Innovations in Bureaucracy

Last week I was at the “World Innovation Summit for Education” (WISE) in Doha, and I don’t think I heard the word “bureaucrat” once. Clearly the organisers don’t read Blattman or they would know that Bureaucracy is so hot right now.

The World Bank might be a bit more ahead of the curve here, and held a workshop earlier this month on “Innovating Bureaucracy.” I wasn’t able to attend (ahem, wasn’t invited), and so as the king of conference write-upsdoesn’t seem to have gotten around to it yet, I’ve written up my notes from skimming through the slides (you can read the full presentations here).

Tim Besley — state effectiveness now lies at the heart of the study of development. Incentives, selection, and culture are key, and it is essential to study the 3 together not in isolation.

Michael Best — looks at efficiency of procurement across 100,000 government agencies (each with decentralised hiring) in Russia. Wide variation in prices paid by different individuals/agencies, with big potential for improvement.

Zahid Hasnain — presents Worldwide Bureaucracy Indicators (WWBI) for 79 countries. Public sector employment is 60% of formal employment in Africa & South Asia, and is usually better paid than private employment.

Richard Disney — provides a critique of simple public-private pay gap comparisons — need to consider conditions, pensions, and vocation. Lack of well-identified causal studies.

James L. Perry — 5 key lessons on motivating bureaucrats in developing countries.

(1) select for ‘vocation’

(2) work on prosocial culture

(3) leverage employee-service beneficiary ties

(4) teacher newcomers public service values

(5) develop leaders who model public service values. (full paper here)

Erika Deserranno: Summary of experimental lit on financial & non-financial incentives for workers. Both can work when well designed, or backfire when not. 3 conditions for effective performance-based incentives;

(1) Simple to understand

(2) Linked to measurable targets

(3) Workers can realistically affect targets 

Yuen Yuen Ang — How has China done so well in last 40 years without democratic reform? Through bureaucratic reform which has provided accountability, competition, limits on power. 50 million bureaucrats: 20% managers & 80% frontline workers. Managers have performance contracts focused on outcomes, with published league tables. Frontline workers have large performance-based informal compensation. (bonus podcast edition with Alice Evans here)

Stuti Khemani — research & policy rightly moving from short-route accountability to long-route. Need much more evidence on how public sector workers are selected. One example suggests elected Chairpersons have higher cognitive ability, higher risk aversion, lower integrity.

Jane Fountain — government IT projects fail in part because they’re too large — should move to agile development (build small and quick, get feedback, revise)

Arianna Legovini — improved inspections of health facilities in Kenya seem to be improving patient safety.

Daniel Rogger — new empirics of bureaucracy — World Bank bureaucracy lab investing in substantial new descriptive work on bureaucracy and bureaucrats using both surveys & administrative data, as well as RCTs on reforms

Jim Brumby, Raymond Muhula, Gael Rabelland — two helpful 2x2s — need to understand both capacity & incentive for reform, and then match data architecture to difficulty of measuring performance.

My favourite thing about the World Bank Nairobi office

It's a pretty close tie between the Nyama Choma crisps and the statistics-packed toilet paper.

The panoramic view from the 17th floor across Nairobi isn't bad either, but somehow I didn't manage to prioritise taking any photos of that. 

Goldin on Global Governance

Almost as scary is his insider’s view of international organisations’ lack of readiness to deal with such threats. He questions the future effectiveness of the UN, and the legitimacy of the International Monetary Fund and World Bank, created at the 1944 Bretton Woods conference. “The picture of global governance today is one of duplication, ambiguity, overlap and confusion,” he concludes. Tax-free salaries and comfortable career paths encourage entrenched views and organisations out of step with modern working practices. 

Pretty damning, from the FT review of Ian Goldin's new book.

Excellent World Bank blogging

This is very entertaining. Apparently its now ok for World Bank staff to elaborately and brazenly take the piss out of the editor of the Lancet and DFID staff. HT: JustinSandefur

Blogging the World Development Reports

Tom just sent me a great World Bank paper on accountability in service delivery, which references the 2004 World Development Report on "Making Services Work for the Poor," which made me think I should really go and read that properly sometime. This just a week after he reminded me that we should really also read the 2008 Agriculture for Development report sometime (it probably nails the whole "economics of livelihoods" question). I'm also a big fan of the 2009 Report on Economic Geography (one of the most misunderstood economic realities there is?), and really looking forward to the 2013 Jobs Report.

Which brings me to.... drum roll please.... the Roving Bandit World Development Report Bookclub / Blogathon: Because you probably haven't read them either, and if you work in development you probably should have. So I'm going to go back to the beginning and read / blog / discuss one report per approximately-week-ish-length-period-of-time. Who's with me?

Cash Transfers in Africa

The World Bank has a new book out reviewing the state of cash transfer programs in Africa, which gives a nice high-level overview, and lots of juicy detail on targeting, coverage, and transfer mechanisms, 

including a timeline ... 

... the cost of programs (they get easier to fund as countries become wealthier) ...

... admin costs are a relatively fixed cost - they become a shrinking share of the program budget as coverage increases ...

... and as a sensible response to the limited capacity of the poorest countries to fund their own programs, donors play a key role in funding systems in the poorest countries ...



Yes all I did was skim the report for the prettiest charts. What!

Questions to which the answer is no

‘if the reallocation of jobs across sectors, and increasingly countries is happening quicker and quicker, due to the exponential growth of technological innovation - then at some point are the productivity gains outweighed by the social damage they do?’

Moussa Haddad, quoted by Duncan Green in an interesting discussion of the new World Development Report on jobs. I'm inclined to think that Duncan is mostly wrong, but in an interesting way. I think he underestimates the insider-outsider problem with labour unions in many developing countries, possibly because of the same rose-tinted view of the history of labour in Britain, which I also succumb to. To be a British leftwinger means to be on the side of unions. But its pretty hard to reconcile the rosy view with the destructive role that teachers unions play in education in India.

He continues...

the team is 100% economists. Don’t get me wrong, some of my best friends are economists (really) and they obviously have to be central to any discussion about jobs. But where are the anthropologists to discuss the deeper cultural and social meaning of work

At which point my eyes glaze over. But don't get me wrong, some of my best friends are anthropologists....

The title of this post borrowed from John Rentoul's meme at the Indepenent. 

“Our Friends at the Bank”

A visit to a friend at the World Bank a couple of months ago reminded me of this fantastic film I saw as an undergraduate at SOAS.

Remember how evil World Bank conditionality used to force poor countries to cut their social spending on health and education? This documentary shows World Bank officials trying to convince Ugandan officials that they need to spend more on education instead of physical infrastructure.

I think my favourite part is Ugandan President Yoweri Museveni explaining the concept of prioritisation to World Bank President James Wolfensohn, and Wolfensohn eventually caving in with “My guess is you’ll get your way, which I think you are used to doing.”

You can buy the video here. (It’s a little pricey as I guess there was a limited market. It also comes with English commentary instead of the French version I managed to put up here).

Economic Policy in Southern Sudan

The SPLM have some pretty respectable economic advisers in Shanta Devarajan, Lant Pritchett, and Tony Venables.

The future of data collection

The Sudanese like to talk, so giving out mobile phones is always going to be a winner. Gabriel Demombynes at the World Bank is now starting to get the first data in from the Southern Sudan Experimental Phone Survey which I wrote about last year.

In November, in conjunction with the Southern Sudan Centre for Census, Statistics and Evaluation, we delivered mobile phones to 1000 households in the 10 state capitals of Southern Sudan. Each month starting last December, Sudanese interviewers from a call center in Nairobi have phoned respondents on those phones to collect information on their economic situation, security, outlook, and other topics.

What is so exciting about this project is the sheer quantity and frequency of data that is being collected at relatively low cost.

For more info see Gabriel’s blogpost and photo essay, and make sure to follow his new Twitter account@gdemom.

Kudos to the World Bank

The clear winner of Publish What You Fund’s new aid transparency ranking. The US clearly needs some work (vindication for AidWatch?).

Richard Dowden on Structural Adjustment

By the end of the 1980s most African countries were indeed in a bad way. The end of the Cold War gave the West - which had always believed it could tell Africans what to do - the chance to impose its own solutions. The West's new agenda was democracy, respect for human rights and the free market.
Africa's economies were handed over to World Bank and IMF economists. "Structural adjustment" introduced a dose of tough economic medicine that would restore the patient to health. Governments were forced to let the "free market" decide the value of their currencies, cut public spending and sell off their assets.
As a theoretical economic solution it might have looked right, but on the ground in Africa it pushed up prices, impoverishing all but a few, and destroying Africa's professional classes by reducing the value of their salaries. Those in power who had mismanaged things so badly, now sold run-down state assets to themselves at knock-down prices.

Really Richard? I find the left’s demonisation of the Washington Consensus a bit annoying and a bit of a distraction. The main reason the evil neoimperialist economists recommended that African governments spent less and sold off assets is because they were broke. It’s really not that controversial, you can’t spend more than you earn forever. That’s life.
I also think the influence of those economists is a bit overdone. There is a great documentary film, “Our friends at the bank” which includes scenes of the Ugandan government politely telling the World Bank to get lost.
All of this is a distraction from the issues where Western policies really are (still!) self-serving and detrimental to the poor - such as farm subsidies and labour market restrictions. How about a bit our own free-market medicine huh?

World Bank discovers concept of local context!?!

The Bank argues that going forward, a project’s entire implementation process —project design, procurement, contracting, disbursements — should be tailored to fit the context of the environment. 

“Uniform application of previous lessons does not work in all contexts, as experience in Sudan has demonstrated,” the bank says. (The East African, Monday October 4 2010)

Apologies for the snark, but oh, sometimes…

Constraints to medium-sized firm growth

The World Bank’s “Doing Business” reports assess the ease of doing business in different countries, by comparing policies and regulation. It is a fascinating exercise, but one which is based upon an implicit assumption that these rules matter, and that they are binding.

A new NBER working paper by Mary Hallward-Driemeier, Gita Khun-Jush, and Lant Pritchett argues that in Africa, policies and regulations are typically not very well implemented, meaning that deals are more important to firms than rules.

We argue that often firms in Africa do not cope with policy rules, rather they face deals; firm-specific policy actions that can be influenced by firm actions (e.g. bribes) and characteristics (e.g. political connections).  Using Enterprise Survey data we demonstrate huge variability in reported policy actions across firms notionally facing the same policy.   The within-country dispersion in firm-specific policy actions is larger than the cross-national differences in average policy … Finally, we show that the de jure measures such as Doing Business indicators are virtually uncorrelated with ex-post firm-level responses, further evidence that deals rather than rules prevail in Africa.

The constraints reported by 3317 firms in 13 countries are shown in the Figure below. The point being made is that policy uncertainty is much more important than licences or customs clearance, but I am also pretty stunned by the reported importance of electricity.

WB Chief Economist for Africa supports cash transfers…

… for oil revenues. In a paper co-authored with World Bank Senior Economists Tuan Minh Le and Gaël Raballand, Shanta says

accountability,  and  hence  public-expenditure  efficiency,  can  be  increased  by transferring oil revenues  to citizens and  then  taxing  them  to  finance public spending ... We  conclude  that, while  it may be difficult  to  implement  such  a proposal in existing oil producers, there is scope for introducing it in some of Africa’s new oil producers.

[For more papers from the 2010 Oxford Economic Development in Africa conference, go here.]

Nancy Birdsall and Arvind Subramanian of the Center for Global Development raised this proposal in 2004 for Iraq, so it isn’t exactly brand new, but good to see the Bank looking at it.

Now, how long before the World Bank make the logical leap from decisions they have very little influence over (how developing country governments choose to use their own revenues) to decisions which they do (how rich countries choose to spend their aid in poor countries).

Oil and aid are both money into the government coffers (directly, or indirectly, via fungability), removing the need for government to bother tax people and face any accountability for its actions. In places where there is low accountability and low efficiency of government spending, why not strengthen the hand of citizens rather than the state, and give our aid money directly to the poor.

Cut out the middle-man.

Tyler Cowen on the World Bank Dining Room

Overall you could do worse than to eat here, which implies donor opinion is a constraint on raising WB salaries explicitly.

The rest here.

“World Bank to give $125 million for health, road programs in South Sudan”

Is today’s headline in the Tribune. Except it isn’t. The World Bank is not “giving” $125 million. The World Bank is making a disbursement of donor money from a fund which it manages. The World Bank is a management consultant here.

This kind of confusion is why we need more explicit contracts and unbundling of aid donations from project implementation (and fund management).

For the 10 hundredth time - go and read Beyond Planning now.

Economists in International Agencies

Great quote from a lifer OECD economist (Stephen Morris) from 1986.

"Working for a long time at two or three removes from actual decision making, people working in international organizations can easily get out of touch with political reality and become over impressed by their own supposed omniscience. At the same time, because they do not have the power of a national government behind them, and can never be sure what real influence they have, they can become overly sensitive, defensive, or defensively aggressive."

Sounds kind of familiar.

Coats, A.W., The Role of Economists in Government and International Agencies: A Fresh Look at the Field, History of Economics Review

Diagnosis: Everything

Nathan Fiala recommends Rodrik's "binding constraints" approach to growth.

As a government economist I entirely buy into the need for effective prioritisation of interventions, and find this theoretical approach pretty persuasive (despite my wariness about development fads). Lant Pritchett, one of the developers of the methodology puts the remarkable speed with which policy-makers have been converted to "diagnostics" and "binding constraints" simply down to the lack of credible alternatives.

My issue is that although the theoretical approach is convincing, it hasn't really been tested. Especially in the lowest-income countries where it seems almost impossible to eliminate any of the potential constraints.

Furthermore it remains to be seen whether this kind of approach is even testable.

I await the results of the current World Bank exercise on Southern Sudan with bated breath.