February 2014|admin|

In 1828 a New York senator quipped ‘to the victor belong the spoils’ in reference to the election of President Andrew Jackson. At the inauguration of the President, his Vermont supporters expected their share of the spoils, which resulted in an unprecedented number of public officials being removed from post to make way for Jackson’s political appointees. An estimated 10 percent of public officials were made redundant, through a set of reforms sold as improvements to public administration. The actions of Andrew Jackson entrenched an inefficient patronage system of public administrations – the spoils system.

Over the years, the inefficiencies of the spoils system were evident, adding impetus to the need for reforms. The reforms that followed were piecemeal, taking over 70 years to significantly scale back the spoils system and enable a better form of public administration to take root. One important lesson that can be drawn from this particular experience mirrors a number of recent findings on why donor funded institutional reforms often fail in developing countries.

It’s now common dogma among development experts that institutions are central to improving the welfare of the poor. And we now also have a better understanding of the types of policies that are conducive to development. There is also agreement that institutions must deliver on their responsibilities for countries to succeed: tax authorities should be able to raise resources effectively; and executing agencies deliver expected services or outcomes. However, after decades of reforms and billions spent in aid, success stories of institutional development are few and failures all too common. It is like a re-run of the movie ‘Source code’ but unlike the movie there are no solutions and no happy endings.

Why the persistent failure? There is mounting evidence that the prescriptive nature of donor solutions is one important reason for the failure of institutional reforms in developing countries.  Unlike 19thcentury America, developing countries are expected to replicate successful institutions from other – typically western – countries, leading in almost all cases to isomorphic mimicry (the adoption of forms of capable states which camouflages institutions that don’t function). For reforms to be successful we need to move away from best models and best practice by working with the grain on locally nominated problems. Giving countries flexibility to trial and mould locally based solutions will increase the likelihood that functional institutions emerge.

An important message from these recent studies is that, whether implementing a public financial management reform programme or judicial reforms, countries need greater independence in design and implementation.

Granted human history is a patchwork of adapting and advancing existing ideas from other countries;  there are plenty of examples of late developers doing this – Meiji Japan, and the East Asian tigers to name a few. There are also good examples of populations drawing on global experiences of governance, contextualising it with local norms and culture, and succeedingif they have the space to experiment. For these types of stories to be the norm, there has to be greater tolerance of diversity in the forms and functions of institutions in developing countries. This shouldn’t be a problem, as long as the outcome is a desirable one – the US and UK budget processes are very different; but their outcomes are not.

One question, yet to be satisfactorily addressed, is the political economy of donors letting go of the reigns and allowing countries to experiment with models of institutions that look different to perceived best practice. This blind-spot is partly caused by researchers being more comfortable with putting aid recipient countries under the microscope than donors. The lack of accountability to beneficiaries means development ministers and boards of multilaterals are unlikely to introduce changes that give them less control of how funds are spent, despite the overwhelming evidence that success is contingent on recipient countries getting more flexibility and space to experiment with reforms.

What role can development actors play in making reforms successful? This was one of the questions explored at ODI’s 2013 CAPE Conference on public financial management – a sector with its fair share of reform failures. There was strong consensus that off-the shelf large scale reforms have in most cases failed, or produced institutions that have the right forms but do not function. There was strong evidence that despite wide scale adoption of medium-term expenditure frameworks in Africa, their success has been at best limited. Basic reforms first, incrementalism and iterative adaptation were reoccurring themes at the conference but these words also closely describe efforts to reform the spoils system in the US.

With hindsight we know the successful development story of the US, despite the legacy of the ‘spoils system, which is still part of the process of governing today. Imitating President Jackson’s system of patronage is not my recommendation. Rather, reforms have a better chance of succeeding if they are grounded in the local context and work with the grain. As in 19th century America, countries need the independence to take a wrong turn, learn from it and correct it (when incentives are right) so reforms can succeed and institutions develop.

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