Generational shifts in international governance assistance: the World Bank and state-building after 911.

AuthorNunberg, Barbara
PositionReport

Abstract

Over the last decade and a half, international assistance to promote good governance in developing countries has increased significantly. The World Bank has been in the lead of major governance donors, with steadily growing resources devoted to governance programs. Even with the rise in governance-related lending, though, governance programs remained relatively marginal to the Bank's overall investments, as economists at the top of the institution had come to view these issues as important--but not central--to broader economic development objectives. Then came September 11th, which, this article argues, raised the stakes for state-building and transformed good governance into a global public good. How have Bank programs responded to the post-911 governance challenge? This article examines Bank investments in governance after 911, showing the roots of recent programs in earlier generations of institutional development assistance sponsored by donors since World War II. Bank spending patterns, official rhetoric, and program documents all suggest that the clarion call of September 11th has not been met with dramatically increased resources or a bold new governance vision. The response has been largely incremental, building on past practices. Still, as the post-911 era moves forward, some of these small shifts may signal a more decisive course of governance assistance, particularly with new leadership at the institution's helm.

Introduction

In the closing decades of the last century, international assistance to improve developing country governance increased at a steady pace. As evidence increasingly showed that institutions mattered to economic development, governance and public sector management programs became the "new, new thing." Multilateral development agencies like the World Bank led the pack, devoting substantial resources to strengthening systems of economic governance in the hopes of enhancing accountability, transparency, and probity in third world governments. Bilateral aid providers also got into the governance game, often with more explicitly political goals of promoting democratic governance in beneficiary countries (Ablo and Reinikka 1998; Barro 1996; Easterly 2001; Hoff 2003; Kaufmann, Kraay, and Zoida-Lobadon 1999; Lindauer and Pritchett 2002; World Bank 2005).

But this rise in governance assistance hardly signaled a paradigm shift. Attention to institutions remained largely ad hoc and piecemeal--still wagging the tail of the vastly larger dog of economic growth in international development aid strategies. Governance assistance had indisputably made solid gains, but it still represented a relatively small portion of total aid to poor countries. While the economists who ran international aid agencies no longer denied that institutions played a role in successful country reforms, neither did they acknowledge the centrality of good governance to the realization of international development goals.

Then came September 11th. The stakes for successful state-building in poor countries were raised, and good governance was transformed into a full-fledged, global public good. The quality of institutional performance in the third world morphed from a matter of mere individual country concern into a challenge that could determine the fate of humankind. But how much have the events of September 11th changed international governance assistance? Have aid donors heeded the governance wakeup call? How are worries about terror, security, and failed states re-shaping governance assistance to developing countries?

This article looks at the response of the World Bank, the leading multi-lateral source of governance financing in developing countries, to the high-profile challenges that emerged after September 11th. It examines spending patterns and organizational rhetoric to assess the degree to which good governance may have become the centerpiece of Bank programs, shedding its traditional role as the mere handmaiden of economic development.

Such an assessment is inevitably a matter of historical comparison. Understanding where post-911 initiatives break decisively with the past--or merely serve old wine in new bottles--is crucial to unraveling the emerging puzzle of post-911 governance. The discussion that follows traces the history of international governance assistance through three successive generations since World War II--each defined by distinctive political economy factors that converged with contemporaneous intellectual paradigms to condition institutional development policies. September 11th and its aftermath, it is argued, created the conditions for yet another, fourth generation of, governance assistance. (1) Below, each of these four generations is examined in turn. In discussing the last, still unfolding generation of reforms, preliminary conclusions are drawn about the direction of the World Bank's governance approach in the first few years since 911. The initial picture suggests less a radical upturn in governance programming than a small signal of shifting priorities.

The First Generation: Limited Institutional Reform in the Bipolar World

The first generation of donor-sponsored institutional reforms in developing countries spanned the long period from the end of World War II through the late 1970s. A thumb-nail caricature of the well-trodden political economy territory of this era sets the stage for governance assistance: In the transition from colonialism to cold war bi-polarism, North-South patrimonialism prevailed, with poor countries lining up as clients of the two super powers. Recently established post-colonial political and administrative systems in Africa and Asia were already eroding, and fledgling democracies evanesced throughout the third world into authoritarian regimes, often led by military juntas. In their economic advice, Western donors promoted a constrained version of capitalism, applying only the gentlest pressure on client governments to dismantle expansive government apparatuses that hosted a proliferation of state-owned firms and autarchies. Essential questions about the size and role of the state were mainly averted so as, at least in part, to minimize defections among country clients into the Soviet camp.

While most development assistance during this period focused on large-scale infrastructure (eventually in combination with basic human needs approaches), donors did also recognize the need to build developing government capacity (skills and institutions) to carry out these tasks. The World Bank, major bilateral agencies, and prominent private foundations addressed this challenge with a moderate--rather than an adversarial--view of the state. Their intellectual orientation adhered to traditional Weberian principles of "good government" that lauded hierarchy, functional specialization and a shared ethos as the path to administrative development (Gerth and Mills 1946). Rational incentives were less important to public performance than were the inculcation of a collective aspiration to transcendent values and the prestige of public service, particularly among an anointed class of bureaucratic "mandarins." The body of institutional development practice that flourished during this first generation thus drew on a deep public administration tradition emphasizing behavioral norms and rules. This tradition relied more on art than on science (Donleavy and Hood 1994; Israel 1987; Riggs 1964).

First-generation institutional programs used three main types of capacity-building vehicles: individual organizational support; human resource development; and substitutional, technical assistance. Individual organizational support consisted of sustained, but largely isolated, assistance to a single government organ such as an economic or agricultural research or extension institute or to a specific ministry. Support took the form of direct technical assistance or a "twinning" arrangement with an advanced country organizational counterpart." (2)

To build skills among policy elites inside and outside government, donors--particularly large foundations--also built capacity by funding broad human resource development programs. Initially, this meant scholarships and training for developing country recipients to advanced country institutions, where both skills and loyalties could be engendered. Later, capacity-building investments were channeled toward in-country institutions to directly develop their own training and educational facilities (Parmar 2002; Tendler 1975).

Perhaps the lion's share of first generation institutional interventions financed "substitutional," technical assistance that sent expatriate experts--often from former colonizing countries--to support host government organizations in carrying out basic functions. In its most extreme form, substitutional technical assistance involved foreign advisors in residence for long periods, at times taking over essential government tasks--such as civil service administration, auditing, or budgeting--from national officials. (3) In many instances, tasks were performed to a high standard but local capacity development was largely neglected. At their core, first generation institutional support initiatives were single-purposed and limited. Although training and education programs did often seek to further the Cold War objectives of winning the hearts and minds of developing country elites, most capacity building efforts were mainly focused on generating skills for key developmental tasks. So, by and large, such programs were decidedly not about radically changing policy environments or overhauling whole systems of government.

It was both the successes as well as the failures of this limited, technical approach to institutional support that drew the first generation of donor sponsored governance financing to an end in the early 1980s. On the positive side, much was presumed to have been accomplished, and assistance could be...

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