It’s now common dogma among development experts that institutions are central to improving the welfare of the poor. And we now also have a better understanding of the types of policies that are conducive to development. There is also agreement that institutions must deliver on their responsibilities for countries to succeed: tax authorities should be able to raise resources effectively; and executing agencies deliver expected services or outcomes. However, after decades of reforms and billions spent in aid, success stories of institutional development are few and failures all too common. It is like a re-run of the movie ‘Source code’ but unlike the movie there are no solutions and no happy endings.
Government capabilities can’t be imposed. Big structural and permanent changes cannot be introduced exogenously. Instead, government capabilities are the equilibrium outcome over time of endogenous choices by key political actors. Still, there is plenty of room for helping governments to develop. Here are some ideas.
Public services don’t work in all sorts of ways. Many service delivery problems are knowable and understandable; more knowledge enables those who care to come up with better solutions. But there can always be too much of a good thing.
In a recent post on the IMF-PFM blog, I highlighted the relevance of politics in the budget process. In particular, I point out that by understanding the role of politics in the budget process and the role of the budget for political bargaining, it is possible to understand why, when and under what conditions public financial management (PFM) reforms may work or not. Moreover, because of the interrelation between budget and politics, the post emphasised a property of PFM reforms that is usually neglected: PFM reforms can have a role beyond the budget process into the confines of politics. The fact that politics matter was one common argument heard at the 2013 CAPE conference, from academics, practitioners and policymakers alike. Another salient topic discussed was the role of government capabilities for making PFM reforms work. This post tackles the latter.
Christmas smorgasbord: Collective action failures, Aardvark attacks and why PDIA may be good old practice but a poor new fit.
If, like me, your mind is now turning more to Christmas parties, you may want to just jump to the end of this piece and watch the 30 second video clip. This will give you a profound new insight into the importance of overcoming collective action failures. And you may also want to forward it to friends that don’t share your fascination with that topic but would enjoy a very funny cartoon about an Aardvark. It might even go viral.