Square Peg Reforms in round Hole Governments

Government often dominates developing countries. Sometimes government is the only game in town. Countries suffer when rules of this game are deficient and governments are ineffective or predatory. Because this frequently seems to be the case, public sector institutional reforms have emerged as central to development. These reforms are an essential element of interventions by players like the World Bank and other multilateral and bilateral agencies. They focus on improving governmental rules of the game and establishing effective governments that facilitate economic growth. These goals are often not met, however, even when countries adopt advised reforms, at considerable expense, and with great anticipation. This book asks why institutional reforms in development often do not lead to improved governments and how they can be better structured to achieve such goal. These questions emerge when looking at recent cases. Consider Afghanistan, where the international community proposed in 2003 that institutional reform would help “within seven years . . . [to] build a stable centralized state . . . arranged around the rule of law and a technocratic administration.”1 Seven years; billions of dollars; and many new laws, regulations, and structures later, the government is still criticized as corrupt and inefficient. Although promises suggested the country could be a new Korea, “[i]t is now hoped that good development in Afghanistan might allow it over decades to draw level with Pakistan.”2 Think also of Georgia, where government streamlined taxes, reorganized public organizations, and cut regulations in 2004 to catalyze private industry and create jobs – with talk of becoming a Caucasian Singapore. Georgia’s government received the