Sometimes, the drive comes from the senior echelons of government – a reform-minded government leader, an important minister or an agency head. At times, there is pressure from donors. Often, the two combine: The initial idea comes from a donor, which a powerful person in government then takes up as an agenda.
Many reforms happen in this top-down way. But, often, there are questions about their sustainability. Commitment to reforms may not be widespread. Once donor pressure wears off, or once the bold reformer at the top moves on (or loses interest or energy), reform initiatives dissipate. Sometimes, the reforms happen on paper, but implementation remains deficient. Top-down reform initiatives often fail to take on board the front-line officials. Implementation thus suffers, especially when the attention of the top-down driver shifts elsewhere.
The 2015 World Development Report, Mind, Society and Behavior, thus points to the need to understand the motivations and behavioral characteristics of different players, such as politicians and government bureaucrats, and how these affect their decisions and actions. The WDR argues that such an understanding helps design policy interventions and reforms that stand a chance of success even in seemingly intractable situations.
This brings us to a third way of reform, less common but potentially more powerful – one that is driven by the middle tiers of bureaucracy. Reforms initiated in the trenches enjoy, almost by definition, the commitment of those responsible for implementation. Reforms may also be better designed, since the officials know exactly what is feasible and where there are pitfalls. A single bottom-up reform may not be very bold. But one reform may lead to another, and the cumulative impact may make a big difference.
Donor programs usually don’t regard mid-level officials as key drivers of reforms. It is often assumed that such officials will oppose reforms and they should thus be bypassed or, at best, co-opted in some fashion. Such assumptions lead to many lost opportunities. Mid-level officials can often be good initiators of reform if they are properly inspired and engaged. The attitudes and perceptions of this important tier of the bureaucracy have an important bearing on the formulation of policies and regulations, as well as on their implementation. These attitudes are shaped by an awareness of business-related issues, or a lack of it.
How Bangladeshi bureaucrats became reform champions
Recognizing this, from 2006 to 2009, the International Finance Corporation carried out the Private Sector Development (PSD) Core Group program designed to build awareness in Bangladeshi government officials about business-related issues. More than 100 mid-level officials, from about 20 different ministries, departments and other government agencies, went through this program. They were joined by a few representatives from business associations.
Over a period of 8 to 10 months, they attended seminars and lectures, went on field visits and did short assignments on resolving business-related issues as part of a learning-by-doing exercise. They interacted with businesses and with experts who work on business-related issues. They got an opportunity to go abroad and see how business-oriented governments work. The presence of private-sector representatives within the group exposed the government officials to private-sector perspectives throughout the process.
Bangladeshi mid-level officials attend a workshop on regulatory reforms while on a study tour to Korea.
Through this program, a reform-minded community of officials started forming. This network soon produced dividends. In one example, a top-down reform to facilitate the reimbursement of duty-drawback claims – a major headache for exporters – stalled in early 2009 after a change in government. Mid-level officials stepped in. They studied the reform, assessed what work was still needed and persuaded colleagues in the middle tiers of government to revive it.
Then, together, they advocated to their superiors for completing the reform. In September 2009, the government issued an order that 70 percent of each claim would be met immediately after submission. The remaining 30 percent would be paid after an audit. This solution, forged by mid-level officials, successfully balanced the twin objectives of expediting payments and minimizing fraud, and thus it met with the approval of government decision-makers.
By helping key stakeholders in government to become well-informed about private-sector issues, and to become better-networked as reform champions, the program created influential “nudgers” within the system who are able to convince both colleagues and superiors to deliver viable local solutions for sustaining reforms.
This community of mid-level officials has also been instrumental in creating “reform ripples.” Thus, when the Office of the Registrar of Joint-Stock Companies became a pioneer in automating processes in the Bangladesh government, the details of that initiative reached the National Bureau of Revenue (tax administration) through this community, which had representatives from both agencies. That triggered an interest in automation of taxpayer services. With 20 different ministries and agencies represented, it is not surprising that quite a bit of intra-governmental knowledge flow was catalyzed.
Measuring mindset changes
Once the program was completed, an evaluation was carried out to compare the attitudes of these officials with those of their peers who had not been exposed to this program and were presumably less aware of business issues. Individual respondents from both groups were presented with a set of statements and were asked if they agreed or disagreed with them. These statements covered four important aspects of a bureaucrat’s mindset: a) views on the importance of the private sector; b) perceptions about private-sector behavior; c) belief in the capacity of mid-level officials to pro-actively bring change; and d) the approach to designing and implementing private-sector-related reforms.
Graph 1 provides a snapshot of the responses, focusing on three statements:
Officials who attended the program agreed with all three statements more strongly than their peers who had not been exposed to the program. They are much more inclined to agree, for example, that many laws are unfriendly to private-sector growth and need to be reformed. They believe more strongly that there is indeed scope within government to pro-actively take these reform actions. They have also developed a more sophisticated understanding of how to approach reform formulation. As the last bar shows, they believe more strongly than their peers that reform priorities and approaches should be identified based on systematic diagnosis, rather than on uninformed gut reactions. Greater awareness of business issues has clearly shaped their views on how to conduct public policy toward business.
The findings captured in the chart, although based on a small sample, are important. They show that, with some effort, the mindsets and attitudes of government officials can be changed, thus enhancing their sense of accountability and the formulation and implementation of business-related policies and regulations. The evaluation exercise also shows that mindset changes can be assessed and captured through well-designed methods.
To sum up, this is the main take-away: Deep inside, many civil servants indeed have a desire to learn and do something good, even if it must be within their limited jurisdictions. A critical mass of latent reformers often exists within the bureaucracy, and those would-be reformers have the potential to become agents of change. The trick is to trigger this latent desire in the middle tiers of government. We do not always need to wait for a high-level champion. Moreover, as was the case with the group in Bangladesh, those in the middle levels today are likely to, one day, become top policymakers.