Looking like a state
Looking like a state
The seduction of isomorphic mimicry
Abstract and Keywords
In this chapter we argue that isomorphic mimicry is a key “technique of successful failure” that perpetuates capability traps in development. In the context of this study, isomorphic mimicry is the tendency of governments to mimic other governments’ successes, replicating processes, systems, and even products of the “best practice” examples. This mimicry often conflates form and function: leading to a situation where “looks like” substitutes for “does”; i.e., governments look capable after the mimicry but are not actually more capable. We argue that this is endemic in development and has become a primary reason why countries do not build real capability even after years of policy and reform engagement and billions of dollars of capacity building work. We suggest that the tendency to so mimic is amplified by the current development ecosystem, especially where public sectors have become closed to novelty but open (and supportive of) agenda conformity. Such characteristics make it very hard for states to build the new capabilities needed, for their contexts, given their realities.
(p.30) Matt, an expert in public financial management (PFM), was recently working in Mozambique. In many respects the country’s progress since the end of the civil conflict two decades ago has been impressive, reflected, for example, in multiple peaceful elections and transitions in top leadership. When assessed using the donor-defined criteria of good PFM, the Public Expenditure and Financial Accountability (PEFA) assessment framework,1 Mozambique’s PFM system comes out as stronger than all African countries apart from South Africa and Mauritius. But there are some disconcerting problems. When assessed on the de jure—what is on the books—Mozambique gets a B. But when assessed on de facto—what actually happens—the ranking slips to a C. Perhaps unsurprisingly, there are many questions about the extent and quality of implementation of the new laws and systems, and of what really happens in the day-to-day functionality in the PFM system. Budget processes at the apex are strong and budget documents are exemplary, but execution largely remains a black box. Information about execution risks is poor, with deficiencies in internal controls and internal audit and in-year monitoring systems, and weak or unheard-of reporting from service delivery units and the politically powerful, high-spending state-owned enterprises. Officials in line ministries, departments, and agencies note that the new laws and systems that claim to be the solution are also part of the problem. They look impressive but are poorly fitted to user needs, require management capacities they do not have, and attempt to institutionalize scripts that reflect international best practice but not political and organizational realities on the ground. The impressive new PFM system garnered kudos from international actors for the ministers but was a missed opportunity to craft a system that works to solve their specific needs.2
Mozambique is not alone is looking good on the surface at PFM. Uganda has had its anti-corruption laws rated 99/100—on paper Uganda is the best anti-corruption country in the world. Yet Uganda is also rated as having the largest gap between law and practice and is regularly beset by corruption scandals. As it happens, the newspaper headlines on the day in 2013 all three of us arrived in Kampala for a PDIA workshop announced that the UK was canceling a large loan because of…corruption.
In order to articulate a persuasive alternative approach to building state capability we first need a coherent diagnosis as to why the prevailing approach is flailing. The diagnosis of the status quo must be able to not only document the lack of capability of public sector organizations (Chapters 1 and 4) but also explain how and why they have demonstrated so little improvement in the half a century or more of the development era. Building state capability has (p.31) been a declared goal and yet, despite the lack of improvement, many states have maintained sufficient internal and external legitimacy that they have continued to receive domestic budget and funding from international agencies throughout this period on the pretext that they are capable of implementation and/or that improvement in capability is imminent. We refer to this combination of capability failure while maintaining at least the appearance and often the legitimacy and benefits of capability as “successful failure.” This raises three key questions. What are the techniques of successful failure that allow state organizations to fail year after year and yet maintain themselves? Why are these techniques so widespread among state organizations in developing countries? And, how can these techniques that have proven successful and robust in protecting failure be subverted?
In this chapter we argue isomorphic mimicry is a key “technique of successful failure” that perpetuates capability traps in development (Pritchett et al. 2013). The concept of isomorphic mimicry is not new, but for present purposes our rendering draws on three existing literatures. Mimicry as a type of camouflage is widespread in the natural world, as in some environments animals can gain survival value by looking like other animals. Some moths, for example, have coloration on their wings that look like eyes; some flies look like bees and have even evolved to buzz like a bee but do not actually have stingers; the scarlet kingsnake has the same yellow, red, and black banded coloration of the deadly poisonous eastern coral snake, but without the bother of actually having venom. The sociologist John Meyer pointed to the “structural isomorphism” of nation-states in a global system (Meyer et al. 1997). Organizational theorists Paul DiMaggio and Woody Powell have emphasized isomorphism as a strategy for both public and private organizations (DiMaggio and Powell 1983).
Isomorphic mimicry conflates form and function: “looks like” substitutes for “does.” Passing a labor law is counted as success even if lack of enforcement means it never changes the everyday experience of workers. A policy of agreeing to return misaddressed mail makes one appear to be a modern post office and is an achievement even if it never happens. Going through the ritualistic motions of “trainings” (Swidler and Watkins 2016) counts as success even if no one’s practices actually improve. A child in school counts as success even if they don’t learn anything. Appealing budget documents count even if they don’t determine spending outcomes.
Isomorphic mimicry is unique to neither developing countries nor the public sector. In many ecosystems, organizations adopt “isomorphism”—looking like successful organizations—to enhance their legitimacy. Indeed, the pioneering work of DiMaggio and Powell (1983) coined the expression on the basis of their studies of aspiring private sector firms in Silicon Valley: if you want to convince venture capitalists your fledgling enterprise is the next (p.32) Apple, look like Apple. As an even partial explanation of the big stuck in state capability we cannot just invoke that organizations in developing countries utilize isomorphic mimicry as a technique; we need to explain why it is particularly virulent, pervasive, and effective in delaying progress in state organizations in developing countries.
We therefore shift the focus from the organization to the ecosystem in which organizations exist. What is it about the ecosystem in which state organizations in developing countries live that makes isomorphic mimicry so frequently an attractive, perhaps even optimal, organizational strategy to adopt? We argue there are two key features related to how systems cope with novelty. One, public sector systems are often closed to novelty—particularly closed to the appearance of novelty via new organizations. Two, developing country public sector systems often evaluated novelty strictly through whether the novelty aligns with agenda conformity rather than enhanced functionality. This evaluation of novelty on agenda conformity is particularly rife in developing countries because the global system—often with donor agencies as the vector—promotes the “transplantation of best practice” and other global agendas that distort local changes. This leads to “institutional monocropping” (Evans 2004).
We also argue that ecosystems in which isomorphic mimicry is an attractive organizational strategy can sustain capability traps because once a system is locked into a closed and agenda-conforming ecosystem and organizations, and once leaders and front-line workers have adapted to that ecosystem, the usual strategies for improvement of organizations—training, reform, generating better evidence, forcing compliance—will fail.
An Ecosystem in which Organizational Isomorphic Mimicry Is Optimal
Figure 2.1 is a schematic of an ecosystem for organizations. It has three layers: the organization is in the middle and is embedded in an ecosystem and agents (within which we distinguish “leaders” and “front-line workers”) operate within organizations. We represent the choices of the types of agents and organizations along a spectrum.
Front-line workers (policemen, teachers, doctors, nurses, regulators, tax collectors, bureaucrats) can choose to either act entirely with pure self-interest (including absenteeism, corruption, abuse of power, laxity, inattention) or act with performance orientation. Performance orientation is when the front-line workers take the actions that promote the best purposes of the organization and can often go beyond mere compliance with formal policies and procedures. Organizations are most successful when front-line workers act with (p.33) performance orientation. As we detail in Chapter 4, weak organizations cannot even induce compliance.
Leaders of organizations (and this does not just mean the head but also those in positions of authority and responsibility who constitute the leadership) can choose along a spectrum from pure organizational perpetuation to public value creation.3 Managers of front-line workers (“leaders”) can use the resources and authority over which they have responsibility to further their own purposes (“elite capture”) with organizational perpetuation (which may or may not be based on performance) or to lead the organization toward higher levels of performance.
Organizations also have an array of strategies. We are not treating the organization as either completely under the control of leaders nor as a unitary actor but as an entity with independent ontological status. In an analogy with evolution, the fundamental drive of organizations is survival and we assume that key to organizational survival is legitimacy. (Keep in mind we are articulating a framework that encompasses organizations as varied as police forces, religious denominations, central banks, hospitals, universities, charitable NGOs as well as private sector for profit firms.) Legitimacy is integral to attracting both human and financial resources. Organizations have two (p.34) means of securing legitimacy: isomorphic mimicry and demonstrated success in producing outputs and outcomes. All organizations deploy some mix of these (and other) strategies in different proportion.
Note that the actions of organizations, leadership, and front-line workers work best if they are coherent. That is, it is difficult to maintain an organization that is an isomorphic mimic if its fundamental legitimation strategy with front-line workers is performance oriented, in part because their performance cannot be evaluated and rewarded by the organization on criteria related to performance if the organization itself does not have a strategy of achieving and demonstrating success. When organizations are mimics then internal evaluation (of both leaders and front-line) tends to revert to assessing mere compliance or, worse, worker characteristics or connections that are irrelevant (or inimical) to performance. High-performing organizations (in the public, non-profit, or private spheres) tend to be coherent on the right-hand side of Figure 2.1 (the organization legitimates on demonstrated success, leaders strive for value creation, and workers are performance oriented) and low-performing organizations coherent on the left.
The question is, what are the characteristics of ecosystems or environments in which organizations operate such that isomorphic mimicry is an attractive strategy? We discuss just two elements of such ecosystems in the following sections, namely: Is the ecosystem within which the organization exists open or closed to novelty? And, does the system evaluate an organization’s novelty on the basis of demonstrated functionality or agenda conformity? We think that these two system characteristics can help explain the prevalence, persistence, and success-at-failure of isomorphic mimicry as a strategy for many state organizations in developing countries.
We use the term “novelty” (Carlile and Lakhani 2011) to avoid the positive connotation of the word “innovation.” Novelty just means new and different, not necessarily better. Evolutionary-like systems have sources that generate novelty and then sources which evaluate novelty and, with more or less success, eliminate negative and proliferate positive novelty. We don’t start with a presumption that “different is better”—after all, in evolution nearly all genetic mutations are harmful and organisms have ways of constantly eliminating and reducing the impact of harmful mutations.
Are Organizations Open or Closed to Novelty?
The organizational ecosystem can be closed or open to novelty via two channels: first, whether the system itself is closed or open to the entry of new organizations; and, second, whether the organizations in the space are themselves closed or open to novelty.
(p.35) What often distinguishes public sector organizations is that they have a monopoly, if not on the provision of services and obligations then on the receipt of public resources for funding them. The deployment of state power to impose obligations in particular is by its nature a monopoly: a given jurisdiction can only have one army or one police force or one imposer of taxes or one arbiter of property rights or one regulator of air polluters’ emissions or one court of final appeal. Monopoly-like situations arise in service provision as well. Some is due to economies of scale, such that it is only economical to have one distributor of electricity in a locality or one rail line or one set of pipes carrying water; such situations create organizations that, whether they are directly owned and operated by the state, act with the franchise of the state. Another source of closure is that in some services the public sector acts as an arbiter of value and hence is only willing to pay publicly mobilized funds for certain services. For instance, many (though not all) nation states channel public funds for primary schooling exclusively through government owned and operated schools as a means of control of the content of schooling that receives state support (Moore 2015; Pritchett and Viarengo 2015). Hence new organizations can arise providing schooling but they will not receive public funds.
In a subsystem or sector of a market economy that is open and competitive, like restaurants, the “market” provides space for new firms to emerge. The “novelty” of these new organizations is ultimately evaluated entirely functionally—by their ability to attract resources from paying clients. Success in such a sector requires either incumbents to compete successfully against novelty (and incumbents compete—through means both fair and foul—to close off the space and prevent new entrants from gaining sales) or new entrants to generate novelty within a system that is set up to reward organizations and has leaders (entrepreneurs) who can deliver it. These ecosystems create ecological learning or, in Schumpeter’s evocative phrase, “creative destruction,” in which overall productivity increases as more productive firms replace less productive firms. Open systems facilitate novelty while closed systems may be more narrowly efficient in some circumstances but are at risk of being closed to novelty.4
One important lesson from these competitive market ecosystems is not that private firms are all wonderfully productive and capable and effective at learning and responding to change, but in some sense the opposite: markets illustrate just how hard it is both to create a new organization that persists and how hard it is for organizations to respond to changed circumstances. In the United States, half of all new firms are gone within five years. What is even (p.36) more striking is that even successful, even dominant, firms often fail to respond to changed circumstances and shrink or go bankrupt. Peters and Waterman’s (1982) management classic studied forty-three of the best-managed US private firms to draw management lessons. Many of these large firms singled out as well managed have since disappeared or gone bankrupt. In a system that lack openness to new entrants Wang Labs and Digital Equipment might still be household names and Delta Airlines might not have gone bankrupt. The US retail sector has been transformed not because the dominant firm of the 1980s (Sears) learned and successfully implemented new approaches, but because new firms have arisen from Sears to Kmart to Walmart to Amazon. Building capability without either the ecological learning embedded in entirely new entrants—or the pressure they put on incumbents—makes the dynamics of building capability more difficult.
A strategy for building state capability has to confront the vexing problem of encouraging, recognizing, and rewarding innovation in organizations that have a monopoly in the utilization of state authority and resources (for whatever reason). There should only be one police force (even though there may be many private security firms) so the openness in competitive markets cannot be harnessed, either to facilitate the introduction of novelty or to put performance pressure on the incumbent.
A second element of how open or closed a system is to novelty is whether the organizations themselves are open to novelty, in the sense of whether they have existing mechanisms of generating new ideas. All organizations have to balance “confirmatory” (“Hey, we are doing great”) and “disconfirmatory” signals (“Hey, something is not going right here”): too many of the former, and problems are ignored until they become a crisis; too many of the latter, and the organization may lose internal legitimacy. Many organizations actively suppress the emergence of novelty (including new evidence about performance) as it may reveal disconfirmatory signals. When organizations are competing for internal and external legitimacy it is possible that “it pays to be ignorant” (Pritchett 2002)—that is, it can be better to limit availability of evidence by examination of performance in order to more effectively transmit confirmatory signals that all is well.
While all organizations have means to limit novelty, this can be particularly true of state organizations and bureaucracies. When a bureaucracy is understood as implementing a preset policy or program, the “authorizing environment” (Moore 1995)—the political and social context—may signal to leaders and front-line workers that their job is not to reason why. Perhaps in some instances this is indeed “optimal” as for relatively routine logistical activities such as issuing drivers’ licenses achieving compliance is all organization requires; no “novelty” is needed or wanted. But this can also mean that even the leadership of state organizations do not perceive that it is their mandate to seek out novelty.
(p.37) One anecdote illustrates this tendency. A friend of ours had developed and proven that a non-standard classroom technique worked to raise the reading scores of children. He then went to the top-level bureaucrat in charge of education in the jurisdiction and told him about this new approach. The response of the administrative head of the education ministry to this novelty was: “You misunderstand my job. My job is to make sure the ministry runs according to the existing rules and procedures. Implementing ways to improve learning is not my job.”
Another anecdote comes with data (making it “anecdatal”?) from an attempt to do a rigorous impact evaluation of ways of improving the functioning of the police force in Rajasthan, India (Banerjee et al. 2012). The researchers were working closely with the Indian Police Service (IPS) officer who had formal authority over the police. They settled on a number of possible innovations with the goal of finding which, if implemented, would lead to improvements in measures of police effectiveness. They did the usual “treatment” and “control” groups. What they found was not the relative effectiveness of the various innovations; what they found instead is that for several innovations (like those that affected the scheduling of policemen) the extent of the “treatment” in the treatment group was exactly the same as the “treatment” in the control group: they just didn’t do it. This organization was closed to (certain types of) novelty—even when the leader of their organization was demanding it.
How Is Novelty Evaluated? Agenda Conformity or Functionality
The second characteristic of the ecosystem for organizations is the way in which novelty is evaluated. If an organization proposes doing something different, how will this novelty be evaluated by the internal and external actors that provide the organization with legitimacy? One pole is that novelty is evaluated on the basis of “agenda conformity”—does it reinforce or intensify the existing agenda? The other pole is that novelty is evaluated on “enhanced functionality”—does the new way enhance the organization’s ability to carry out functions of producing the outputs and outcomes that are the organization’s (formal and at least ideal) purpose? This section explains the contrast of agenda conformity and enhanced functionality.
The standard “logical framework” or “theory of change” or model of any program, policy, or project is intended to be a complete, coherent, and correct causal chain from inputs to activities to outputs to outcomes. That is, if I want safer driving I can provide inputs (both financial and state authorization) to an organization to issue licenses to drive only to those who have demonstrated (p.38) competence in operating a motor vehicle. These inputs lead to activities by front-line workers like carrying out specific assessments of applicants’ driving skills. These activities lead to outputs—some people are legally authorized to drive and others are not. These outputs are intended to lead to an outcome of safer driving. This chain of “inputs–activities–outputs–outcomes” can be produced for any organization’s purposeful activity: environmental regulation, promoting financial access, tax collection, assigning titles to land, pre-natal care, promoting the reduction in HIV, etc. The key difference between “agenda conformity” and “enhanced functionality” is whether novelty is evaluated on the near end of the chain (were more inputs spent? Were activities carried out in accordance with specified processes? Were activities “intensified”?) or the far end of the chain (were more outputs actually produced? Did those outputs actually lead to intended outcomes?).
There are several common types of agenda conformity: focus on inputs, process compliance, confusing problems and solutions, and intensification.
Inputs. The easiest thing for an organization to do is ask for more. Asking for more budget (or inputs) is a simple and clear ask that often mobilizes internal and external supporters of the organization. One might propose, for example, that all countries spend 4 percent of GDP on education, even though it cannot possibly be anyone’s goal that countries spend whether it impacts students or not.
Process compliance and “control.” Another common element of “agenda conformity” is novelty that will claim to increase process compliance or increase management control, like management information systems, irrespective of whether there is any evidence the processes actually are strongly related or “tightly coupled” with outputs and outcomes or not.
Relabeling problems and solutions. Defining the lack of a particular solution as the problem is a popular practice as it makes the adoption of the solution to be the solution—whether it solves any real problem or not. One could start from genuine problems in volatility of budgets over time that lead to real negative consequences for the timeliness of project execution (e.g. roads left half finished). One could then argue that one possible solution was a medium-term expenditure framework (MTEF). But this can easily elide into defining the budget problem not as the consequences to outputs and outcomes but as the lack of an MTEF. If that is how the problem is defined, then MTEF adoption means the problem defined as the lack of the solution is solved whether the solution solves the actual problem (an incomplete road) or not.
Intensification (or “best practice”). Another mode of agenda conformity is to adopt new inputs (e.g. computers) or trainings (“capacity building”) or “upgrades” that appeal to internal constituencies, independently of their impact on outputs or outcomes. In the Solomon Islands, for example, a consortium of donors help finance the construction of an expensive state-of-the-art courthouse as a response to civil war in the early 2000s, one cause of which was deemed to be a weak criminal justice system (Allen and Dinnen 2010). The courthouse was built with local labor, sourced with local (p.39) materials, completed with few setbacks, and situated to capture on-shore breezes (thereby eliminating the need for air-conditioning, thus ensuring its compliance with “green” building codes and enabling it to boast that it had a “low carbon footprint”). Such projects are a donor’s delight: they comply with (even exceed) all administrative requirements, look impressive, are photogenic, please senior counterparts, and thus readily comport with demands for “clear metrics” of taxpayer money well spent. But the courthouse is used infrequently, and not two blocks from the courthouse a police station remains backlogged with hundreds of cases, most of which do not need a courthouse to reach a satisfactory resolution. The post-conflict justice concerns facing most Solomon Islanders most of the time are not those amenable to resolution via formal systems that are expensive, remote, time-consuming, and alien. As Christiana Tah, former Justice Minister in Liberia, aptly puts it,
For these kinds of problems in post-conflict countries…there is no quick fix, no textbook solution, no best practice; rather, there is a need for a diligent inquiry into the deep-rooted causes of specific problems that will guide the development and application of innovative, probably unique, and, hopefully, adequate solutions that are likely to endure.5
Ecosystems for state organizations are particularly susceptible to evaluation of novelty by agenda conformity, for several reasons. The most obvious difference is that private firms in competitive markets have a hard bottom line: if they cannot generate revenue, they cannot pay their bills. State organizations are allocated budget through political processes. Another difference is that, by being monopolies, state organizations are tasked by political processes to accomplish many different outputs and outcomes, often far more than they even ideally could (more on this in Chapter 3). As the adage goes, if an organization has more than three goals it has no goals. Also, state organizations, by being universal, must satisfy many constituencies and cannot simply be effective in one segment or niche of a market. This provides even more pressure for diffuse goals. Finally, the causal connection between the organization’s actions and the outcomes is often complex and difficult to demonstrate. In these instances nearly all organizations will seek legitimation among internal and external stakeholders by agreeing upon agendas: inputs and activities, rather than promoting accountability to hard targets on outcomes.
In an organizational ecosystem that is closed (both to new entrants and to novelty itself) and/or in which novelty is evaluated on the basis of agenda conformity, often such that there is no agreed-upon, regular, and reliable reporting on outputs and outcomes, then this cascades into the behavior of organizations, leaders, and front-line workers.
Organizations optimally choose isomorphic mimicry—the pursuit of agenda-conforming reforms that reform forms and ignore function—as an (p.40) organizational strategy. Leaders inside the public sector choose to administer and promote, at best, compliance with existing processes than pursue changes to enhance value. Front-line workers have a difficult time being “performance oriented” when the organization and leaders themselves cannot provide clear and coherent measures of what actions of theirs lead to the organization’s vision of “performance.”
Isomorphic mimicry is consistent with the observation that organizations and leaders are constantly engaged in “reforms” putatively to improve performance and yet very little performance is achieved.
Global Systems, Agenda Conformity, and Isomorphic Mimicry
The conditions for isomorphic mimicry to be widely used as a technique of successful failure that supports capability traps (ecosystems that are closed and evaluate on agenda conformity) are particularly prevalent for state organizations in developing countries. Organizations around the world are embedded both in national systems but also in a global system in which agendas are set by processes that often do not reflect the factual conditions these countries face. DiMaggio and Powell (1983, 1991) identify three types of pressures for isomorphic mimicry: “coercive” (in which external agents force isomorphism on the organization), “normative” (in which organizations adopt mimicry because it is an acknowledged “best practice”), and “mimetic” (in which organizations simply copy other organizations’ practices). All three of these pressures for mimicry operate from a global system to country-level organizations and up to “structural isomorphism” (Meyer et al. 1997) in which organizations in developing countries are encouraged to adopt global agendas, “solutions,” and the forms and formal apparatus of policies that are identified as “best practice”—whether they address locally nominated problems or are adapted to the local context or not. While foreign assistance agencies are often singled out as the vectors of this global system isomorphism, the underlying phenomena are deeper and hence affects countries even where donors have little presence or leverage.
Figure 2.2 is a representation of a “domain” or “sector” or “field”6 or “movements”: an area of endeavor in which there is some common purpose. This figure can be related to a type of organization (e.g. university or trade union or museum), academic disciplines (economics or electrical engineering), professions (doctors, lawyers, actuaries, architects), sectors of the economy (electricity, (p.41) tourism, hotels), social activism or movements (human rights, environment, religion), or domains of government endeavor (basic education, environmental regulation, public financial management). In each there are spheres of discourse, cooperation, and action, each of which can be weaker or stronger in affecting the course of events and each of which plays a typical role.
There is a “global” level, often with an identifiable apex organization or association. The global level often sets “themes”—what is on or off the global agenda in that domain. These themes change in response to changes in the world (e.g. the rise of HIV/AIDS as a disease, climate change) or changes in ideas (e.g. the shift from demographic programs to reproductive health, the shift to “independent central banks”). To be effective these themes have to be translated into action at various levels from national to local. There are national cosmopolitans—those who interact directly with the global level (and may move back and forth)—who are often responsible for translating global themes into national action plans or goals or national agendas, which can either be explicit or implicit, but still in the realm of ideas. To take these into practice national actors need to translate these ideas into policies, programs, and projects that have budgets and tasked actors with roles and responsibilities—the kinds of things that have inputs–activities–outputs–outcomes that can, in principle, be implemented. For some kinds of activities, like central banking, this is as deep as implementation needs to go. However, as we detail in Chapter 5, (p.42) many activities are “transaction intensive” and require many, many actors to achieve results. This is the level below the national level (and below the state or provincial level in large nations) which can be called the “district”—which could be a city or municipality, or could be an administrative unit like a district or block. This is the level at which people are responsible for the management of the implementation of policies, programs, and projects. Then there are the front-line workers who are often, in the terms of Swidler and Watkins (2016), the “interstitial elites”—those with connections both at the village/local level but who have technical capacity to implement. These are policemen, engineers, teachers, nurses, officials, tax collectors, etc. who are the day-to-day implementers (“street-level bureaucrats”) and interact directly with citizens in the course of their functions. Most populous of all are the citizens who are, in an ideal sense, the “recipients” or “beneficiaries” of state action.
The global actors in these systems often create themes that are accompanied by various scripts or concrete measures that define not only goals but also the desirable forms of action that attract legitimacy. The PEFA indicators focus developing countries on conforming to characteristics ostensibly reflecting “good international practices…critical…to achieve sound public financial management.”7 The Doing Business indicators tell the ways that governments can create a climate conductive to investment. The apex organizations in HIV/AIDs like UNAIDS created themes for addressing HIV that national commissions were expected to translate into national action plans. In domains like basic education global organizations articulate and promote goals, processes, and recommended practices.
These global pressures can be a powerful force for good, bringing into national systems both positive pressures in important areas and potentially bringing in relevant expertise. Ironically, however, global systems can also be among the drivers of capability traps in developing countries because they create and reinforce processes through which global players set agendas and constrain local experimentation. This can facilitate the perpetuation of dysfunction as organizations can gain external legitimation and support with agenda conforming mimicry.8
At times these global scripts have essentially closed the space for novelty in the development system, imposing narrow agendas of what constitutes acceptable change. Developing countries and organizations operating within (p.43) them are regularly evaluated on their compliance with these scripts, and the routine and generalized solutions they offer for establishing “good governance,” facilitating private sector growth, managing public finances, and more. Organizations like finance ministries or central banks gain legitimacy by agreeing to adopt such reforms, regardless of whether they offer a path toward demonstrated success in a particular context. Leaders of the organizations can further their own careers by signing off on such interventions. Their agreement to adopt externally mandated reforms facilitates the continued flow of external funds, which can further various public and private interests. Front-line workers ostensibly required to implement these changes are seldom part of the conversation about change, however, and thus have no incentive (or opportunity) to contribute ideas about how things could be improved.
The example of procurement reform in countries like Liberia and Afghanistan is a good instance of this dynamic in action. PEFA indicators and United Nations models of good procurement systems tout competitive bidding as a generic solution to many procurement maladies, including corruption and value for money concerns. Competitive bidding regimes are introduced through laws, as are the creation of independent agencies, the implementation of procedural rules and the introduction of transparency mechanisms. These various “inputs” are readily evaluated as “evidence” that change is in effect. Countries are rewarded for producing these inputs: with new loans, a clear path to debt forgiveness, and higher “good governance” indicator scores (which in turn may attract additional foreign investment). Government entities and vendors subjected to such mechanisms are assumed to simply comply. In these situations, the result is a top-down approach to building procurement capacity (and beyond) through which external role players impose themselves on local contexts and crowd out potential contributions local agents might make to change. These local agents have every incentive to treat reforms as signals, adopting external solutions that are not necessarily politically accepted or practically possible in the local context. Local agents have little incentive to pursue improved functionality in such settings, especially when they are rewarded so handsomely for complying with externally mandated “forms” (appearances).
Global systems inhibit particularly disruptive innovations. How can genuinely useful innovation be reliably distinguished from innovation for its own sake, or just another “best practice” imitation masquerading as an innovation? Personal computers, for example, completely altered the world of computing, replacing mainframes as the dominant way in which everyday computing was conducted. At the time (1980s) it was obvious that PCs were a decidedly inferior technology to the existing mainframes. As Christensen (1997) details, PCs were a disruptive innovation in that they were an inferior technology—one that was dismissed by engineers at the “best practice” firms (p.44) as a mere toy for hobbyists. But as the PC came to meet the actual functional objectives of the vast majority of users better than mainframes, it was the “excellent” firms that were left by the wayside. Had the profession of computer engineering itself been in a position of choosing innovation, the PC could have never emerged—but markets had a space for novelty and a way of evaluating novelty so that consumers could vote with their keyboards (and dollars) for the new. Within development agencies, one hears frequent reference to the quest for “cutting edge thinking” and the importance of taking “innovative approaches,” but how can such agencies enhance the likelihood that PCs (rather than just new-and-improved mainframes) will emerge?
Donors as a Vector of Isomorphic Mimicry
Isomorphic mimicry has sustained the current, third, phase in development practice. The first phase, the accumulation or “big push” phase of the 1950s and 1960s, said “Rich countries have more stuff (e.g. bridges, factories, ports) than poor countries, hence building stuff is the key to development.”9 The second phase, the policy reform or “structural adjustment” phase of the 1980s and 1990s, said: “Rich countries have good policies, hence adopting good policies is the key to development.” The third, current phase, says: “Rich countries have good institutions, hence promoting good institutions is the key to development.” Isomorphic mimicry was not unknown in the first two phases—a poor country could convey the allure of becoming “developed,” to its citizens and to donors, by showcasing seemingly impressive new infrastructure (first phase) and notionally committing to policy reforms (second phase)—but is vastly more insidious in today’s third phase, since “institutions” are as ephemeral as they are important. The processes by which “effective institutions” are realized reside in an entirely different ontological space than constructing highways, immunizing babies, or adjusting exchange rates. But if the legitimacy of development actors, and their country counterparts, depends on continued narratives of success in building “good institutions” when actually demonstrating success is problematic even in a best-case scenario, isomorphic mimicry becomes the technique by which business as usual continues.
Promoting “good institutions” has, by and large, meant attempts to transplant Weberian-styled bureaucracies (and their associated legal instruments) throughout the developing world. There is a powerful logic driving (p.45) transplantation: If Weberian organizations underpin modern economic, administrative, and political life in high-income countries, isn’t the shortest distance between two points a straight line? If we know what effective and capable state organizations look like—if indeed there is a “global best practice”—why not introduce them as soon as possible? Why reinvent the wheel?
Programmatic approaches to “good institutions” routinely conflate form and function. The form of “institutions”—from constitutions to commercial codes to agencies overseeing land administration to procurement to how schools look—is easy to transplant. Countries can adopt the legislation that establishes forms: independent central banks, outcome-based budgeting, procurement practices, public–private partnerships in electricity generation, regulation of infrastructure. Reforms are costly and consequential; if they routinely fail to deliver, then the very legitimacy of the reform process is fatally compromised. Isomorphism through the transplantation of best practice allows governments and ministries to secure their legitimacy through simply imitating those forms—rather than through functionality or proven performance. Their reform efforts enable them to “look like a state” without actually being one.
Organizations in developing countries have been required to accept such interventions for decades now. As Rodrik (2008: 100) notes, “institutional reform promoted by multilateral organizations such as the World Bank, the International Monetary Fund, or the World Trade Organization (WTO) is heavily biased toward a best-practice model. It presumes it is possible to determine a unique set of appropriate institutional arrangements ex ante, and views convergence toward those arrangements as inherently desirable.” Such apparent convergence is undertaken to ensure continued legitimacy with, and support from, the international community. A common example is procurement reform: laws requiring competitive bidding are a procedure that many development organizations require their client countries to adopt in order to receive financial support. Such requirements, for instance, were among the first demands international organizations made in postwar Liberia, Afghanistan, and Sudan (Larson et al. 2013). They are intended to constrain corruption, discipline agents, and bring an air of formality and legitimacy to the way governments operate.
The conditions we allude to have characterized the politics and processes of international development since at least the 1980s, a period when government reform became an important dimension of development work. At that time, many external development organizations began tying their funds to such reforms, as well as using conditions in structural adjustment and other budget financing initiatives (e.g. “sector wide” approaches). This has made it increasingly difficult for a developing country to receive external financial assistance without committing to change their government and market (p.46) structures. The commitments must be made ex ante and promise reform that is open to visible evaluation in relatively short time periods, such that external development partners have something tangible to point to when justifying the disbursement of funds. In this relationship, development partners have to accept proposed reform ideas and sign off on their attainment.
When certain forms are perceived as “best practice,” their unwitting transplantation prevents new forms from emerging, and displaces existing modes—or, as is often the case, is justified by simply pretending they are not there at all, succumbing to “the illusion of the blank slate,” as one of our colleagues aptly puts it. Ostrom (1995) tells of a World Bank financed irrigation scheme for which the loan documents claimed the project would bring benefits because there was no irrigation in that valley. However, when the project was delayed and there was time to do additional surveying there were in fact thirty-two existing and fully operational irrigation schemes. But since these were farmer-managed schemes not controlled by the government they were invisible to the “high modernist” reality of the World Bank and the government of Nepal. Importantly, these schemes might not have been “modern” but they were not inherently inferior. Detailed studies of the operation and productivity of the irrigation schemes with modern head-works found that they were actually less productive in delivering water to system tail-enders than were farmer-managed irrigation schemes without modern infrastructure.10 The supposed trade-off was between the technical benefits of the modern infrastructure versus the erosion (or shift) in social capital needed to underpin the modern infrastructure, but when informal was not replaced with effective formal administration the new schemes could be “lose–lose”: i.e. worse at social capital and worse at irrigation.
A consequence of believing that form drives function is that it permits—even creates an imperative for—transplanting “best practices” from one context to another. Having deemed that a particular development intervention “works,” especially if verified by a notionally “rigorous” methodology, too many researchers and policymakers mistakenly take this empirical claim as warrant for advising others that they too should now adopt this intervention and reasonably expect similar outcomes (Pritchett and Sandefur 2013; Woolcock 2013). Among the many difficulties with transplantation is that the organizations charged with implementing the intervention in the novel context are grounded in neither a solid internal nor an external folk culture of performance at a local level (for local services) or even at times at an elite level. It is process—the legitimacy of “the struggle” by which outcomes are attained—that matters for success, even if that success comes to be consolidated into forms (p.47) that look very much like others. It may well be, for example, that all successful post offices have many very similar features which are driven by the nature of the task, but success is unlikely if transplantation of that form is undertaken without the struggle that creates the internal folk culture and the external performance pressure.
History versus Transplantation
We are not arguing against the superior functionality of the state organizations in developing countries. What we are arguing is that the process of transplantation of the forms is a counterproductive approach to achieving high capability.
The first reason is that it is the process of arriving at state capability, not the form, which matters for sustained functional success. Form really does not matter that much one way or the other; the same form could work in lots of contexts and many different forms could work in the same context. This is clear enough by examining so-called “universal” best practices in rich countries. Take education. The public education system in the Netherlands, for example, may appear “Weberian” from a distance, but is in fact quite different to its counterparts elsewhere in Europe and North America: it essentially funds students to attend a school of their choosing. Dutch education is not a large, centralized, service-providing line ministry as it is elsewhere in the OECD, but rather a flat organizational structure that funds a highly decentralized ecology of different educational organizations—and yet produces some of the best educational outcomes in the OECD. This system evolved idiosyncratically under particular circumstances unique to the Netherlands—which is exactly how the education systems formed in all the rich countries, whether or not they resulted in large, centralized systems. For present purposes we make no normative judgment as to which system is “better”; our key point is that high standards of education demonstrably can be attained by a system that varies significantly from the canonical Weberian ideal.11 In short, a variety of institutional and organizational forms can deliver similar performance levels and identical institutional and organizational forms can give rise to diverse performance levels.
Developed countries are much more similar in their functionality than their forms. A close examination of countries with high “governance” scores (Andrews 2008) reveals that, far from having identical Weberian characteristics, (p.48) the administrative structures that underpin such countries instead exhibit an extraordinary variety of organization forms, some of them classically Weberian but many of them significantly different (e.g. the relationship between banks and states in Japan versus the United Kingdom).12 Again, we make this point not to attack Weberian structures per se or to celebrate alternatives just because they are different, but rather to stress that the Weberian ideal is not inherently the gold standard to which everyone should aspire and against which alternatives should be assessed. Finally, even in the most celebrated cases of Weberian effectiveness, such as Japan’s Ministry of International Trade and Industry (Johnson 1982), it is not clear that its effectiveness was achieved because of, or in spite of, its “Weberian-ness.”
State organizations in the developed countries occurred in a period where the global system was not providing agendas or best practice or scripts. State organizations had to struggle their way into legitimacy of control of their domains in a process that was strongly contested, not just by “special interests” but also because they were displacing local and “folk” modes of accomplishing the same objectives.13 This led to a gradual process in which “modern” systems had to adapt and remain organically grounded in folk roots (see Carpenter 2001). The contribution of Putnam (1993) on the role of social capital in the effectiveness of certain Italian states was so powerful in part because it emphasized that even in modern states which are formally Weberian, and where social ties play no explicit role, the informal nonetheless strongly affects the functionality of the formal. Put differently, the top-down accountability systems work reasonably well largely because the social norms of folk accountability survive in practice. Moreover, while one can complain about the annoying facets of the modern bureaucracy—long queues to get your driver’s license, or surly postal workers, or “red tape” of government bureaucracy—historically administrative modernism had to struggle its way into control by proving it was effective.
A Capability Trap Is a Trap
What makes a trap a trap is that one can avoid getting into it, but once in, it is difficult to get out. When the ecosystem for organizations in a given domain is closed and novelty evaluated on agenda-conformity then this creates cascading behavior of organizations, leaders, and front-line workers. Organizations adopt (p.49) strategies looking like successful organizations. Leaders seek organizational survival, continued budgets (and a peaceful life) by complying with agenda conforming standards of legitimacy. Front-line workers choose routine compliance (at best; at worst, often corruption or malfeasance) over concern for the customers and citizens they serve. Once the trap is sprung it creates self-reinforcing conditions from which it is hard to escape.
If there is no functional evaluation of performance then an organization—a schooling system, a police force, a revenue service, a procurement branch—has no means of securing its legitimacy through demonstrated performance. If it already occupies a monopoly position then it can survive (and perhaps even thrive) simply by projecting an appearance of being a functional organization by adopting “best practice” reforms. Once an ecosystem responsible for the organizational/administrative oversight is “stuck” in such a dynamic the options for an organization on its own to engage in successful reform that affects functionality become extremely limited.
Just because a tire is flat does not mean the hole is on the bottom. The diagnosis of isomorphic mimicry is meant to shift focus from the usual litany of the proximate symptoms that are offered to explain poor performance. An organization is like an organism and constantly faces threats to its efficacy. Shared purpose is an organization’s immune system. Organizations born through transplantation that did not have to struggle their way into existence defending their legitimacy on the basis of functionality are creatures without an immune system. Eventually something will kill its functionality; it will fall prey to one or some of the many diseases that affect governmental organizations.
People who have weak immune systems are at risk of dying of pneumonia. But pneumonia is only the proximate cause, the weak immune system is the real cause. Consider one of the most common “illnesses” affecting the functionality of state organizations: patronage. If politicians can reward their supporters with government jobs, the pressure on organizations is powerful. If the organization’s internal and external support is based on a strong performance basis and there is a strong consensus that the performance requires merit-based hiring and promotion, then the damage from a patronage politician can be resisted or minimized by that healthy organizational immune system. On the other hand, if an organization’s “merit-based hiring” was based on transplantation and is merely isomorphism, then these will provide little resistance to the ubiquitous pressures for patronage. But the organization’s problem wasn’t patronage, it was lack of purpose-driven practices. If the organization had not succumbed to patronage, it would have died of something else. Statements that allege a country would progress if only it had less corrupt leaders and more capable and concerned civil servants miss the point. This perspective has yielded efforts to discipline agents, reduce corruption and (p.50) patronage by organizational interventions such as civil service, judicial, and public finance reform that are themselves transplantations.
Capability traps persist because there is a big difference between reforming a functional organization with problems and bringing a dysfunctional organization back from the brink. An achievable absence level is 5 to 7 percent. If an organization’s absences have crept up to 10 or 12 percent then there are a variety of administrative or management reforms that could bring absence down. However, in the health sector of India (remember, a country rated above average in our generic state capability measures in Chapter 1) studies show that absenteeism rates of health workers in Rajasthan and Karnataka range from 40 to 70 percent. Once dysfunction has reached this level standard reform initiatives—like introducing tighter leave policies, enhanced (biometric) monitoring of attendance, threatening to dock pay or leave time—have been shown to have either no impact, or perhaps even perverse impacts. The titles of the papers themselves suggest the degree of success: “Band-aids on a corpse” and “Deal with the Devil.”
Some promise hope that new “leaders” or “change agents”—potentially dynamic individuals with skill-sets to be potential innovators and reformers—can build capability or restore functionality even when in an ecosystem where the optimal legitimacy-promoting strategy is isomorphic mimicry. However, these leaders will get pushback from above and below. Those to whom the organization is accountable will worry that, in the absence of a well-defined metric for functionality, the innovations will actually put the organization at risk. If the innovations actually “look” worse and appear to generate less organizational control (perhaps because front-line agents are given more autonomy), they can be blocked by higher authority. Even if the changes would lead to superior results there is no way to prove this without a prior agreement on the standard of functionality or public value creation—which is often precisely what is absent. From below, organizational managers and front-line workers will resist innovation because without a clear metric of functionality their optimal strategy is compliance with internal processes and procedures that frees them of potentially negative accountability. In such circumstances, the prospect and consequences of demonstrated failure for leaders vastly outweigh the gains that might accrue to attaining notional success.
This is not to say there are not pockets of success—it is that these are effervescent—small bubbles that shoot up and disappear. This leads to the phenomena illustrated in India by Kapur (2007) of a life cycle of innovations (he illustrates it with institutional success) such that at any given time there are innovations being born, innovations maturing to scale (at the local or state level) but there are also reforms petering out and ending. If the reform death rate and birth rate are similar, then there will always be a stream of reforms, (p.51) but no forward progress. As long as the reforms are dependent on a particularly engaged and determined civil servant these will often disappear with the officer (for case studies of reform in India see Chand 2006).
The difficult reality is that once the “capability trap” is sprung there is no incentive—and often no possibility—for any one organization or leader or front-line agent to break out of it. Even if the space for innovation is closed, often no functional evaluation of innovation is possible because organizations systematically eliminate the possibility of their being judged against anything other than their form and their compliance with “accepted” procedures.
Moving out of the system isn’t a solution either. Many dynamic leaders move outside the state sector and their own organization. But even if that organization proves locally successful, closed spaces for organizational innovation may lead to a brief localized success but with no scalable impact on the system. This can explain the contradiction between the appearance of dynamism and long-run stagnation. At any given time it may seem as if there are many promising innovations at the “pilot” stage but the systemic functional performance never improves: these “pilots” never scale as there is neither an external space for innovation nor can the externally generated innovations be internally adopted.
Development of state capability is about moving the ecological equilibrium in Figure 2.1 from the left to the right. Put differently, “modernization” is an ongoing process of discovering and encouraging which of the diverse array of context-specific institutional forms will lead to higher functionality. Characteristically, however, responses to project/policy failure (or explanations of success, for that matter) tend to focus only on individual elements of this ecology (capacity building for front-line staff, concern that rules and “best practices” are not being followed, etc.) that are “legible” to and actionable by external actors; we argue that it is the broader fitness environment of this ecology for its constituent elements that primarily shapes observed outcomes.
Finding and fitting solutions to local problems is a collective capability, acquired only through the process of trial and error. Just as individuals learn skills such as speaking a language, riding a bicycle, or playing a musical instrument by being awful before they become good, so too must organizations charged with responding to “wicked hard” problems learn how to struggle together to implement an optimal solution. Taking lots of training seminars on how to ride a bicycle is no substitute for actually sitting on it at the top of long slope, falling off multiple times on the way down, and bravely persisting until one’s brain eventually figures out how to stay upright while in motion on two wheels. Similarly, while much is made of the different playing styles of top tennis professionals, their underlying stroke mechanics of service, forehand, and backhand are nearly identical. The underlying biophysics pretty much demand a very narrow range of ball-striking behavior to generate (p.52) the velocity and direction desired. One size pretty much does fit all. But nevertheless (and alas) you cannot transplant Roger Federer’s forehand onto your tennis game. Without your own personal struggle of training, of hitting the ball under pressure in many competitive situations, you cannot develop a high-performing forehand.
By extension, this is especially true for mediating inherently political contests, where the legitimacy of the process by which an outcome is reached is crucial; protecting the space wherein these contests take place, and ensuring that they are minimally equitable, is itself a collective capability acquired through a “good struggle.”14 Whether learning to juggle or to build an arbitration council, there are two distinct, but not mutually exclusive, reasons why you perhaps cannot “skip the struggle.”
(8) Our argument at the institutional and organizational level is similar to that made by van de Walle (2001) about “structural adjustment” in Africa. He points out that engagement of governments in the process of reform—even when patently insincere on the part of governments and when reforms were not implemented—brought external legitimacy. This contributed to the puzzle of the region with the worst development outcomes having the most stable governments.
(9) Romer (1993) describes this initial phase of development thinking as one preoccupied with filling “object gaps,” which in turn gave way to a second phase concerned with filling “ideas gaps” (education, policies).
(11) How such a system emerged historically is crucial to understanding whether and how it can be adopted elsewhere. As such, even if the Dutch education system produced the highest achieving students in the world, it is far from clear that Chad and Uruguay could emulate it by importing its constituent organizational structures. We recognize, however, that a given state may have capabilities that are adequate for one challenge but inadequate for another.
(12) See also the classic work of Hall and Soskice (2001) on the “varieties of capitalism.” Similar arguments can be made for “democracy”; there are all manner of institutional designs that constitute any given democratic country.