this may work as polemic, the logical and factual base of the blog is less strong.
Rosalind and Chris start with evidence-based medicine, so let’s start in the same place. One of us (CW) started training as the last senior doctors to oppose evidence-based medicine were nearing retirement. ‘My boy’ they would say, generally with a slightly patronising pat on the arm, ‘this evidence-based medicine fad won’t last. Every patient is different, every family situation is unique; how can you generalise from a mass of data to the complexity of the human situation.” Fortunately they lost that argument. As evidence-informed approaches supplanted expert opinion the likelihood of dying from a heart attack dropped by 40% over 10 years, and the research tools which achieved this (of which randomised trials are only one) are now being used to address the problems of health and poverty in Africa and Asia.
The World Bank’s External Affairs Operational Communications Department, the World Bank Institute’s Governance Practice, the Annenberg School for Communication at the University of Pennsylvania, and the Annenberg School for Communication and Journalism at the University of Southern California are currently accepting applications for the 2012 Summer Institute in Communication and Governance Reform, to be held from June 16 to 27, 2012, at the University of Southern California in Los Angeles.
The 12-day course will equip participants with knowledge about the most recent advances in communication and proven techniques in reform implementation. Participants will develop core competencies essential to bringing about real change, leading to development results in a wide range of sectors. The course seeks to impart critical skills in the following key areas:
We have reported on this blog that the Communication for Governance and Accountability Program (CommGAP) and the World Bank Institute’s Governance Practice (WBIGV) jointly organized a two-day workshop entitled “The Political Economy of Reform: Moving from Analysis to Action”. Held in Washington, D.C. a few months ago, the workshop sought to explore the role that Political Economy Analysis (PEA) can play in supporting and informing real-world reform efforts. The event brought together more than fifty participants from various sectors: representatives of donor organizations, senior journalists, private firms active in development policy and practice, academics and applied researchers, and World Bank senior operational staff.
The video posted above is the second in a series we are featuring on this blog. The interview was conducted last June, during a learning event jointly organized by the World Bank Institute’s Governance Practice and CommGAP entitled “The Political Economy of Reform: Moving from Analysis to Action.” The event’s primary objective was to bring together relevant expertise and take stock of experiences from around the world on the ways in which political economy analyses have been and can be made more operationally relevant. Featured in the video is Rakesh Rajani, head and founder of Twaweza (“we can make it happen” in Swahili), a “citizen-centered initiative, focusing on large-scale change in East Africa.” From years of experience working in Kenya, Uganda, and Tanzania, Rajani describes five local networks that he has found exist everywhere in these countries:
They are organic. They are powerful. They go to scale. They matter to people’s lives. People invest in those networks. And they would be there even if every aid dollar dried up tomorrow… And you’ll notice that those five are typically not the organizations or the institutions that development actors work with.
The interview posted above was conducted last June, during a learning event jointly organized by the World Bank Institute’s Governance Practice and CommGAP entitled “The Political Economy of Reform: Moving from Analysis to Action.” The event’s primary objective was to bring together relevant expertise and take stock of experiences from around the world on the ways in which political economy analyses have been and can be made more operationally relevant. In the interview, Claudia Melim-McLeod of the UNDP Oslo Governance Centre starts off with highlighting a critical issue in supporting change agents on the ground:
Technical assistance, although important, is not enough… we have to be politically savvy to be able to deliver results not only in terms of development effectiveness, but also in terms of what our partners expect us to do.
For two days last month (June 21-22) CommGAP and the Governance Practice in the World Bank Institute organized a workshop on the theme: The Political Economy of Reform: Moving from Analysis to Action. In attendance were practitioners and academics from around the world, including several leading donor agencies. While the insights from the very productive workshop are being organized - they will be made available as soon as they are ready - I want to share this report regarding an unanticipated leitmotif of the meeting.
Without prompting, several donor agency officials, and they were senior ones, turned their attention to the challenges posed to reform efforts by the behavior of donor bureaucrats. I have just been through the notes I took during the meeting, and what follows are some of the comments that were made. The meeting took place under Chatham House rules, so no names will be mentioned here:
The story was told to me and so I will tell it to you. No, it was not passed down to me by my father or my father’s father but I still think it is a great story. A known story amongst international volunteer corps, it is whispered between friends with wistful eyes and knowing glances.
- South Asia
- Middle East and North Africa
- Latin America & Caribbean
- Europe and Central Asia
- East Asia and Pacific
- Communities and Human Settlements
- Agriculture and Rural Development
- political economy analysis
- consensus building
- Coalition Building