Public sector institutional reform faces some fundamental challenges. Successful reforms are not only about technical capacity and knowledge. Improving public sector effectiveness is fundamentally political and shaped by the political settlement (Bukenya & Yanguas, 2013). Reforms have to deal with complex political and social contexts including corruption, patronage, and political capture. Thus PSIR initiatives need to take politics seriously and move from ‘thinking politically’ to ‘working differently’ (Rocha Menocal, 2014). Moreover, we know that fundamental changes to institutional features (staff capacity, organisational culture) take decades if not centuries (Lange & Rueschemeyer, 2005). This poses challenges for short term political opportunity spaces as well as donor funding.
Within these broad challenges, the following main components of institutions need to be taken into account while considering reforms:
|Priorities||Has government identified its priorities amongst its desired outcomes and allocated resources accordingly? Are allocations adhered to? What are the core policy and decision making structures? What levels of expenditure can be afforded in the short, medium and long term? What mechanisms are available to ensure that poor people’s views are taken into account? Who sets priorities and in response to what interests? Can priorities be translated into resource allocation?|
|Policies||How effective are the core policy and decision making structures and processes? Are they based on evidence and data? What is the availability and quality of data? What is the impact of policy changes on the poor?|
|Incentives||What is the current formal/informal incentive structure? Who benefits? What are the incentives for state structures to deliver services; for the bureaucracy to attract and motivate staff; for the development of national skilled human resources? What incentives, if any, are there to modify behaviours of key players in support of the desired outcomes? What incentives are there to review and improve performance?|
|Rules and Law||Are formal rules and laws respected? Are there informal rules leading to corruption, patronage, victimisation, exclusion? Can rights be enforced through law? Are rules and law subject to political interference? Are there informal systems of dispute resolution?|
|Culture||National attitudes to risk, hierarchy, incentive systems, participation, donor interventions, etc. Willingness to engage in consultation. Responsiveness to information, Issues of community and individual identity.|
|Drivers for Change||What are the key drivers for change? Social, technological, economic or political? Are there sponsors or champions for reform? Extent of their power and influence. Level of commitment to reform. What benefits or incentives do they have to push a reform process? Level of political stability. What are the implications of the current electoral cycle?|
|Voice and Partnership||What mechanisms and structures are in place to promote the concerns of poor people? Awareness raising, capacity building, joint manage of e.g. forestry or water resources, participatory budgeting? How effective are they? What voice do people have to hold delivery organisations to account? Report cards? Public audits?|
|Source: DFID, 2003b, p. 4|
Lack of political commitment is a common explanation for public sector institutional (or ‘governance’) reform failure. It can be linked to factors such as reform fatigue, patronage networks and a lack of financial incentives (Scott, 2011, p. 18), as well as aims such as staying in power and satisfying elite supporters. In such contexts, increasing political participation could simply enhance the power of local elites (Brinkerhoff & Goldsmith, 2004; Unsworth, 2010, p. 40; DFID, 2011b), while women are often excluded from male-dominated patronage and power networks (Gender Action, 2013).
Political commitment, in particular to higher order objectives such as independence or statehood, can open up space for reform. For example, a cross-country study of public financial management reforms in post-conflict situations concluded that a lack of incentives to pursue reforms was often the most critical bottleneck, more so than weak capacity (Fritz et al., 2012). Unsworth (2010) and Fritz et al. (2012) recommend thinking of political commitment in terms of incentives for and against reforms; this can help donors calibrate reforms to the available space and engage strategically. Political commitment is not static – it fluctuates and can be influenced by external actors and factors.
A key question relates to assessing political commitment. Brinkerhoff (2007, p. 115) proposes a framework of six elements to assess political commitment and ownership of reforms: a) whether impetus for change is external or internal, b) whether domestic actors have been the drivers behind assessing policy options, outcomes and costs/benefits; c) the extent of consultation with stakeholders; d) public commitment and allocation of resources; e) continuity of effort and commitment of resources and planning for the long term; and f) whether processes for adaptation and learning have been established.
Public sector institutions operate within systems of formal and informal norms. Informal norms and institutions are pervasive and can have negative (Collins, 2002) or positive impacts on development outcomes (Booth, 2012; Colignon & Usui 2003). Public actors are subject to both formal and informal incentives, and in some instances, informal norms can trump formal incentives (Helmke & Levitsky, 2004). In developing countries clientelism and patronage politics are particularly pervasive (see next section), but other informal norms and organisational cultures can be equally insidious. Helmke and Levitsky (2004, p. 726) cite the example of Brazilian state law which prohibits extra-judicial executions, but informal practices hint that this is encouraged, making police officers engage in such killings. Strengthening the law or enforcement policies under such circumstances is unlikely to have the desired effect.
One result of not taking informal institutions into account can be ‘isomorphic mimicry’ – when governments copy formal rules without changing implicit rules and norms (Pritchett et al., 2010). Eventually the formal rules collapse without informal institutional foundations (Andrews, 2013).
Honduras: Institutional form without function
From 1988 onward, Honduras engaged in 59 World Bank projects involving institutional reform:
- Projects produced laws on banking, trade and privatisation in the early 1990s and established regulatory, procurement, and concessions agencies.
- The late 1990s saw new civil service laws, privatisation decrees, downsizing, the creation of public financial management information systems, the formalisation of civil service payment systems, and wage bill controls.
- Projects in the early 2000s bought laws on civil service and procurement, Public Financial Management, competition and external audit. A treasury single account and multiyear budget was introduced; information technology capabilities improved; the audit court was revamped; and new strategies, procurement mechanisms, and results-based management systems were adopted.
- Between 2004 and 2008, the government revamped its civil service laws again and introduced anticorruption and transparency regulations, an anticorruption agency, participatory budgeting, merit-based hiring and performance-based compensation.
- Privatisation continued throughout the period.
Most of the World Bank projects were considered successful. During this time, however, Honduras’ Quality of Government scores dropped, and GDP per capita grew at about 2 per cent per annum, much less than the average for other lower-middle income countries. In 2009, the President was ousted in a coup.
The large set of reforms cost over USD 700 million. They may have made the Honduran government look better, but apparently fell short of improving governance enough to register in external indicators or to prevent political upheaval.
Source: Andrews, 2013, pp. 24-25
Clientelism is the exchange of goods or services for political support. Mungiu Pippidi (2006, p. 87) highlights how in clientelistic societies, access to public goods is predictable but unequal, and is based upon the closeness of groups to centres of power. Under such contexts, reforms need to tackle the pervasiveness of clientelism, rather than its manifestations within specific organisations (Mungiu Pippidi, 2006). Clientelism can undermine reform efforts: Leftwich and Sen (2010) provide an example from India where organised interests blocked the implementation of the Forest Rights Act 2006 to protect their political power (and, possibly, rent-seeking abilities).
Clientelistic arrangements may also have hidden positive effects, such appeasing elites, integrating people into the state, and giving poor people access to resources. Booth (2012, p. 26) finds that with divided societies or weak administrations, clientelism may be a pragmatic way of ensuring investors have access to resources, basic property security, and political stability, and of limiting corruption outcomes.
The challenge for international donors is how to differentiate clientelistic institutions that serve, or at least do not undermine, the majority’s needs from similar-looking institutions that harm the majority (Brinkerhoff & Goldsmith, 2004, p. 165). One case study is documented by Schneider and Zúniga-Hamlin (2005) who found that advancing local people’s rights in rural Peru was more successful when it adopted a pragmatic approach to the prevailing clientelism.
Advancing local people’s rights in rural Peru
In Peru in 2002, members of Regional Coordinating Councils (CCRs) contested resource distribution to regional presidents’ patronage networks. In the CCRs, local mayors and civil society organisations pressed for resource distribution based on the shared needs of rural municipalities. To organise these efforts, one district mayor took the lead in several neighbouring rural districts. To build up his coalition, he promised to divide the spoils among his supporters (including the Women’s Neighbourhood Committee and the Association of Mothers).
Thus, a clientelist leader used rights norms to leverage resources. However, his efforts distributed resources to previously excluded areas and broke regional leaders’ monopoly on power.
Exclusive public sector institutions can perpetuate socio-economic disadvantage and poverty through shaping policy priorities and implementation. They can lead to discrimination against socially marginalised groups in accessing services. Institutions can compound disadvantage in cases of groups who face multiple exclusions (e.g. a disabled, low caste, poor widow in a remote location).
Inclusive institutions are characterized by being universal (offering equal access and entitlements to all); non-discriminatory (based on merit) and can be targeted to address historical disadvantage (e.g. affirmative action) (see Inclusive Institutions Topic Guide).
A gender perspective is key in institutional reform. There is enough evidence now to suggest that a gendered approach is developmentally beneficial. Potential positive outcomes include increasing uptake of services by everyone, providing positive role models for women, improving services for women, making policy responsive to women’s needs and changing the organisational culture to be gender friendly (Joshi, 2010). However, attempts to increase the proportion of women in public organisations have had limited success (Zafarullah, 2000), and increasing the number of women in positions of power is not sufficient to achieve women’s empowerment (Tinker & Zuckerman, 2013). A ‘critical mass’ is required to change organisational cultures.
Understanding the proportion and different roles of women and men involved in reform processes and related collective action matters for effective development (Gender Action, 2013). Women’s and men’s interests usually differ; moreover, women’s disempowerment restricts their access to basic services and participation in collective decision-making (Gender Action, 2013).
To date, mainstream governance reforms have not focused on gender issues: programme documents rarely include gender benchmarks or indicators (Scott, 2011, p. 24). Further, there is a striking lack of research on the impacts of public sector governance reforms on gender and diversity, and on public sector governance reforms with a gender or diversity focus (Scott, 2011, p. ii). Gender Action (2013) provides recommendations on integrating gender into public sector institutional reform.
Integrating gender into public sector institutional reform
- Strengthen political will to achieve gender equality and equity at the local, national, regional and global levels
- Incorporate a gender perspective into the planning processes of all government ministries and departments
- Integrate a gender perspective into all phases of sectoral planning cycles, including the analysis, development, appraisal, implementation, monitoring and evaluation of policies, programmes and projects
- Use sex-disaggregated data in statistical analysis to reveal how policies affect women and men differently
- Increase the numbers of women in decision-making positions in government and the private and public sectors
- Provide tools and training in gender awareness, gender analysis and gender planning to key personnel
- Forge links among government, the private sector, civil society and other stakeholders to ensure better use of resources.
Source: Gender Action, 2013, p. 5
Capacity assessment and development refer to the capacity of individuals, organisations and institutional frameworks (DFID, 2013). The three levels are interrelated, and institutional reform requires capacities for implementing change at all levels and can affect capacities at all levels. Training, equipment and staff are elements of organisational capacity, but institutional effectiveness also depends on how organisations and individuals interact with institutions – on ‘political processes in which rules are respected, avoided or negotiated’ (DFID, 2013). Moreover, as public sector institutions are affected by social and political norms, capacities need to be assessed in civil society and the private sector as well as the state. The creation of an enabling environment for organisational and institutional development requires looking beyond state structures to society, the economy and ideology (Berman, 2013).
- There are some exceptions: the Global Fund, the Global Alliance for Vaccines and Immunization, and two climate change funds (the Global Environmental Facility and the Adaptation Fund) attempt to integrate gender (Arend & Lowman, 2011).
- Andrews, M. (2013). The limits of institutional reform in development. New York: Cambridge University Press. See document online
- Berman, S. (2013). Ideational theorizing in the social sciences since ‘Policy paradigms, social learnig and the state’. Governance, 26(2), 217-237. See document online
- Booth, D. (2012). Development as a collective action problem: Addressing the real challenges of African governance (Synthesis report of the Africa Power and Politics Programme). London: Overseas Development Institute. See document online
- Brinkerhoff, D. W. & Goldsmith, A. A. (2004). Good governance, clientelism and patrimonialism: New perspectives on old problems. International Public Management Journal, 7(2), 163-185. See document online
- Bukenya, B. & Yanguas, P. (2013) Building state capacity for inclusive development: The politics of public sector reform (ESID Working Paper No. 25). Manchester: IDPM. See document online
- Colignon, R., & Usui, C. (2003). Amakudari: The hidden fabric of the Japanese economy Ithaca: Cornell University Press.
- Collins, K. (2002). Clans, pacts and politics in Central Asia. Journal of Democracy, 13(3), 137-52. See document online
- DFID. (2003b). Promoting institutional appraisal and development: A sourcebook of tools and techniques. London: Department for International Development. See document online
- DFID. (2013). How-to note: Capacity building. London: Department for International Development. See document online
- DFID. (2011b). The politics of poverty: Elites, citizens and states. Findings from ten years of DFID-funded research on governance and fragile states 2001-2010 (A Synthesis Paper). London: Department for International Development. See document online
- DFID (2013) Public Sector management: A DFID Portfolio Review: 2008-2012. London: DFID.
- Fritz, V., Fialho Lopes, A.P., Hedger, E., Tavakoli, H., & Krause, P. (2012). Public financial management in postconflict countries. Washington D.C.: World Bank. See document online
- Gender Action. (2013). Gender toolkit for international finance watchers. Washington, DC: Gender Action. See document online
- Helmke, G., & Levitsky, S. (2004). Informal institutions and comparative politics: A research agenda. Perspectives on Politics, 2(4). See document online
- Joshi, A. (2010). Women at the Frontline of Service Delivery: A Concept Note. New York: UNIFEM.
- Lange, M., & Rueschermeyer, D. (2005) States and development: Historical antecedents of stagnation and advance. London: Palgrave Macmillan. More information
- Leftwich, A. & Sen, K. (2010). Beyond institutions: Institutions and organisations in the politics and economics of poverty reduction – a thematic synthesis of research evidence. DFID-funded Research Programme Consortium on Improving Institutions for Pro-Poor Growth (IPPG), September 2010. University of Manchester. See document online
- Mungiu-Pippidi, A. (2006) Corruption: diagnosis and treatment. Journal of Democracy, 17(3), 86-99. See document online
- Pritchett, L., Woolcock, M., & Andrews, M. (2010). Capability traps? The mechanisms of persistent implementation failure (Working Paper 234). Washington D.C.: Center for Global Development. See document online
- Rocha Menocal, A. (2014). Getting real about politics. London: Overseas Development Institute. See document online
- Schneider, A., & Zúniga-Hamlin, R. (2005). A strategic approach to rights: Lessons from clientelism in rural Peru. Development Policy Review, 23(5), 567-584. See document online
- Scott, Z. (2011). Evaluation of public sector governance reforms 2001-2011. Literature Review. Oxford: Oxford Policy Management. See document online
- Tinker, I., & Zuckerman, E. (2013). Women’s economic roles and the development paradigm. In B. Currie-Alder, B., D. M. Kanbur, & R. Mehdora (Eds.), International development ideas, experience and prospects. London: Oxford University Press. See document online
- Unsworth, S. (2010). An upside-down view of governance. Brighton: Institute of Development Studies. See document online
- Zafarullah, H. (2000). Through the Brick Wall, and the Glass Ceiling: Women in the Civil Service in Bangladesh. Gender, Work and Organisation, 7(3), 197-209. See document online