How can donors facilitate the development of better governance institutions in developing countries? This paper from the Brooks World Poverty Institute analyses current development practice in institution-building through two case studies in Cambodia and Indonesia. It argues that traditional, linear, technically-driven approaches are unproductive due to the inherent unpredictability of socio-political processes. Donors should instead embrace the concept of ‘interim institutions’ as a means of promoting equitable political contestation and facilitating positive and sustainable change.
While there is broad agreement within the development field on the importance of ‘good governance’ and other institutional factors for improving development outcomes, understanding of how to realise these goals remains elusive. At present, most donors favour policy and project interventions that aim to quickly achieve the ideal institutional ‘end-state’ which supposedly embodies the characteristics of a well-governed, fully functional state. These interventions enable donors to adopt technical, expert-led approaches in which political and economic development is standardised and more easily managed.
Evidence from developing countries, however, suggests that this approach is flawed. Governance and legal reform are inherently adaptive development issues, ill-suited to technical interventions. Examination of two case studies, from Cambodia and Indonesia, reveals some broad findings that illustrate the deficiencies in current development practices:
- Institutional design is a deeply complex problem, composed of technocratic, standardised, and idiosyncratic elements—these idiosyncratic elements are unknown and unknowable ex ante, undermining overly technical approaches
- Identifying and articulating a problem is in and of itself a political process, involving negotiation and contestation—any ‘answer’ must emerge from these processes, (‘good struggles’), and generate sufficient political support to sustain itself against inevitable opposition
- Institutionalisation is not necessarily about convergence—even among western countries variation abounds; how states are structured and how they function is determined by the historical and political environment of the country.
Moving away from this rapid, linear, technically-driven approach, a potentially viable alternative is a more process-oriented approach that focuses on building ‘interim institutions’. These are formal or informal institutions that have the potential to engage with and incrementally transform the political economies within which they exist. They are likely to be hybrid in nature, based on local knowledge but underpinned by the principles of rule-based, transparent, and accountable decision-making.
Rather than seeking to transform developing country politics rapidly from the outside, donors could support the creation of spaces where equitable political contestation can occur, enabling institutions to evolve and develop organically and sustainably. Some strategies for facilitating this transition include:
- Find ‘cracks’: Identify and exploit cracks in the infrastructure of power, capitalising on potential avenues of reform
- Manage conflict: All interventions have the potential for conflict—providing procedures and spaces for negotiating and managing this conflict is critical
- Craft equitable ‘rules of the game’: Institutional design that reifies existing inequalities or advantages one group over another is unlikely to succeed—good underlying principles enable better transformations
- Harness collective action and diverse view points: Provide opportunities for marginalised groups to participate on equal footing to ensure both diversity of opinions and equity of access
- Recognise the importance of policy entrepreneurs and local translators: People are key to socio-political change — policies need champions and advocates who can bridge the gap between groups and opinions.