Category Archives: Uncategorized

KEEPING THE LIGHTS ON – Workable and unworkable approaches to electricity sector reform (WWG implementation series #5)

January 9, 2016 By in Uncategorized Tags: , , , , , , , , Leave a comment

electricity high wireTwo decades ago, when I was working on utility sector reform we knew the answer. Here (using the example of electricity) is what it was: unbundle generation, transmission and distribution; introduce an independent regulator; rebalance prices; privatize. Two decades later, we have learned the stark limits of orchestrating reforms on the basis of ‘best practice’ blueprints such as these.

What would a more ‘with the grain’ approach to electricity sector reform look like? To explore this, I asked my Johns Hopkins SAIS and University of Cape Town students to review how a variety of country efforts unfolded in practice – focusing specifically on efforts to introduce private sector participation into electricity generation. Some striking patterns emerged.  Here I contrast South Africa’s experience with those of Kenya, Peru and Lebanon. The former illustrates powerfully the hazards of ‘best practice’ reforms;  the latter point to the promise of  more  incremental, cumulative, with the grain approaches.

In 1997, an official South African report signaled that in 2008 the lights would go out if there was no new investment in electricity generation; the report proposed that the country embark on a far-reaching effort to implement the ‘best practices’ template for electricity sector reform, constraining the dominant parastatal, ESKOM, and turning to the private sector for new investment in electricity generation. In 1998, the government adopted the report’s recommendations. In her richly-researched Masters dissertation (available on the link that follows), Nchimunya Hamukoma detailed what happened next.

Contestation over the agenda among competing factions within the ruling African National Congress and its allies interacted with a hugely-ambitious reform design — one for which almost none of the requisite political, institutional, economic and organizational capabilities were in place. The result was that after six futile years of trying, the effort at restructuring and private participation was abandoned, and ESKOM was given a green light to invest in new capacity. But the six lost years – the result of futilely pursuing an unachievable ‘best practice’ chimera – had an inevitable consequence. In 2008, as predicted, the lights went out.

Kenya, Lebanon and Peru pursued very different reform paths than South Africa. And all have been able to supplement generation capacity via private investment. Here in very brief summary (with links to more detailed papers by my SAIS students) is what happened:

  • In Kenya, initial efforts in the late 1990s to introduce independent power producers were mired in the usual Kenyan controversies of corruption and insider dealing. But, as Joshua Moraczewski details restructuring also resulted in the emergence of strong technical capacity in both the Energy Regulatory Commission and the restructured Kenya Power and Light Company (KPLC). (KPLC remained state-owned, but now focused exclusively on electricity transmission and distribution.) These capabilities underpinned a series of follow-on initiatives. As of 2015, Kenya had successfully attracted 695 MW of private power (making it a leader in Africa), via a process that had come to be regarded as competitive, transparent and effective.
  • By contrast, Peru’s initial reforms were far-reaching. In response to endemic supply shortfalls and brown-outs, then President Alberto  Fujimori used dictatorial powers to undertake a comprehensive unbundling and privatization of its state-controlled utility sector. These reforms failed to attract private investment in new capacity, and in 2001 Fujimori was forced from office. But the reforms had created an island of technical capability within the electricity regulator, OSINERG. – and, as Kayla Renz shows in her paper, when subsequent democratically elected governments moved to attract new independent power producers, OSINERG had the skills that (paralleling Kenya) underpinned a transparent and competitive bid process. The result was entry and investment by over a dozen new private providers, and an additional 2,100 MW of new capacity since 2009.
  • Lebanon is hardly an obvious example of electricity success.  in a fascinating case study, one of my students noted that as of 2014 it was ranked by the World Economic Forum as the second-worst country in the world for the quality of electricity supply. But in 2014, the city of Zahle, the fourth largest city in Lebanon, had had enough – and moved to contract with a private operator to provide new electricity capacity, and integrate it seamlessly with the haphazard public supply. Private generators already on the scene strongly opposed the initiative – and communicated their views by blockading roads, issuing death threats, and vandalizing the facilities of the newly-contracted operator. But a determined coalition of local civic, political and business leaders held firm, winning the support of citizens with a skillful media campaign. As of late 2015, Zahle became the first jurisdiction in the country to provide 24 hour electricity to its residents, with prices 40 percent below those that had prevailed prior to the initiative.

For all of the very large differences between the above three reform experiences, considered together they offer a key insight into what can make ‘with the grain’ reforms successful. The underlying logic was laid out by Daniel Carpenter in his influential discussion of public entrepreneurship. Key is the interaction between two sets of variables:

BUILDING INTERNAL CAPABILITY <=>  NURTURING EXTERNAL ALLIANCES

In different ways, the Kenyan, Lebanese and Peruvian experiences all illustrate the essentials of this formula. In all cases, reform champions began early in the process of change to cultivate internal capacity around an organizational focal point of excellence with strong internal capabilities. In all cases, these capabilities increasingly were recognized beyond the organization itself. And in all cases, external allies (sometimes the private sector, sometimes donors, and sometimes political actors eager to build a reputation for effectiveness) provided a buttress of support that enabled the technically-capable leaders to consolidate their initiatives. (Interestingly, South Africa’s successful post-2011 initiative to contract for over 5,000 MW of wind and solar electricity generation from independent power providers offers a further illustration of the ‘with the grain’ formula at work.)

In sum, a with-the-grain approach directs attention to two questions for reformers of utilities and other public agencies seeking to foster change in ‘messy’ governance settings:

  • Do the proposed reforms facilitate the emergence of a focal point of strong organizational capability, committed to effective performance over the long term? And
  • Does the change process empower external allies, ready to support the organizational champion, and the process of change more broadly?

Viewed from the perspective of technocratic ‘best practice’, these questions are very much secondary to the ‘hard’ challenges of getting the engineering, economic and accountability blueprints right. But viewed from a with-the-grain perspective, they are crucial — not only as guideposts for what to prioritize in initiating change, but also for sustaining the momentum of change over the long haul.

Clear seeing

January 2, 2016 By in good governance, public sector governance, Uncategorized Tags: , , 2 Comments

L_ Superior SunriseHow  can we contribute to a renewal of political discourse? A large hazard for 2016 is that we end up countering  anger, false certainty and hatred with their mirror image, and in so doing fuel a downward spiral. Clear seeing as to the way things actually are offers an antidote to these Gramscian ‘morbid symptoms.

Late last year, spurred on by the truly appalling tone of discourse in the Republican Party’s nomination contest, I wrote three United States-centric blog posts on the ways in which we talk about government. Each of the posts explored one aspect of the theme:

The first post explored the Great-Gatsby-like carelessness of the discourse: “….careless people….. who smashed up things and creatures and then retreated back into their money or their vast carelessness or whatever it was that kept them together, and let other people clean up the mess they had made.”

The second post used the example of the Washington DC Metro to show how carelessness can undermine the performance of public agencies. It described the ways in which  a combination of hubris and inattention resulted in a downward spiral of dysfunction – and offered some thoughts as to how this might be turned around.

The third post used the example of Obamacare to expose the “good governance high standards shuffle” – in which superficially appealing benchmarks of perfection are used cynically to undermine any sense that government can contribute to the public good, even when real gains have been achieved.

(In case you’re interested in a parallel exploration in a different context, in a set of posts earlier in 2015 I detailed how South Africa’s sour, conflict-prone discourse seemingly is destroying Nelson Mandela’s remarkable example of reconciliation and leadership.)

Antonio Gramsci’s famous quote from his Prison Notebooks, written in the 1930s when he was imprisoned by Mussolini’s fascist regime, captures perfectly what seems to be happening in so many parts of our contemporary world:

“The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this inter-regnum a great variety of morbid symptoms appear.”

In 2016, may the wisdom that comes from the effort to see clearly help us to turn away from anger and polarization, and thereby renew the possibility of looking to the future with hope, rather than recrimination and despair.

Obamacare and the ‘good governance standards shuffle’

December 16, 2015 By in good governance, governance, Uncategorized Tags: , , , 5 Comments

Fred Astaire stillThis post is about Obamacare. It’s hardly news anymore, I know. But my focus is less on the details of America’s ongoing efforts to reform its health sector, than on the way the discourse has played out – making the post  another in my series on the dysfunctional ways in which we speak about government.

In an earlier post, I explored Great Gatsby-style carelessness. This time, I want to introduce a dance move —  the ‘good governance high standards shuffle’, a display of exuberant glee (disguised as disappointment) whenever the real world intrudes, and the outcome of one or another public initiative  is less than perfect.

In the same way that it can be difficult to distinguish between real tears of disappointment, and malicious glee hiding behind crocodile tears, sometimes the ‘high standards shuffle’  can be difficult to detect. Sincerity can all too easily get ‘played’ by cynicism in disguise. While some dancers of the standards shuffle are clumsily obvious,  others have the moves down pat — making it hard to tell whether or not one is being played. (And some exponents might even be unaware that they’re doing the standards shuffle.)

Each year, as part of my teaching at Johns Hopkins School of Advanced International Studies, I select a ‘live’ example of the challenges of public management. A few weeks ago, as I described in another post in this series, I used the case of Washington’s Metro to explore with my students at SAIS the costs of careless in our discourse about government. In 2014, my focus was on the  ongoing American debate on health care reform (also known as “Obamacare”). That debate offers a marvelous  opportunity for seeing the high standards shuffle in action – an opportunity that has not diminished with the passage of time.  So: come dance with me……

An exchange in the United States Congress early this past summer illustrates what the clumsy version of the standards shuffle looks like. Here (as reported by the Washington Post’s Dana Milbank) is  President Obama’s Secretary of Health and Human services, Sylvia Burwell, being grilled by Sam Johnson, Republican Congressman of Texas:

“’It looks like to me everything’s going up’” Johnson said, complaining about health care costs. Burwell pointed out that Medicare spending was $300 billion below forecast and that per-capita health-care costs growth has been the lowest in 40 years.

‘Well, but the insurance rates are going up’, Johnson pressed. Burwell said rates are going up at a lower rate than before enactment.

‘Okay’, Johnson said, ‘Let me just change subjects for a second….’ “

But sometimes the moves can be much harder to detect. Let’s go back to October 1st 2013 —  the day the Obama administration launched  the online platform for purchasing (subsidized) health insurance.  A week before the launch White House officials were assuring the public that the start up would be smooth. But that was not what happened. Over eight million people tried to log on to healthcare.gov  in the first three days of the launch. It took hours of trying to get onto the site. In the first month, fewer than 27,000 people actually were able to navigate the site to the point that they could select a plan to purchase.

Then things turned around. In late October, the Obama administration turned to Mr Fixit, Jeffrey Zients, an entrepreneur and former management consultant (including with Bain & Company….). Zients promised that by the end of November four out of five people on the site would successfully complete their efforts to purchase insurance, and that by the end of the year the site would  by working smoothly. He delivered.  By April 2014, 5.4 million people had enrolled for health insurance via the healthcare.gov site, a number which exceeded Obamacare’s proponents expectations.  had succeeded beyond its proponents expectations. As of mid-2015, 16.4 million people who otherwise would have remained uninsured had benefited from one or another aspect of Obamacare – bringing the percentage of the population that remained uninsured down from 16% in 2009 to 9% in 2015.

Yet even if, in broad terms, Obamacare has achieved its objectives, might the messiness in implementation have been avoided? Intriguingly, my SAIS students and I concluded that, for two reasons, it was an inevitable part of the package.

The first reason is technological: Large information technology projects almost never launch as planned, in either the private or public sectors. An October 2013 article in Computerworld reported that only 6.5% of 3,555 projects from 2003 to 2012 with labor costs in excess of $10 million were wholly successful; that 41.5% were failures (either abandoned or started anew from scratch); and that the remaining 52% were challenged (over budget, behind schedule or failing to meet user expectations). Generally, private companies respond to these realities by scaling-up incrementally, with multiple ‘beta’ versions, fixing problems as they arise, and managing expectations along the way.

This brings us to the second reason why the messiness of the launch was likely unavoidable – namely that in the politically toxic environment that prevailed in Washington, an incremental approach was not feasible. Here’s how the political context was described in a November 2013 article in the Washington Post:

“The project was hampered by the White House’s political sensitivity to Republican hatred of the law – sensitivity so intense that the president’s aides ordered that some work be slowed down or remain secret for fear of feeding the opposition…. Republicans also made clear they would block funding…..Tucking [the unit responsible for implementation] within a large bureaucracy, some administration officials believed, [it] would be better insulated from the efforts of House Republicans, who were looking for ways to undermine the law….‘You’re basically trying to build a complicated building in a war zone, because the Republicans are lobbing bombs at us’ a White House official said…”

Reflecting on the Obamacare experience, I am tempted to propose two theorems of public sector implementation in ‘messy democracies’:

  • That start-up will rarely be as smooth as proponents promise, and generally messier than in the private sector. (Even without the Obamacare-specific politics, public organizations need to content with a more complex combination of multiple goals and rigid procurement practices than do their private counterparts.). And
  • That the true measure of public sector capability is the capacity to adapt when crisis becomes apparent – with the moment of crisis creating the opportunity to cut through the fog of political obfuscation and bureaucratic routines. Whether a public organization can rise to the occasion is the true test of what can be achieved, not judgement against a standard of perfection.

But these theorems imply that public action will almost always be vulnerable to the ‘good governance standards shuffle’. Again, the discourse surrounding Obamacare is revealing. Though the facts of what happened seem clear, endless repetition of the ‘failed roll-out of Obamacare’ mantra persist. In the eye of at least some beholders, success (rather than failure) simply is not an option. Evidently, something other than an engagement with the facts is at work. In the case of Obamacare, there’s not much ambiguity as to what it is: a determination, for ideological (or other) reasons to discredit the reforms. Obamacare WILL serve as ‘Exhibit #1’ of what government cannot do, irrespective of the evidence.

To be sure, things can (and do) go wrong; those of us committed to public action hardly have room for complacency. But we would also do well to avoid buying into superficially appealing benchmarks of perfection, thereby inadvertently contributing to the corrosive discourse about government. Rather, we can step back and publicly applaud the cynical performance for what it is – a virtuoso display of the ‘good governance high standards shuffle’!!!!

(Postscript: Here, for your enjoyment, as a bonus for reading this post, is a link to a YouTube video of a true dance master in action – Mr Fred Astaire…….).

 

 

Washington’s Metro — The Costs of Carelessness (WWG implementation series #4)

December 9, 2015 By in governance, public sector governance, Uncategorized, Working with the Grain Tags: , , , 4 Comments
District of Columbia Fire and Emergency workers at the site of a rush-hour collision between two Metro transit trains in northeast Washington, D.C. Monday, June 22, 2009. (AP Photo/Pablo Martinez Monsivais)

District of Columbia Fire and Emergency workers at the site of a rush-hour collision between two Metro transit trains in northeast Washington, D.C. Monday, June 22, 2009. (AP Photo/Pablo Martinez Monsivais)

For those who are so disposed, finding instances of government dysfunction can be like shooting fish in a barrel. But the resulting back-and-forth cycle of blame, defensiveness and recrimination can be a dangerous distraction from the crucial task of  getting public agencies that play a central role in our daily lives to work better. Take the example of Washington’s Metro.

Each year, as part of my teaching at Johns Hopkins School of Advanced International Studies, I select a ‘live’ example of the challenge of public management. This year, Washington’s Metro seemed to be a good case to choose — barely a week has gone by without one or another crisis of Metro management making it into the headlines.

The Metro case demonstrates vividly the costs of carelessness in our discourse about government. (In a complementary blog post, I drill more deeply into how this ‘Great Gatsby’ government discourse works. ) But it also points to a possible way forward — how  a combination of public entrepreneurship and  active citizenship potentially can be leveraged to foster a sustainable turnaround of performance. (For additional detail on the recent Metro experience, here is a link to an article published in the Washingtonian, a few days after I taught the case at SAIS.)

In the beginning, Metro looked like a success story. It opened its doors to passengers in 1976; its 117 miles of track, over 215 million trips per year (and up-front $9.3 billion capital investment) made it the second largest system in the United States. Washingtonians came to expect a streamlined, comfortable, reliable, and aesthetically pleasing commute. In 1987 and again in 1997, the Washington Metropolitan Area Transit Authority won ‘Outstanding Achievement’ awards from the American Public Transportation Association.

But beneath this success something else was incubating.  By 2001, the key management tasks had become routine operational ones – but Metro’s long-time (1996-2006) general manager, Richard White, was not one to sweat the details. “He was a frequent visitor on Capitol Hill…He drove to work….He was part of the regional dialogue about highways and land use and everything else….[he] didn’t spend much time mingling with the rank and file”. The system began to decay. In 2006, the Metro board terminated his contract, three years early.

Then followed an accelerating downward spiral of deteriorating performance in the management of both financial and safety systems:

  • A 2008 internal audit report raised the red flag on poor controls. Richard Sarles (general manager from 2010 to end-2014) reported that “Metro had poor financial controls when he arrived in 2010 and that he had been working to improve them”. (WP 6/7/15).
  • In 2009, two trains collided, killing nine people, and injuring 80. “What you’re finding, when you look behind the curtain, is that there’s been a lot of neglect to safety priorities coming out of accidents,” said Kitty Higgins, a former member of the National Transportation Safety Board to a Washington Post team investigating the accident. “It really is disheartening.”
  • A 2014 audit by the Federal Transit Administration reported extensive safety concerns, including: understaffing in the central Metro train control center (only 34 of 54 authorized positions were filled; those in position enjoyed massive overtime payments); shortages in keeping maintenance materials in stock (so, for three months, replacement brake pads were cannibalized from out-of-service trains); and the non-repair of tunnel ventilation systems (two fans in Metros deepest tunnel location were out of operation for more than six months awaiting repair). It also found “extensive grant-related mismanagement that had gone on for several years”.
  • In January 2015, passengers were left stranded for a half-hour as their train and tunnel filled with smoke, and Metro officials were paralyzed with indecision as to what to do, resulting in one death.
  • The track defect that caused an August 2015 derailment (no one was injured this time) had been identified as an urgent problem in a safety inspection a month earlier, but with no follow-up. Metro’s chief safety officer resigned a month later.

Underlying these performance shortfalls were weaknesses in governance. Four jurisdictions (the District of Columbia; the states of Maryland and Virginia; and the Federal government) plus multiple sub-jurisdictions all have oversight responsibility for Metro, and are allocated seats on the Metro board of directors. Governance by multiple principals is messy; but it mirrors the spatial geography of Washington’s capital city. However, the consequence has been that none of the jurisdictions has taken a broad strategic view of the organization’s challenge.

Board members focused disproportionately on narrower concerns that are of interest to their constituents: where bus stops would be located; operating and closing times; caps on fee increases in the face of revenue shortfalls. Financial oversight also has been shortsighted. In response to the 2014 audit findings of shortfalls in Metro’s financial management, the FTA imposed new layers of restrictions on Metro’s access to federal funds. Punishing a system in the midst of a downward spiral for its continuing shortfalls might offer some satisfaction for ideologically-inclined politicians – but it also is an almost certain recipe for accelerating the decline.

What, then, is to be done? In the short-to-medium-term there is room for optimism that things will turn around. The attention of the Board (and the areas’ politicians) is there. A new CEO has been appointed. The immediate task, though formidable, seems clear: rebuild confidence in the operation – and renew its mandate and finances.

But how to ensure that the cycle described above – rising confidence, de facto autonomy, and then a slide into dysfunction — doesn’t repeat itself? Key, I would argue, is to look again at how we think about the boundary between the spheres of bureaucracy, of politics, and of civil society. Our standard narrative is Weberian, and extols the virtues of an ‘insulated’ bureaucracy. However, as the experience of the latter 1990s onwards underscores, a lack of insulation from pressure for performance has hardly been Metro’s problem.

The past two years have seen a rise in public focus on Metro.  Coverage by Washington’s media has been forthright, detailed. Metro’s riders, too, have increasingly been on the case. A variety of activist groups of Metro riders have been formed. In October 2015 these came together to form the Washington Metro Riders Union. Viewed through the lens of bureaucratic insulation, journalism, social media and civic activism might seem to be noise in the system. But, as Daniel Carpenter has highlighted, high-performing American public sector organizations took root

“…. not at the expense of democratic participation but in a symbiotic relationship with it….….grounded in multiple networks through which agency entrepreneurs can build program coalitions around the policies they favor….. At their strongest, these ties cut across the established lines of class, partisanship and ideology…and enable officials to ground their agency’s reputation in a broader embedment in society.…. The [contemporary] challenge of American statebuilding may be to reengage state bureaucracies with the very civic organizations and social networks in which they once flourished.”

Robert Putnam makes a similar point in his classic 2000 book, Bowling Alone. “American democracy”, he argued:

 “….evolved historically in an environment unusually rich in social capital….. A politics without face-to-face socializing and organizing….would be heard as a muddle of disembodied voices….. Just as one cannot restart a heart with one’s remote control, one cannot jump-start citizenship without direct, face-to-face participation. Citizenship is not a spectator sport.”

Encouragingly, in his first day on the job, Metro’s newly appointed General Manager, Paul Wiedefeld, went on a listening tour among stakeholders – including a commitment to meet with the Riders Union. Is it really too much to hope that in America’s capital city, a city where more words are spoken in praise of democracy than almost anywhere else on earth, public discourse need not be a toxic battleground – but that instead an activated media and citizenry could become an integral part of the fabric of active, effective governance?

 

The Great Gatsby government discourse — carelessness and its consequences

December 8, 2015 By in Uncategorized 9 Comments

top hatsI’ve been thinking a lot in recent months about how we talk about government. So, spurred on in part by the truly appalling tone of discourse in the Republican Party’s nomination contest, I’ve decided to write a few United States-centric blog posts on the subject (though I’ll stay away entirely from chauvinistic slurs, or comments about ‘walls’ or ‘roads to serfdom’).

Somehow, in the area of governance, our usual ways of measuring (and honoring) human endeavor don’t seem to  apply. Ordinarily, working and playing in teams teaches us how to master the challenges of  co-operative, collective achievement — which can be way, way harder than striving alone. Governing is a quintessentially collective endeavor, especially in democracies.  Yet all too often  the discourse (and not only by nameless plutocrat presidential candidates…..)  is resonant  of   F. Scott Fitzgerald’s description of Tom and Daisy in The Great Gatsby:

“They were careless people…..  They smashed up things and creatures and then retreated back into their money or their vast carelessness or whatever it was that kept them together, and let other people clean up the mess they had made.”

In a series of complementary blog posts — on Washington’s Metro (on this link)   on Obamacare (on this link);, and on South Africa’s public sector (available here) — I explore some consequences of our carelessness in the way we speak about the public sector.  Here I focus on the underlying logic of the conversation. A good place to begin is with the analysis of institutions.

The great institutional economist, Douglass North, defined institutions formally as “humanly devised constraints which govern human interaction”. (‘Rules of the game’ is his classic, informal definition.) Another Nobel-prize-winning economist, Oliver Williamson, built on North’s definition. “Governance”, Williamson suggested, “is an effort to craft order, thereby to mitigate conflict and realize mutual gains”.   Crafting governance arrangements for the public sector is hard – much harder, Williamson emphasizes, than governing a private firm. Yet, somehow, seduced by high-sounding bromides, we  trivialize the challenge. We gloss over the complexities, imply that what is extraordinarily difficult should be straightforward, and end up fueling disappointment and despair. The result is the pervasive distrust of government evident across much of the industrialized world.

The ideas which lead to this hypercritical way of talking about government are deeply rooted, even among protagonists of active government. Here’s the slippery slope  in mainstream economics.  Economics, we learn in the standard canon (or ought to learn, as even a recent book on the pro-market ‘Chicago school’ of economics reminds) walks on two legs. There is the private sphere, where markets offer an efficient, adaptive mechanism of economic and social organization. And there is the sphere where public value differs from private value, so collective action is needed. Standard welfare economics thus takes as its point of departure the distinction between the narrow goal of private profit-seeking and the broader purpose of the pursuit of social welfare. Yet, somehow, even as many of us embrace the goal of pursuing social welfare, its high-minded resonance seduces us into forgetting that what we mean by ‘social welfare’ cannot be derived straightforwardly. It is the outcome of an ongoing, messy, contested political process — one which, in democratic societies, inevitably pervades public action.

As a second example of  the (sometimes) unintentional slippery slope, consider the seeming truism that ‘good governance is necessary for development’. This notion, as Frank Fukuyama reminds us, confuses contemporary ‘Denmark’, with the long, messy journey en route, the journey of ‘getting to Denmark’. (The problem goes deeper than intellectual confusion. As I explore in my blogpost on Obamacare, I  increasingly am convinced that the ‘good governance’ dictum has served de facto as a  tool for discrediting government, one which many of us genuinely committed to public action have unwittingly embraced.)

Here’s how Michael Lipsky, in a  2010 ‘Afterword’ to his 1980 classic book on Street Level Bureaucracy, described the rhetorical trap we fall into:

“In principle, a debate between defenders and critics of an expansive state can be healthy. That debate is rarely engaged, however….. Advocates with an interest in an expansive government role typically focus on the shortcomings of the sector in which they take an interest….If they defend anything at all, they defend the programs they support, but not the set of collective interests of which their favored programs are a part…”

“…The tendency of media to report on government failures but ignore government successes… ensures that when government comes to public attention it is in a negative light. Moreover, elected officials rarely praise government, possibly because they fear being regarded as self-serving. They almost never draw attention to government’s essential role. With conservatives opposing government programs in principle, liberals opposing them in practice, and news about them focusing only on their failings, it is hardly a wonder that the reputation of government is low……  Of course, democratic governments, like all human endeavors, are sometimes flawed…. But of the major institutions in society, only government sustains attacks without effective rebuttal or even measured assessment of the charges…”.

Instead of empty sloganeering (from the left or the right) what is needed for the public sector to thrive is active, ‘with the grain’ engagement with the often-challenging day-to-day realities that are the essence of democratic governance. (More on how this might work in my posts on the Washington Metro and on Obamacare.) Democracies often are messy – but can thrive in the midst of messiness. Messiness and complexity often are part of the package —  inseparable from the vision of human dignity and active citizenship that lie at the heart of democracy’s promise.

 

 

South Africa — some elements of inclusive policy and governance discourses

September 9, 2015 By in Uncategorized Tags: , , 2 Comments

khayelitsha-cape-townSome new reflections on public sector governance — as part of a broader  series of recent reflections on how South Africa’s discourses on public sector governance and economic policy could become more inclusive.  The growing effort  to transcend the sourness of current debates  requires a transformation of both the intent and the content of discourse. I thought it would be useful to consolidate my three sets of reflections into a single post.

HERE is the exploration of South Africa’s public sector governance — contrasting the sour discourse with the more mixed reality.

HERE is the exploration of inclusive economic policy in the South African context — exploring how the discourse might move from zero-sum to value adding options.

HERE is a more general reflection on the origins, and underlying logic of the current, sour discourse — and how it might be transcended.

Public sector governance — what we (choose to) see shapes what we get….

September 9, 2015 By in democracy, governance, institutions, public sector governance, Uncategorized, Working with the Grain Tags: , , , , , , , , , , 2 Comments

storm-rainbowDiscourses on public sector governance, in South Africa and elsewhere, illustrate powerfully the insight of behavioral psychologists that ‘framing’ matters. If our framing is inconsistent with the way things actually are, we are doomed to disappointment and unhappiness. But frame in a way that responds to reality, and opportunities abound for active, worthwhile engagement.

South Africa’s daily headlines and frustrations dispirit – from electricity blackouts, to corruption in the procurement of railway engines (including allegations that the engines purchased did not match the specifications of South Africa’s railway system); to reports that neglect of maintenance could lead to the collapse of water utilities in over half the country’s utilities; and that teaching jobs can be bought (including via threats of violence to ensure that a desired position becomes vacant).

As of 2014, only 34 percent of the country’s citizens reported that they had confidence in their government, down from 66 percent in 2007. While the country is hardly alone in its lurch into pessimism (on average, as of 2014, only 40 percent of citizens in countries the club of high-income democracies, the OECD, had trust in their governments), South Africa’s decline in confidence is among the most rapid anywhere. In a complementary blog post I explore how the country’s current extraordinarily sour, conflict-prone public discourse has its roots in economic and psychological deformations inherited from the apartheid era. This post focuses narrowly on public sector governance.

Notwithstanding the evident challenges, might pessimism about the performance of South Africa’s public sector be overdone? Without wishing away the challenges, might there be alternative ways of framing that point towards creative entry points for strengthening public sector performance?

To answer these questions, it is helpful to disentangle two arguments that often are conflated:

  • that a predatory political leadership can provoke a downward spiral into disaster; and
  • that good governance is necessary for development.

The first argument is straightforward — and, as recent dark prophecies emphasize, all too plausible for South Africa. (I will return to it at the end of this post.) But the broader ‘good governance’ argument does not withstand scrutiny — either empirically or conceptually.

Consider first South Africa’s empirical track record. Aggregate indicators indeed show that government effectiveness in South Africa rates well below high-income countries, with substantial decline between 1996 and 2014. Even so, as shown in the accompanying table of  South Africa’s comparative governance relative to other middle-income countries, as of 2014 South Africa’s government effectiveness rated at the high-end for relevant comparators — on a par with Mexico and Turkey, and well above Brazil and Thailand. In a recent paper for the DFID-funded and University of Manchester led Effective States and Inclusive Development (ESID) research programme, Alan Hirsch, Ingrid Woolard and I documented major gains between 1994 and 2010 in the provision of public services to the poorest 40 percent of the country’s population. And, to further confound the drumbeat of daily headlines, here are some recent examples of public sector effectiveness:

  • The successful procurement from independent power providers of well over 5,000MW of renewable (wind and solar) electricity generation capacity between 2011 and 2013, an investment of over US$15 billion, with very large declines in unit prices over four rounds of competitive bidding (e.g. for solar, from from $0.35c/kilowatt hour in the first round to under 8c/kwh in round four)   – transforming South Africa from a laggard to a leader globally.
  • The leveraging of the Expanded Public Works Programme  to create over one million work opportunities in 2014 (the equivalent of about 400,000 low-income jobs) — and to integrate these into ongoing programmes of support for the social sectors (in Limpopo), for rehabilitation and maintenance of rural roads (in the Eastern Cape) and for environmental rehabilitation (via, for example, the internationally renowned Working for Water, Working on Fire, and Working for Wetlands programmes).
  • Ongoing gains in the outcomes of basic education in some provinces (e.g. the Free State), and persistent examples of high-performing public schools even in provinces (such as the Eastern Cape) where the broader environment for educational performance remains weak.
  • High-quality, proactive regional economic development strategies in both of South Africa’s two leading regional economic hubs – the Western Cape and Gauteng. And
  • A four-fold increase between 2009 and 2012 in the number of people receiving anti-retroviral therapy – with over 2 million people receiving life-saving anti-retroviral medications in 2012, delivered through a supply chain that reaches effectively into the most remote parts of the country, and alongside interventions that successfully have lowered rates of HIV-prevalence.

Why, given these results, is the tone of the discourse so unrelievedly negative? Part of the reason is that most South Africans (whether of the political left or right) implicitly conceive of the public sector in top-down, hierarchical terms. Good leaders get the policies right, and then direct the bureaucracy to deliver. Viewed through this lens, all is either won or lost at the top of the hierarchy – ‘a fish rots from the head down’ in the reigning metaphor.

More broadly, the ‘good governance’ paradigm implicitly frames public performance as ‘all’ or ‘nothing’, with little scope for shades of gray. However, as recent landmark contributions by Francis Fukuyama and Douglass North underscore, this pre-occupation with good governance is inconsistent both with the evidence of how results are achieved in many developing countries, and with the historical record of all contemporary high-income countries. (Note, though, that as I explore in an accompanying blog post it can, for some, have a paradoxical ideological function — a seeming embrace of ‘good governance’ can, for those on the political right, offer a marvelous opportunity for ‘crocodile tears’, for seeming to wish that government can do better, but then sorrowfully concluding that it cannot.)

Letting go of a narrowly, top-down framing of how the public sector works opens up space for identifying potential entry points for positive action that can help build a thriving, inclusive society. Developing democracies can indeed thrive – but, as a review of the track record over the past fifteen years underscores,  almost everywhere the process looks very different from a ‘best practice’ vision of how hierarchy is supposed to work .  Rather, in these messy settings results often come via ‘islands of effectiveness’.

Islands of effectiveness emerge when stakeholders take the initiative: from public entrepreneurs within government going to the limits of their formal mandates, and sometimes beyond, in their efforts to make a difference in peoples’ lives; from multistakeholder partnerships capable of trumping predatory pressures . (Working with the Grain explores these processes in depth.) As a landmark study shows, this combination of public entrepreneurship and multistakeholder partnership was key to the gradual, cumulative transformation of the patronage-driven American bureaucracy of the 1880s into (by the early 1920s) a more performance-driven organization. It also has underpinned many of the positive outcomes along the lines of the South African examples listed above.

There is, however, a crucial caveat. Predatory politics and islands of effectiveness can coexist for a while, but not over the long term. Robust coalitions can resist everyday predators, but they cannot indefinitely withstand all-pervasive predation emanating from the top of the political order. Combatting that kind of predation is, ultimately, the task of politics – of the choices political parties make as to their leaders, and of how citizens respond to those choices. It is a task for activists – but it is not the only task. Even in the midst of a messy politics, there is scope for supporting the emergence of initiatives that can make a difference in peoples lives, and for celebrating gains where they are made. Approaches that throw out the baby with the bathwater may or may not be sufficient to get rid of the bathwater – but they will almost surely kill the baby.

 

 

 

 

South Africa: From reconciliation, to recrimination, to….. ???

August 18, 2015 By in Uncategorized Tags: , , , 3 Comments

Its your faultSouth Africans no longer bask in the glow of the country’s ‘miracle’ of reconciliation. Great leadership can enable a society to seemingly transcend its deeply-rooted deformations.  But such leadership is rare — and in its absence what comes to the surface are the underlying ways in people in a society interact. Unsurprisingly, given the country’s brutal history, what has resurfaced in South Africa is profoundly discomfiting.

Two sets of inherited deformations  make the depths of the country’s  challenges almost unique among middle-income countries. The first is economic – the country’s stark inequality. In a recent working paper (click here to access)  for the DFID-funded and University of Manchester led Effective States and Inclusive Development (ESID) research programme, Alan Hirsch, Ingrid Woolard and I contrasted South Africa’s income distribution with that of four other middle income countries (MICs) – Brazil, Mexico, Turkey and Thailand. Compared with the other countries, South Africa has an extraordinarily steep distributional cliff within the top third of the distribution. South Africa’s citizens are either affluent or poor, with little in between. As our ESID paper explores, the steepness of this cliff is the consequence of a combination of continued concentration of wealth and income in the hands of the beneficiaries of apartheid, and a post-apartheid economy that is failing to expand opportunities for its citizenry.

Many countries around the world are grappling with high and rising inequality. Everywhere, finding solutions is daunting, In South Africa, however, inequality also interacts with a second challenge — a psychological one. I am using the term ‘psychological’ in a very specific way here — to point towards inherited patterns of thought, speech and interpersonal interaction. Steve Biko, putting it in the political language of the black consciousness movement, framed South Africa’s inherited legacy in this area as follows:

“In time we shall be in a position to bestow on South Africa the greatest possible gift – a more human face….. As a prelude, whites must be made to realize that they are only human, not superior. The same with blacks. They must also be made to realize that they are also human, not inferior…..”

In the initial glow of democratization, it might have seemed as if Biko’s vision of a ‘more human face’ was being realized. But two decades later, and in the absence of visionary leadership, South Africa’s twin deformations are feeding off one another to produce an extraordinarily sour, conflict-prone public discourse.

In two companion blog posts, I describe in detail how this bile-filled downward spiral of (un)civil discourse plays out around specific arenas of public policy and its implementation. One post focuses on jobs and investment (access the post by clicking on this link); the other (access by clicking on this link) on the provision of public services. But the underlying logic is the same:

  • Prevailing policies reflect (as policies do in many places around the world) messy compromises among competing interests. Narrow, politically-connected interests are given special favor – and the result seems like something of a lowest common denominator. (The latter is especially likely given the current combination of relatively weak political leadership, and the reality that the governing African National Congress is itself an unruly coalition of divergent interests…..)
  • Critics of government lambast the policies and juxtapose them with their preferred alternatives – framing their discourses with claims of certainty as to the rightness of their views, and with a superior-sounding high-mindedness.
  • This framing is especially grating to those who confront the day-to-day necessities of wrestling with imperfect realities, and who know that the likely impact of alternative proposals is much more uncertain than protagonists claim. The criticism is all the more grating is that it comes disproportionately from white South Africans who enjoyed elite status during the apartheid years, and who frame their criticisms using seeming code words like ‘capacity’, ‘competence’ and ‘standards’……
  • Government and ruling party spokespeople respond with defensiveness and anger – with the latter both real (given the country’s history and interpersonal baggage), and also tactically useful as a way of deflecting attention away from some of the shortfalls in policy and implementation.

The result, at least in the short-run, is stalemate.

But with creeping economic decay confronted by rising social dissatisfaction, and fueled by an increasingly confrontational discourse, stalemate is not a sustainable equilibrium. One way or the other, stalemate WILL be broken. How? One possibility is a downward spiral of political disaster. Another is a deus ex machina of visionary new leadership. I prefer to focus on a third alternative, laid out in depth by Nobel-prize winner Elinor Ostrom.

For all of their sharp ideological disagreements, most of the current South African discourse operates out of a shared set of ‘top-down’ assumptions as to how policymaking and implementation works – politicians (taking a lead from voters) set goals; high-level technocrats help turn these general goals into detailed policy; the bureaucracy implements. Ostrom contrasts this hierarchical way of thinking with an effort to achieve results by co-equals working collaboratively – fully cognizant of (and committed to managing constructively) the tensions between their private purposes and collective ends. Building on decades of research, she identifies a set of necessary good practice design principles for collaborative governance to succeed.

Ostrom focuses narrowly on the governance of common pool resources such as fisheries, forests and irrigation systems. However, as I spell out in detail in my book Working with the Grain (published in 2014 by Oxford University Press)  the applicability of her insights is far, far broader. They apply directly both to efforts (to be explored in an upcoming post) to improve public service provision, and efforts (explored in the complementary blog post accessible via this link) to accelerate private (as well as public) investment and job creation.

An Ostrom-style, working-with-the-grain vision points in a very different direction from South Africa’s usual policy discourse. Its point of departure is a recognition that for most developing democracies, the way forward is a messier one. Gains come, not from discovering some ‘magic bullet’ that will magically unlock seemingly intractable challenges, but rather through the accumulation of successes across many ‘islands of effectiveness’. And each island, depends for its success on stakeholders engaging in the hard work needed for collaboration to succeed.

This, in turn, calls for taking seriously Steve Biko’s dictum – that genuine co-operation requires us all to learn how to engage with one another as absolute equals in rights and dignity. Considered alone, each individual success may seem quite modest. But taken together, the cumulative consequences of achieving concrete development ‘wins’ – and achieving them in a way that builds on the founding spirit of South Africa’s democracy — can be far-reaching.

To get its economy moving again, South Africa needs to rediscover the capacity to co-operate (WWG implementation series #3)

August 18, 2015 By in Uncategorized Tags: , , 2 Comments

jazz instrumentsFinding a way to reinvigorate economic dynamism in a context of high inequality is a daunting challenge under any circumstances.  But in South Africa, this search increasingly  is being made even harder by an addiction to framing  policy choices in polarizing ways — short-circuiting rather than building momentum for forward movement.

It doesn’t have to be this way.

  As I argue in a companion blog post (“”from reconciliation, to recrimination, to…??”), the search for ways to turn things around is bedeviled by the country’s apartheid history – directly by the country’s continuing stark inequality (examined comparatively in an ESID working paper co-authored with Alan Hirsch and Ingrid Woolard), and indirectly by ways of communicating that undermine the search for creative responses to crisis.

One might have hoped that South Africa could draw on the spirit of its democratic ‘miracle’ of 1994 to address the country’s rising crisis of economic hopelessness. Instead, the opposite seems to be happening  —  a dysfunctional policy discourse is giving  zombie-like life to deeply habitual and deeply destructive approaches to engagement.

Harvard economist, Dani Rodrik  points to the possibility of an alternative way forward. He famously distinguishes between the function and the form of economic policymaking. According to Rodrik:

“First-order economic principles do not map into unique policy packages. There is no unique correspondence between the functions that good institutions [and policies] perform and the form that such institutions [and policies] take. Reformers have substantial room for creatively packaging these principles into designs that are sensitive to local constraints and take advantage of local opportunities.

Here is one example of how, notwithstanding Rodrik’s dictum,   South Africa’s current economic policy discourse quickly degenerates into dispiriting polarization:

  • Providers of investment resources and entrepreneurial energy (rightly) argue that it makes no sense for them to invest if they lack confidence that they will be able to benefit economically from successful investments – and high-mindedly frame their arguments in terms of the sanctity of law (and thus of property rights).
  • Historically disadvantaged, but newly-politically-influential groups (rightly) recognize that, absent broader initiatives to transform the economy, the benefits of increased investment will flow disproportionately to established elites, bypassing them. Conditioned by decades of struggle, respond skeptically and suspiciously to high-minded, superiority-tinged recourse to the ‘sanctity of law’.

In this dialogue of the deaf, the result is stalemate and continuing economic decline. Indeed, even during the minerals boom of 2000-2008, mining investment in South Africa was flat, in large part because of contestation and recrimination along the lines laid out above.

And here’s another example:

  • Many economists and businesses (rightly) argue (vociferously, and with great certainty) that wage settlements above ‘market clearing’ levels and other labour market rigidities inhibit employment creation. But they do not add that (in ‘economist-speak’) the rate of employment creation subsequent to liberalization depends on the elasticity of demand for labor — and that the structural rigidities of South Africa’s minerals-energy complex imply that over the short-to-medium-term, the elasticity of demand (and hence employment creation) is likely to be low.
  • Meanwhile, employers and workers argue (loudly) over their annual agreements. Worker organizations embrace the rhetoric of revolutionary struggle — even in the face of evidence (summarized in our ESID paper) that unionized, employed workers have become a labour aristocracy, largely embedded within the top third of the distribution. Employers, on the other hand, ignore the implications for employees of South Africa’s distributional cliff of inequality– namely the reality that prevailing labor-market rigidities are what protects their employees from sliding rapidly from relative comfort to near destitution.

The result, again, is continued polarization and stalemate, limited job creation – and deepening pessimism as to South Africa’s economic future.

How labor markets operate, how economic power is distributed, and how property rights are protected are indeed central to South Africa’s economic performance. But might there be other ways forward than a pre-occupation with zero-sum alternatives which fuel old, destructive way of speaking and (not) listening?

As the companion blog post details, Elinor Ostrom, 2009 winner of the Nobel Prize in economics, offers an alternative. Her lifelong work focused on the challenge of how to achieve results by co-equals working collaboratively – fully cognizant of (and committed to managing constructively) the tensions between their private purposes and collective ends.

Here are five potential entry points for Ostrom-style multistakeholder collaboration in support of job creation and investment – focusing on possibilities at regional, sectoral and meso levels (where the prospects are perhaps better of moving beyond the ugly polarization of headline-level discourses). Each is ‘low hanging fruit’, in the sense that many of the foundations for implementation already are in place:

  • Social compacts around job creation, at sub-regional and sectoral level – a major push for an employment-oriented special economic zone in, say, the Eastern Cape (where the Coega industrial development zone already provides the requisite infrasutrctural platform) underpinned by negotiated agreement among stakeholders to do what it takes to create a large number (500,000 say) of new jobs.
  • A reinvigoration of labour-skills upgrading – where a multi-stakholder governance structure was established in the latter 1990s (in the form of Sectoral Training Authorities), but with weak follow-through on the part of both private sector and government actors. The result has been a consolidation within government of policymaking and implementation for ‘further education and training’ – but (in part because of the absence of sustained private sector involvement) continuing disappointing outcomes.
  • A determined effort to strengthen participatory governance in basic education. A strong role for School Governing Bodies formally is laid out in the South African Schools Act — but it was included there to protect elite (former Model-C) schools, not as a platform for inclusive governance more broadly. Yet research from other parts of the world (and some striking examples within South Africa) suggests that — with pro-active support — SGBs can play a powerful, constructive role.
  • A reinvigoration of sector-level broad-based black economic empowerment (BBEEE) initiatives. These were negotiated sectorally in the early 2000s, then consolidated using a balanced BBBEE scorecard (which focused broadly on transformation vis-à-vis ownership, management, skills and enterprise development). But with little collective commitment – and no collective mechanisms for ongoing monitoring, conflict-resolution and enforcement – they have receded into the background, and the fires of contentious BEE debates continue to burn.
  • Strengthened support (including via fiscal resources) from business elites for the expansion of successful public employment programmes for unskilled adults – these both provide employment, and support the provision of local infrastructure and services, especially in low-income areas.

Each initiative comprises a constructive step in the direction of building a genuinely inclusive economy. And each requires sustained co-operation among diverse stakeholders for its successful implementation (perhaps less directly so in the case of public employment; I include it because its embrace requires established elites to recognize that South Africa’s job creation and inclusion crisis goes beyond anything that can be met through familiar market-based solutions).

To be sure, these five initiatives are hardly sufficient to resolve South Africa’s vast, continuing challenges of exclusion and inequality. Even so, taken together, their successful implementation could be a game changer – a signal of the renewed willingness of South Africa’s diverse citizenry to turn away from polarization and recrimination, and rediscover the power of joint, co-operative problem-solving….. and thereby renew the possibility of looking to the future with hope, rather than recrimination and despair.

President Obama on ‘with the grain’ leadership

June 28, 2015 By in Uncategorized 1 Comment

rafting1smThe description below, by President Obama, of the essence of leadership in complex times, is extraordinary. Reflect back on his presidency, and its achievements — reversing an incipient economic collapse, making (near) universal health insurance available for the first time in history, ‘bending the curve’ on American policy vis-à-vis  climate change. grasping the nettle on immigration reform — and, hopefully, with a nuclear deal with Iran, modeling the possibilities of a foreign policy whose point of departure is the open-hand of a search for mutually beneficial options. One of the features of  effective ‘with the grain’ efforts at change is that the achievements seem somehow unsatisfying — until one looks back, and sees how long is the distance has been travelled…….

“I have strengths and I have weaknesses, like every President, like every person,” President Obama told [David Remnick of the New Yorker – click here to link to the New Yorker article]. “I do think one of my strengths is temperament. I am comfortable with complexity, and I think I’m pretty good at keeping my moral compass while recognizing that I am a product of original sin. And every morning and every night I’m taking measure of my actions against the options and possibilities available to me, understanding that there are going to be mistakes that I make and my team makes and that America makes; understanding that there are going to be limits to the good we can do and the bad that we can prevent, and that there’s going to be tragedy out there and, by occupying this office, I am part of that tragedy occasionally, but that, if I am doing my very best and basing my decisions on the core values and ideals that I was brought up with and that I think are pretty consistent with those of most Americans, that, at the end of the day, things will be better rather than worse.” “I think we are born into this world and inherit all the grudges and rivalries and hatreds and sins of the past,” he continued. “But we also inherit the beauty and the joy and goodness of our forebears. And we’re on this planet a pretty short time, so that we cannot remake the world entirely during this little stretch that we have. … But I think our decisions matter. And I think America was very lucky that Abraham Lincoln was President when he was President. If he hadn’t been, the course of history would be very different. But I also think that, despite being the greatest President, in my mind, in our history, it took another hundred and fifty years before African-Americans had anything approaching formal equality, much less real equality. I think that doesn’t diminish Lincoln’s achievements, but it acknowledges thatat the end of the day, we’re part of a long-running story. We just try to get our paragraph right.”

FINALLY — in case you’re wondering why I decided to illustrate this post with an image of river-rafting, here are the final few sentences of Working with the Grain:  “A  vision of ‘good governance’ is perhaps somewhat helpful as a north star that can help guide navigation, but it is no more than that. If the journey requires crossing a stormy sea, voyagers must navigate the heavy winds, and the churning currents. Inevitably, the winds, the tides, the ocean will  bring  new, unanticipated, and sometimes seemingly intractable challenges. Our task is to bring our best effort to the search for ways forward. We can do no more than that, and should strive to do no less.”