Answer to Question 2: What do these agents do? And what could they do to help limit reform limits?
In my opinion many reforms are hatched by interactions between the agents I described in my answer to question 3, and the internal actors who overlap with the external PFM community (like B). The different agents play different roles, as above, and all are needed to make reform happen.
Theory on institutional entrepreneurship argues that institutional change requires having (at minimum) someone who is aware that the status quo is not working, someone who has some idea why it is not working, someone who has some idea of alternatives to try as reform, and someone with enough power and influence to get the community to adopt change. Some like to think this is one person. The proverbial champion. Unfortunately, network theory suggests we should expect that those with power (at the center of a network) do not have the awareness of problems. Agents at the periphery enjoy such awareness, but seldom have power.
So, change requires a combined and connected interaction of multiple players across—and between—networks. In the area of PFM, this would be having some power players in countries working with agents who are in the international community, given bridging agents between both worlds. All this to say that we should know what roles we can play as agents on the periphery…or beyond…and we should first of all be pretty humble as a result. As external agents
we cannot really do the change on our own (or even be the main role players).
To answer Martin, then, let me think about what we can do, which is to try and foster endogenous change in the contexts we are working in.
First, this would involve helping build awareness around problems in the context, such that we foster constituencies of internal restless agents, who are aware of the inconsistencies and deficiencies of incumbent structures. There are many issues that we as outsiders see in any country we visit, but we should be aware that issues are not problems and problems are the things that gain attention, cause internal people to examine their situations, and motivate change. So, as outsiders we can help to turn issues into problems. This would involve (a la John Kingdon’s work) using focal events to draw attention to problems, using data to construct stories about problems, and using past experiences to draw attention to problems.
This is best done with groups of internal agents and takes time. But it is the way to ‘hook’ people in. My sense is that this is what you finally got to in Albania, Martin: a place where the inside agents finally saw what their problems were after years of tinkering and ‘got it’. I read about a similar experience in a recent paper about an HMIS reform in Tajikistan’s health sector. External consultants ran into walls of opposition because—they realized at the end—the internal folks did not ‘see’ the same problems they did. The end result was that the internal group was starting a dialog of reflection, where they were questioning incumbent structures that had been in place for 70 years and were in the way of progress (http://sprouts.aisnet.org/495/1/Institutional_logics_and_HMIS.pdf
I would argue strongly against external agents defining problems or—what we usually do—introducing solutions into contexts where internal groups do not see the problems themselves. Where this is the case, I think the chance of getting political buy in to reform is really low.
As Mauro hinted, international organizations don’t hire consultants to go through this kind of ‘problem guiding’ process. If you work on a project preparation team you have a couple of weeks to come up with a set of activities and an end goal for four years out. I argue that this almost always guarantees limits (unless the country is already at a place of problem awareness).
Second, I would recommend that external agents focus less on bringing in specific solutions—MTEF, program budgeting, FMIS (yes, even IPSAS). These things are good, but we all know that they may not fit into contexts and we don’t really know what makes a good fit. Given my work in this area I think external agents are better located to help with broad-based scanning for solutions—given the problems that have attracted attention. This scanning would involve external and internal activities: Looking for a range of good ideas that address the class of problems being addressed, building a theoretical story about each (where they emerged, where they did not, what seemed to make them work, etc). This would then be the basis of a menu and an education campaign for insiders. They must ultimately choose, and I think we all believe that choices are better when there is a well designed menu to choose from. External folks can really help in this process.
For example, I see some great external support for Rwanda’s matching grant program for decentralization. The government got advice on doing matching grants from a variety of players, based on a variety of similar—but different—experiences. The advice was broken down into ideas about laws, supporting activities, etc. Some of the ideas came from inside Rwanda—Imihigo performance contracts, for instance. Ultimately, the country seems to have built a workable system around this assortment of ideas.
This brings me to the difficult part of my second recommendation. The literature on institutional change suggests that viable solutions are almost always hybrids; they are created from elements of different ideas that are both internal and external. In a sense, then, you should never be able to develop an MTEF or program budget that does not have some weird and wonderful element that someone will criticize.
Getting back to Mauro, I worry that international organizations do not provide the time or resources—or have the patience—to allow this kind of scanning. The emphasis is on finding solutions quickly and cost-effectively. Even worse, I think that international organizations—and governments in developing countries—are attracted to pure-form best practice reforms that are like limiting straitjackets. These best practice reforms are the best option when reforms are intended as signals. Consultants are likely to get agreement for their recommendation to develop a program budget, but will struggle if they say ‘we advise a process where Cambodia finds its own approach to strategic budgeting.’ A World Bank project leader will struggle getting a ‘Scan for hybrid’ project through the Board. If she recommends a best practice it will steer through much clearer. And everyone—including governments—will accept best practices over undefined hybrids that need to be found (that sounds like a lot of work). I
Limits to reform result where such external incentives and processes have us bypassing the process of finding and fitting reforms.
Third, external agents can help to build reform communities. We could play the role of convener, or connector. The literature on institutional change finds this kind of role vital. Think about the one who brings disparate groups together for meetings to talk about common problems, or who introduce new parties so that new ideas can diffuse. The idea of groups of institutional entrepreneurs being the facilitators of change is well established, and the idea that change even requires connections beyond these groups—to distributed agents—is also gaining headway.
Limits to reform emerge where these kind of connections are not created, either because time is limited or because the belief in individual ‘champions’ crowds out initiatives to build constituencies beyond such. This is, I believe, one of the main reasons why externally influenced reforms are often limited to change in concentrated groups. No one is connecting more broadly.