Public sector reform — function versus form
(extracts from pp. 142-4, 156)
“One set of options is to focus on comprehensive public sector reforms which seek to build a high-performing core of government along Weberian (or new public management) principles – and cascade reform downwards throughout the operating units of the public hierarchy. Other approaches proceed more incrementally, via:
- Targeted efforts to improve public management – focused on specific functions, sectors, public agencies and locales where there exist credible champions and an appetite for reform.
- Multi-stakeholder initiatives which bring to center stage the participatory engagement of non-governmental as well as governmental stakeholders in the (micro-level) processes of formulating the relevant rules and policies, and assuring their implementation.
“An over-arching principle of a ‘with the grain’ approach to development policy is that successful reforms need to be aligned with a country’s political and institutional realities. For any specific reform, an incentive compatible approach begins by asking: who might be the critical mass of actors who both have standing and have a stake in the proposed arrangements, and so are in a position to support and protect them in the face of opposition? Without these actors, there will be no one to defend reforms in the face of the ever-present incentives to renege in search of private advantage. This principle has especially stark implications for maximalist reforms to strengthen public administrative management.
“Public sector maximalism has been built on a brittle foundation of technocratic exhortation, the search for reform ‘champions’, and the willingness to see as windows of opportunity a few carefully chosen turns of phrase by senior officials eager to seem to accommodate the aspirations of donors. On occasion it works. But in all too many settings, these maximalist pre-occupations have been a distraction from the pursuit of more incremental, but real results – and a corresponding focus on more modest, but achievable, reforms…..In personalized competitive settings, multistakeholder engagement takes on heightened relevance– as a complement to targeted initiatives to improve public sector capacity incrementally and as the basis for building and sustaining islands of effectiveness even in the absence of a supportive public sector.”
WORKING WITH THE GRAIN: Integrating governance and growth 
How do you identify “the critical mass of actors” with standing and a stake in changed policies? Social psychologists and social anthropologists have difficulty enough doing so in societies with troubled institutions of various kinds, so how should development economists go about doing so? Do you provide guidance later in the book?
A thought-provoking insight! On reflection, the problem of identifying the relevant actors seems harder in theory than in practice. For many public actions (especially those focused on a relatively specific narrow function), it turns out not to be that difficult to identify who are the stakeholders which have a stake in the outcome (positive or negative) and who have the power to champion (and or block) the intended outcome. Chapter 8 of Working with the Grain discusses this in depth in a section entitled “the logic — and politics — of multistakeholder governance”, which builds on the work of Elinor Ostrom.