Cookie cutters and context: The limits of institutional reform in development

Billions of dollars have been invested to improve the quality of government in developing countries. The evidence shows that the chances of those investments being effective are about the same as that of calling heads or tails correctly. While the quality of government matters, the development community is still somewhat confused about what “good governance” is and struggles to identify ways in which outsiders can help to make governance more effective. Afghanistan is perhaps the most striking demonstration of this: hundreds of billions of dollars and thousands of lives have been spent on rebuilding state capability, yet the likely outcome is a state less capable than it was in the 1970s.

In his new book – “The Limits of Institutional Reform in Development” – Matt Andrews examines the effectiveness of efforts to promote institutional reform (a.k.a. the “good governance” agenda) and sets out an alternative approach. His argument begins with the observation that development organizations such as the World Bank, USAID and the UK’s Department for International Development have tended to promote a standard set of reforms that might look good on paper but which rarely work in practice. According to Andrews, and to other commentators who have made similar points over the last 5 to 10 years, these reforms fail because they pay insufficient attention to the context in which they are applied.

For example, many countries have implemented reforms in their Public Financial Management systems that introduce new accounting practices or procurement mechanisms. In practice, these reforms might help a country receive a higher score on a World Bank rating, but do little to change the underlying processes and power dynamics that determine how resources are actually allocated. Furthermore, such reforms can close off space for the emergence of locally-appropriate ways forward.

After demonstrating the limits to the standard approach to institutional reform – a “best practice” cookie-cutter approach – Andrews sets out a more promising approach which is about fostering the emergence of solutions that fit the local context. In this way, he moves beyond the standard critique of one-size-fits-all development blueprints, offering a way out of the “good governance” impasse and outlining a path for avoiding what Dani Rodrik refers to as “the tyranny of political economy”. The way forward is – wait for it – the Problem-Driven Iterative Adaptation. Not the snappiest of titles, but an extremely promising and practical approach.

Problem-Driven Iterative Adaptation is about “purposive muddling” – local people and organisations focused on specific challenges and working, innovating, experimenting and learning together to come up with solutions that are viable and relevant, and therefore have a chance of working, in the local context. This approach is consistent with the idea – popularised by Owen Barder, amongst others – that development is, and always has been, about adaptation, context and complexity.

One example of this approach is seen in Burundi’s HIV/AIDS Control and Orphans Project. In that project there was a clear focus on the problem, but also flexibility about how best to address it. For instance, anti-retroviral treatment had not been part of the initial project plan, but when such treatment became affordable the plan was revised to take account of this change of context. Not rocket science, but the sort of flexibility that has often been lacking. Another example, on a different scale, comes from Rwanda’s Decentralization Reforms. This initiative was successful, Andrews argues, because it embraced flexibility and incorporated existing practices and norms – around voluntary work, collective action for community development and prioritizing support for the needy – rather than seeking to follow a standard recipe for reform.

Matt Andrews is now hard at work, applying this approach – focus, flexibility and learning – to specific problems, in specific contexts, working with others to craft solutions that work. At ONE, we’re keen to learn more and to think through how ONE’s agenda on transparency and accountability can empower people with the information that they need to craft locally-appropriate solutions to the specific challenges they face.

For more information about Problem Driven Iterative Adaptation see this paper – co-authored by Matt Andrews, Lant Pritchett and Michael Woolcock, from the Center for Global Development.

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