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Why Just the Why?

Germano Mwabu's picture

Some Thoughts on Shanta's Anniversary Blog

I have extracted what I find to be the key points in Shanta’s blog post “It’s not the How; It’s the Why” and have commented on them:
 
1. “Bad policies or institutions exist and persist because politically powerful people benefit from them.” 

Bad policies or institutions are bad for those who are excluded from their benefits in the short-run, but they also harm the supposed beneficiaries in the long run. Further careful analysis can corroborate this, and show the long-term harm caused by bad policies to virtually everyone in a particular country.

2. “In this setting, telling governments that they should reform these policies, or even showing them how to reform them, is at best unhelpful.”

So the right thing to do is to explain why reform is needed – but to the general public directly, not to policy makers who may have strong reasons to oppose or subvert reforms. This can be done in a range of settings, from public meetings to blog posts. However, the public must be literate for the blog option to work.

3. “Recognizing that distortions are the result of a political equilibrium also sheds light on the refrain, ‘One size doesn’t fit all.’”

Pinpointing a bad political equilibrium (through analysis) is always helpful in a reform effort. So it seems that, in this case at least, one size fits all. If this is the intended meaning, the point is great.

4. “The politics, however, were very different.”

So it is bad politics (from the analyst’s and the populace’s points of view) that thwart reforms. Kenya is a good example here.  The devolution of governance to the countryside – and away from Nairobi – was mandated by the new Constitution in 2010. But the devolution is being resisted by some people in the Opposition as well as in the Jubilee Government, even though citizens like the devolved county governments.  Bad politics might in the end destroy the county governments, or at best weaken them substantially. So politics (not economics!) is really the “why” variable in Shanta’s model. Is this not obvious to everyone? Is a blog post needed to tell people what they already know? What is not obvious is why bad culture, bad economics, bad climate, and so on, are not barriers to reform, but bad politics is. I would find it refreshing if a politician were to reverse Shanta’s point and state that it is “bad economic equilibrium” that is a problem for reform. In that case, he cannot ask: “If distortions represent a political equilibrium, what can be done about them?” - as bad economic equilibrium is the proxy for distortions. An example of a bad economic equilibrium is the set of stable economic circumstances that led to the global financial crisis in 2008 before the politicians moved to the scene.

5. “Only if there is a political consensus—not if he reads it (recommendation) in a report—is a politician likely to adopt the recommendation.”

This is a very insightful view about what drives a reform. In Kenya, the Opposition is trying to mobilize people (through a referendum) into a consensus on what is wrong in central government so that it can be reformed (in favor of the Opposition). So, the “how” and “what” also matter in a reform process. It seems that a sharp focus on “why” is at greater risk of failing to bring about a reform than a fuzzy focus on what, why, how, when…  


 

Comments

Submitted by Luxman Siriwardena on

Thank you Shanta for your rational and timely blog. Since I join the public service in Sri Lanka I have noticed that hundreds of "What to do" consultants and experts, both foreign and local were hanging around in the corridors of Ministry of Finance and other officers of importance.Many of them, if not all,were totally disregarding or ignorant political realities and more impotently political equilibrium. I my self have believed in and
contributed to creating unrealistic expectation of a possibility of overnight implementation of idealistic economic reforms and the government implementing such reforms will be popular because "Good Economics is Good Politics". After nearly 40 years of exposure to the public policy environment in Sri Lanka I firmly believe that how to do is equally important as what to do. Nevertheless, private think tanks should continue to advocate what to do as well as what can be achieved through reforms. If the think tanks can not be creative or imaginative to recommend how to do in the relevant socio-political context they will become irrelevant prescriptions of doctors.

I hope many economist and with exposure to policy making will join this dialog.

Submitted by Shanta on

Luxman, thanks so much for joining the discussion. I'm glad you find this line of reasoning to be relevant and useful for Sri Lanka. I should clarify, though, that I am not advocating for consultants, advisers and reform-minded government officials to come up with ways of "getting around" political constraints. That still assumes that these people know better than the general public what is best for the general public. Rather, what I am advocating for is to ensure that the general public is informed about the costs and benefits of policies, and letting them decide what is in their best interest. This is a different role for external advisers and government officials to play, but it may be necessary if we are to help countries like Sri Lanka get out of these low-level political equilibrium traps.

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