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Building state capacity for inclusive development: The politics of public sector reform

Working paper 25

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Badru Bukenya and Pablo Yanguas
Abstract
A capable state is essential for inclusive development, and throughout the developing world governments and international development agencies are seeking to build it through a multifaceted agenda of Public Sector Reform (PSR). This paper presents an analytical review of the PSR agenda, emphasizing the political contestation inherent to the development of state capacity, and argues for a more nuanced and politically-informed research agenda. We begin by examining the various definitions of state capacity that are commonly employed by researchers, and settle on bureaucratic capacity as the transversal precondition for policy implementation. State capacity so understood has two components, effectiveness and accountability, and two domains, internal and external. Their intersection generates four broad dimensions of reform: organizational rationality, administrative restraint, social embeddedness and political autonomy; and each dimension in turn is likely to exhibit a different pattern of political contestation due to the parallel incentives for patrimonialism, corruption, oligarchy, and capture. We use this analytical framework to categorise and examine the major components of the PSR agenda, assessing their rates of success or failure according to the available evidence: we find that the relative failure of the PSR agenda so far is due to its reliance on flawed assumptions about the administrative politics of state capacity. We then evaluate whether new models that try to bypass central bureaucracies are likely to encounter greater success; specifically, we review the Africa Governance Initiative, the Open Government Partnership, and the ‘hybrid models’ approach of the Africa Power and Politics Programme, and argue that all of them will be forced to confront the same politics of state capacity in the end. We close the paper by outlining a set of tentative guidelines for future research at ESID and elsewhere, suggesting a greater focus on the role of elites, informal institutions, the legislature as a non-state component of state capacity, the distinction between transversal and sectoral approaches, and finally the modalities and objectives of external assistance.