MANAGING SUCCESSFUL GOVERNANCE REFORMS

1. MANAGING SUCCESSFUL GOVERNANCE REFORMS LESSONS OF DESIGN AND IMPLEMENTATION PREM learning week presentation Mark Robinson

2. Key reform areas • Fiscal management and tax administration • Anti-corruption • Civil service reform • Innovations in service delivery

3. Conceptual framework • Formal and informal institutions shape incentives for reform • Political commitment to reform depends on assessment of potential risks and benefits • Political risks: loss of patronage resources and erosion of public support • Political benefits: electoral dividends from improved economic performance and service delivery

4. Political influences on incentive structures • Political institutions: Which institutions, whether part of the state apparatus or informal, influence reform implementation? • Connections between state and society: How to mobilise the support of political parties and civil society? • Political agency: How to package reforms, moderate scope and pace, identify levels and arenas for reform

5. Structural features of politics and society • Institutional depth: longevity, adaptability, and legitimacy of formal and informal institutions that shape pacts and bargaining strategies • Composition of governing elites: resistance to reform efforts and pro-reform coalitions • Composition of civil society: scope for building new reform coalitions and sources of political support to offset opposition

6. Design considerations (1) • Sequencing, timing and pace of reforms: speed and ambition versus gradualism and incrementalism • Technical capacity: capacity constraints blunt reform impact, autonomous institutions can foster implementation but undermine bureaucratic commitment

7. Design considerations (2) • Decentralisation: devolution of responsibility can deflect reform but encourage innovation and competition • Monitorability of reform: commitment to reform contingent on openness to public scrutiny and legislative oversight

8. Key findings • Political agency and political institutions • Formal and informal institutions • Timing and sequencing • Containing resistance and cultivating support • Devolution to local governments • Composition of governing elites • Technical capacity

9. Political agency and political institutions (1) • Political leadership: vision of potential benefits, willingness to consider reform options, reliance on technocrats • Political commitment: importance of visible political commitment, sustainability more vulnerable

10. Political agency and political institutions (2) • Political feasibility: severity of crisis (war or fiscal crisis) creates space for reform • Political longevity: durability of political institutions enhances credibility and predictability, but creates opportunity for entrenchment and backsliding

11. Role of formal institutions • Formal institutions place boundaries on behaviour of bureaucrats and politicians • Institutions govern the extent of reforms: wholesale change versus within institution change • Insulation of policy makers and institutions does not prevent predation • Exclusion of organised groups weakens oversight and accountability

12. Role of informal institutions • Clientelism generates reciprocal expectation of patronage in return for support for reforms • Influence of political culture on bargaining and accommodation in democratic contexts • Variable influence of ascriptive factors: caste and religion not significant in governance reform in India, but kinship and family important determinants of reform outcomes in Uganda

13. Timing and sequencing • Incremental approaches work well in democratic political contexts, to build up support and mitigate opposition • Cumulative reforms can have a significant impact over time e.g. fiscal pact in Brazil • Incremental reform can limit wider impact and inhibit more difficult reforms • Long term time horizon compatible with rapid implementation of far-reaching reforms where vested interests are not threatened

14. Resistance and support for reform • Limits to political mobilisation increase scope for reform implementation • Fragmentation of political opposition minimises resistance and maximises support • Successful reforms generate benefits for many or do not threaten vested interests • Difficult structural reforms require incentives, compensation of losers, and strong leadership to succeed • Improved pay and conditions and positive customer feedback create reform incentives

15. Devolution to local governments • Devolution to lower levels of government for reform implementation may not deflect opposition • Sub-national governments can take the lead in governance reform e.g. states in India and municipalities in Brazil • Centralising initiatives can be effective in ensuring elite accommodation to reform and overcoming sub-national resistance

16. Composition of governing elites • Changes in governing elites are not a critical factor in successful outcomes: rural landowning interests unaffected by governance reforms in India • Influence of traditional sub-national elites can be reduced by reform e.g. fiscal responsibility law in Brazil

17. Diversity and depth of civil society • Limited engagement in reform design but gradual opening up to greater inclusion positive for reform in India • Citizen engagement in governance reforms increases with higher literacy and active media • Mobilisation of organised citizens builds support for reforms in India • Limited civil society engagement in implementation of governance reforms in Brazil and Uganda

18. Technical capacity • Successful reforms require high levels of bureaucratic capacity to ensure effective implementation and ownership • High degree of technocratic involvement in design and implementation in Uganda, but not conducive to broader participation • Use of private sector advice and technical expertise in reform implementation in India

19. Key success factors • Type of reform: incremental reforms produce modest benefits but can have cumulative impact, generate support and stronger prospects for sustainability • Political regime: political commitment is major determinant of successful implementation, but needs to be broad based for sustainable reform

20. Key success factors (2) • Technical capacity: significant determinant of successful design and implementation • Paradox of state capacity is that it takes time to build up and develop; weak states lack capacity in initial stages of reform • Insulation of technocrats is conducive to rapid reform but mitigates accountability and oversight

21. Implications for analytical work • More systematic evaluation of country level and sub-sector governance programs • Further comparative research in specific reform areas e.g. civil service reform • Political feasibility analysis for identifying risks and opportunities at country level

22. Importance of regime type • Consolidated democracies: incremental approach to minimise opposition and build support • Unconsolidated democracies: limited scope for PSG reforms, focus on political institutions • Partial democracies: strong commitment and incentives can be conducive to reform • Authoritarian regimes: lack of political commitment and weak institutions not conducive to reform

23. Development policy lending • Stronger country ownership conducive to ownership and willingness to take risk • Policy-based lending premised on greater participation, consultation and oversight • Trade-offs between accountability and efficiency gains in incremental reforms • Focus on long-term structural changes over an extended time frame vs. short-term, high impact reforms

24. Technical assistance and investment loans • Mix of lending instruments tailored to country conditions is an optimal approach • Investment lending required to address priority governance areas that may lose resources from budget support • Strengthened skills in political and institutional analysis in country offices