Public policy during a crisis: 3 Lessons learned from Ecuador’s earthquake

Guest blog written by Sandra Naranjo Bautista

Last October, I was a guest lecturer at Harvard’s Executive Education Program, Budgeting Through Crisis. I talked about my experience as a minister during Ecuador’s 2016 earthquake with Salimah Samji, Director of the Building State Capability Program. Our conversation brought up memories that motivated me to write this blog. You can also listen to the podcast.

I’ll share 3 lessons from my experience dealing with a crisis. I also prepared a cheat sheet with additional information and examples that complement this blog. You can download it here.

Ecuador’s 2016 earthquake

In April 2016, Ecuador was struck by a 7.8 magnitude earthquake, the strongest earthquake in nearly a century. The epicenter was between the coastal provinces of Manabí and Esmeraldas, around 200 Km away from the capital, Quito. At the time I was Minister of Planning and Development. That night, as the reports started to arrive, I could literally feel the weight of the world on my shoulders. The next morning, the scale of damages became clearer and the severity of the situation started to sink in. Homes, businesses, schools, hospitals, and major infrastructure had been destroyed. More than 600 lives were lost, and damages and losses amounted to US$ 3 billion (0.7% GDP).

Lesson 1: Have your priorities clear

Emergencies are unexpected and their effect can surpass government’s installed capacity to respond. There can be confusion about what to prioritize and how to find the required resources. Breaking the process into manageable steps can help to avoid becoming overwhelmed.

Economic Growth in Liberia: 10 Weeks to Remember

Guest blog written by Fred D. Koilor

This is a blog series written by the alumni of the Leading Economic Growth Executive Education Program at the Harvard Kennedy School. Participants successfully completed this 10-week online course in July 2020. These are their learning journey stories.

What if this was a one-week journey? Well, many things about the Leading Economic Growth (Online) course probably would not have been the same. Firstly, I can certainly say that students would not have had ample time to digest the course materials and make adequate appreciation of knowledge acquired during the ten weeks. Secondly, the one week on campus would not have given us the opportunity to reach out to institutions and development stakeholders for vital pieces of information, which helped to shape our understanding of the lecture materials discussed during the course. During the ten-week period, I had the opportunity to meet with two departments within the Central Bank of Liberia (CBL) for data and analysis on aspects of my growth strategy. Thirdly, the span of ten weeks provided enough time for the lecture materials to be sequenced into ten weekly modules. This approach enabled the students to navigate the course in a consecutive order of logic, chronologically sequenced from week one through week ten. More importantly, it made learning a lot easier than it would have been in only a week.

In spite of my economic background, this course offered some key insights, which are not only novel, but also shaped my understanding of economic growth, especially considering the growth challenges of my country, Liberia.

The Scrabble Theory of Economic Development provides a fundamental explanation for why some countries are rich and others are poor. With the help of the scrabble metaphor, the theory explains, in very simple terms, that the wealth of nations or prosperity of economies is determined by the level of societal knowhow, which is represented as letters used to produce products, represented as words. Knowhow, described as what the society knows how to do, is not measured by the depth of knowledge individuals in the society possess, but the diversity of knowledge spread across different individuals at the societal level. With a higher level of diverse knowhow, otherwise known as letters, more complex products, otherwise known as words can be produced, thus increasing the complexity of goods and services produced by a nation. The intuition of this theory explains, to a large extent, why Liberia is economically poor, even though it is enormously endowed with natural resources. Liberia has vast deposits of rubber, iron ore, timber, gold, and palm oil, but these resources are mostly exported to other countries in their raw or unprocessed forms because the population does not have diversified knowhow (letters) to produce products of more complexity (words) that could generate higher export earnings, reduce or cancel out our balance of payments deficit, generate more foreign exchange, increase employment opportunities, spur growth of industrial activities, and improve the macroeconomic outlook. Liberia needs more knowhow to manufacture more complex products from its natural endowments. Local manufacturing will generate more jobs locally, add value to our local products, increase their worth as exports, and positively impact many macroeconomic indicators, including balance of payments, net foreign capital inflow, international trade, etc.

Leading Economic Growth in a World at Risk

Guest blog by Sharon Lewis

BSC 2020: The Year in Review

written by Salimah Samji

2020 was a challenging year. The Covid-19 pandemic and other crises highlighted the failures of governance and the large economic disparities that exist around the globe. The need to build public sector capability to meet these increasingly complex challenges has never been greater.

Our response to these challenges included convening and training policymakers, as well as practitioners, around critical issues of leading through crises, implementing public policies, inclusive growth, and budgeting in times of uncertainty. Drawing on BSC’s past experience running both online programs and blended learning programs, we put our knowhow into action and pivoted two executive education programs to online. We also provided our students opportunities to work on real-world problems as a way to help them build the muscle memory of solving complex problems.

Some highlights of 2020 include:

Trained and engaged with 875 practitioners around the globe (incl. degree programs, online executive education, and direct policy engagements with governments);
Published 89 blog posts;
Recorded 17 podcasts, including a new 4-part series on the 4P model of strategic leadership; and
Activated our HKS IPP community of practice.

Here’s a month by month playback of 2020.

January

BSC collaborated with the Bloomberg Harvard City Leadership Initiative on their Cross-Boundary Collaboration Program, by developing three problem exploratory online modules as part of the pre-work to be completed by participants in advance of their training in New York City. 72 participants across 9 City teams completed these exercises.

BSC Faculty Director Matt Andrews chaired the executive education program entitled, Public Financial Management (PFM) in a Changing World at the Harvard Kennedy School. 36 PFM practitioners participated in this program.

Matt Andrews and Salimah Samji, co-taught the class entitled, PDIA in Action: Development through Facilitated Emergence at the Harvard Kennedy School. This year we invited alumni of our IPP Executive Education program to nominate real-world problems that the students could work on. You can read more about what student’s learned about dealing with uncertainty, the bias towards finding solutions, the importance of different perspectives, iteration, and team-work.

Class photo taken after final presentations in March 2020.

The process of implementing public policies and solving complex development problems requires working in teams. We released a podcast on building effective teams recorded by BSC Faculty Associate, Professor Monica Higgins, Kathleen McCartney Professor of Education Leadership at the Harvard Graduate School of Education.

Developing a Strategy for the Border Region between Australia and PNG

Guest blog written by Geoff King

Having worked as a development professional for the better part of two decades, I was hoping Leading Economic Development would deliver a few additional tools I could add to my well worn tool belt. However, in several fundamental ways it has led to the evolution of my thinking and changed my practice.

Growth diagnostics informed by complexity analysis, have changed the way I view the challenge of economic development. The method, presented using accessible analogies, are powerful analytical tools that can help identify points of entry for further diagnosis/analysis informing economic development strategy. I will never think of monkeys in trees the same!

I was broadly familiar with PDIA thinking. However, applying the approach to a case I am currently working on brought the theory to life. From my experience, project/ program documents have become littered with claims of adaptation, iteration and learning as you go, but the rhetoric rarely translates into reality.

PDIA uses an accessible conceptual vocabulary to provide a systemic, yet flexible, approach to complex (often meta) problems supported by practical tools and processes. While individual case studies demonstrate its success, a meta-study demonstrating its efficacy in a larger population of cases would help in gaining the support of skeptical decision makers questioning case selection bias (picking winners).

Working for the Australian Government in PNG, I lead a team that in week two of the course was tasked with developing a development strategy for the border region between Australia’s Torres Strait and PNG’s South Fly district of PNG.

At its closest point, PNG and Australia are only four km of open water apart. Australia’s per capita GNP is 21 times that of PNG. One of if not the largest disparity in the world for any two countries sharing a border. The gross regional product of the Far North Queensland region, comprised of 260,000 people, is one third of the GDP of PNG, with a population exceeding 8 million. Life expectancy in South Fly is estimated to be around 60 years and maternal and child mortality is extremely high. In comparison, Australia ranks sixth on the global Human Development Index league table.

The region is ethnically and linguistically diverse, but has english as the lingua franca spoken by the vast majority of residents and taught in schools. This common language, to a degree, shapes a regional identity.

Learning to Lead Economic Growth during COVID-19

Guest blog written by Yakama Jones

My country suffered from the Ebola crisis six years ago, experienced negative growth rates and is yet to attain pre-Ebola growth rates. It is in the midst of the recovery process that the current Corona pandemic has struck. There is a general scale down in economic activities, rise in employment, and risks of food insecurity in vulnerable households. This is coupled with existing challenges in human capital development and infrastructure. The introduction of movement and social distancing restrictions in a bid to ‘flattening the curve’ has exacerbated already existing multi-dimensional poverty and social protection issues. Despite some financial support from International Finance Institutions, and donations from the private sector, the economic impact of COVID-19 on our import-driven economy, which we have spent the last couple of years struggling to diversify, would be long-lasting.

Yes, there is a lot of data, albeit high-level projections of the economic impact of COVID-19. The forecasts produced with technical support from the IMF, saw original GDP growth projections for 2020 being revised downwards from 4.2% to -2.2%; Balance of payments worsening from $30.2 million to -$301.3 million; and domestic revenue falling by about 15%. Resources are being diverted towards the health response and the Quick Action Economic Response Programme.

Nevertheless, I am convinced that the implementation of the country’s Medium-Term National Development Plan has slowed down. There is a need to re-evaluate current progress and re-strategise our approach to growth and development to help catch up and accelerate growth, especially for the delivery of His Excellency the President’s Human Capital Development Priority Portfolio. It is within this context and aim to contribute to Post-COVID growth that I enrolled on the Leading Economic Growth Course.

One of the first things I learnt from this course is that the challenge of addressing economic growth and making sure it leads to development is not a complicated but complex problem. Like every country, mine comes with its history, experience, governance styles, natural resource endowments, institutions and humans. As humans, we are already complex beings. Bringing all our knowledge, skills, technology, and other production capabilities together are also complex. The interconnections across the ecosystem are numerous, and so are the possible outcomes. Country experiences and positions are continually evolving. Sometimes it is just not easy to determine what would ‘make the monkeys jump’.

Working with local governments to improve service delivery in Indonesia

Guest blog written by Karrie McLaughlin

When Indonesia decentralized just over 20 years ago, it did so partly on the promise that bringing services closer to citizens would help to improve them. However, at the same moment that responsibility for the provision of basic public services was shifting to local governments, the nature of those service delivery challenges was itself shifting from improving availability of services to improving access and quality. The logistical tasks of constructing clinic and school buildings and hiring nurses and teachers had largely been completed, and districts are now left looking toward the top of the tree at more difficult problems. This blog examines the MELAYANI – Untangling Problems in Improving Basic Services program to better understand the issues local governments face in dealing with more demanding service delivery challenges, and how they can better be supported in doing so.

Importantly, there is a common element to these more difficult problems—they are complex, context-specific and cannot be solved by one-size-fits-all prescriptions from the central government. The root causes of these problems are multi-faceted and frequently vary from one location to another. As such, they require district governments to play a more active role in identifying, understanding and responding to them.

MELAYANI addressed these challenges by working with local governments to solve service delivery problems of their choice, while testing scalable capacity development approaches and learning about locally-led change. Experiences in the three locations (Bojonegoro, East Java; Kubu Raya, West Kalimantan; and Belu, East Nusa Tenggara (NTT)) are presented in this video.

MELAYANI supported local governments to select the problems that they felt were most important, helping to ensure that they were locally salient. By anchoring analysis in a key issue, rather than a particular sector, it allowed both for more actors to be involved and for the identification and mobilization of new resources. In addition, by providing support to local governments to better understand citizen problems, it provided clearer arguments for policy stability and commitment.

Using the PDIA Toolkit to Help a Nonprofit in Philadelphia

Guest blog written by Jamison Hicks

The PDIA toolkit has yet again proven to be both useful and effective in providing organizations with the structural means to continually monitor and evaluate programmatic and organizational success. From a usage perspective, even though the toolkit was created in the US, the majority of PDIA blog posts on implementation seemed to be focused on out-of-country nations. With this simple observation, I thought it right to take advantage of the opportunity to implement the toolkit for a nonprofit organization in the US, namely, Philadelphia, Pennsylvania. Before I get too far ahead of myself, I think it is important to briefly note how I came to learn about PDIA since I am not a conventional student of the program. While interning at World Vision, the Executive Advisor on Fragile States and my personal mentor Jonathan Papoulidis, introduced me to the toolkit. By reading the free online textbook and watching many videos, I was able to gain a sufficient grasp of the concepts and in turn convert theory to an “empiric”.

One Day At A Time (ODAAT), the nonprofit organization where I implemented the toolkit focuses on substance addiction and homelessness in North Philadelphia. This region has some of the highest rates of opioid use and homelessness in the US. The first step taken was gathering all program or team supervisors into one room to diagnose problems using the Fishbone Diagram. One lesson learned; understanding the language of the organization was a necessity. Terms and questions used were not easily understood by the organization. This resulted in having to continuously adjust the approach.

For example, when trying to figure out the overarching problem the community faced, and the causes of those problems, I found it extremely helpful to use the power of stories. To explain the main problems and their causes, I offered the example of murder. Generally, individuals do not murder others without reason. The motive behind the individual’s actions could be childhood traumatic experiences, pain, loneliness, etc. This analogy helped the organization draw comparisons between the example and the initial question asked. Their main or overarching problem was equated to the hypothetical murder, and their related causes were the equivalents to the reasons behind “said” murder. Stories increased the fluidity and effectiveness of the Fishbone Diagram.

4 Ways to Rethink Economic Growth During COVID-19

Guest blog written by Manuela Fulga

The pandemic threatens to erase years of progress made by developing and emerging economies towards sustainable development. The World Bank estimates that between 71 and 100 million people could be pushed into extreme poverty in 2020, increasing the global extreme poverty rate for the first time in more than 40 years.

This realization convinced me to apply to the “Leading Economic Growth” course at Harvard Kennedy School. My objective was to explore and learn practical strategies that countries can adopt in the current context, particularly with limited resources and tight fiscal spaces, in order to protect their population without forgetting the important investments necessary to achieve the Sustainable Development Goals (SDGs) by 2030.

The 10-week online course allowed me to take the key concepts from the lectures and readings and apply them to a specific country, developing a plan for the recovery. It truly felt like a journey, and more specifically like a climbing expedition: professors Hausmann and Andrews were the expert guides, leading the way and setting the trail for us; the video lectures and readings were the manuals we read before starting to climb; the weekly assignments – deep-dives to help us develop our own country strategy – represented key milestones, or the most difficult trails where we had to reflect on the learnings and apply them to our strategy; the feedback of the teaching assistants was our anchor and rope, setting us on the right path to success.

This course opened my eyes to new ways of thinking about economic growth and particularly to innovative approaches that can support governments in identifying game-changing policies. These are the four key takeaways that have forever changed my view on development and economics, and that have the potential to help countries build back better from COVID-19 towards a more resilient future.

Focusing on problems rather than solutions

The dominant theory of change in development is that great governments emerge when a savvy leader takes the opportunity of a crisis to implement the right policies and holds power long enough to drive implementation. In reality, the story is far from simple: it is not about one solution applicable for all, forced down the system by a powerful individual. Development is a complex matter, where many social and economic factors are correlated and interact with each other, causing at times unexpected consequences, and requiring multiple iterations to achieve true impact.

This is why “problem-driven iterative adaptation” (PDIA) is a more hopeful concept than “solution- and leader-driven change” (SLDC): countries do not have to wait for a brilliant leader to change their faith, but can adopt a new approach by engaging distributed groups of agents in a gradual and iterative search for the best policy to drive economic growth. PDIA materializes when governmental agents interact and exchange information in new ways, yielding locally determined responses to economic challenges by constructing and deconstructing bottlenecks preventing growth. This enables governments to transform tangled and complex problems into manageable issues, by revealing the root causes and addressing them step by step, identifying quick wins.

LA FÁBRICA, a strategy for the economic transformation and social inclusion of Renca, a commune in Chile

Guest blog written by Gabriela Elgueta P

Photograph: Cerro de Renca, Matias Peralta @matias.fpl

In the midst of the pandemic, I began this course when Chile had 300 deaths and 27,219 infections. Today, at the end of this process, I have to regret a total of 7,186 deaths and a total of 321,205 infections, mostly affecting the most vulnerable population, amplifying the effects of the social inequality in which most Chileans live.

For 10 weeks I have been inserted in a process of combined learning between the conceptualization of economic growth and global trends with the contrasting reality of a vulnerable commune in the metropolitan area of Santiago that was experiencing a triple social crisis: health, social and economic.

As a reflection of Chile, the metropolitan area of Santiago (RM) is a highly segregated city, both socially and economically, generating a deep inequality in access to public goods and services for the poorest segments of the population, compared to the higher income groups located in the East of the city.

The commune of Renca, with 147,151 inhabitants, is located in the pericentral area of the city, with a multidimensional poverty of 28% widely exceeding the regional average (14.9%), has a population of low socio-economic level, is part of that city that experiences social exclusion and the consequences of the undesirable outcome, of fragmented planning and unequal public investment, carried out by the State itself, affecting the daily life of its neighbors, in the quality of its infrastructure and its equipment, both public and private.

At the same time, at the beginning of the course, I was commissioned by the Mayor of Renca to develop a proposal for an economic development strategy for the commune that would consider a short-term reactivation plan and enabling actions for the medium term. In this way, one of the greatest lessons learned from the course has been the possibility of reflecting on and establishing a different way of developing this strategy.

Often, political times and the daily contingency to which local governments are exposed, demand to be in “mode” of the solutions, however, it is fundamental to understand the complexity of the growth challenges, investing time in better understanding the problem, deconstructing it and identifying the binding constraints. Undoubtedly, the fishbone tool allowed me to visualize a broader framework of the problem and to open multiple conversations with key actors, and it also showed us the enormous gaps in information and robust data for the decision-making process.