On being and becoming a “development expert”

written by Michael Woolcock

The Three Stages of Expertise by Simon Wardley

Half-way through my HKS course on ‘Social Institutions and Economic Development’ I host a class, usually timed to be given on the eve of spring break, on what it means to be a “development expert”, especially as it pertains to engaging with social institutions. For better or worse, I now have enough grey hair and professional visibility to often have that awkward title bestowed upon me, but while I like to think I have come to know a little about development processes, and probably know more now than I did 25 years ago, the notion of being deemed a development “expert” is a label I try to wear lightly, if I must wear it at all. In this class, I stress that technical expertise is real, rare, its application deeply necessary and consequential, and for certain kinds of development problems, exactly what you need. For other kinds of development problems, however – and certainly the bulk of those problems associated with building state capability – routinely prioritizing the singular deployment of a narrow form of technical expertise as the optimal solution is itself part of the problem (in the sense articulated in the “Solutions when the solution is the problem” paper I wrote with Lant Pritchett back in 2004). 

These days, my preferred metaphorical, ideal-type juxtaposition is between expertise that fills a space and expertise that creates and protects space; this distinction roughly corresponds to, respectively, Theory X and Y in the management literature (as famously articulated by Douglas McGregor in 1960). I like this distinction expressed in the terms of ‘filling’ versus ‘protecting’ space because it broadly reflects the different skills and sensibilities that, to me, are so readily on display in development decision-making – whether in the board room, the online seminar, the policy forum, the diplomatic table, or the village meeting hall. The space-fillers primarily perceive their job, and their kindred colleagues’ job, as one of “controlling” (empirically, epistemologically, managerially) the extraneous “noisy” factors intruding on the space they’ve carefully “identified” so that, into this space, their particular, somewhere-verified “solution” can be deftly but decisively inserted. It’s what Atul Gawande calls the savior doctor model, in which one provides “a definitive intervention at a critical moment… with a clear, calculable, frequently transformative outcome.” I’ve checked the key indicators (‘vital signs’), asked my go-to questions, diligently eliminated various possibilities; I’ve scanned the decision-tree as I understand it, and determined that the highest-probability solution to this problem is X. The faster and more “cleanly” I can do this, the more genuinely ‘expert’ (and efficient and effective) I believe myself to be. Providing such decisive input into this space is emotionally thrilling; it vindicates all my years of elite education and hard work, pays me real money, yields the tantalizing allure of future successes at grander scales with higher stakes, and bestows upon me tangible professional accolades and high social status. Like nature, I abhor a vacuum, so I’ve confidently stepped in where the “less rigorous” fear to tread. I’m trained and socialized to think counterfactually, so I can’t help but indulge my vainglorious ceteris paribus fantasy that, but for my presence at that moment, things would have turned out so differently… Heck, I’ve changed history!

Continue reading On being and becoming a “development expert”

Using PDIA to tackle off-budget spending in Liberia

Guest blog by Alieu Fuad Nyei

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Like many other African countries, budget execution is a huge challenge in Liberia. Last fiscal year (July 2016 to June 2017), off-budget spending was over 15% of the approved budget while in-year budgetary transfers have been on the increase, significantly undermining the credibility of the approved budget. This huge ratio of off-budget spending led to cutbacks in on-budget programs in areas such as health and education, either delaying or reducing the scale of medical and educational supplies to schools and hospitals across the country. Efforts over the years to address this problem have failed mainly because they focused more on improving the quality of the budget document and less on the root causes that have allowed this problem to continue unabated. Using the Problem Driven Iterative Adaptation (PDIA) approach, we started a 7-month journey to better understand and tackle the problem of spending entities (SEs) not executing their budgets as planned. Continue reading Using PDIA to tackle off-budget spending in Liberia

Getting Real about Governance and Governance Indicators

written by Matt Andrews

Many have asked me how I personally think about governance and assess governance when I visit countries. I have a new working paper that presents my thoughts on this. These thoughts manifest in what I call an ends-means approach to looking at governance.

I focus on ends as a starting point in looking at governance because these reflect the revealed functionality or capability of states—what they can do. I think that revealed capabilities and ends are ignored in much of the current governance discussion because of a bias towards questions about form and preferred means of governing. The bias manifests in reform programs that introduce commonly agreed-upon and apparently ‘good’ means of managing public finances, structuring regulatory frameworks, procuring goods, organizing service delivery, managing civil servants, and much more. The bias is even reflected in views that governments should be transparent and non-corrupt and have merit based hiring procedures. I am sure we all want to be in governments that look like this, but do appearances matter as much as action? And do these appearances always promote the action needed from governments, especially in developing countries?

In promoting a form based governance agenda (of what we want states to look like), I think we (as a community of governance observers) often forget that governments exist to do and not just to be. We thus focus on the means of being rather than the product of doing. This bias leads to governance indicators and reforms that emphasize perfection of means, often failing to make a connection to the ends or even clarifying which ends matter. (Or allowing for the idea that different ends might matter in different places at different times or that different ends might justify and even warrant different means in different countries or even sectors in countries). This is particularly problematic in developing countries where governments are only five or six decades old and are still defining and creating their ends and their means. Approaches to governance should help in this process of defining and re-defining, but this help should start by emphasizing ends—what governments need to do to promote development for citizens—and then think about means—how governments could do such things.

The tension between ends and means in the governance discourse

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The first section of this new paper makes the argument for focusing on ends and then means. The second and third provide details on the ends and means I typically look at; identifying seventy of these to get as full a picture of governance as possible. A fourth section then discusses why I do not use stand-alone, hold-all indicators of governance to present this picture. The next section introduces my own way of actually looking at and analyzing governance data: Using comparative, bench-marked dashboards and narratives instead of stand-alone indicators. I build a dashboard example to show how it allows a view on the multi-dimensional nature of governance and fosters a conversation about strengths, weaknesses and opportunities in specific countries.

Here is what it looks like. For details you will have to read the paper, but the idea is that one picture—made up of 70 pieces of data—illustrates how a specific government compares with others on important ends and means. The variation in colors reflects the variation in governance characteristics and performance, which is commonly evident in countries. Hold-all governance indicators commonly fail to show this variation, averaging it out instead of revealing it as key to getting a full picture of the governance situation in any state.

Example of a Dashboard

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I don’t intend for this to be an academic treatise, but offer it as my personal viewpoint on an increasingly important topic. Think of it, perhaps, as an exercise in ‘thinking out loud’. As such, the paper is a cover-all piece on my views about this subject to date, which one will see in the references to my work, including articles, blog posts, formal figures and tables and less formal cartoons. Hopefully the totality of this work provokes some thinking beyond my own. In particular, I aim to contribute to the discussion about including governance indicators in the post 2015 development indicator framework. The final section of this paper offers specific ideas in this regard, intended to build on already-important contributions.

 

 

 

 

The Chief Minister Posed Questions We Couldn’t Answer

Guest post written by Jeffrey Hammer

I was recently at a conference in Lahore, Pakistan sponsored by the International Growth Centre where the keynote address was given by Shahbaz Sharif, the Chief Minister of the province of Punjab, Pakistan (100+ million people). While fun to see old friends and colleagues, the conference was a little depressing in the way it reflected the state of the development economics profession.

The Chief Minister posed serious questions that have traditionally been the bread and butter of the economics profession. Unfortunately, we are not even trying to answer them any more. The specific question was “Should I put more money into transport? Infrastructure (power, roads, water)? Law and order? Social services? Or what? And where am I going to get the money?” What questions could be more solidly part of the core of economics than these? Unfortunately none of these were even remotely the focus of the “evidence-based” policy making discussed.

Almost all of the cases analyzed were  single, simple policy “tweaks” that were, first of all, isolated from the broader market context in which they occurred and, second, had no conception of opportunity cost – what we would have to give up to pursue these things? We had an answer to “how to improve a public food distribution system” but even with a precise answer (to whether a tweak would work) we had no idea whether the substantial amount of money funding such a system is a good idea. Maybe the Chief Minister would be better off improving education or road networks or police or rural electricity. Some of these alternative policies could have more impact on food consumption than food distribution if we thought about how the world worked. Getting food to market securely (roads, better cold storage, trustworthy police and safe roads – this is Pakistan, which no one seemed to notice) may increase food availability much more than any tunnel-visioned food program Or not – maybe the food distribution system is better. We just don’t know. And none of us “experts” are trying to find out.

On spending priorities, what we need is the old fashioned notion of opportunity cost. “Evidence” now is “did something work?” meaning did it have any effect at all? or “can we get it to work a little better?” But the real question in such a resource-constrained economy is “does it work well enough to take money away from the power plant it prevented or any other thing money could have been used for?”  Or even, “is it better than leaving the money in private hands by not collecting the taxes to pay for it?” Besides not knowing the marginal welfare cost of taxation (anyone remember that?), we forget that poor people use their money for food, so the first-order effect of tax revenues is to make poor children hungrier. Is the benefit from secondary education or bicycles or the fertilizer subsidy so good as to impose this cost on these children?  We don’t know who ultimately pays taxes (when wages, for example, respond to indirect taxation) but it is likely that poor people, the majority of the population, pay at least some substantial share. And we don’t know how badly distorted the tax system is – in its very structure, not just in its administration. The incidence and efficiency loss of the whole structure of taxation are the first order answers the Chief Minister needs. No one studies these anymore.

When someone says “we should have more “X” because we have evidence that it works”, the response should be “compared to what?” What should we cut in order to promote your particular interest? My hobby horse these days is more sanitation in South Asia. I should have to defend it against (at least) a few alternatives.

It’s not like we have no basis for making this comparison. We usually try to determine which things the private sector (i.e. almost everyone – farmers, bicycle manufacturers and repairmen, truckers, shopkeepers, halal sausage casing makers) can be safely relied upon to produce, where it goes somewhat wrong (exactly how bad are private schools or doctors?) and where it is a flaming disaster such that the government is utterly indispensable. While we’ve all drawn the gap between public and private costs (or benefits) to help us talk about optimal Pigouvian taxes, when was the last time anyone tried to measure this one, central concept for valuing interventions in developing countries? Or in developed countries, for that matter? We look at enrollment rates (or even learning rates) but never ask “how much is this secondary education worth, and how much of that isn’t captured by the student?” Further, since there is no reason to think the number is the same in any two places, even if there were a couple of such studies, it wouldn’t make up the bulk of what we call policy-relevant research. And it’s not like it’s easy to do so we can’t just say “let the practitioner-types do the (routine) calculations”. There is nothing routine to it at all.

 In the conference, several research projects measured an effect (not an externality, not a welfare loss – just an effect) that could well be part of an almost completely private good with no serious market failures to speak of. Can it really be the case that date exporters genuinely didn’t know that packaging for export was available (and wouldn’t a phone call to either the exporters or the marketing wing of the packaging producers suffice)? Did football producers really need to know a better pattern for cutting pentagons out of leather when mechanized stitching (as the commentator on that paper noted) is swiftly changing the entire production process worldwide? Will the competition that is currently mechanizing allow firms to exist even with the 10% higher profits that a better pattern enables? And are policy makers (even with Ivy League economists as their advisors) really going to make better decisions than those producers or, much more importantly, the competitive forces in the economy?

My defense of my promoting sanitation is that I contrasted the value of health via providing public goods (sewer systems in cities) to spending on publicly provided health care (a rival and excludable service – I’m avoiding the “p” word, this being the sub-continent). I don’t know if I’ve cleanly identified the effect that I purport to have measured – whether open defecation without sewage in slums damages the health of its residents – but it makes sense, is tied to most peoples’ notions of the nature of public and private goods, and gives some evidence of an externality. One reason to avoid specifying which service should be sacrificed is to avoid fights. Even fairly convincing evidence that publicly provided healthcare is of questionable value can provoke uncomfortable arguments. But not even mentioning the opportunity cost of a proposed policy is irresponsible.

On collecting more taxes: this is, of course, a core government activity. Any way we can efficiently get more money into government coffers to support critical public services is to be applauded. But what we were treated to was a two-year experiment on something that looks like tax-farming (and indeed, was titled as such). Higher powered incentives to collect taxes? When you’re being watched?  Tax inspectors didn’t know an experiment was underway? Even if it was double blind (which it was not), can a two-year project using currently recruited tax inspectors (i.e., those that entered public service expecting to get a salary without having to work too much) anticipate what happens in equilibrium when everyone figures out how to make money from these high-powered incentives? That is, core government service or not, there is a labor market in which the people who this experiment purports to study operate. It is the nature of the long-run equilibrium of that market that is the proper level of analysis for policy purposes, not the behavior of the particular individuals who happen to have the job at present. As the commentator on that paper noted, the proposal looked like the medieval version of tax farming. But that scheme always deteriorated in time (longer than a two-year experiment would tell us) into an ugly system that brought down rulers.

The Chief Minister is a committed and capable man. With the recent elections behind him, he has the opportunity to actually accomplish things. He deserves much better support than we’re giving him.

This post originally appeared as a World Bank Blog.

You cannot Juggle without the Struggle: How the USA historically avoided the “Tyranny of Experts”

written by Lant Pritchett

The period between the end of the American Civil War and the end of World War II saw a transformation of America with the rise of dominant large organizations in both the private economy and public life. The economic historian Alfred Chandler’s in The Visible Hand and Scale and Scope documents the rise of “managerial capitalism” with large economic bureaucracies in the railroads, oil, steel, automobiles, electricity, and telecommunications establishing new foundations of a productive economy.

Similarly, in nearly every domain of engagement the organization of the state became more centralized, more bureaucratic, more centrally controlled. Or, as this is typically described, the “Progressive Agenda” caused governance to become more “professional” more “scientific” more “efficient” as bureaucratic hierarchies displaced localism and Ostrom-esque “polycentric” systems.   Historians of the US tell this story about many fields and organizations.

Samuel Hays Conservation And The Gospel Of Efficiency: The Progressive Conservation Movement, 1890-1920 is summarized as: “Against a background of rivers, forests, ranges, and public lands, this book defines two conflicting political processes: the demand for an integrated, controlled development guided by an elite group of scientists and technicians and the demand for a looser system allowing grassroots impulses to have a voice through elected government representatives.” In the end the “modern” organizations of management of publicly owned lands—but only after having to struggle to prove the improved effectiveness of their methods against continued powerful opposition.

Daniel Carpenter’s The Forging of Bureaucratic Autonomy: Reputations, Networks, and Policy Innovation in Executive Agencies, 1862-1928 narrates the rise of (among other organizations) the “modern” Post Office as a centrally controlled civil service bureaucracy. It had to struggle itself into control of the post against powerful political forces and local resistance that supported the former Jacksonian system of locally appointed postmasters.

Education historian David Tyack’s The One Best System: History of American Urban Education tells of the rise of the urban school system as a “modern” and “scientific” organization that struggled—with mixed success—to consolidate and control the myriad of locally controlled schools and school districts. American began the century with 150,000 school districts, down to around 15,000 today.

Hernando de Soto, though not an academic historian like the others, tells “The Missing Lessons of US History” in chapter 5 of his Mystery of Capital. He shows that property rights in the US as the country expanded westward were a constant struggle between local systems of de facto recognition of use and attempts at de jure top-down ordered and rational systems. In this struggle the de facto usually won politically and the law changed to acknowledge the reality, rather than vice versa.

In each of these cases narratives of “scientific” and “efficiency” and “rational” and “ordered” and “modern” were used to justify placing ever greater power into the hands of centralized organizations. But these organizations had to struggle against counter-claims of people and grass-roots movements and local politics who knew they were losing power. Westerners strongly resisted the claims of the “conservation” movement that they should be given consolidate power over land use. Parents resisted being sidelined in their control of the schools.   People with de facto usufruct rights over land resisted the formal legal claims against their control. Local postmasters resisted the increasingly central control of the post office.

In this struggle they used their rights as citizens for a variety of modes expression of opposition and their voice in democratic processes. The result was a messy, protracted, conflicted struggle.

I take one of the main points of Bill Easterly’s new book The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor to be that the mainstream “development” process underestimated the necessity of the struggle. That is, it was thought that “modernization” could be achieved as a purely technical exercise in which the demonstrable successful organizations and institutions of the “developed” world could be transplanted to other countries. Why should the newly sovereign country in the 1950s and 1960s “struggle” towards an effective Post Office when there exist working models throughout the world (US Post Office, Royal Mail, Bundespost)? It was believed that “modern” police forces, schools, roads, courts, forest services, water companies—the organizations that make a state capable and deliver what the state promises—could be created without all of the bother of citizens being empowered to not just vote, but also resist, to subvert, to complain, to protest, to organize and agitate.

There are a variety of conjectures as to how and why this possibility of “transplantation” through development could actually, in some instances, make things worse.

One, organizations could gain legitimacy simply from mimicking the forms of rich country organizations without their function. Sociologists of organizations call this “isomorphism” and describe the pernicious impacts of allowing organizations to attract support without having to demonstrate superior functionality.

Two, the availability of resources from development agencies who were more familiar with and expected to see “modern” organizations meant that accountability to citizens could be attenuated.

Three, by changing the nature of the struggle the “experts” were not forced into a process of testing their ideas and notions and ways of “seeing like a state” against direct and immediate feedback—and push back—from local realities. Mistakes of mismatch between what the “experts” recommended and the reality of what could work in the local context could be larger and persist longer when insulated from the test of functionality.

But you cannot juggle without the struggle. The fact that someone else can juggle, and can show you how to juggle, and describe juggling in great detail does not mean that functionality is transferable. By changing the nature of the struggle many developing countries are stuck with state organizations that just cannot juggle.