Revisiting the "country-specific solution"

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ImageThe mantra of the “country-specific solution” has become fashionable post-Washington Consensus. The consensus has shifted massively against simplistic economic theory that ignores country specificities. In fact, the rebellion has gone way further, encouraging theorists to abandon the search for big solutions, and practitioners to become advocates of ownership and participation -- thus enabling the new experimentalists to feel even more righteous about their focus on the small.

So country specificity is here to stay – we now need to understand better what this fuzzy concept means for development actions. Certainly, in recent years there have been many innovative solutions, and most have taken place at the country level, driven by new technologies (information and communications technologies, for example), or social forms that foster cooperation (group lending,  for example). The list, which actually is not that long, includes the public works programs in Maharashtra, micro-finance in Bangladesh, export processing zones in Mauritius, conditional cash transfers in Mexico and Brazil, capital controls in Chile, and recent SMS -driven social accountability in Kenya or Ghana.

It is likely that technological innovation that is useful to the poor is under-produced globally, and that social innovation is more likely to be produced in open societies, where social activism is dynamic. But it is also true that when these types of innovation occurs, they tends to be imitated everywhere.  They may be invented in specific circumstances, but they have global value and are not, in this sense, country-specific.

Of course, innovations need to be properly adapted to particular circumstances – time and place – before they can be useful. Institutions, politics, culture differences mean that blue-prints of interventions cannot be copied as is. But is this what people mean by local specificity? Perhaps this would be the minimalist description.
The classic tale to support the maximalist interpretation of the idea of country-specificity is that of the opening of China’s agricultural market. But what is unique is timing -- the fact that a particular policy move was politically feasible at that time, and could create large momentum too.

I was reminded of the importance of timing when I visited a West African President last week. He was still fuming after a visit to the port, where he had harangued custom officials against corruption. I offered to help contract out customs, an idea which he really liked. Time will tell if this will work. But it may. The President needs the revenues to pay the teachers before the next elections, and he may be calculating that if he can generate more revenue from customs, he would actually gain more votes, on net, in spite of a loss of patronage. But there’s nothing country-specific or innovative about the idea of contracting out customs – it was implemented in Indonesia a quarter century ago. Again, its timing that stands out -- the same recommendation was included, and ignored, within a long list of recommendations offered in a recent assessment of trade policy options.

A more dramatic example is from my days in Ethiopia, during the famine of 2003. Instead of leaving the response to the food aid community, as in the past, we thought to pull these resources and more into an ambitious productive safety net fund -- cash for poor workers to replenish an environment degraded by poverty and try to avoid future famines. We shamelessly copied the Loess Plateau experience in China. The difficulty was to convince the food donors to play ball. Prime Minister Meles was able to do this  – I doubt that Mengistu or the Emperor, who presided over other famines, could have achieved that. So again, what mattered was timing – the specific context and circumstances -- not the intervention itself.

Development pathways are amazingly unique. When development comes, if it does, it is from a long lucky strike of small moves and not from a short sequence of large moves, because policymakers in poor country can rarely afford to make large moves. Always, there is a large combination of potential sequences, and thus a large set of possible next moves to choose from, each with its own benefits and costs.  The choice cannot be guided by best practice – it becomes an art. It is like the childrens’ game of ‘snakes and ladders’. You rise if you hit a ladder, but you fall if you hit a snake.

It is this search for time/place specific solution that I love most in my work – the possibility of finding myself miraculously at the right time, at the right place, with the right idea.  But let me also confess that I still draw these ideas from a toolbox of not so imaginative best practices. (For a complementary take on country-specific solutions, click here.)



Ishac Diwan

Lecturer on Public Policy

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