turning governance upside down

Development Policy Review, 2011, 29 (1): 115-124

© The Author 2011. Development Policy Review © 2011 Overseas Development Institute.

Published by Blackwell Publishing, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

Book Review Article Turning Governance Upside Down

David Booth∗ An Upside Down View of Governance. By Centre for the Future State. Brighton: Institute of Development Studies at the University of Sussex, 2010. 83 pp. £14.95 pb. This is a small but enormously important book. It contains the distilled essence of five (and in some respects ten) years of research in one of the best of the development research centres funded by DFID. It has a central message of great intellectual and practical significance. And, in its format, it exemplifies an innovative approach to the dissemination of the results of major social scientific research programmes. Punchy and well written, it not only offers research findings in a form that senior policy-makers might be expected to find digestible, but engages them in a discussion about the reasons why uptake of the central message into policy is going to be challenging.

Upside Down Governance (hereafter UDG) is in some ways a sequel to an earlier small volume with the title Signposts to More Effective States (Future State, 2005). But the sequel is better. Not only does the research reported in UDG build on the research reported in the earlier booklet, but the message has matured and become radicalised in a most interesting way. 1 Challenging the consensus Signposts helped to get over to the policy community the idea that constructing states which can sustain successful development processes is a political and not just a technical-assistance business. Mick Moore and his collaborators in Phase One of the Centre for the Future State (hereafter CFS) did much to help along a growing recognition of the centrality of state-building and governance in development co-operation which was reflected in, among other things, a succession of UK International Development White Papers and cohorts of Governance Advisers placed in DFID offices around the world. Now Moore and his team, inspired and supported by a former Chief Governance Adviser of DFID, Sue Unsworth, are challenging the consensus they helped to create.

The heart of the matter is that the current default perspective of development practitioners, including many Governance Advisers, is an unhelpful one from the point of view of actually helping poor countries to acquire the governance institutions they need if they are to become less poor:

∗Research Fellow, Politics and Governance, and Director, Africa Power and Politics Programme, Overseas Development Institute, 111 Westminster Bridge Road, London SE1 7JD ([email protected]).

116 Book Review Article

© The Author 2011. Development Policy Review © 2011 Overseas Development Institute. Development Policy Review 29 (1)

Their default position is to look at the world from the perspective of a ‘developed’ country, aspiring to introduce governance reforms that would align the institutions of poor countries in the South more closely with those of an OECD state. The goal includes an elected executive and legislature, a rules-based bureaucracy, an independent judiciary, a security apparatus under civilian control, and a regulated market economy – in short, effective, accountable public institutions that can support a broad range of civil, political, economic and social rights. The conventional donor approach to governance has been to analyse problems in developing countries in terms of deficiencies when compared to this ideal model. (p. 1)

Policy-makers increasingly do recognise that improving governance involves more

than transferring formal institutions from rich to poor countries. Nevertheless, they find it hard in practice to break away from what elsewhere has been called the Good Governance gap-filling approach (Shivakumar, 2005: 59-62). In practice, almost all governance-improvement programmes under bilateral and multilateral donor auspices are about filling gaps in this sense, helping countries to acquire some of the elements that have proven helpful to the functioning of public administrations and democratic political systems in OECD countries.

Why does this matter? It matters because this approach provides only a few clues as to how the countries in question are likely to move forward, in governance terms, from where they are now towards something better and eventually, perhaps, to something like the OECD model. It does not tell us whether, when and how the elements being supplied by donors and NGOs through their public-sector reform, business climate or democracy-deepening programmes are likely to be genuinely adopted, so that they become integral to processes of progressive change with real endogenous drivers. In traditional programme-design language, they lack a theory of change or a clear concept of the causal chain leading from the supplied inputs to the hoped-for results.

Against this background, Phase 2 of the Future State research: ... offers development practitioners a fresh perspective – an upside-down view of governance – in two senses. It focuses less on the destination – formal, rules-based democratic and market institutions – and more on the means of getting there, preferring an open-minded exploration of how elements of effective public authority are actually being created in a variety of ways. And it suggests that instead of viewing informal arrangements as a major part of the governance problem, they could be part of the solution. (p. 2) This fresh perspective does not question the ultimate desirability of inclusive,

rules-based public authority. But it does object to the arrogance that often accompanies donor advice on institution-building, and it involves turning things upside down in the sense of encouraging us to start our thinking with how to improve on what exists, rather than with solutions established by international ‘best practice’. What exists includes very importantly the informal relationships and rules of the game that are to be found alongside or within the formal structures with which donors usually interact. The

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research evidence shows the importance of understanding how these work, and suggests, furthermore, that they may have a constructive role to play in the improvement of governance.

2 What’s new?

These ideas are not, of course, entirely new. In some ways, they have been around since the 1960s when early critics of the concept of ‘modernisation’ then popular with development agencies pointed to the unexpected ‘modernity of tradition’ (Rudolph and Rudolph, 1968) in India and elsewhere. After an extended hiatus, in the 1990s Mick Moore himself provided important building blocks of a fresh approach in a couple of remarkable contributions (1994; 1997). Lately, Mushtaq Khan (2006), Merilee Grindle (2004), Ha-Joon Chang (2002) and Dani Rodrik (2007) have been exciting exponents of the general view that the institutional and governance requirements of getting from extreme poverty to moderate poverty may be different from the requirements of ‘getting to Denmark’. Critiques of the ‘best practice’ approach are gaining influence at the World Bank (Levy, 2010). A number of research programmes are ploughing the same furrow with particular attention to endogenous change possibilities in regions where governance problems loom particularly large, such as sub-Saharan Africa.

But despite what may seem an impressive set of references, this remains a minority viewpoint even among academics. Especially but not only in the world of development assistance, turning governance thinking upside-down is uncomfortable, as uncomfortable as sitting on the upturned Vincent van Gogh chair which figures on the front cover of the UDG booklet.

Understandably, perhaps, the bulk of the high-quality research in comparative political science and institutional economics concerns itself with the big story of how OECD polities and market systems got to be where they are now, or, in the language of the most important recent landmark of this literature, how some countries made the transition from ‘limited access orders’ to ‘open access orders’ (North et al., 2009). Interesting as this question is, it is not the same question as how to take the next steps in the right direction in, say, Niger or Tanzania. And the governance monitoring that keeps donor Governance Advisers and a number of indicator/database outfits busy (notably, Kaufmann et al., 2008) takes its cue from the big story, not from a body of understanding about the more relevant small story. Even the research emerging from DFID-supported programmes other than CFS is sometimes ambiguous at best about some of the main issues, because these are genuinely difficult, for a complicated mix of ideological, moral and practical reasons.

I emphasise the minority position of the upside-down governance viewpoint partly because I have a quibble with UDG over the way it characterises the problem with the donor default position. I will return to this after giving more of a flavour of the substantive research summarised in the book.

Chapter 1, ‘A Fresh Look at Governance’, spins out the opening argument. During the past 15 years or so, donors have become formally committed to supporting country-led development, and in this context have declared themselves in favour of basing their support on an understanding of the history, political economy and other relevant features of their ‘partner’ countries. But practice has only adjusted in a few ways. Better



understanding still tends to be placed in the service of gap filling, as a way of enabling the promotion of best practices to be steered around the pathologies and ‘vested interests’ that define the existing order of things. The notion that the existing order itself might provide foundations that can be built upon is still rare in donor programming (and, I would add, in the reports of consultants hired by donors to provide country analysis; it is indeed ‘often easier to see how dysfunctional relations and informal arrangements cause governance problems than it is to find ways of fixing them’, p. 13).

The FS research helps by showing in specific instances how local institutions have served or been adapted for progressive purposes. The comparative surveys and individual case studies summarised in the book suggest ways of asking questions about any particular governance system which help to bring out the features that may be the key to turning the chair upside-down. The most telling case studies are the positive ones, like the role of a very non-standard property rights regime in sustaining fast economic growth in China, on which CFS research fleshes out some of Rodrik’s influential observations (2007: Chapter 6). Examples of missed opportunities are less obviously appealing but no less relevant, as in the case of unduly supply-driven approaches to community development in Afghanistan.

The general message is: ‘informality is everywhere’ and you had better understand it if you want to have a hope of changing institutions for the better. And you will not understand it if you dismiss it with pejorative labels like ‘vested interests’ and make undue use of value-laden terminology about democracy, rights and the rule of law. Chapters 2, 4 and 5 illustrate both kinds of point with reference to three aspects of what may be termed the state-society nexus: state legitimacy and fragility, ‘social accountability’ in public-service provision and the place of ‘traditional’ local governance. Chapters 3 and 6 pick up the same themes in relation to research on investment climates and tax relationships. 3 Getting real about the state-society nexus One of the main themes of the gap-filling or best-practice approach to governance improvement is the strengthening of the formal institutions through which societies enable states to become more capable, accountable and responsive (for example, DFID, 2007). The research-based argument of UDG injects a healthy realism into this type of thinking in three important ways, in Chapters 2, 4 and 5 respectively.

Chapter 2 is about the important topic of state fragility and breakdown. Its argument, which has had some previous exposure in the pages of this journal (Moore and Unsworth, 2006), focuses on one particular underlying cause of state fragility: ‘the lack of elite incentives to create effective public authority’ (p. 18). It points out that this aspect is more amenable to policy interventions than the various historical or structural factors ordinarily stressed as causes of weak state legitimacy. It then enumerates the several powerful ways in which today’s global system – with its unprecedented income gaps, resource rents, markets in military capability and channels for unregulated financial transfers – weakens the incentives of elites to nurture national economies and build effective states. The conclusion is that Northern governments and international organisations with an interest in addressing state fragility should pay more attention to initiatives which mitigate these global drivers, and relatively less to efforts to strengthen



institutional checks and balances or bolster security at country level. In my view, this blows a welcome current of fresh oxygen into the rather stale air of the international debate on state-building ‘in situations of fragility’. The uncompromising focus on elite incentives, as the decisive determinant, is welcome. So is the appeal to OECD states to prioritise putting their own house in order, rather than the superficially appealing but actually very difficult business of influencing political dynamics within countries.

Chapter 4 has a similar freshness, this time in relation to standard approaches to improving public-service delivery by means of formal democratisation, civil-society support or client pressure. The point of departure, strongly informed by Phase 1 CFS research, is scepticism about the possible contributions of competitive electoral processes, a generalised strengthening of the capacities and the autonomy of ‘civil society’ and devices for encouraging direct accountability of service providers to individual consumers. The research, which was focused on large cities in India and Brazil, confirmed the relative importance of ‘social accountability’ as exemplified by sectoral reform processes in which there is ‘collective action by or on behalf of poor people to demand accountability from policymakers and service providers’ (p. 41).

The conclusion drawn is cautious about specifying the conditions under which social accountability will develop, especially in non-BRIC countries and rural areas. A strong emphasis is placed on the role of networks linking public and private actors which are the product of previous history and are context-specific. The negative message is more definite: donor programmes that concentrate on giving financial and management support to particular participatory schemes or citizen organisations are very likely to miss their target. I would add that it would not take much to convert this into a positive. There may well be scope for external actors to contribute materially to the effectiveness of some social accountability processes. But this will be on condition that they (the external actors or their agents) are properly embedded in the relevant networks and able to work with a good sense of the local history and excellent knowledge of the individual and organisational actors that are involved on both sides of the public-private divide. This may seem like an impossibly tall order for a foreign aid agency, but DFID programmes in Latin America were at one point achieving this sort of embeddedness in some countries with good or at least promising results (Rocha Menocal et al., 2008).

Chapter 5 is about informal local governance institutions and ‘traditional’ leadership with particular reference to two Indian States and the Pakistan Punjab. Along with the investment-climate topic discussed below, this is an important test-case for the proposition that informal institutions may have a positive role to play in improving governance. With its strong South Asian focus, it nicely complements work currently under way in another DFID-funded programme which is asking questions about ‘working with the grain of local societies’ in Africa, the Africa Power and Politics Programme (APPP; www.institutions-africa.org).

The CFS conclusions again stress context specificity and the dangers of adopting formulaic approaches on the basis of ideological preferences (for example, for or against ‘traditional’ elements in modern settings) or a superficial knowledge of realities on the ground. Even within the three regions considered, the local arrangements are quite varied, and there are sharp overall contrasts between Karnataka and Punjab in particular (with Rajasthan somewhere in between). These differences are demonstrably



connected to different colonial patterns of indirect rule, supporting an aspect of the recent argument by Lange (2009). Nevertheless, in Karnataka at least, the ‘traditional’ institutions have proved adaptable and capable of contributing to a constructive synthesis with ‘modern’ local government bodies. All this seems to confirm the wisdom of approaching the matter in an empirical way, with deliberate neutrality towards the emotive issue of whether ‘tradition’ as such has much to offer in general, a position which the APPP is also adopting (Kelsall, 2008; Booth and Golooba-Mutebi, 2010).

4 A good enough investment climate The CFS work on investment climate has affinities with Mustaq Khan’s critique of mainstream institutional theory (2006). It is also a source of inspiration to a research stream on Business and Politics within the above-mentioned APPP (Kelsall et al., 2010). The research problem begins with the observation that rules-based reforms designed to improve the climate for private investment have proven difficult to implement and may be unsuited to the task of helping poor countries with weak institutions to increase investment:

If building best-practice institutions in poor countries is not a short-term option, and if relationships between private investors and public authority are likely to remain highly personalised and informal in the medium term, the question becomes in what circumstances might such relationships lead to productive investment rather than crony capitalism? (p. 23) The empirical material consists of well documented case studies from Egypt,

Indonesia and China. In different ways these do show how personalised and informal relationships can play useful roles in moving countries, or particular sectors or cities, up the long ladder towards the arrangements that theory says are ideal. So they also ‘illustrate the power of ... closing off conventional assumptions about what constitutes a “good” investment climate, and looking instead in a more open-minded way at what is actually driving investment in a given context’ (p. 32).

This is an important finding because, in the words of UDG, it is ‘potentially actionable’. It has very direct implications for the way donor business climate and private-sector development programmes are undertaken, and provides a basis for dialogue with a number of practitioner groups (p. 33). But it has not quite settled its own question as put in the quotation above. The question ‘in what circumstances ...?’ invites a causal generalisation of some sort. It suggests the possibility of elaborating some middle-range theory which would give donors and policy thinkers more specific guidance – that is, more than the general advice ‘to view with some modesty their ability directly to influence these very informal processes’ (p. 33). That may be over-ambitious, particularly if the scope is global rather than sub-regional (as the equivalent APPP research is), but the question does not seem intrinsically unanswerable.



5 Tax bargaining and progress in governance Specialists will be familiar with some of the well-reviewed publications with which CFS research on the tax relationship has already been disseminated (notably, Bräutigam et al., 2008). This is one of the areas in which Phase Two was launched from the platform provided by Phase One. It is an area in which Mick Moore and his colleagues have already had a considerable influence on donor thinking via the DAC (for example, OECD, 2010).

Building on the historical story about the role of tax bargaining in the formation of effective and responsive states in Europe, the new research focuses on six present-day developing countries, three in Africa – Ghana, Kenya and Ethiopia – and three in Latin America: Bolivia, Ecuador and Peru. The general finding is that there is contemporary evidence of ‘a broad causal mechanism linking government reliance on taxation with pressures for increased responsiveness and accountability’ (p. 60).

The evidence for Africa rests on documented episodes where reforms were prompted by tax bargaining with citizens; where tax resistance built up pressure which made reforms more feasible at a later date; or where taxation was a catalyst for a strengthening of civil-society organisations. The messages for policy people are ‘pay much more attention to the political dynamics of tax reform and tax collection, with sensitivity to the particular country context’ and ‘how tax is collected matters, not just how much’ (p. 65). The Latin American examples are about the particular conditions under which reliance on natural-resource revenues does not become a ‘curse’ from a governance point of view, a topic of some urgency now in Africa. The overarching research conclusion is that management mechanisms need to be ‘embedded in the political and institutional context’. Therefore, policy-makers should ‘adapt their advice ... to take account of a country’s pre-existing political and institutional arrangements’ (pp. 66, 68).

Again, the taxation research provides a bit more than a general injunction to pay attention to country context and a bit less than a theory. This will satisfy some practitioners but perhaps not all. For me, this is not unduly surprising, but it does illustrate the point to which I want to return before ending. It is genuinely difficult, for researchers and for consultants who are aware of the research literature, to come up with advice for policy-makers that goes a long way beyond ‘good questions to ask’ about particular countries and policy spheres.

6 Getting research uptake: what kind of problem? I began by saying that part of what makes UDG important is its effort to engage policy-makers in discussion of the challenges involved in taking up the implications of research findings in the field of governance and development. Chapter 7, which sums up and concludes, returns to this aspect of the matter.

The problem, it says, is not just the familiar one that researchers tend to offer conclusions which are either too anodyne (‘politics matters’ etc.) or too specific to be useful. Nor is it just that donors have difficulty coming to terms with messages which say that they, as outsiders, have less influence than they imagine. The CFS research



suggests a more radical explanation: ‘Development practitioners, and especially Western donors, have mental models of development and of their own role in the process that get in the way of accepting and applying research findings’ (p. 69). Moreover, the kinds of questions that research suggests are important and of practical relevance ‘do not offer a good institutional or ideological fit with the organisational culture of most development agencies’ (p. 76).

These are important propositions, but they seem insufficient in two ways. First, they imply a greater confidence than I think can be justified that governance research is doing as well as it can to provide the sort of knowledge that is needed to inform better policy. My concern here is not about CFS research in particular – quite the contrary; precisely because it has been a strong programme it illustrates the generic point well. Second, I do not think the problem about uptake can be left at the level of ‘mental models’.

On the first point, the CFS work has relied quite heavily on intensive case studies which are individually illuminating and illustrate well the importance for practitioners to get to grips with the particular country realities in which they work. This is no doubt an important point to get over, relevant well beyond the field of international development as conventionally defined and eminently applicable to the big issues of war and peace in our time. There is, however, a sense in which, almost by definition, policy needs to be informed not just by facts but by theory. Moreover, the theory that is most likely to be useful is not the kind typically generated by cross-country regression analysis and related techniques on their own (on their own, these too tend to give us anodyne messages: ‘institutions matter’, ‘aid matters a bit, probably’). It is the kind that relies upon the systematic use of case studies (George and Bennett, 2005).

As noted above, some of the CFS questions seem to imply a concern to answer questions of the type: ‘under what circumstances does x happen?’ – in other words, to advance propositions in the form ‘if ... then ...’. This is something they do not quite manage to do. I do not pretend for a moment that it is an easy step to take. But if we do not even attempt it, I think there is a question about whether we have set the bar of expectations high enough.

On the second point, the phrase ‘mental models’ describes well enough what was said at the beginning of this review about the good-governance gap approach. But if it is supposed to explain as well as to describe, I hunger for a slightly more materialist formulation. The same applies to the ‘organisational cultures’ of development agencies. These formulations seem simultaneously too sanguine and too pessimistic about the prospects of change.

If overturning the gap approach and getting aid to become less supply-driven were merely a matter of changing the ideas in the heads of the managers of a few agencies, the problem would be relatively tractable. Unfortunately, a common-sense version of the same mental model is churned out and regularly reinforced by the public campaigns of NGOs and political parties in Western countries. ‘They’ need more of ‘our’ money, and our willingness to provide it, and prevent its being stolen by corrupt intermediaries, will determine whether development and poverty reduction take place or not. Rightly or wrongly, politicians believe that voters have a similarly simple-minded conception of how development happens. In turn, both bilateral and multilateral development agencies are heavily constrained by what the politicians tell them to do. The end result is that



development agencies have a powerful incentive to spend large budgets within country programmes, and not to devote expensive staff time to getting to know countries’ real needs or devising ways of intervening intelligently.

In view of the completeness and parsimony of this explanation, it seems unnecessary and a little unfair to the agencies to invoke either unthinking adherence to a mental model or a problem of organisational ‘culture’. Quite a few members of the advisory cadres of a number of agencies I know find the main thesis of UDG intellectually compelling. But they are aware of the point I made at the beginning – that this is still a minority view even in the research world – and anyway they are powerless to act upon its advice so long as their ultimate bosses, and the political pressures on their bosses, define their job in the way they do.

7 Final words I hope to have made clear why this book is important. The range and richness of its content seems to me to illustrate well why it is worthwhile spending public funds on medium- to long-term research centres or programmes which address major global issues. It also provides a model that others should emulate when it comes to disseminating the main conclusions of such research. Its brevity, clarity and ambition to reach out to policy-makers and challenge them about acting differently are all important virtues. The marginal queries I have noted about parts of its argument only underline the powerful good sense of its main ideas. References Booth, David and Golooba-Mutebi, Frederick (2010) ‘Rooting Governance in African

Realities: Are Customary Institutions the Answer?’. Paper presented at the International Conference on Customary Governance and Democracy-Building: Exploring The Linkages, Addis Ababa, 14-16 September.

Bräutigam, Deborah, Fjeldstad, Odd-Helge and Moore, Mick (eds) (2008) Taxation and State-Building in Developing Countries: Capacity and Consent. Cambridge: Cambridge University Press.

Chang, Ha-Joon (2002) Kicking Away the Ladder: Development Strategy in Historical Perspective. London: Anthem Press.

DFID (2007) Governance, Development and Democratic Politics: DFID’s Work in Building More Effective States. London: Department for International Development.

Future State, Centre for the (2005) Signposts to More Effective States: Responding to Governance Challenges in Developing Countries. Brighton, UK: Institute of Development Studies at the University of Sussex.

George, Alexander L. and Bennett, Andrew (2005) Case Studies and Theory Development in the Social Sciences. Cambridge, MA: MIT Press.

Grindle, Merilee (2004) ‘Good Enough Governance: Poverty Reduction and Reform in Developing Countries’, Governance: An International Journal of Policy, Administration, and Institutions 17 (4): 525-48.



Kaufmann, Daniel, Kraay, Aart and Mastruzzi, Massimo (2008) Governance Matters VII: Aggregate and Individual Governance Indicators 1996-2007. World Bank Policy Working Paper 4654. Washington, DC: World Bank/World Bank Institute.

Kelsall, Tim (2008) ‘Going with the Grain in African Development?’, Development Policy Review 26 (6): 627-55.

Kelsall, Tim, and Booth, David with Cammack, Diana and Golooba-Mutebi, Frederick (2010) Developmental Patrimonialism? Questioning the Orthodoxy on Political Governance and Economic Progress in Africa. Working Paper 9. London: Africa Power and Politics Programme.

Khan, Mushtaq H. (2006) ‘Governance, Economic Growth and Development since the 1960s: Background Paper for World Economic and Social Survey 2006’. New York, UNDESA.

Lange, Matthew (2009) Lineages of Despotism and Development: British Colonialism and State Power. Chicago, IL: University of Chicago Press.

Levy, Brian (2010) Development Trajectories: An Evolutionary Approach to Integrating Governance and Growth. Economic Premise 15. Washington, DC: World Bank.

Moore, Mick (1997) ‘Societies, Polities and Capitalists in Developing Countries: A Literature Survey’, Journal of Development Studies 33 (3): 287-363.

Moore, Mick (1994) ‘How Difficult is it to Construct Market Relations? A Commentary on Platteau’, Journal of Development Studies 30 (4): 818-30.

Moore, Mick and Unsworth, Sue (2006) ‘Britain’s New White Paper: Making Governance Work for the Poor’, Development Policy Review 24 (6): 707-15.

North, Douglass C., Wallis, John J. and Weingast, Barry R. (2009) Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. Cambridge: Cambridge University Press.

OECD (2010) Citizen-State Relations: Improving Governance Through Tax Reform. Paris: Organisation for Economic Cooperation and Development.

Rocha Menocal, Alina; Booth, David; Geere, Malcolm; Phillips, Lauren: Sharma, Bhavna and Mendizabal, Enrique (2008) ‘Punching Above its Weight’: An Evaluation of DFID’s PSPS, LAMIT and ENLACE Programmes in Latin America. London: Overseas Development Institute.

Rodrik, Dani (2007) One Economics, Many Recipes: Globalization, Institutions, and Economic Growth. Princeton, NJ: Princeton University Press.

Rudolph, Lloyd I. and Rudolph, Susanne H. (1968) Modernity of Tradition: Political Development in India. Chicago, IL: University of Chicago Press.

Shivakumar, Sujai (2005) The Constitution of Development: Crafting Capabilities for Self-Governance. New York: Palgrave Macmillan.

turning governance upside down

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