IBP is currently updating our organizational strategy. We are using an explicitly systems-oriented lens and approach. One of the key questions is why is the system (in our case the system for raising and spending public resources, including on service delivery, with a focus on historically marginalized groups) stuck in a ‘vicious cycle’ of ineffectiveness and exclusion? Here is the short draft version that I came up with when going back to some of the key evidence on this question (some key sources noted at the end).
Fiscal governance systems around the world operate in ways that exclude important constituencies – from women to indigenous groups to residents of informal settlements – and their needs for public services from health to sanitation to a basic social safety net. The causes of this exclusion are rooted in unequal power relations between these historically excluded groups (particularly those facing overlapping and intersectional exclusions, such as poor women from minority groups) and the state (as well as non-state actors). These power asymmetries undermine the possibility of a more democratic and equitable social contract, and public resource governance systems that would reflect this through policies, processes and tangible delivery of priority public goods and services.
Power asymmetries in the public resource governance system undermine the effectiveness of core functions, as well as the inclusiveness, responsiveness and accountability of actors and outcomes through three main pathways: exclusion, capture, and clientelism.
Exclusion. Individuals or groups often find themselves systematically sidelined from decisions that affect their interests. Individuals from disadvantaged groups often face barriers to engaging and bargaining with decision makers and implementers.
Capture. Influential groups often have the ability to capture policies and make those policies serve their narrow interests. For example, powerful and well-connected actors can influence policies and processes to protect their economic and/or political power, obtain preferential treatment, and/or block competition, thereby taking a toll on resource allocation, productivity and equity.
Clientelism. In some settings, benefits are exchanged in return for political support. One type of clientelism involves public officials “buying” votes from citizens from historically marginalized constituencies in exchange for (usually) short-term benefits such as transfers or subsidies. Clientelism can also involve service providers like teachers or doctors. In exchange for their political support, service providers may extract rents through the diversion of public resources, withhold their efforts in the form of absenteeism, or engage in other corrupt practices.
Public resource governance systems both reflect and reinforce these power asymmetries in practice, even when formal policies or processes are neutral or even have inclusive and equitable objectives. This is seen in the gap between the formal or ‘de jure’ design of the system and its ‘de facto’ functioning. In many cases, formal policies, institutions, mechanisms and processes align with international standards or official objectives related to development effectiveness and accountability. However, evidence consistently reveals an ‘implementation gap’ in which these systems function differently in practice, often aligning with the interests of powerful actors to maintain discretionary decision making power over public resources and services.
Reflecting and reinforcing these power asymmetries, and the role of the state in promoting more accountable and equitable outcomes, is the role of ideas and ideology. Political choices shaped by power inequalities as well as dominant ideological framings or norms, dictate what is considered possible and desirable in terms of public resource governance outcomes, for example a more egalitarian distribution of public resources or an emphasis on effective public services for marginalized communities. Ideas and norms also shape how public participation and accountability are understood, as well as reinforcing and justifying the exclusion of some groups based on gender, ethnicity, religion or other identities. Thus, ideas, norms and discourse also play a role in shaping the design, decisions and outcomes of the public resource governance system.
In addition to these power asymmetries and ideologies, there are significant complexities and technical challenges involved in raising public resources and spending them to deliver equitable development outcomes that also contribute to ‘implementation gaps’. Some of these challenges are in the design of policies and mechanisms to ensure that the raising and spending of public resources is effective, inclusive, responsive and accountable. But arguably more of the challenge lies in implementing even well-designed policies and mechanisms in contexts of limited or fragmented state capacity as well as complex social dynamics. Effectiveness and accountability of policies and implementation are further complicated by the increasing role of the private sector in service delivery (in addition to shaping policies and practices according to their interests, as noted above).
The complexity and opacity of most public resource governance systems means that often no single actor in government (individual or institution) fully understands or directs the system. Thus, bottlenecks and gaps emerge because of a lack of shared information about processes, outcomes and obstacles; coordination failures among actors with potentially overlapping or unclear functions; and/or other diverse challenges. Often, incentives and mindsets reflecting power asymmetries, both the discretion of powerful actors and the exclusion of marginalized groups, undermines efforts to acknowledge and address these challenges, both in terms of problem-solving within existing policy and institutional frameworks and efforts to advance broader reforms.
Thus, the fundamental drivers of exclusion and ineffectiveness in public resources governance systems relate to power and complexity. However, most efforts by government, international actors and even civil society focus on formal, visible and isolated aspects of the system: structures, policies, capacities, tools, etc. Often, these efforts align with ‘international best practices’ and/or positive objectives related to accountability and equity, but too often they don’t reflect the contextual realities of power, exclusion, capacity limitations, and other challenges in the public resource governance system in which they are being undertaken. Efforts to strengthen inclusiveness and public accountability also often fall into this trap of focusing on isolated and technical functions, tools and practices, based on optimistic or even naïve assumptions. Releasing documents or establishing digital platforms, opening formally participatory processes, and establishing government or civil society oversight mechanisms often gives the impression of progress (and may be well meaning by government actors), but fails to meaningfully shift public resource governance systems to be more inclusive, responsive or accountable. In the context of budgets and service, a narrow focus on either budget allocations or service delivery monitoring (or even both), fails to engage with the ‘black box’ of PFM and sectoral systems in which many bottlenecks tend to be found. This generates and exacerbates the gap between ‘de jure’ policies and institutions and ‘de facto’ implementation on the ground. Thus, efforts to improve public resource governance systems are often overly formal, technocratic, de-contextualized, and isolated, and do not meaningfully address the underlying drivers of system functioning.
These challenges of power inequality, ideas and norms, complexity of implementation, and isolated and technocratic ‘fixes’ have contributed to public resource governance systems being ‘stuck’ in a vicious cycle of ineffectiveness and exclusion.
What do you think? Any key gaps or misinterpretations? Good enough for a ‘2 pager’ to inform strategy discussions?
Much of the discussion below is informed by the 2017 World Development Report: Governance and the Law; Fox, J. A. (2015). Social Accountability: What Does the Evidence Really Say? World Development 72: 346-361; De Gramont, D. (2014). Beyond Magic Bullets in Governance Reform. Washington, D.C., Carnegie Endowment for International Peace; Andrews, M. (2013). The Limits of Institutional Reform in Development: Changing Rules for Realistic Solutions. Cambridge, Cambridge University Press; Levy, B. (2014). Working with the Grain: Integrating Governance and Growth in Development Strategies. Oxford, Oxford University Press; and Piketty, T. (2020). Capital and Ideology. Cambridge, MA, Harvard University Press.
Politics, Governance and Development 