State-Society Synergy for Accountability

STATE-SOCIETY SYNERGY FOR ACCOUNTABILITY:

LESSONS FOR THE WORLD BANK

John Ackerman

University of California, Santa Cruz

Civil Society Team

Latin America and the Caribbean Region

The World Bank

April, 2003

ACKNOWLEDGEMENTS

This paper was written by John Ackerman. The report benefited from comments by Many thanks to Jonathan Fox, David De Ferranti, Kathy Bain, Patti Pettesch, Susan Rose-Ackerman, Catalina Smulovitz, Michael Walton, Ernesto May and the members of the LCR Public Sector Group. for their helpful comments on previous drafts of this paper.

TABLE OF CONTENTS

Executive Summary……………………………………………….……..3

I. Forward: Economic Development & Good Government………….…..4

II. Conceptual Introduction: Accountability & Civil Society……………8

III. Case Studies…………………………………………………………14

§ Participatory Budgeting in Porto Alegre, Brazil…………….16

§ Mexico’s Federal Electoral Institute…………………………21

§ Police and School Reform in Chicago……………………….31

§ Decentralization and Rural Development in Mexico………..35

§ Toxics Release Inventory in the United States………………40

§ Women’s Police Stations in Brazil…………………………..44

§ Grass-roots Anti-Corruption Initiatives in India……………..47

IV. Lessons for the World Bank…………………………………………51

V. Conclusion……………………………………………………………58

VI. Bibliography…………………………………………………………59

VII. Tables & Figures……………………………………………………66

EXECUTIVE SUMMARY

The contemporary era of globalization and market liberalization by no means implies the end of the state. The institutional, technical, administrative and political capacities of the state are now as important as they have ever been. Good government continues to be an absolutely necessary prerequisite for successful economic growth in the developing world.

One of the most effective ways to strengthen the basic capacities of the state is through the construction of an honest, efficient and effective (or, in other words, “accountable”) bureaucratic apparatus. This task should be at the top of the agenda for almost all states in the developing world. But, how can this be done?

There are two general strategies for the achievement of this task. On the one hand, One option is for governments can to strengthen the “command-and-control” elements of government. On the other hand, The alternative is for governments canto open up their bureaucracies to pressure “from below”. This involves constructing a healthy relationship between state and society so that social actors and individual citizens are empowered to oblige the government to uphold the rule of law and fulfill its promises.

Although the top-down approach is clearly important and necessary in most countries of the developing world, especially given the chronic weakness of their bureaucratic apparatuses, the focus of this paper is on the latter approach. Specifically, how can the relationship between state and society be transformed from a process of particularistic demands, concessions and manipulations to a healthy engagement that produces a solid bureaucratic apparatus and policy outcomes that are in the interest of the public as a whole? This is the central question that guides the study below.

The paper first surveys the literature on accountability and establishes a categorization of the different ways by which civil society can interact with the state in order to improve accountability. It then explores in detail seven case studies of successful experiences of “state-society synergy for accountability”. The studies draw from a wide range of different contexts (Brazil, India, Mexico, U.S.) and from a variety of different areas of government activity (corruption control, environmental regulation, poverty reduction, election monitoring, infrastructure provision, school reform, police reform).

The paper concludes with a series of conceptual and practical lessons for World Bank staff on how best to initiate, design and implement successful pro-accountability mechanisms grounded in state-society synergy. Some of the most important lessons include the need to fully institutionalize participative mechanisms, to involve societal actors from the very beginning of the design stage of the process, to open up participation to a wide diversity of social and political actors, and to complement decentralization with centralized supervision.

In the end, this paper argues that marketization is not the only way to tap into the energy of society for the improvement of governance. Instead of sending sections of the state off to society, it is often even more fruitful to invite society into the inner chambers of the state.

I. FOREWORD:

ECONOMIC DEVELOPMENT AND GOOD GOVERNMENT

The agonies of collapsed states such as Liberia and Somalia demonstrate all too clearly the consequences of statelessness. Good government is not a luxury but a vital necessity, without which there can be no development, economic or social

(Chhibber, 1997 as cited in Wallis & Dollery, 2001:246).

A capable, efficient and effective state apparatus is necessary to maintain the political stability, competitive markets, social policies, rule of law and infrastructure investments required for vibrant economic growth in the developing world. Contrary to popular opinion, this is particularly the case under conditions of market liberalization and globalization. As many authors have argued in recent years (e.g. Haggard & Kaufman, 1995; Evans, 1995; Grindle, 1996; World Bank, 1997; Vellinga, ed., 1998), it is a mistake to equate economic success in the globalized world with a simple reduction in the size or the range of the state’s activities. To the contrary, global production chains and rapid communications demand a qualitative transformation and restructuring of the role of the state. Indeed, in recent years, most states in the developing world have even been under pressure to increase their capacity. Witness, for instance, the intense international pressure on otherwise market-friendly presidents like Mexico’s Vicente Fox to increase government revenues through tax hikes.

Loans need to be paid back, basic services must be provided to the poorest citizens, workers need to be helped in their transition to a more urban, industrialized and market-based economy, strategic investments in education and infrastructure have to be made, markets must be regulated, and peace and stability need to be maintained. As Merilee Grindle has argued, in order to carry out these and other tasks the state must strengthen its capacity in at least four different areas (See Table 1). First, its institutional capacity must be assured through the imposition of “authoritative and effective ‘rules of the game’ to regulate economic and political interactions” (Grindle, 1996: 8). This means that the state ought to have the “ability to assert the primacy of national politics, legal conventions, and norms of social and political behavior over those of other groupings” (Grindle, 1996:8). Second, the state’s technical capacity has to be consolidated. This implies “the ability to set and manage effective macroeconomic policies” (Grindle, 1996:8), which in turn requires “a cadre of well-trained economic analysts and managers [and] well–staffed and appropriately placed units for policy analysis” (Grindle, 1996: 8). Third, states need to strengthen their administrative capacity, which involves the “ability to perform basic administrative functions essential to economic development and social welfare” (Grindle, 1996: 8). Finally, states in the developing world have to develop a full political capacity, which requires the construction of “effective and legitimate channels for societal demand making, representation and conflict resolution” (Grindle, 1996: 8).

[INSERT TABLE 1 HERE]

TABLE 1: FOUR DIMENSIONS OF STATE CAPACITY

DIMENSION

DEFINITION

INSTITUTIONAL CAPACITY

/ Authoritative and effective “rules of the game” to regulate economic and political interactions. Ability to assert the primacy of national policies, legal conventions, and norms of socio and political behavior over those of other groupings.

TECHNICAL CAPACITY

/ The ability to set and manage effective macro-economic policies. A cadre of well-trained economic analysts and managers. Well-staffed and appropriately placed units for policy analysis. Important role for technical input and information in decision making.

ADMINISTRATIVE CAPACITY

/ Effective administration of basic physical and social infrastructure. Ability to perform basic administrative functions essential to economic development and social welfare.

POLITICAL CAPACITY

/ Effective and legitimate channels for societal demand making, representation, and conflict resolution. Responsive political leaders and administrators. Societal participation in decision making.

(Adapted from M. Grindle, Challenging the State: Crisis and Innovation in Latin America and Africa, Cambridge: Cambridge University Press, 1996, p.8, Table 1.1)

When we turn to the Latin American and Caribbean Region (LCR), we can see that there are three fundamental threats to the construction of good governance in the region, namely corruption, clientelism and capture. All three of these phenomena refer to the use of public office for private gain and their impact goes far beyond the simple diversion of funds. Corruption, in addition to directly enriching individual bureaucrats, distorts markets and hampers service delivery (Rose-Ackerman, 1999). Clientelism, in addition to unfairly channeling public resources to specific client groups, alters the dynamics of political competition and leads to the ineffective provision of public services (Fox, 1994). Capture, in addition to providing rents to specific economic actors, also greatly alters markets and worsens the position of consumers, workers and the environment vis á vis corporations (Stigler, 1971). In the end, only by assuring the public interest character of the state will good governance and the economic growth that accompanies it be possible in LCR.

The poor are the hardest often hard hit by such “particularistic” uses of the state. This is because the poor usually have few resources available to play such particularistic games. Good governance is therefore necessary not only for economic growth in general but also for combating poverty in particular. As the case studies will further illustrate, the relationship between societal participation and development effectiveness stems from numerous causal links, including:

1. Participatory planning processes promote decision-making based on needs identified by potential beneficiaries, thus yielding a better targeting of resources;

2. Social accountability provides greater oversight of public resource management to discourage corruption, clientelism and capture; and,

3. Participatory monitoring and evaluation gauges client opinion and satisfaction to advise in the improvement of the quality of services.

One of the most effective ways to strengthen the four basic capacities of the state and to combat corruption, clientelism and capture is through the construction of an honest, efficient and effective (or, in other words, “accountable”) bureaucratic apparatus. This task should be at the top of the agenda for almost all states in the developing world. But, how can this be done?

There are two general strategies for the achievement of this task. On the one hand, governments can strengthen the “command-and-control” elements of government. This involves forcing bureaucrats into line “from above” by more rigorously enforcing performance targets and by making them more vulnerable to punishment by superiors. On the other hand, governments can open up their bureaucracies to pressure “from below”. This involves constructing a healthy relationship between state and society so that social actors and individual citizens are empowered to oblige the government to uphold the rule of law and fulfill its promises. This second strategy constitutes one of the central thrusts of what has been called the “New Public Management”[1] and in general involves what McCubbins and Schwartz (1984) have called the “fire alarm” approach as opposed to the “police patrol” approach to assuring the accountability of public servants.

Although the top-down approach is clearly important and necessary in most many countries of the developing world, especially given the chronic weakness of their bureaucratic apparatuses, the focus of this paper is on the latter approach. Specifically, how can the relationship between state and society be transformed from a process of particularistic demands, concessions and manipulations to a healthy engagement that produces a solid bureaucratic apparatus and policy outcomes that are in the interest of the public as a whole? This is the central question that guides the discussion below.

The first section provides a general overview of the concept of accountability. It begins with a review some of the most important literature on this topic. Then it offers a categorization of the different ways in which civil society can interact with the state in order to improve government accountability.

The following section includes various case studies of successful examples of what I call “state-society synergy for accountability”. The emphasis is on successful cases since, as Judith Tendler has pointed out, “the mainstream donor community’s advice about public-sector reform arises from a literature that looked mainly at poor performance…This means that countries and the experts that advise them have few models of good government that are grounded in these countries’ own experiences” (Tendler, 1997: 2). Development professionals are acutely aware of the ways that governments fail. There is a desperate need for sustained study of successful government innovations in order to inspire and direct positive action. It should be noted that thisThis study offers possible strategies for reflection and discussion by World Bank staff. These case studies present just a sampling of the innovative work currently being conducted in this sector. In addition, it should be noted that the evaluation of the impact of the relationship between state and civil society on poverty reduction and the public policy process remains a work in progress. Each of the cases presented offers mechanisms that demonstrably increase civic engagement. Each anticipates an outcome of improved public sector performance, but evaluations identifying precise determinants and relationships of causality on these types of initiative are still few and far between.[2] As the forms of social accountability are varied, it is also possible that their impact is not uniform. Further review may find that “accountability” as active participation in the policy process has different consequences for policy quality than does accountability as social monitoring and control. Participation as voice may also differ from participation in the decision-making process itself. While evaluations identifying precise determinants and relationships of causality on these types of initiative are still few and far between, several of the cases suggest positive results. Further investigation is required to provide additional evidence on how and if increased civic involvement can improve public policy performance and poverty reduction.

The case studies draw from a wide range of different contexts (Brazil, India, Mexico, U.S.) and from a variety of different areas of government activity (corruption control, environmental regulation, poverty reduction, election monitoring, infrastructure provision, school reform, police reform). The diversity of cases is important for two reasons. First, it allows the reader to gain a full perspective on the many different ways in which states and societies can work together to solidify accountability. Second, it lends scientific weight to the conclusions. When the same fundamental issues come up repeatedly throughout a wide diversity of cases it is much more likely that the issues are fundamental to the phenomenon itself, and not due to specific contextual factors.