21 March 2014
* Current development practice focuses too much on the form institutions take, at the expense of worrying about function.
* A focus on strict rules that aim to curb corruption and inefficiency can diminish the amount of experimentation and adaptation that is possible.
* The desire to have a way of visibly evaluating reforms in a short period of time has led to the adoption of a number of scripts which define acceptable types of reform.
Development projects have generally been successful when their aim has been to build physical things. Schools, hospitals, irrigation canals, roads and even government ministries, agencies and courts have all been successfully built as part of the development agenda. However building human capability can be more difficult. This is particularly problematic as many of the successes in terms of building physical capacity do not mean much in the face of insufficient human capacity. Schools serve little purpose if the state cannot use them to educate children, and hospitals are merely symbolic if they cannot effectively cure patients.
This occurs in part because developing countries seeking donor support often fall into a trap where institutional reforms are not matched by improvements in human capacity. Traditional development policy actually plays a role in setting this trap. Developing countries aiming to meet the criteria set by their development partners often focus on the form of institutions at the expense of worrying about actual outcomes. This problem can be avoided by adopting a different approach to reform, that of Problem Driven Iterative Adaptation (PDIA).
The capability trap
The capability trap can be usefully analyzed at three distinct levels, at the level of individual agents, at the organizational level, and at the systemic level.
At the agency level two tensions play out. Front line workers have to choose between simply complying with the rules or pursing more positive performance driven actions. Individual leaders and managers have to choose between seeking simple personal or organizational gain and attempting to create new public value from within the institutions they run.
At the organizational level there is a tension between complying with external expectations of what form the organization should take and the idea that their legitimacy should derive from demonstrating performance regardless of their structure.
There are a further two tensions at the systemic...