Skip to main content Accessibility help
Hostname: page-component-cd4964975-598jt Total loading time: 0 Render date: 2023-04-01T06:06:57.189Z Has data issue: true Feature Flags: { "useRatesEcommerce": false } hasContentIssue true

Part III - New governance strategies

Published online by Cambridge University Press:  05 January 2014

Jacqueline Best
University of Ottawa


Governing Failure
Provisional Expertise and the Transformation of Global Development Finance
, pp. 89 - 186
Publisher: Cambridge University Press
Print publication year: 2014

Part III New governance strategies

5 Fostering ownership

In its own internal reviews the World Bank has come to the same conclusion – “ownership,” or strong domestic support of reforms, is essential for adjustment lending to succeed. Before 1990 about a third of adjustment loans failed to achieve expected reforms, and the lack of borrower ownership or commitment was a key factor in the failures.

World Bank. Assessing Aid: What Works, What Doesn’t and Why, 1998.1

One of the principal lessons that the International Monetary Fund (IMF), the World Bank and donors drew from past failures of aid effectiveness was a belief that borrowers’ lack of political will was a crucial part of the problem. In response, after considerable debate and disagreement, institutional actors developed the strategy of fostering country ownership. In contrast to earlier eras, in which development policies sought to separate politics from economics or to redefine political questions as economic, the ownership strategy treats the political support for development programs as a legitimate object of international financial institutions (IFIs) and donor action. Four assumptions underpin this strategy: politics (or at least political economy, defined in public choice terms) is relevant to economic development; policies should be tailored to local contexts; borrowing countries must take more responsibility for their own progress; and they must participate more actively in IFI and donor programs. In combining these four assumptions, the strategy of ownership brought together a number of concepts that had existed before, but separately, such as “courageous political leadership,” “self-sufficiency,” and participation.2 It was only once institutional actors and critics began to problematize the role of politics in development and to identify the political sources of policy failure that these problems were brought together and made governable.

In this chapter, I will focus my attention on two key practices that are part of the ownership strategy: the streamlining of conditionality and the introduction of Poverty Reduction Strategy Papers (PRSPs). Although these practices exist in part as specific policies in certain institutions like the IMF, the World Bank and various donor agencies, they all exceed any one particular organizational context. I will therefore examine each policy as it functions both within and across several different institutional contexts, and then consider the combined effects of these new practices as they interact and intersect with one another to make up a more provisional kind of governance.

This chapter seeks to answer two questions about the strategy of ownership: why it emerged, and how it works. I will first answer the why question by examining the various pressures that led to the adoption of the ownership strategy, before considering how the strategy of ownership works by applying a meso-level analysis and focusing on the principal governance factors. I will use a number of concepts derived from actor network theory (ANT), examining how actors sought to operationalize ownership by developing inscriptions that could translate a broader range of voices and concerns into a single powerful document. This analysis reveals some significant shifts in how these new policies do the work of governing, including changes in several key factors of governance: the application of small “i” ideas, the development of increasingly symbolic and informal techniques, the enrolment of new civil society actors, the expansion of the basis of institutional authority and the increasing reliance on productive and indirect kinds of power.

I will conclude by suggesting that efforts to foster ownership provide considerable evidence of the emergence of a new, more provisional style of governance in which governing is done indirectly, often in the gaps in official policy, while governance strategies are increasingly proactive and performative, relying on symbolic techniques for their effectiveness, yet always aware of the possibility of failure.

The evolution of ownership

Before considering the institutional evolution of the two specific policies that I will examine here, it is worth considering how IFIs and donors ended up with the practice of fostering “ownership” itself. Why this new emphasis on explicitly political strategies, given the donor institutions’ long history of trying to appear objective and apolitical? It is tempting to see the strategy of ownership as part of a linear trajectory in the evolution of development policy. Yet the evolution of the strategy and policy was both contingent and contested.

By emphasizing the importance of country ownership, IFIs and donors have sought to respond to two criticisms: to non-governmental organizations (NGOs) and borrowers who charged them with heavy-handedness, ownership promised to shift more control to local communities; and to taxpayers who were suffering from aid fatigue, it was part of the “aid effectiveness” agenda that promised to deliver better results.3 Much of the impetus behind the ownership push revolved around emerging concerns about what counted as success and failure, as the debate on aid effectiveness began to erode earlier metrics and IFIs and donors found themselves under pressure to demonstrate achievements on the ground. Drawing on public choice theory, researchers at the World Bank argued that one of the crucial reasons for the poor performance of many Bank programs was the lack of a good “policy environment” in borrowing countries, which they defined as poor macroeconomic performance and distorted institutions. This meant that IFIs could not resolve countries’ economic problems without also addressing their political context, and that a willingness to reform was essential if programs were to succeed.4 Policymakers thus began to view politics as a central part of the problem of development finance, one that was crucially linked to rates of success and failure.

One strand of the ownership strategy’s development began in a technical part of the Bank, its Operations Evaluation Department (OED), responsible for in-house evaluation. OED staff first became interested in the promotion of country ownership in the 1990s, as part of their efforts to find new ways of assessing programs in the face of what appeared to be declining success rates: by their 1994 report, success rates as measured by the OED had dropped from 80 per cent (common throughout most of the 1980s) to 65 per cent.5 Of course, such figures are somewhat misleading, as the metrics used also changed over time, as I discussed in Chapter 4. Nonetheless, this vastly increased rate of failure became a matter of concern and debate within the organization. By 1998, Dollar and others in the Development Research Group identified ownership as key to aid effectiveness, and the OED also integrated it as a metric of program success, making it a crucial part of evaluation practices.6

Concerned about the apparent decline in success rates, the newly appointed World Bank President, James Wolfensohn, made the improvement of Bank performance a priority.7 In January of 1999 he launched his comprehensive development framework (CDF) in a bid to improve aid effectiveness, in part by fostering country ownership. As I will discuss below, NGOs had been pressing for policies that gave borrowing governments more flexibility to adapt policies to their own priorities throughout the 1990s. There was also pressure for reform from major shareholder governments, including the British and the Americans.8 Actors within the World Bank sought to use the strategy of ownership to translate critics’ concerns about responsiveness and flexibility in a way that would tackle what had become an embarrassing rate of failure in their programs.

At the IMF, both internal and external actors also played a role in introducing the strategy of ownership. Fund staff and directors began to discuss the issue of ownership in the mid-1990s in the context of discussions about how to ensure that adjustment policies did not negatively affect investment and growth in borrowing countries.9 The issue moved to the front of the institution’s agenda in 1997, when the IMF commissioned two different reviews of the organization’s Enhanced Structural Adjustment Fund (ESAF), one internal and one external.10 Despite its orthodox approach to the problem, the internal report identified country leaders’ “commitment to reform” and broader political factors as key determinants of program success.11 The external review went much further, concluding that one of the failings of ESAF programs was their inability to solicit country ownership.12

At about the same time, Masood Ahmed, the senior World Bank manager responsible for the highly indebted poor countries (HIPC) initiative and PRSP policies, moved to the IMF’s Policy Development and Review Department (PDR). The ESAF review and the change in personnel played important roles in highlighting the idea of ownership for Fund policy staff at a time when they were looking to reform their lending policies – partly in response to severe external criticism of their handling of the Asian financial crisis.13 Michel Camdessus, the Managing Director at the time, remembers being a strong proponent of the policy:

Personally, I felt extremely strongly about requiring ownership. A country that was not ready to publicly state its support for the policies it had agreed to, including the difficult steps it needed to take to fix the economy, didn’t deserve to be eligible for funding.14

Although IMF staff adopted the practice of fostering ownership rather later than at the Bank, some of them ultimately became quite keen proponents of the strategy – including a group of staff in PDR who played a central role in integrating it into organizational practice.15

Both institutions thus embraced the practice of fostering country ownership as a way of responding to what were perceived to be some serious failures in their policies – made visible by the contested failures of the Asian financial crisis and the “lost decade” in sub-Saharan Africa. Rather than admitting wholesale to their responsibility for these past failures, IMF and World Bank staff redefined the terms of the debate by introducing the concept of country ownership. Suggesting that the causes of failure were linked to a lack of political commitment, a subject that they had previously believed to be beyond their control, Fund and Bank staff were able to place a measure of responsibility on low-income countries (LICs) (for their lack of commitment) while promising to improve success rates (by building more ownership). In practical terms, this new attention to country ownership translated into the development of several new policies, including the introduction of general budget support, the streamlining of conditionality, and the development of the PRSP.16 These last two policies will serve as the basis for this chapter’s analysis.

Redesigning conditionality

Although the number and character of IMF and World Bank conditions has varied significantly over time, the trend in both institutions has been a persistent increase in both their number and scope – at least until recently.17 Long gone are the days when the IMF contented itself with credit ceilings and a few monetary targets, as in the 1950s and 1960s.18 Instead, by the mid-1990s, IMF stand-by agreements and extended facility arrangements often included a host of structural conditions on trade policy, privatization of state-owned industries, and financial sector reforms. With the advent of structural adjustment loans (SALs) in the 1980s, the World Bank had got into the business of imposing conditions and had also gradually expanded those conditions to cover a similar range of areas. Donors followed suit for the most part, either imposing their own conditions or linking their aid to a country’s successful negotiation of an IMF agreement.

This trend reached its peak in the IMF response to the Asian financial crisis in 1998, as the Fund negotiated some of its most intrusive financing programs. Yet this financial crisis was also a turning point, as it produced a backlash against the continued expansion of conditionality not only among the IMF’s critics, but also, to a lesser extent, within the organization itself.19 As one IMF staff member put it to me, you only had to look at the reaction caused by the Fund’s rigid attitude to Latin America to understand why the various regional departments at the Fund were treading more softly in recent years: no one wanted to end up facing that much criticism again, or losing so many clients. Although the IMF was perhaps the most self-conscious and public in its efforts to reconsider and revise its practices, it was not the only organization engaging in soul-searching about the nature of its conditions. The World Bank and several donor agencies also revised their practice of conditionality in the early part of the new century.

Streamlining at the IMF

It was just a few years after the Asian financial crisis that Horst Köhler began his leadership of the Fund and revised the IMF’s guidelines on conditionality as one of his first major initiatives.20 Arguing for the importance of “streamlining” conditionality, Köhler sought to reduce the number and scope of IMF conditions.

There are several different stories about what motivated him to call for these revisions. One senior IMF official has suggested that Köhler’s earlier role in negotiations on Indonesia’s post-crisis financing package had led him to conclude “that the Fund had gone overboard” in demanding conditions.21 A former member of the Executive Board suggested that Köhler’s Africa tour first prompted his concern with the scope of IMF conditionality, after he witnessed the level of Fund conditions on the Mozambique cashew industry.22 What is clear is that he acted quickly after his appointment as Managing Director, issuing an interim notice on streamlining conditionality in September 2000, followed by formal guidelines that were approved by the Executive Board in September 2002.23

Why did the Fund embark on these reforms? Although Köhler himself clearly played a central role in making them a priority, he was also responding to broader pressures: growing uncertainty and debate about the effectiveness of the IMF’s conditions and increasing criticism of its policies. The Fund’s concern with achieving country ownership was driven in part by concerns about program effectiveness, particularly after condition-laden programs negotiated in the context of the Asian crisis were deemed by many to be failures. This was a highly contested issue: as one IMF staff paper put it, “The relationship between conditionality, ownership and the implementation of Fund supported programs has been the subject of an extensive debate, both inside and outside the Fund.”24 This paper and several others around this time nonetheless concluded that political support was crucial to program success.25 There was also a growing sense that the ever-expanding number of conditions was making things worse. As one senior IMF official noted: “If conditionality is excessive, it leads to unnecessary political fights that are to the detriment of the programs.”26 Fund staff thus began to use the concept of ownership to identify the causes of program success and failure in both political and economic terms. They also began to explore ways of translating the idea of ownership into a measurable practice – creating a new kind of expertise capable of governing these new challenges.27

The bid to reform conditionality and increase ownership was not entirely driven by concerns about re-establishing expert authority: it was also a rather effective way of responding to some of the Fund’s critics. On the one side, NGOs critical of the IMF’s activities had become increasingly numerous, organized and vocal in the course of the 1990s. They saw a rise in the number of structural conditions as the imposition of free-market ideology on developing countries. On the other side were major shareholder governments, who had also been calling for reforms to the IMF. British officials had been pushing for reforms to the IFIs since the election of Tony Blair’s government; the United Kingdom government’s first White Paper on development in 1997 argued for a shift to a partnership-based approach to lending that “moves beyond the old conditionalities of development assistance and requires political commitment to poverty elimination on both sides.”28 Their Executive Director at the time, Stephen Pickford, was also an advocate for reform.29 In the United States, Treasury officials were under pressure from both left and right to push for IMF reform and sought to respond to concerns that they knew the Meltzer Commission report was going to articulate.30 In late 1999 and early 2000, Treasury Secretary Lawrence Summers called for more focused conditionality as part of the Fund’s overall need to return to its “core competencies” in several speeches. Yet throughout these debates, US representatives remained quite reluctant to reduce the number or scope of conditions.31

After a vigorous debate on the Executive Board, the ultimate form that the new guidelines took was based on five new guiding principles: parsimony, tailoring, coordination, clarity and ownership. Fund staff were to use parsimony in determining what conditions are necessary to achieve program objectives, limiting structural conditions to those that are deemed “macro-critical,” a formulation introduced by Canadian Executive Director, Thomas Bernes.32 Staff must also now carefully tailor programs to the specific contexts of individual countries. The move to redesign conditionality around the idea of country ownership was an effective way for the Fund to both re-establish its expert authority by providing a technical solution to its perceived failures, and to respond to its critics by promising to be more responsive to local contexts.

A more gradual change at the World Bank

Although the Bank only undertook a formal review in 2004, it had introduced some significant changes in its conditionality policy over the previous few years, driven by similar concerns to the Fund about compliance and ownership as well as external pressure for reform.

In a 2004 retrospective on adjustment lending, Bank staff suggested that both technical and political considerations played an important role in driving changes in conditionality policy at the institution.33 The Bank’s own research and analysis of the successes and failures of the 1980s and 1990s indicated that overly detailed and complex conditions had little chance of success, that program ownership was key to any adjustment program, and that selectivity played a central role in improving program completion.34 At the same time, Bank staff were aware of the criticisms that had been directed towards them of late by “the development community,” acknowledging that external criticisms helped shape changes in Bank policy.35 One of the more influential critiques came from Paul Collier, who announced the “Failure of Conditionality” in a widely-cited essay.36 The paper was published in 1997, just one year after he became Director of the Development Research Group at the World Bank.

Although most of these critical voices were from NGOs and academics, some of the more influential critics were actually within the British government, and included the British Executive Director to the World Bank, two successive Secretaries of State for International Development, Claire Short and Hilary Benn, and the Chancellor himself, Gordon Brown. Since the election of the Labour Party under Tony Blair in 1997 and the subsequent creation of the Department for International Development (DFID), the British government had begun to stake out a more critical approach to international development financing, as I will discuss below. The British Executive Director, Tom Scholar, along with Tony Benn, pushed hard for the Bank to undertake a formal review of its conditionality policy.37

One important shift in the Bank’s conditionality policy came in 2004 with the Board’s adoption of a new operational policy and procedure for lending: the World Bank decided to replace adjustment lending with development policy lending.38 This involved not simply a change in name – although the symbolic importance of that change should not be underestimated – but also a number of shifts in policy: the new policy document eliminates all reference to privatization as an explicit objective of such programs and places more emphasis on poverty, participation, the environment, fiduciary responsibility and other related governance issues.39,40 The World Bank also undertook a formal review of its conditionality policy in 2004, producing a report on its findings in 2005.41 The report, dismissed by critics as more of a justification than a critical review of current policy, ultimately argued for a series of “good practice principles” similar to those adopted by the IMF in its streamlining exercise: criticality, transparency and predictability, customization, harmonization and ownership.

More radical shifts in some donor states

International organizations (IOs) are not the only players that have made significant changes in their approaches to conditionality. Both the UK and the US made more radical changes in the 2000s – although they did so in different ways.

In its 2005 policy paper, Partnerships for Poverty Reduction: Rethinking Conditionality, the British government declared that it would no longer impose economic policy conditionality on those states with which it had a bilateral aid relationship.42 While the British retained certain conditions to ensure fiduciary responsibility – i.e. ensure that the money is spent transparently – and also introduced some new governance conditions, they committed themselves to stop imposing formal economic conditions.43 This placed them in a relatively small minority of donor states, including the northern Europeans, who believe that conditions undermine rather than support development efforts, and demonstrate this conviction in their aid programs.44 Although, in the words of one NGO representative, the British were sometimes viewed as “pot smokers” by other donor government for their radical position on conditionality, they did quietly persuade other nations to pay attention to their ideas.45

Why this significant shift in development philosophy and policy by the British government? Nearly all of those I interviewed on the subject suggested that it was a logical outcome of the previous twelve years of Labour government policy, consistent with the creation of DFID as a separate department and with a succession of White Papers by that department. Some argued that the first Secretary of State for Development, Clare Short, had been instrumental in changing the overall tone and philosophy of the UK’s aid to one based on the principle of partnership.46 Others suggested that the more radical shift to eliminate economic conditionality owed more to the second Development Secretary, Hilary Benn, who was willing to take bolder action,47 while others suggested that it was the movement of so many NGO staff into DFID offices that explained the shift in policy. Underlying these individual personalities and dynamics was a broad preoccupation with “the failures of existing aid,” as one former assistant to Clare Short put it.48 As they noted in their first White Paper on development, the British were keenly aware of the costs of the lost decade in sub-Saharan Africa.49 Not unlike the World Bank, they traced the source of many of the failures of aid to “two flaws” in thinking about the relationship between politics and economics: the belief that the state is the only solution, and the belief that it is the only problem.50

This emphasis on the political economic dimensions of aid failures at both the World Bank and DFID was not a coincidence: DFID, together with the UK think tank, the Overseas Development Institute (ODI), were major actors in the debate on aid effectiveness. Together, they produced a significant amount of research in the late 1990s and early 2000s indicating that excessive conditions were often part of the problem, including Tony Killick’s influential work on “the failings of conditionality.”51 Finally, the British government was no more immune than other institutions from political pressure: this took the form of an organized and vocal community of NGOs in the UK, as well as the recognition that, in the words of one Treasury staff member, it is politically very difficult as donors to impose conditions on other nations.52

On the other side of the Atlantic, the Americans also made a significant change to their conditionality policy, through the creation of a new donor agency, the Millennium Challenge Corporation (MCC), in 2004. The MCC seeks to promote sustainable economic growth through a different kind of process than that used by the IMF, the World Bank or DFID. Rather than imposing ex-post conditions on countries that must be followed once a timetable of financial assistance is agreed upon, the MCC reverses the process by pre-selecting countries that have already attained certain basic criteria in three broad areas: “good governance, economic freedom and investments in people.”53

The criteria are interesting in the way that they seek to provide a quantitative measure of compliance, even when the objects being measured are extremely complex (like the level of political rights). I will further discuss this effort to measure development results in Chapter 8. For the present, it is worth noting that the MCC transforms these criteria into a “scorecard” for each country, and determines whether the state has passed or failed in each of these different areas, drawing more attention to the question of failure and creating a particularly stark distinction between those eligible and ineligible for assistance. Although in many ways the MCC approach to conditionality is significantly different from those being adopted by the IMF, World Bank and DFID, it does share one important attribute: the MCC places significant emphasis on ensuring – and measuring – the level of country ownership.54

Analysing conditionality reform

In the context of debates about what counts as program success and the move to begin to problematize the political dimensions of policy failure, IOs and donors developed a range of strategies for redesigning conditionality. Despite their differences, they share some significant commonalities in their underlying style of governance, similarly conceptualizing the problem of politics, developing more symbolic techniques to engage the problem, and broadening the basis of authority and informalizing power relations in the process.

Small “i” ideas

If the experiences of the 1990s had produced some significant debates about the expert authority of the IFIs and donor states, then these new conditionality policies can be understood in part as efforts to respond to those contested failures.55 All four institutions’ strategies are shaped by their interpretation of the causes of those earlier failures – whether it is the problem of excessive conditions for the World Bank, the IMF and DFID, the importance of selectivity at the Bank and the MCC, or the importance of country ownership at all four.

What all of these policy innovations have in common is the problematization of the “political economy” dimensions of development, using a cluster of public choice assumptions to conceptualize and engage with their objects. A handful of studies are cited over and over again in the policy literature on the subject: analyses by David Dollar, Jakob Svensson, Paul Collier, Tony Killick and Craig Burnside, all of whom draw heavily on public choice theory (and most of whom worked for the World Bank at some point).56 What does politics look like from this perspective? It takes two principal forms: first, as the “environment” within which conditions are implemented, an environment made up of existing policies and institutions.57 Second, the political appears in somewhat more active guise as the leaders of borrowing countries, who are deemed to be either “reformers” – keen to implement “sound” economic policies – or not.58 Dollar and Svensson argue that these “political economy variables” play a crucial role in determining whether or not an adjustment loan achieves its intended outcomes, regardless of World Bank efforts.59

From the perspective of public choice theory, development financing should therefore be more selective, directed towards “reformers,” since “adding more conditions to loans or devoting more resources to manage them does not increase the probability of reform” for poor performers.60 What then is the role of conditions, if they are not needed to “buy” or even encourage reform? They become a kind of “commitment technology,” in the language of public choice and credibility theory: they are a way for governments to (voluntarily) bind their own hands, in order to show markets and donors that they are credible reformers.61 Yet this new logic for conditionality contains a dilemma for donors: markets will only find governments credible if they trust that they will follow through on their promises. Research by Collier and others indicates that many governments state their willingness to undertake reforms in return for financing, and then fail to follow through.62 In public choice terms, IFIs and donors thus face the problems of adverse selection and moral hazard: because most World Bank loans are fully disbursed to borrowers even when conditions are not met, governments have considerable incentives to misrepresent themselves as reformers. Hence the crucial importance of selectivity: IFIs and donors must not lend to poor candidates, not only because aid is unlikely to foster reforms, but also because they will actually undermine the credibility of good candidates’ conditions.63

The logic of public choice theory points towards a different kind of conditionality policy – one where the number and scope of conditions matters much less than the credibility of governments’ commitment to implement them. Commitment, or ownership, as it eventually came to be called, becomes the key to addressing the “failure of conditionality,” as Collier bluntly called it.

Symbolic and informal techniques

How was this new public choice conception of conditionality translated into practice? There is little question that there has been a culture shift in the IFIs, particularly at the World Bank, around staff’s perception of the role of conditionality. A number of staff who I spoke with suggested that conditions were far less important than they had been, one former senior staff member suggesting that in the region that he was involved in, “we do not have conditionality any more.” Instead, “government comes up with a plan which we discuss; the plan is put down on paper and discussed, and if it seems to be something worthy of support, we give them the money to help them implement it.”64 A closer examination of the evolving practices of conditionality, however, suggest that rather than disappearing, conditions have changed in form, becoming increasingly symbolic in character, and informal in application.

As I discussed above, public choice theory proposes a much thinner conception of conditions as commitment technology. Conditions become less about what they are (required reforms) and more about what they represent (signals of “sound” intentions). Their relationship with concrete policy changes therefore becomes increasingly distant and hypothetical – more symbolic than real. Although all conditions today potentially play this symbolic, signalling role, the IMF has gone so far as to introduce a kind of conditionality that is purely about signalling commitment. The policy support instrument (PSI) does not include any financing whatsoever: it is conditionality without the money. To date, seven countries, all of them African, have negotiated a PSI with the IMF. Why would a government agree to conditions without receiving any financing in return? It would be in order to signal to donors and financial markets their willingness to stick to the sound policies that the IMF supports.65

At the same time as formal conditions have been pared down and become increasingly symbolic, informal conditions have proliferated. At the World Bank, the number of formal conditions has dropped from above thirty-five on average in the late 1980s, to twelve in 2005.66 Yet even as these formal conditions have declined, there has been an increase in those conditions that the Bank does not officially define as such: these include benchmarks and triggers, which are used in programmatic lending, as well as the country policy and institutional assessment (CPIA), which all play a role in determining whether funding will be provided, and at what level.67 Thus, while official conditions may have decreased, by 2001 the average number of benchmarks increased from fifteen in the early 1990s to twenty-three or more, and as many as thirty-five for the poorest countries.68 Even at the IMF, where one of the objectives of the 2002 streamlining exercise was to rely less on subjective structural benchmarks in order to increase the “clarity” of conditions, the Board reversed course after the 2008 financial crisis and replaced quantitative performance criteria with more subjective reviews, again blurring the boundaries of what counts as conditionality.69 Paradoxically, even as IFIs and donors seek to make conditions more transparent, they are becoming less visible.

As donors and IFIs have scaled back formal conditions, they have also been increasing their technical assistance, upping the role of consultants and other sources of policy advice. For example, in the UK, as both DFID staff and NGO critics point out, even as formal conditionality has declined, the agency’s budget for technical assistance remains “huge” and has become a crucial means for applying less formal pressure on borrowers.70 As ODI researcher, Ruth Driscoll, put it, “In practice, what you get is a bit of a fudge where DFID staff engage in a lot of ‘policy influencing’.”71 Finally, in their studies of “new” or “post-conditionality” in Africa, Graham Harrison and Jeremy Gould have both demonstrated an increase in perhaps the most invisible kind of development conditionality: the growing internalization of donor and IFI norms by developing country leaders, particularly by finance ministry officials who have come to accept the imperatives of domestic adjustment.72 The combination of this kind of internalization with the persistence of significant aid dependence in many countries makes it difficult to identify the degree of external influence.73

Informalizing power

As public choice theory would have it, the new conditionality avoids power dynamics altogether, since borrowing countries use conditions to tie their own hands and to signal to markets and donors their ownership of policy reforms. Not too surprisingly, this account turns out to be something of a fantasy. Instead of eliminating power dynamics, the informalization of conditionality techniques discussed above produces a certain informalization of power relations. Even where formal conditionality has been reduced or eliminated, its ghost lives on at the edges of or in the spaces between formal lending programs – its invisibility lending it a paradoxical kind of power.

There is no question that the reduction in the number of formal conditions by the IMF, World Bank and DFID alters the ways in which the lender can influence the behaviour of the borrower. At the IMF, the attempt to limit step-by-step conditions means that staff have less ability to control how borrowing states comply with conditions, while efforts to focus on their core areas of expertise limit the issues they can address. Yet there is little doubt that the institution retains significant power in its relationship with borrowing states. The very fact that poor African countries would choose to accept the constraints of the PSI without financing suggests that the IMF wields considerable authority through its capacity to decide what counts as sound economic policy.

The fact that the World Bank and DFID have moved even further away from formal conditions suggests that the diminution of lender control will be even more noticeable; yet their increased emphasis on technical assistance, consultants and more flexible benchmarks does not so much reduce as transform their power to influence borrowers’ policies. One former senior World Bank staff member I spoke to suggested that conditions have given way to conversations at the institution. In cases where there is considerable evidence that the country is moving in the right direction, that conversation can be reasonably open-ended. On the other hand, “if you have a situation where there is no progress on the poverty reduction front, then you need to ask tougher questions, and it means a tougher dialogue – which can be interpreted as conditions.”74 This shift towards a policy of conversations is a double-edged sword as it can both complicate and conceal the power relations at work in the aid relationship, evidenced by the fact that surveys have indicated that borrowers do not see much difference between formal and informal conditions.75 To put it more succinctly, the difference between a condition and a conversation is not always clear to those on the borrowing side of the relationship.

Even at the MCC, where the practice of relying on quantitative pass-fail indices appears to be the least ambiguous approach possible, the dynamics of selectivity also work to informalize power. As the then Chief Executive Officer of the MCC, John Danilovich, noted with pride, poorer states that have yet to qualify for MCC assistance have begun to proactively make changes to their governance practices and business regulations in hopes of eventually qualifying.76 These changes are no doubt in large measure aimed at achieving a better score in the MCC indices; yet they are also a kind of performance of good faith – a demonstration of country ownership. When conditions become increasingly symbolic, power relations also take a representational turn, as borrowing countries seek to signal their willingness to be good political economic players.

This willingness to conform demonstrates the expert authority of the IFIs and donors as they set themselves up as the arbiters of “sound” policies that the markets (and other donors) will view as credible. This expert authority is a particularly productive form of power. Ilene Grabel points out that the discourse of credibility is highly political and performative: the act of declaring a policy as credible (generally by an external, authoritative actor) seeks to create rather than to simply signal credibility.77 If the initial performance of the statement of credibility is accepted as authoritative, donors and market actors will follow through with funds and further endorsements that effectively reinforce the initial statement about credibility. Moreover, those policies that are deemed “sound” remain strikingly familiar, focusing on low inflation, financial and trade liberalization, and the creation of a friendly business environment – the stock-in-trade of neoliberalism.

Paradoxically, as conditions become more symbolic, they also become more performative: conditions are designed to do a lot more than simply indicate what policies should be changed; they now also communicate a particular kind of political will. Similar to the standards and codes that I will discuss in the next chapter, these seemingly simple techniques are thus delegated a new kind of power, as conditions take on a life of their own.

These new subtler forms of power can nonetheless be devastatingly effective. We should not forget that underpinning the new conditionality is a belief in the value of selectivity – of only providing financing to those countries with good policy environments and leaders who demonstrate their commitment to reform. The aid effectiveness studies discussed above suggested that those not deemed “genuine reformers” should receive advice and technical assistance but no money; in practice, as one former senior World Bank staff member noted, not only has the allocation of dollars been reduced to countries deemed poor candidates, but so has the time spent on them, which is a serious mistake given that “the whole point was that these countries needed more engagement.”78 Moreover, in the wake of these changes, Bank aid in particular has become more selective.79 The cost to poor countries of not complying with informal conditions – of not convincing lenders of their commitment – is therefore very high indeed. Selectivity and the threat of selectivity act as particularly potent forms of exclusionary power, sorting countries into the saved or the potentially savable, and the damned.

Poverty Reduction Strategy Papers (PRSPs)

Conditionality policy is not the only policy through which IFIs and donors have sought to foster country ownership: the PRSPs are also key to that strategy. In fact, the PRSPs can be understood as a more active process for generating the country ownership that is needed for streamlined conditionality to work. First introduced in 1999, PRSPs replaced the poverty framework papers (PFPs) that the IMF and World Bank developed in the late 1980s to coordinate their programs.80 By the late 1990s, institutional actors recognized that “the PFP process was broken”: the plans were drafted in Washington, largely by the IMF, with countries signing off but not terribly committed to the program.81 PRSPs were first developed by staff at the World Bank and IMF in the context of the debt relief initiatives for “highly indebted poor countries” (HIPC). Staff developed the idea of requiring governments to draft a PRSP before receiving debt relief – developing a “big picture” plan for how the funds would be used. The practice of creating the PRSP was also intended to give borrowing governments more responsibility for setting their own priorities, and at the same time to nudge them towards a more responsive relationship with their population.

Like efforts to streamline conditionality, the development of the PRSP was driven in part by political pressure from states and NGOs, and in part by expert concerns about past policy failures and the belief that country ownership was essential if development finance was to succeed. With the PRSP these institutions went considerably further, however, in their efforts to re-establish their flagging authority by developing techniques designed to foster public involvement in the creation of development plans and thus actively build local ownership. Although its development was contested, the PRSP ultimately became the key mechanism for putting country ownership into practice.

The push for the PRSP

Karin Christiansen and Ingie Hovland, in their excellent analysis of the dynamics underpinning the development of the PRSP, have described its adoption as the consequence of a “tipping point” in the international development field.82 As both internal and external actors began to problematize the political dimensions of policy failure, debates about aid effectiveness, new concerns about poverty and participation, and internal bureaucratic dynamics converged to make the PRSP the crucial practice for operationalizing ownership.

External actors played an important role in pressuring the IMF and World Bank to adopt a policy that would enable country ownership and poverty reduction. As in the case of conditionality, the UK, under the leadership of Clare Short and Gordon Brown, argued forcefully for a more participatory and country-owned process.83 The Clinton administration was less enthusiastic but ultimately supported an instrument that they saw as ensuring that the neediest people and states would benefit from debt relief and additional assistance.84 The Development Assistance Committee (DAC) of the Organization for Economic Co-operation and Development (OECD), an organization bringing together major donors, also played an important role in championing the new emphasis on ownership.85 NGOs like Jubilee 2000, Oxfam, Christian Aid and ActionAid also pushed for debt reduction and argued for a poverty-focused approach to aid. Finally, although southern actors played a smaller formal role in the development and adoption of the PRSP process, the strategy was modelled in part on several developing states’ own earlier poverty reduction plans, including those in Tanzania, Bolivia, Mozambique and, above all, Uganda.86

It is impossible to neatly separate out political from expert pressures, however, since all of the main “political” actors, like donors and NGOs, participated in the debates about policy success and failure, and articulated their concerns in these terms. Nevertheless, the public choice-informed analyses of aid effectiveness discussed above tended to tackle the problem of reform in relatively narrow terms, emphasizing the need for orthodox economic reform, and pointing to political commitment as a crucial determinant of success. These concerns about how to reduce policy failures combined with a growing emphasis on poverty reduction as a central goal of development finance, though there was little consensus on how to best tackle the problem.87

These emerging concerns about political commitment and poverty reduction combined with a third debate around participation. The practice of integrating participation into development had been circulating for some time, appearing in a number of different contexts with different meanings. As I will discuss in the next chapter, in the public choice-informed debates on aid effectiveness, local participation was defined as a means to better service delivery. The idea of participation was also popular among the more “critical” units of the World Bank, like Social Development, where it was framed as a way of getting civil society actors to hold government accountable – a conception that would eventually come to underpin the “demand side” of good governance. More broadly, increased emphasis on development finance as a “partnership,” in which developing country governments must take some responsibility for reform, relied on more active participation from borrowing country actors.88

By the late 1990s, there was therefore an emerging consensus about the importance of increasing aid effectiveness, focusing on poverty reduction, and encouraging greater borrower participation and responsibility – even if the actual meaning of the term “ownership” remained contested. This process of debate and problematization helped create a tipping point that meant that some kind of change in policy was needed; what form that policy was to take – the question of how to operationalize ownership – was, however, far from inevitable. Several different possibilities were on the table, including World Bank President James Wolfensohn’s proposed CDF.

Although the PRSP has been popularly represented as a brainchild of Wolfensohn and a logical continuation of his CDF, the World Bank President was not actually pleased with the PRSP when it was first developed, seeing it as competing with his framework.89 His fears were at least partly vindicated, since the PRSP quickly overshadowed the CDF as the dominant practice for tackling ownership within the broader aid community. Wolfensohn’s CDF was defined by four major principles, emphasizing long-term thinking, citizen participation, country ownership and measureable results.90 It was therefore very much in tune with the broader shifts in developing thinking that I have discussed, and also consistent with the principles underpinning the PRSP. Yet the CDF remained in the realm of ideas – it was a framework, not a policy – and in an organization as vast and decentralized as the World Bank, frameworks need to be put into practice to have much effect. The PRSP, in contrast, promised a set of concrete practices for achieving these objectives: it was practical, and as such, quickly eclipsed the CDF. The PRSP was eventually represented as a way of putting the CDF into practice.91

The IMF’s own adoption of the PRSP was actually a matter of chance. Facing pressures from the Asian crisis, and NGO and developing country criticism of conditionality policy, PDR staff sought to restructure their lending relationship with poor countries. The PRSP, which in its earliest form had been developed partly by senior IMF staff member Jack Boorman,92 seemed like a policy that might just do the job.93 The Fund’s transformation of the old ESAF into the poverty reduction and growth fund (PRGF) (which was then tied to the PRSP) was far from automatic, as the very question of whether the Fund should have a presence in LICs was contested at the institution; yet the IMF Managing Director at the time, Michel Camdessus, was a deeply religious man who saw the Fund as having a moral responsibility towards the poor, and ultimately pushed hard to ensure that the institution included poverty reduction as a central part of its mandate.94 In my interview with him, Camdessus himself noted that focusing on poverty as well as macroeconomic stability required a difficult shift in the culture of the institution – one that was resisted by some staff members and stakeholders.95 The significance of this shift for the Fund’s internal culture should not be underestimated. As one senior IMF staff member put it: “It’s now accepted in this building that the IMF . . . [is] an instrument of the international community to end poverty. You would have been laughed out of the building if you had said that twenty years ago.”96

Over time, the PRSP’s role was expanded, as it came to replace the PFP as the planning document for IMF and World Bank concessional lending. Donor governments also began to use the PRSP for their own aid strategies, making it a lynchpin in the governance of development finance.

Analysing the PRSP

Perhaps even more clearly than efforts to streamline conditionality, the introduction of the PRSP brought with it a number of important changes to how the IFIs and donors did the work of financing development, including the introduction of new inscriptions and technologies of community, the integration of new actors into the work of governance, and the application of subtler but more productive forms of power.

Engaging new actors

Those involved in developing and implementing the PRSP have sought to use this policy strategy to engage new actors in the practices of governance. Who has historically been responsible for the day-to-day work of governing international development finance? If we look back to World Bank President Robert McNamara’s “war on poverty” in the 1970s, McNamara himself was not only a force behind the adoption of new policies, but also played dual roles as a diplomat working behind the scenes to influence borrowers, and as a technocrat whose measurement techniques ensured that staff were achieving their targets.97 As the Bank and Fund became actively involved in structural adjustment in the 1980s, more work was delegated to technical staff. With the shift from one-off projects to more program-based lending, domestic government actors became more important; yet they were conceptualized in passive terms as consumers of policy advice rather than as active participants, as IFI staff often bypassed domestic institutions and actors.

With the introduction of policies like the PRSP, Bank and Fund staff have continued to be key actors. Yet the PRSP’s architects hoped that the day-to-day practice of governing economic growth, adjustment and poverty reduction would increasingly be undertaken by a new set of actors. Domestic governments were seen as much more active participants in their own governance, preparing their own strategies and taking more responsibility for their successes and failures. The PRSP’s creators also sought to integrate civil society actors as active players, participating in the creation of the PRSP and then using it to hold the government to account. In practice, the range of actors involved in the formulation of the PRSPs has varied considerably, but has included religious groups, parliamentarians, worker and peasant organizations, indigenous peoples, women’s groups, local government officials and others. Even the poor themselves, who were once deemed unable to organize themselves into an effective political force, are now seen as a group capable of having an effect on government policies.98 In the process, developing countries’ civil society has come to be viewed as a necessary quasi-political space – a third space, to use Nikolas Rose’s term – in between the rent-seeking realm of the state and the self-interested logic of the market.99

New techniques

In order to understand what role these new actors play, we need to consider the techniques through which the PRSP does its work. Two kinds of techniques in particular are crucial: inscription techniques, and what Rose calls “technologies of community.”100 The technique of putting things down on paper has long played an important role in IFI lending to poor countries: the PFP was also designed to translate complex domestic economic factors into practical goals. Both the PRSP and the PFP it replaced can usefully be understood as inscriptions: they each seek to translate the complexities of a country’s economic, social and political context, their aspirations and objectives, into a single document capable of enrolling actors and orienting action. Yet they are very different kinds of inscription.

If we compare them, the most obvious difference between the two is the length and scope of the documents. PFPs were relatively short (twenty- to thirty-page) documents that covered a range of areas, from social to monetary policy, viewing them all through the lens of economic efficiency.101 The object of the PFPs, and the structural adjustment programs that they facilitated, was economic transformation. The PRSPs, in contrast, are not merely much longer documents – often close to 200 pages long – but also much more ambitious in their objectives.102

What is perhaps most interesting about the PRSP is the way that it is produced – a key selling point for its advocates. This is where technologies of community combine with inscription techniques to produce a more dynamic and performative document. Whereas the PFP was a report created by Bank and Fund staff in order to coordinate their respective development programs, the PRSP is, at least in theory, prepared by the borrowing government. It is not just the Treasury staff who are involved: many of the affected ministries now play a role, together with a range of civil society groups and individuals. The goal of the PRSP is to engage a myriad of actors in discussing the shape of the country’s development policy. By translating some of the past experiences with micro and project-level participation to a macro level, staff involved in implementing the PRSPs seek to engage a range of stakeholders in the process of formulating, implementing and monitoring a country’s poverty reduction strategy. In practical terms, techniques include information dissemination strategies, various kinds of consultations, workshops and focus groups, citizen surveys and report cards.103

New forms of authority and power

By linking PRSPs to a wide range of different development practices, the IFIs have sought to both re-establish and expand their institutional authority. They have sought to re-found their economic expertise by putting into practice many of the insights of public choice theory and institutionalist economics. At the same time, IFIs’ use of various “technologies of community” help to enhance their claims to popular authority – allowing them to argue that their programs are based on a wider, more robust kind of ownership than in the past. These more popular technologies also delegate a certain amount of governance authority to a wider range of actors – giving domestic governments and local populations more control over their own economic development.

Given its popular, participatory dynamic and its effort to redistribute authority, the PRSP appears to be less subject to power imbalances than the PFP. Yet this delegation of authority is far from unconditional. Although the instrumental power that was so often visible in SALs has become less prominent, power relations remain in a different guise.

The PRSP has been designed not simply to engage government and civil society actors in governing, but also to help shape them. As Joseph Stiglitz, then Chief Economist at the Bank, put it, “At the heart of development is a change in the way of thinking and individuals cannot be forced to change how they think.”104 Rather than operating through coercion, the PRSP is designed to work more subtly, fostering change through the document’s production and reception. Even after the document is produced, its publication is to have performative effects. One of the “wagers” of this strategy, as one development think-tank member put it, is that by giving civil society actors new capacities and tools, they will put pressure on governments to become more responsive.105 In the process, PRSPs, as inscriptions, have become increasingly performative, as institutional actors have delegated considerable powers to them – powers that continue to operate after their original formulation.

Another wager contained in this policy is that if government actors participate in devising their own programs – and become “self-responsible” in the words of one IMF Managing Director – they will become better at developing “good” rather than “distorted” policy environments.106 This emphasis on fostering an internal will to reform resonates with Foucault’s concept of governmentality, in which the objective is to govern by encouraging actors to regulate themselves.107 This is also a particularly proactive strategy that seeks to create the conditions necessary for its long-term objectives, rather than simply reacting to ongoing events and challenges.

The power relations enabled by policies like the PRSP are thus not only more productive and proactive, they are also increasingly indirect. Although the goals are economic – development, adjustment, stability and poverty reduction – the means are through various intermediaries. It is only through the roundabout route of mobilizing the poor, encouraging civil society pressure, generating demand for reforms and fostering political will that the ultimate objective is attained.

Like efforts to reform conditionality, the PRSPs have the effect of informalizing power and making it less visible. This is rather ironic, given that one of the central premises of the PRSP is to make development planning more transparent. Although the preparation of the PRSP as inscriptions is a more public process, with many more participants, it is certainly not universally inclusive. In most countries, not all civil society groups are included in the consultation processes: in Uganda, for example, the unions and many other groups seen to be too “political” were excluded from the first PRSP process.108 In Bolivia, it was local government officials who played a preponderant role in consultations.109 Moreover, studies of the Bolivian, Ghanaian, Ugandan and Nicaraguan PRSPs suggest that donors continued to play a significant role in defining the ultimate form of the PRSP, often undermining the “bottom-up” accountability that the process was intended to create.110 Which actors were included in the participatory processes? Which ones were heard? Whose voices were ultimately translated into the PRSP documents? The answers to these questions say a great deal about the power relations reflected in and enabled by this particular poverty reduction strategy. Yet they are obscured as much as they are revealed by the PRSPs themselves.

A more provisional style of governance

When we look at the recent revisions to conditionality policy and the introduction of the PRSP together, we find that despite the somewhat different motivations and pressures behind them, they have much in common. Both have been designed to respond to the contested failures of finance and development in the 1990s and are concerned with improving the efficiency of development financing by making specific conditions and entire poverty reduction policy frameworks more responsive to local contexts. Both policies are also motivated by a concern about the flagging authority of the IFIs and donors. By reinventing structural adjustment policies as PRSPs and streamlining or redefining conditionality, IFIs and donors seek to regain expert authority and bolster it through increased popular authority. At the same time, both continue to reinforce power relations – in less formal and often less visible forms.

The turn to ownership represents a shift in how the work of governance is done, as the overall approach to governing has become more provisional. As I discussed in Chapter 2, a provisional style of governance is a particular kind of response to the problem of policy failure and to the fragility of expert authority: rather than seeking to control absolutely, those seeking to govern provisionally apply a less direct, more proactive approach to the task – one that relies crucially on increasingly symbolic techniques, and often hedges against the possibility of future failure.

In the case of the ownership strategy, we can see how governance increasingly occurs indirectly rather than through direct action. Influence is exerted in the spaces where conditions have been cut, in the form of advice, quasi-conditions, conversations or unspoken expectations that must be met to demonstrate “genuine” commitment to reform. The PRSP, in turn, is designed to solicit pressure for reform from civil society actors rather than applying it directly on government actors. This indirect form of governance relies crucially on the increasingly symbolic character of policy techniques. Both loan conditions and inscriptions like the PRSPs are valued for their capacity to signal political commitment. The symbolic nature of these policy techniques is crucial for their performative effectiveness. Paradoxically, it is because conditions and PRSPs are abstract signs of ownership that they work to foster “real” ownership. If the markets believe in the credibility of a country’s leaders’ commitment to fulfil the conditions, they will reward that country, making it easier for the leaders to stick to their commitments. Similarly, if civil society members see the PRSP as a signal of their government’s responsiveness to their concerns, they will begin to take more ownership of the strategy and related aid programs. In theory, at least, the symbolic character of these techniques produces a virtuous circle in which the appearance of a thing helps to make it real.

These policies are also highly proactive: the Bank and major donors increasingly recognize and address the temporal dimension of policies, seeking to create the conditions for longer-term reform by not only altering the incentives but also changing thinking. They are therefore seeking to pre-empt failure by changing the context in which policies are developed and implemented. It is not just this more proactive approach to governance that seeks to inoculate the policies against failure: all of these more provisional tactics of governance do the same. The indirect techniques of the PRSP and streamlined conditionality allow the IFIs and donors to step back a bit from the highly politicized fray of more direct conditions, and escape some responsibility. By delegating more responsibility for success and failure to domestic governments and their populations, they further distance themselves from potential failures. Institutional actors’ reliance on more symbolic techniques also allows them to hedge their bets: if they are interested less in “real” ownership than in its appearance, then the fact that participatory dynamics are often instrumentalized, and that ownership is not always genuine, is not a sign of failure.111

Yet despite these efforts to inoculate themselves against failure, the possibility of failure remains a continual preoccupation of IFI and donor staff – in large measure because the strategy of fostering ownership is fraught with so many of its own problems. I will take up these various failures and their implications in greater detail in the Conclusion to this book. For now, it is just worth noting that these challenges have begun to erode internal and external support for the PRSP, unravelling the initial consensus on the strategy of ownership. Although they have continued to pursue efforts to foster country ownership in various forms, IFI and donor staff have grown increasingly ambivalent about its promise, running into persistent difficulties in quantifying ownership and finding the strategy difficult to put into practice.

One of the challenges that the ownership strategy has had to come to terms with is its complex relationship with a second important governance strategy: the push to develop new global standards in everything from good governance to budgeting practice to infant mortality rates. As I will discuss in the next chapter, even as IFI and donor staff have sought to tailor their policies to particular local contexts, they have also pursued a far more universalist strategy of standardizing global practices.

6 Developing global standards

International institutions seek to govern in the name of and through universals. By claiming to be working on an issue of universal concern – such as global poverty, human rights or sound economics – international organizations (IOs), non-governmental organizations (NGOs) and donors seek to gain authority. At the same time, they often represent the kinds of expertise that they use to tackle these problems as universal. World Bank and International Monetary Fund (IMF) staff drew on both of these universalizing strategies during the structural adjustment era: arguing that they were seeking to achieve the universal good of economic development, while simultaneously drawing on what they saw as the timeless universals of economic theory to identify the policies needed to achieve those ends. As I discussed in Chapter 4, the inflexibility of these universals was one of the central reasons for the erosion of the international financial institutions’ (IFIs) expert authority in the mid-1990s. As a growing number of critics described these rigid economic prescriptions as failures, IFI staff, management and directors sought to respond – not by rejecting universals altogether, but by problematizing and ultimately redesigning them.

If anything, the rhetoric of IFI and donor leaders became more explicitly universalist in the late 1990s and early 2000s, as they sought to build support for their vision of a new global economic order in the wake of the contested failures that they faced. The World Bank President, James Wolfensohn, initiated this new universalism with his famous speech about the “cancer of corruption” at the 1996 Annual Meetings, while the IMF Managing Director, Michel Camdessus, promised in 1999 that the institution would contribute to “civilizing globalization,” the UK Minister for Development, Clare Short, argued that “We have a moral duty to reach out to the poor and needy,” and Camdessus’s successor, Horst Köhler, called in 2002 for a new “global ethics.”1 This is a language that was unashamedly universalist.

Yet the kinds of universalizing strategies being used today by IFIs and donors are very different from those of the structural adjustment era. For one thing, their scope has expanded: when Wolfensohn or Camdessus talk about the universal value of their institutions’ efforts, they are not just talking about economic development, but also recognizing the social and political underpinnings of economic success. The new global norms of development include standards of political as well as economic transparency, judicial as well as central bank independence, and maternal as well as economic health.2 Not only the scope but also the form of these universals has changed. The law-like economic rules of the 1980s and early 1990s have been supplemented and replaced with more flexible standards, often taking the form of best practices and benchmarks.3 These new standards seek to define the norm in far more complex and contested arenas than in the past. Despite efforts to black-box them as thoroughly as the economic rules that they replace, more effort is therefore required to justify and maintain them.4 As the IFIs in particular move beyond the narrower mandate of the structural adjustment era, they have felt the need to justify the universality of these standards in moral as well as expert terms – which helps to explain the strikingly normative tone of some leaders’ rhetoric.5

This chapter examines the evolution and logic of this new universalist strategy of standardization by focusing on two policies pursued by the IMF and World Bank: the development of the “good governance” agenda from the 1980s onwards in response to the perceived failures of traditional aid, and the more recent adoption of the standards and codes initiative after the financial crises of the late 1990s. Both initiatives involve a range of other institutions in the process of governance: practices designed to foster good governance have been adopted by many donors, while the standards and codes initiative relies on organizations like the Basel Committee on Banking Supervision, the International Accounting Standards Board, and the Organization for Economic Co-operation and Development (OECD) to develop the standards. While I will focus my attention here on these policies’ initial development by the IMF and World Bank, these standardizing practices have thus gone on to become part of a wider community of practice in development finance.

Although the standards and codes initiative has received less attention, the rise of good governance has been widely examined in the academic literature, particularly by those working on the World Bank.6 What is gained from revisiting these policies yet again? The simple fact of expanding the discussion from considering just good governance to looking at standards and codes, and of looking beyond the World Bank to the IMF, reveals these changes to be more widespread and profound than the conflicts within and around any single institution or issue area. The focus on the how of governance also reveals the complexity of the changes involved, particularly when one looks at the most recent developments in the good governance agenda – the emphasis on the “demand side” of governance – which has been understudied to date.7 Finally, I have drawn on verbatim minutes recently made available from the IMF and World Bank archives, which provide additional insight into the debates around these policies.

A meso-level focus enables us to see these new policies as part of a broader strategy of developing global standards, and to understand them as a way of governing in the name of and through universality. In order to grasp the character and significance of these emerging policies, we need to pay attention to how good governance and standards and codes do the work of governance. There are important ways in which standardization acts to foster a new kind of normal, a new kind of norm, as Michel Foucault would suggest.8 Yet, such analyses tend to over-generalize contingent, locally driven processes as part of a singular logic of governmentality.9 Within sociology, particularly among those working on science and technology studies (STS), there is a growing literature on processes of standardization that I will draw on throughout this chapter, which draws attention to their often local, contingent and socially constructed character.10

The good governance agenda and the standards and codes initiative both define new global standards of economic development, and pressure governments to adopt them. In pursuing these policies, IMF and World Bank staff have drawn on small “i” ideas to redefine universals, changing how they go about the business of governance. They seek to enrol a wider range of actors in the processes of governance – not only member governments, but also market and civil society actors. As in the ownership strategy discussed in the previous chapter, institutional staff rely on new, more performative and reflexive techniques, including new ways of measuring and publicizing compliance with standards, and new technologies to encourage popular pressure, thus redistributing a measure of governance authority. They draw on different forms of power in doing so, including more indirect and proactive forms that seek to produce cultural changes aimed at longer-term transformations. As power has become more productive, the forms of exclusion that it generates have become more complex, a matter of degree rather than of absolutes.

Together, I will suggest, these shifting factors of governance once again point towards the emergence of a provisional kind of governance. This form of governance uses indirect but proactive techniques to encourage market and civil society to pressure governments to comply with new standards. Its advocates use techniques that are increasingly symbolic and highly performative to achieve these ends, relying on the fiction of credibility to do so. And although all of these various gambits are designed to minimize the possibility of failure, they nonetheless remain aware of its dangers and seek to hedge against them.

Good governance

In the last half-century we have developed a better understanding of what helps governments function effectively and achieve economic progress. In the development community, we have a phrase for it. We call it good governance. It is essentially the combination of transparent and accountable institutions, strong skills and competence, and a fundamental willingness to do the right thing.

Speech by World Bank President Paul Wolfowitz, April 2006.11

Over the past two decades, it has come to seem natural that IFIs and donors would make good governance and limits on corruption part of their development programs. Governance conditions now apply to over 85 per cent of IMF programs.12 Governance factors also account for over two-thirds of the country policy and institutional assessment (CPIA), which the World Bank uses to determine how much concessional assistance poor countries are entitled to through the International Development Association (IDA).13 Governance is also front and centre in many donor assistance programs, from the United Kingdom’s Department for International Development (DFID) to Canadian international development programmes and the United States’ Millennium Challenge Corporation (MCC).14 When governance was first introduced into the World Bank and IMF, it was politically sensitive and the subject of considerable debate.15 Since then, however, good governance and anti-corruption efforts have come to be seen as an essential part of development finance.

The evolution of a governance agenda

Given that the term “good governance” is ambiguous, it should come as no surprise that it has come to mean different things at the World Bank and the Fund. While there are overlaps in the practices of fostering good governance at the two institutions, it is worth looking at each separately, since the path that each has taken is different.

The World Bank

The World Bank prides itself on being the first institution to recognize and act on the idea that governance is central to economic development. Although its staff and management have certainly retained that conviction over the past twenty-odd years, they have defined and acted on that idea differently. It is possible to define two broad phases in the evolution of the governance agenda at the World Bank: the first phase, from 1989 to 98, was an extension of neoliberalism and defined governance primarily in public choice terms as an effort to avoid rent-seeking by creating a leaner, more effective government. The second phase, dating roughly from 1999, saw a broadening of the governance agenda to include the Bank’s new emphasis on poverty reduction and a shift in the theoretical framing from public choice theory to new institutionalism; this phase also saw the development of more experimental policies aimed at fostering the “demand side” of governance.

The term “good governance” first emerged in response to the perceived failures of development in sub-Saharan Africa. In an influential 1989 report on the subject, the authors argued that the principal source of this failure was not external – in declining terms of trade, for example – but internal, based on a failure of investment linked to bad public management.16 This “crisis of governance,” they argued, must be addressed before economic progress can be expected.17 The report is framed in neoliberal terms and can be read in part as a neoclassical rebuttal of dependency theorists’ claims that the causes of underdevelopment are within the capitalist system.18 While the report places some responsibility for failure on the Bank for its inability to recognize the importance of institutions, it also implies that the ultimate blame for underdevelopment rests with poor countries’ governments. Although the report was never formally discussed by the Executive Board, nor served as the explicit basis for policy discussions, it framed later discussions on the legality of the Bank’s move into the governance area.19 In fact, during discussions of the Bank’s legal mandate in this area, the Libyan Executive Director, Salem Omeish, went so far as to charge the Bank staff with trying to “sneak” the results of that study into policy discussions.20

This report launched a broader process of debate and problematization at the Bank, as the issue of good governance became a central preoccupation, with Bank staff producing several further reports on the subject and Executive Board members debating the emerging policy.21 Not surprisingly, those involved in these initial debates about governance drew heavily on economic theory, using a public choice conception of state–market relations that treated all of the players as self-interested and individualistic agents.22 Perhaps the most pervasive argument made throughout staff documents at this time is that rent-seeking is the central problem of governance. Rent-seeking is a concept that assumes that the state’s ability to make decisions about resource allocation – e.g. the building of a dam in a particular location – can have perverse consequences as it encourages the unproductive use of resources by those seeking to affect government decisions.23 The most touted solution to rent-seeking in the public choice literature is to reduce the scope of state decision-making by shifting greater responsibility to the markets.

By the mid-1990s, the governance agenda was having a concrete impact on Bank operations: in 1994, a report on the Bank’s experience of governance programs noted that the volume of governance-related lending was significant and increasing, with as many as 68 per cent of lending operations containing some kind of governance dimension.24 Yet, even as the idea of governance began to take hold within the institution, it was clearly a fraught issue. The Bank’s General Counsel, Ibrahim Shihata, was asked to provide a legal opinion on whether the institution’s mandate allowed it to address governance issues. Shihata’s opinion – which he only provided after significant pressure from management – narrowly reduced the scope of the Bank’s involvement to factors that had a direct impact on economic development.25 When the Bank’s executive directors discussed the legal opinion in an Executive Board seminar, their conversation was intense, with one director noting that the subject was “clearly delicate and perhaps emotive,” while another went so far as to charge the institution with attempting to “move into the distinct political arena and dictate [a country’s] political agenda and ideology.”26

It was not until James Wolfensohn took the helm of the World Bank in 1995 that the issue of governance – and the related problem of corruption – took centre stage. In a famous speech at the 1996 annual meetings, Wolfensohn called for an end to the “cancer of corruption.”27 It was during his tenure that the 2000–1 World Development Report (WDR), Attacking Poverty, and the 2002 WDR, Building Institutions for Markets were released.28 Together, these two reports altered the good governance strategy in several respects.29 First, they justified good governance based on its capacity to reduce poverty. Second, they reframed the theoretical justification for good governance in terms of new institutionalist economics.30 This shift is significant because although an institutionalist approach remains consistent with much neoclassical economic theory, it emphasizes the problems of market failure – instances in which the state must step in because markets are unable to allocate resources effectively.

The good governance agenda also began to focus more explicitly on the importance of public participation and demand. The role of participation had been controversial in the early 1990s: Shihata’s 1991 legal opinion had identified participation as a borderline case that might be viewed as too political, yet a number of directors were vocal in their advocacy for its importance.31 By 2000, in the context of the development of the ownership strategy, the idea that governance reform should be driven by the “demand” of public and private actors (and not just the “supply” from lenders) had become a defining feature of efforts to foster good governance.32 When Wolfowitz took over as Bank President in 2005, he continued this emphasis on the demand side of good governance. As one World Bank staff member put it in 2011,

A lot of Wolfowitz’s enthusiasm for governance and anti-corruption has given a real boost to an interest in citizen participation, because – we can have a discussion about neo-conservatism and Strauss and some very interesting philosophical ideas – but a central neoconservative idea is let’s support human rights, citizen rights and grassroots democracy. . . The [World Bank] President loves this stuff.33

This focus on local participation was integrated into Wolfowitz’s governance and corruption strategy (GAC), which remains the principal framing document for governance activities at the Bank.34

International Monetary Fund

The story of the evolution of the IMF’s governance policy is somewhat shorter since the Fund only got on board with the good governance agenda in 1997 and has remained more consistent, broadly in line with the Bank’s early public choice-driven approach.

In 1996, following a directive from the IMF’s Interim Committee,35 the Executive Board sat down to discuss a staff paper on “The Role of the Fund in Governance Issues.”36 Like the Bank’s early governance strategy, Fund staff drew extensively on public choice theory to frame the problem of governance, arguing that the central issues were those of rent-seeking and ad hoc decision-making, which could be best resolved through continued economic liberalization to reduce opportunities for government mismanagement.37

Despite Fund staff and management’s attempts to define governance issues as consistent with the institution’s traditional role, the attention to governance clearly expanded the organization’s mandate. A 2001 report on the Executive Board’s discussion of governance issues provides a useful overview of the new practices undertaken by the IMF under the rubric of “good governance”:

[S]trengthening revenue administration; enhancing financial accountability of state enterprises; improving bankruptcy laws and procedures; consolidating extrabudgetary funds into the budget; enhancing transparency in tax and tariff systems; reinforcing central bank independence; extending prudential bank supervision; and improving economic and financial statistics.38

In concrete terms, such governance issues were not only raised in the context of the Fund’s usual Article IV consultations with member states, but were also integrated into its lending conditions.39 Good governance practices therefore had teeth, since program approval could be “suspended or delayed on account of poor governance.”40

In a 1998 speech on the IMF’s role in good governance, Managing Director Michel Camdessus argued that there existed a “universal consensus” on the importance of good governance.41 Yet, in truth, this expansion of the Fund’s mandate was more contested on the Board than Camdessus suggests. Jack Boorman, then head of the Policy Development and Review (PDR) department, which was responsible for developing the governance policy, has since noted, “the resistance to the governance agenda was amazing in the mid-1990s.”42 Camdessus himself admitted as much in the same speech cited above, suggesting that initially “Some of our shareholders feared that in taking on such issues the [Bretton Woods] institutions would become politicized and lose their effectiveness.”43

Those pushing to broaden the Fund’s role to include governance issues ultimately won the day. In fact, as the 2001 review of the IMF’s experience noted, engagement on governance had expanded well beyond the staff and Board’s initial expectations when they had first approved the Guidance Note on Governance in 1997. The principal reasons for this expansion were the Asian financial crisis in 1997–8, which led to the standards and codes initiative discussed below, and the decision to link governance conditions to debt relief as part of the Highly Indebted Poor Countries (HIPC) initiative.44 The emphasis on governance issues also continued to increase in the Fund’s bread-and-butter policies – in its Article IV surveillance consultations and lending programs.

Analysing good governance
A new kind of universal

The good governance agenda was an effective response to critics’ charges of the failure of past efforts at financing development: it allowed the IFIs to shift significant responsibility for those failures onto low-income governments while at the same time developing new forms of expertise to respond to the “problem” of governance. In the process, institutional actors did not so much reject their earlier economic universals, as modify and supplement them through a different kind of universal: one that was broader in scope, more symbolic in character, and that combined technical and moral appeals to its authority.

These new universal standards of good governance are defined partly in technical terms. Through their use of public choice theory, Bank and Fund staff have framed the challenges of governance in universal terms, viewing them as the logical outcomes of human self-interest and the difficulties of collective action. The solution for developing states is no different from what (it is assumed) applied to industrialized states many years ago – the development of rules and institutions capable of keeping self-interested tendencies in check. The institutionalist economics literature, which has played a more important role in framing good governance policy in recent years, is somewhat more nuanced, focusing on institutional rather than individual dynamics, and paying more attention to historical and geographical variation. Yet, here as well, the problems of transaction costs and market failure are represented as universal. The 2002 WDR on institutions begins with a discussion of eleventh-century Maghribi trades, suggesting that the challenges that they faced in expanding trade, and the solutions that they found to overcome problems of information and cheating, are parallel to those faced by people everywhere today.45

Given the prominence of such technical economic claims in the good governance agenda, how different is this standardizing strategy from that of the structural adjustment era, which also relied on technical economic universals? If we take a closer look at the kinds of universals that are being deployed through good governance policies, we find several significant differences.

The first of these differences is the broader scope of the new universals, which not only define “sound economics” but also explicitly identify the kinds of political and social institutions needed to achieve such economic goals.46 This is a much messier and more contestable undertaking – one that runs the risk of overstepping the IFIs’ mandate. IMF and World Bank staff have worked hard to police the boundary between “politics” and “economics.” By insisting that only those institutional reforms needed to achieve economic stability or development are appropriate, they have managed the policy in such a way as to “protect [the institution’s] reputation for technical excellence, professionalism and objectivity.”47 Yet, in practice, the move into governance issues has further blurred these distinctions. As Michel Camdessus noted in an interview,

We had to promote a shift in the mentality of staff members. Many saw the mission of the Fund as technical, and were not comfortable mixing a more technical emphasis on problems such as inflation with other policies focusing on human living standards. The challenge was to bring both together in a new approach.

Eventually, Camdessus suggests, staff grew more accepting of the need to move into this new terrain.48 The 1996 IMF staff paper on governance, as well as the later staff guidelines, simultaneously argue for defining the Fund’s role in terms of the macroeconomic consequences of governance, while also noting the difficulty in clearly separating political from economic dimensions.49 World Bank Executive Directors also noted the difficulties in separating politics from economics: as the UK Director, David Peretz, put it, “There is always going to be some ambiguity, some borderline cases.”50

The second major difference from structural adjustment-era universals is the form that good governance standards take. Because good governance is more complex and pushes the boundaries of the IFIs’ (formally) apolitical mandates, these standards tend to be more visibly constructed, even arbitrary, and therefore contestable. Of course, the “rules” of sound economic practice are also social constructs, built up over centuries as the institutions of the market economy were developed and propagated and homo economicus was formed.51 Yet these economic norms have been black-boxed: naturalized as expert knowledge and integrated into everyday life, so that the principles of low inflation and independent central banks now appear as law-like propositions that are natural facts rather than symbolic constructions.

The principles underpinning good governance, in contrast, are less commonsensical and more obviously Western in their origins. IFI actors advocating their adoption face more vigorous opposition and are more aware of the need to actively define, construct and police the boundaries of these new governance standards. These are standards of good practice, rather than fundamental rules: they are therefore more clearly contingent in their construction, making visible their character as what STS scholars, Timmermans and Berg, describe as “local universals,” a term that emphasizes the way that “universality always rests on real-time work, and emerges from localized processes of negotiations and pre-existing institutional, infrastructural, and material relations.”52 As these specific, localized standards are generalized and universalized, however, they lose contact with the particular Western liberal contexts in which they were produced and become increasingly symbolic, even arbitrary.

The strategies that IFI actors have used to justify these new, more symbolic and visibly constructed standards have taken two different forms: on the one hand, as I discussed above, IFI staff have sought to justify them in technical terms through the use of public choice theory and new institutionalist economics. On the other, they have begun to justify the good governance agenda in explicitly moral terms. This moral turn may appear self-defeating in a context in which actors are supposed to be objective and apolitical. In fact, by framing good governance standards in universal moral terms, the IFIs are working to move these standards into a category that is beyond dispute – not because they are technical, but because they are universal goods.53

Both Fund and Bank leaders have made strong moral claims for the importance of the good governance agenda. The quotation that begins this section makes that clear: when Wolfowitz claimed in 2006 that good governance requires “a fundamental willingness to do the right thing,” he was making an explicitly normative argument regarding the universal “goodness” of the good governance agenda. Although many of the universal moral principles being alluded to are largely drawn from industrialized, Western economies, the claim that the “problems of governance are universal” suggests that this is not a policy directed only at developing economies, but rather at a global challenge.54 Executive Board discussions make it clear that it was important to some members that governance not be seen as “a peculiarly African problem,” but rather that “the principles and practices are universal or ought to be so.”55

This combination of moral and technical universalism has several interesting effects: although the technical logic remains the predominant one, it is supplemented by a thicker set of universals, enhancing the basis of the institutions’ claims to legitimacy. This thicker set of universalist claims provides a more robust foundation for expanding the institutions’ mandate to include increasingly contested and politically charged areas in their programs, thus expanding the basis of their authority.

New actors and sites of authority

The shift towards broader, messier and more self-consciously constructed universals entailed in the good governance agenda has led to the enrolment of new state, market and civil society actors, and the redrawing of the boundaries that separate them. Although these new standards do intervene more closely into the workings of borrowing states, they do not seek to render local actors “docile,” to again borrow a term from Timmermans and Berg.56 Instead, IFI staff have sought to encourage the engagement of more proactive, reflexive local actors in the process of governance: citizens and market participants who will demand better governance, and government actors who will respond. This strategy distributes the authority for governing more widely to a range of new actors, while simultaneously reconstituting them in particular terms.

One of the most striking aspects of the changes taking place in IMF and World Bank policies and pronouncements over the past decade has been their renewed interest in the state and government actors – after several decades of denigrating their role. Yet that attention has retained a certain scepticism about state actors, and a belief that their role should remain secondary to that of the market. The 1997 WDR, The State in a Changing World, carefully differentiates the renewed emphasis on the state from earlier state-led development efforts in the 1950s and 1960s. In the 1990s, the report argued, developing-country government actors could only become effective if they first pared down the role of the state by shifting some of its “burdens” to the private sector and to local communities, and made “the state’s central institutions work better.”57

These policies seek to redistribute some governance authority by enrolling state functionaries in the development process – but only insofar as those government actors learn to behave in certain ways. The World Bank in particular has expended an enormous amount of energy over the past decades in fostering Western-style public services in borrowing countries.58 The goal is not only to change public-sector management practices but also to transform bureaucratic actors by fostering a different kind of culture. As I will discuss in Chapter 8, in the context of results-based management, many of these efforts are inspired by new public management theory, which is based on public choice assumptions and seeks to make bureaucracies work more like markets. Drawing on these ideas, World Bank and donor staff seek to transform developing-country bureaucrats into more efficient, accountable and market-like actors.

One of the key ways of cultivating this new kind of bureaucratic actor is by creating checks on their actions, which reduces the potential for corruption among public officials – a classic concern in public choice theory.59 These checks can take the form of rules, procedures and internal audits, but also include other actors: specifically, active citizens and other non-state actors. The World Bank has long been interested in using market actors and forces to check government action – that is part of the logic underpinning decades of privatization and efforts to build up a strong private sector. The logic behind these new initiatives is, however, somewhat different: there is a genuine attempt in the demand-side initiative to encourage both market actors and citizens to press for better governance. Civil society actors are also therefore granted a degree of authority and responsibility in the practice of fostering better governance. Yet these are citizens of a peculiar kind: “citizen-consumers” who are both consumers of basic services, such as water or health care, and citizens of a state responsible for the provision of those services.60 Their identity as public actors is linked to their role as private consumers. The architects of the good governance agenda thus seek not only to enrol a range of new actors in the practices of governance, but also to reconstitute them as more responsible and active participants.

New techniques: governing through universals

Bank and IMF staff use a range of new techniques in their operationalization of good governance practices. Some of these are similar to techniques used for structural adjustment programs, while others are far more innovative, experimenting with ways of generating popular support for governance reforms.

Since the mid-1970s, the World Bank has relied on the CPIA to help establish the level of funds that the poorest countries receive from the IDA, the World Bank’s concessional financing facility. The CPIA translates countries’ performances in a wide range of areas into indices, which it ultimately reduces to a single numerical score: a classic technique for making disparate contexts commensurable with reference to a set of universally applicable criteria.61 The CPIA initially focused on macroeconomic criteria, but starting in 1997 the Bank introduced governance criteria into the mix, which now account for 68 per cent of the final score.62 At the IMF, more traditional techniques include the inclusion of governance concerns in Article IV consultations and the addition of governance conditions in stand-by agreements and concessional loans.

The good governance agenda has also led to some innovative practices. At the IMF, the chief example of this is the standards and codes initiative, which I will discuss in the second half of this chapter. At the World Bank, this kind of innovation is most apparent in the institution’s move to foster the “demand for good governance” (DFGG) at the country level, through the development of new technologies of community.63

Bank staff have identified several practices as key to supporting DFGG: transparency and the dissemination of information, consultation and participation, and ongoing monitoring and evaluation. These techniques should be familiar to anyone who has examined liberal conceptions of the public sphere as a site where individuals engage in publicity (typically through a free press) and debate. Bank staff thus seek to mobilize popular support for good governance in a way that combines liberal normative assumptions about publicity and participation with public choice ideas about the need to develop checks on government excess. In the process, deliberation is transformed into a kind of thin participation that is somewhere between consumer feedback and citizen consultation.

If citizen-consumers are to act as checks on government, they need information about what government actors are doing. The Bank’s goal is not simply to engage public actors in the initial formulation of policies, but rather to create mechanisms through which they can monitor, evaluate and report on government policies on an ongoing basis.64 For this to happen, it is necessary to gather information about the effects of those policies, to assess them against predefined indicators, and to communicate them to the public. This involves the creation of new kinds of inscriptions. These can include Doing Business indicators, a Bank initiative that scores countries on how easy it is to set up a business, complaints mechanisms, media investigations, and “citizen report cards,” in which civil society organizations grade public services.65 Transparency, participation and monitoring thus come together, as information on service performance is transmitted to encourage public actors to “voice” their views, producing data that is in turn used to improve service delivery.

While such thin public practices could potentially spill over into thicker, more genuinely political activities, this possibility is constrained by the tendency to frame civil society actors as consumers of services first and foremost. Narrowly economic forms of consultation such as obtaining customer feedback thus come to redefine and constrain activities that might have produced more political kinds of engagement.

New forms of power and authority

Any efforts to reshape the policies and institutions of developing-country governments clearly involve power relations, whatever claims the IFIs may make to the contrary. The IMF and World Bank have always relied on a range of forms of power, from the more coercive power of traditional conditional lending to the informal power of technical advice and assistance. The incorporation of governance criteria into the CPIA at the World Bank and of governance conditions into loans at the IMF are examples of how the good governance agenda has extended the IFIs’ more traditional coercive forms of power. Yet when World Bank executive directors discussed the institution’s initial move into good governance, they were explicit about the importance of using “persuasion” rather than “constraint” as the key tool for achieving objectives.66 Efforts to develop new standards of good governance have made the IFIs more reliant on productive, indirect and proactive forms of power.

As Barnett and Finnemore suggest, IOs like the IMF and World Bank have always exerted a kind of productive power that uses their capacity to define and categorize objects of governance in order to give them real meaning and presence.67 The idea of good governance is a classic example of a term whose invention has had performative effects by making possible a range of practices and interventions that would not have been possible before. “Good governance” can be seen as an extension of earlier such categories, like “sound economics,” which have been used for much longer. Yet whereas calls for sound economics once defined state and market actions in largely negative terms, as a matter of deregulating and liberalizing, the category of good governance seeks to define far more explicitly – and positively – the role of government, civil society and market actors.

Thus the IFIs aim to create important changes in the organization of low-income governments and their relationship with the market and citizens by creating the conditions in which others (chiefly citizen-consumers) will demand those changes. This is a kind of indirect power that relies on information and transparency to achieve its ends. Not only is the form of this strategy somewhat unusual, but its goal is also novel, at least in the developing world: the attention to market and popular demand together with the emphasis on transparency and accountability makes it clear that the objective is to create what Mitchell Dean, drawing on Peter Miller, has described as a kind of reflexive government:

The imperative of reflexive government is to render governmental institutions and mechanisms . . . efficient, accountable, transparent and democratic by the employment of technologies of performance such as the various forms of auditing and the financial instruments of accounting, by the devolution of budgets, and by the establishment of calculating individuals and calculable spaces.68

Michel Foucault’s discussions of the different forms that power take are useful here: the universalist strategy that underpinned structural adjustment operated both like a juridical rule, dictating orthodox economic practice, and like a form of discipline, differentiating normal economics from abnormal forms.69 The standardizing practice that underpins the turn to benchmarks, standards and best practices shares with the structural adjustment era a disciplinary logic, as it sorts economies into normal and abnormal. But it also increasingly relies on a more governmental form of power, focusing on managing circulations around the norm (rather than drawing lines between what is normal and what is not), and seeking to foster a more active, self-disciplining kind of subjectivity among the bureaucratic, market and civil society actors that it enrols.

The form that power takes here is not one of domination, since the goal is not to produce docile subjects, but to enrol a wide range of actors in the process of demanding and providing better governance. Yet these less direct mechanisms still work to generate forms of exclusion and inequality. Standards may appear inclusive but, as Timmermans and Epstein put it, “every standard inevitably implies an evaluation at the expense of some other, often obfuscated, devaluation.”70 In the case of good governance standards – and even more clearly with the standards and codes initiative, as I will discuss below – those kinds of institutions and practices of governance that have been deemed “good” are almost entirely drawn from Western, liberal, free-market societies. The patterns of inclusion and exclusion enabled by standards are therefore subtle: countries are graded and ranked, rather than simply excluded. Moreover, because their “grade” translates, through the CPIA and performance-based conditions, into different levels of funding, this ranking has very real consequences for the poorest in the world.71

Standards and codes

Although the good governance agenda is the most prominent of recent efforts to develop global economic standards, it is not the only such policy. By taking a look at a second, related, policy change – the development of standards and codes – we can gain a more concrete sense of how the IFIs have deployed the strategy of standardization in practice. Whereas the World Bank was the main driver of the good governance policy, here it is the IMF that has been in the driving seat.

Developing the initiative

The standards and codes initiative ultimately became the centrepiece of the IFIs’ response to the financial crises of the 1990s.72 Over time, the standards also came to be viewed, particularly by the IMF, as their central contribution to the spread of good governance practices. Yet the first standards were not developed with such grand objectives in mind. In fact, the standards and codes initiative evolved gradually, eventually taking on the central role that it plays today. By tracing the initiative’s development, we can also track the evolution of thinking about the role of these standards and recognize the choices that were made in pursuing this path to financial stability and good governance – choices that reflected a desire to govern more provisionally.

The standards and codes initiative was developed in two major stages in response to two major crises – the Mexican and Asian financial crises. While external critics saw these two crises as evidence of a profound failure of the IFIs’ efforts, IMF staff and management interpreted them rather differently: as evidence of a more modest failure in the information that governments made available to market actors, and of a more serious failure in borrowing countries’ institutional quality. It was not markets (or the IMF), but states that were to blame for these failures, they argued, due to their poor institutional capacity and failure to provide the markets with timely and accurate information. In debating the nature of these failures and the appropriate responses, IMF staff and management thus began to problematize the role of information and transparency in domestic governance, both of which played a central role in the global standards that they developed in response.

The first stage in this standardization strategy was the IMF’s development of a highly technical and, at least on the surface, unexciting set of standards for statistical information: the special data dissemination standard (SDDS). Reacting to G7 calls for action in the wake of the 1994 Mexican crisis, the IMF created the SDDS to encourage member countries to begin publishing statistics on their economies in a standardized and timely manner.73 The IMF, the G7 and others saw the poor quality of Mexican data as one of the causes of the crisis, and believed that better data would improve market confidence. Shortly after creating the SDDS, which was designed for countries that were able to borrow from international financial markets, the Fund created a second general data dissemination standard (GDDS), which gave poorer states an incentive to develop their statistical capacities and publish the data that they obtained. Central to both standards is the technique of publicity: the strategy not only seeks to get countries to regularly publish their statistics, but also publicizes countries’ compliance with the standards through an electronic bulletin board.

This same preoccupation with transparency and publicity characterized the second stage in the development of this standardizing strategy. In 1997, the IMF Executive Board sat down to discuss two staff papers, one on “Transparency in Government Operations” and the other on “Fiscal Policy Rules.” The first of these papers discussed the value of transparency – not only in the provision of statistical information but also in the everyday fiscal activities of a state.74 The second document focused on the usefulness of fiscal policy rules – such as balanced budget rules, or a maximum budget deficit threshold such as the 3 per cent of gross domestic product (GDP) limit in the Maastricht treaty.75 In their discussions, IMF staff and directors focused on the problems of the kind of “creative accounting” used by some European Union countries in order to meet Maastricht rules. They expressed concerns about unintentional opacities – when a government does not have the capacity to provide the necessary information – and intentional forms, in which a government attempts to “escape public scrutiny of its behaviour – especially in the run-up to elections – in order to avoid or postpone possible adverse reaction from the electorate and from financial markets.”76

The outcome of these discussions was the next step in the creation of the standards and codes initiative. Although executive board members considered the possibility of integrating fiscal rules into their programs, they decided instead to take a less direct and more flexible approach to transparency. At an October 1997 meeting, the board asked Fund staff to compile current best practices into a manual that would be available to all members. By March of the following year, pressure from the G7 and various government leaders for more explicit guidelines was strong enough that the Fiscal Affairs Department drafted a more comprehensive code of conduct on fiscal transparency. The code emphasized the importance of providing timely and accurate information on the budget to the public, ensuring that the budgeting process was open and that there were independent audits of public accounts.77 Shortly after the code on fiscal transparency was approved in 1998, a second code on monetary and financial policies was developed.78

The IMF Board and staff gradually developed techniques for monitoring compliance with the codes.79 This process initially took the form of experimental case studies, but eventually grew into the more standardized reports on observance of standards and codes (ROSCs). Like the SDDS and the GDDS, the ROSCs are based on the principles of voluntary compliance, publicity and market discipline. Both the adoption of the standards and codes and the publication of the ROSCs are voluntary. Staff and directors believed that peer pressure and a desire for market approbation would lead governments to adopt the standards and codes, and publish information on their compliance. They hoped that markets would provide a further crucial incentive by rewarding compliant states with lower borrowing costs.

The list of standards and codes continued to grow, ultimately including twelve different issue areas covering everything from accounting standards to bank supervision and the prevention of money laundering.80 The World Bank and the Fund together have responsibility for overseeing their implementation. What initially began as a rather modest effort to reform statistical capacities has thus grown into a vast array of standards covering a wide range of different aspects of political economic life.

An analysis of standards and codes
A new kind of universal

The standards and codes initiative, like the good governance agenda, is a universalist strategy that seeks to promote new global standards of good political economic practice. Yet, once again, when we look closely, we find a visibly constructed universal at work, broader and more flexible than the rigid economic rules that defined the structural adjustment era.

As I discussed in the previous chapter, a particular small “i” idea – credibility theory – was highly influential when the IMF Board was debating whether and how to develop new standards of economic practice.81 Advocates of credibility theory and the time inconsistency problem argue that as long as governments are able to revise the policies that they committed to earlier, they will not be seen as credible by market actors, and will therefore find their efforts at constructive market intervention undermined; in such circumstances, the only credible alternative is for the government to relinquish much of its policy discretion and commit to binding rules.82 This is seen as a universally applicable axiom, since it is assumed that all rational market participants will recognize good or bad economic policy, and therefore judge the credibility of a government’s actions accordingly.

The fiscal rules paper that the IMF Board discussed was particularly explicit in its reliance on both public choice and credibility theory to justify the application of universal rules that would bind governments’ hands.83 In the end, the Board decided not to adopt fiscal rules as their primary technique for fostering standardization. Yet the logic of credibility remained central even as they developed more flexible techniques for achieving their ends. Staff believed that fiscal transparency and the publication of the ROSCs would have a similar effect on credibility, by providing markets and the public with additional information on fiscal plans, reducing governments’ leeway to back-track on policies, and thus increasing their credibility.84

Although technical expertise served as the primary grounds for justifying the universality of these new standards, this was a different universal claim from those underpinning the economic rules of the structural adjustment era. Credibility theory relies on a more contingent kind of universal from those in traditional neoclassical theory – or rather, credibility theory makes the symbolic and performative dimensions of economic universals more visible. As I noted in the previous chapter, the very acts by market participants that are supposed to be signals of objectively credible or non-credible policy actually create or undermine policy credibility.85 For example, an inward flow of foreign capital, which is often seen as a sign that a government’s policies are credible, actually generates that credibility by providing the government with resources that enable it to keep its promises, while an outward flow of capital has the opposite effect. Similarly, the role of external experts who are often imported to play key roles in monetary institutions do not simply verify and communicate a government’s latent credibility, but actually help to create it through their presence as symbolic markers of Western economic expertise.

These standards and codes are not only more performative but also far broader in their scope than past economic norms – defining best practices in the fields of auditing and accounting, corporate governance, money laundering and terrorist financing, to name a few. In their effort to justify a move into these new domains, the IMF leadership, like the World Bank, moved beyond a narrowly technical discourse and began to frame the policy in moral terms. Horst Köhler, the managing director of the IMF during the early years of the initiative, suggested “While standards and codes deal with highly technical matters, there is nothing narrow or technical about their purposes.”86 Michel Camdessus, Köhler’s predecessor, also suggested that universal standards could help to “civilize globalization” by creating new “rules of the game” to tame the wilder excesses of the global economy. Given the interdependent character of that global economy, Camdessus argued, “a duty of universal responsibility is incumbent upon all. Every country, large or small, is responsible for the stability and quality of the entire world growth.”87 These new universals are therefore not only more symbolic and performative than their predecessors, but also more complex in their justification, relying on both technical and moral appeals to their universality.

More performative techniques

An interesting aspect of the standards and codes initiative is the way in which its creators sought to put the policy into practice through new and innovative techniques. The key technique at the heart of the standards and codes initiative is the ROSC. This technique was developed through an experimental process in which IMF staff undertook several case studies in a range of different countries, published their findings, and solicited public feedback. The IMF Board initially deemed these “experimental ROSCs” a success, but continued to advocate a “gradual and interactive approach” in developing the Fund’s involvement in standards.88

As their name suggests, ROSCs are reports: they are inscriptions that seek to translate the messiness of a country’s strengths and weaknesses into a single document. They were intended to establish “best practices” in a range of areas from corporate governance to banking regulation, and to benchmark individual countries’ performance in each of these areas. Part of the goal behind these benchmarks is to enable governments to assess their own progress over time. Once the ROSCs are published, however, their role shifts significantly and credibility becomes key, as an early IMF report notes:

By highlighting actual practices and identifying those in need of improvement, transparency reports could reduce the likelihood that market participants are uninformed or misled, and enhance the credibility of those national authorities following sound practices.89

The role of ROSCs as inscriptions is thus not only to translate complex economic and political actions into a single document, but also to signal good (or bad) economic practice to market actors. Like the conditions I discussed in the last chapter, standards and codes are not only important because of what they are (guidelines for best practice) but because of what they signal through the ROSCs. Their value is increasingly symbolic and it is through that symbolic role that they do their most important work: IMF staff and management believed that this signalling would have significant material effects, as those interested in buying government bonds would pay attention to ROSCs and reward good economic performers with lower borrowing costs.90

Although many policies based on credibility theory, such as fiscal policy rules, ignore or downplay the performative character of the policy, advocates of ROSCs were highly reflexive about the performative nature of this kind of signalling device, seeing the reports not simply as descriptions of an objective reality but as tools for creating the kind of self-fulfilling cycle that pushes countries towards more “credible” policies.

New actors and sites of authority

These new techniques rely for their effectiveness on the active involvement of a range of actors: not only the IFI staff who conduct the evaluations, or the member government actors who are to use the benchmarks established, but also civil society and market actors who, it is hoped, will pay attention to the ROSCs and reward good performers.

As in practices to foster good governance, information, publicity and transparency are the key mechanisms through which these new actors are to be informed and enrolled. As I have discussed elsewhere, although a policy of transparency may appear to be minimalist, its objectives are not.91 Take the two data standards discussed earlier: although the SDDS and the GDDS seem highly specialized and technical, they are important for several reasons. They frame the problem of economic governance in terms of the quality of information. They also seek to constitute a particular capacity to obtain and communicate that information, particularly among emerging and developing countries.92 And in providing that information they also hope to influence not just the actions of government, but also those of civil society and market actors, by providing them with the information that they need to keep the government in check. This same logic underpins the other standards and codes. As the introduction to an early draft of the code on fiscal transparency put it:

Increased fiscal transparency should lead to better-informed public debate about the design and results of fiscal policy, make governments more accountable for fiscal policy and management, and thereby strengthen credibility as well as mobilized popular support for sound macroeconomic policies.93

The standards and codes initiative thus seeks, like the good governance agenda, to redefine the relationship among state, market and public actors. Here again we see a new emphasis on the demand side of governance, and an effort to redistribute some governance authority based on the belief that market and public actors can pressure governments to act in certain ways. Although one might argue that these assumptions about the superior rationality of the market and the public are rather naïve, it is important to note that the goal of fiscal transparency is not simply to rely on existing public actors but also to educate them about the budget, thus constituting a more informed and active public citizenry. This belief in the importance of external scrutiny is key to the particular form of power that the standard and codes initiative relies on.

More indirect power

What is perhaps most striking about the standards and codes initiative is its almost exclusive use of indirect forms of power. Although there were wide-ranging debates both within and outside the IMF about whether the new standards and codes should be mandatory or voluntary, those who believed in the power of peer pressure ultimately won the day.94,95 Underlying this informal strategy was the assumption that it was in states’ interest to adopt the new standards and codes. Thus, Köhler argued, “While it is still early in the game, there is already evidence that meeting standards can pay off,” as investors reward good behaviour with lower borrowing costs.96 No need for the IMF or World Bank to use the blunter instrument of conditionality to achieve their desired goals.

The forms of power involved in making the standards and codes initiative work are also clearly productive: the goal is not simply to make government actors behave in certain ways, but to give them new tools – statistical capacities, best practices and benchmarks – to enable them to see and calculate their actions and objectives in new ways. In Michel Callon’s terms, the strategy is one that seeks to generate a particular kind of economic society by fostering new calculative capacities.97 This is therefore also a proactive strategy: while transparency is partly an end in itself, more importantly it is a means to encourage market and civil society to pressure governments to achieve longer-term goals of economic policy change.

Who gets to decide what count as “best practices” of fiscal and monetary policy? As the initiative’s critics – academics, NGOs and emerging market leaders – were quick to point out, the process for establishing these news standards was exclusive, and largely based on Western, free-market principles.98 Moreover, as Ilene Grabel notes, although scholars and policymakers generally insist that credible policies (low inflation, low taxes, minimal government involvement in the economy) are timeless and universal, they are instead based on neoliberal values, and tend to support a particular set of economic interests. The process of fixing these particular economic values as the standard also devalues alternative forms of political and economic policy as non-credible and therefore not viable.99 Although the mechanisms through which these valuations of better and worse policy are therefore far subtler than a fiscal rule or strict conditions, their effects are nonetheless to grade and rank country practices according to Western norms.

A more provisional kind of governance

Both the good governance agenda and the standards and codes initiative involve a significant shift in how the IFIs govern through, and in the name of, universals: the universal economic rules of the structural adjustment era have been supplemented by a more reflexively constructed and justified set of global standards. In the process, universals based on technical expertise have been combined with moral and popular ones, new actors have been enrolled and authorized to play a role in governance, more performative techniques have been developed, and more indirect and productive forms of power deployed.

As standardization has gradually colonized new terrains of global life, so has the influence of technical expertise. Yet the evolution of this new strategy of standardization has been far messier and fragile than a narrow focus on technical expertise would indicate: IFI leaders have had to bolster their technical justifications for the standards with normative claims, changing the character of the standards themselves in the process.100 Although we might expect a strategy of standardization to be a classic example of the spread of technical expertise to new areas of social, political and economic life, what we find is a more complex picture, in which governance and the expertise that underpins it have changed in form and become more provisional: more proactive, indirect, symbolic and aware of the possibility of failure.

The IMF and World Bank Executive Boards both considered and rejected the option of enforcing these new standards using more direct techniques, opting instead for an indirect approach that works through the publication of performative inscriptions and the pressure of market actors, civil society and peer states to achieve its ends. The techniques involved are also proactive, playing the long game: both policies seek to use these less direct pressures to change the cultures of borrowing country governments, markets and civil societies, giving them new tools and new incentives to pursue the changes sought by the IFIs.

These standards are not only more flexible than the economic rules that they supplement, but also more visibly constructed and symbolic in form. Because their subject matter is more complex and contested, the assumptions and biases that go into a standard of good governance or transparent fiscal policy are more visible than those that underpin the rules of sound economic policy. They are therefore harder to naturalize and black-box. At the same time, the role played by these standards is increasingly symbolic – aimed at signalling credible government intentions, whether to civil society actors or market investors. Whether in the form of the Doing Business Indicators, government “report cards” or ROSCs, these policies all rely on a kind of inscription designed to translate complex on-the-ground realities into a signal of good or bad state behaviour. In a context in which transparency, information and publicity are key techniques, it is this signal that does the real work of encouraging further government compliance: enrolling external actors in the business of pressuring, punishing and rewarding governments.

These new governance practices were developed in response to particular interpretations of the failures of international development and finance. At the same time, the provisional character of the standardization strategy enables IFI staff and leaders to avoid certain kinds of failure. The indirectness of these governance practices creates considerable distance (and thus deniability) between IFI policies and their effects. Moreover, the policies’ proactive effort to give more authority to governments for ensuring their own compliance with the standards also transfers to borrowing countries much of the responsibility for failure.

In spite of these pre-emptive tactics, IFI staff and management continue to be aware of and preoccupied with the strategy’s limits. I will discuss the challenges faced by the standardization strategy at some length in the Conclusion to this volume. They include the gradual unravelling of the compromise that these standards represent – with some seeking to return to hard and fast rules, while others argue for an even more contextual and flexible interpretation of governance norms. These challenges also include some very real practical difficulties in the operationalization of the inscriptions as, for example, the market actors who were supposed to pay attention to the ROSCs have tended to ignore them entirely, thus eroding their performative effectiveness. These limits have in turn ensured that the strategy’s advocates have had a hard time black-boxing these standards, leaving them open to ongoing contestation.

While the standardization strategy remains highly influential today, neither it, nor the strategy of ownership, have managed to fully resolve the problems of institutional authority posed by the contested crises of the 1990s. These two early provisional strategies have been followed, however, by two newer strategies designed to tackle more explicitly the epistemological and ontological problems of earlier governance practices. By measuring results, IFI actors are developing a new epistemological foundation for assessing development financing. And by managing risk and vulnerability, the subject of the next chapter, they are developing a new ontology of poverty, debt and the unknown.

7 Managing risk and vulnerability

In the past two decades, international organizations (IOs) and donors have become increasingly aware of the uncertainty of the global environment and the contingency of policy time. All organizations’ actions have an implicit temporal logic and a set of assumptions about the unknown. In the early days of development finance, as I discussed in Chapters 3 and 4, institutional actors generally assumed that policy time was relatively linear and uncertainty reasonably manageable, with progress achievable over time.1 As the international financial institutions (IFIs) and donors began to pursue more complex and longer-term structural adjustment policies in the 1980s and early 1990s, they encountered more surprises and disappointments and began in response to manage their policies over a longer period of time. Yet these early shifts in the conception and management of policy time were relatively minor, gradually extending time horizons rather than profoundly rethinking the challenges of the unknown.

It is only in the last fifteen years or so that these organizations have really changed the way they manage policy time, treating it as increasingly uncertain and volatile. Why this shift in thinking and practice? The easy answer is that international actors were literally shocked out of their linear conception of time by three key crises: the AIDS crisis in Africa, the Asian financial crisis, and the more recent global financial crisis. Each was a highly visible shock to the system that made it clear that the unexpected could occur with devastating consequences. Yet it was not these events alone that changed how IFIs conceptualized and managed the unknown, but rather how they were interpreted and acted upon. As I have suggested throughout this book, organizational actors are often concerned with the problem of policy failure: what counts as failure, what causes it, and how to resolve it. The shocks of the 1990s raised the spectre of a particular kind of failure: that caused by the sheer unpredictability of the social and physical world. The AIDS crisis and the Asian crisis both forced many people back into poverty after they had just climbed out of it, reversing decades of effort by the World Bank, non-governmental organizations (NGOs) and donors. The Asian and global financial crises also put at risk low-income countries’ (LICs) efforts to reduce their debt burdens with the help of policies like the highly indebted poor countries (HIPC) initiative.2 Policies once deemed successes were suddenly put into doubt, raising questions about the expert authority of the institutional actors behind them.

These unsettling events sparked a process of problematization, as scholars, practitioners and critics debated how to manage these more volatile problems. In the process, IFI and donor actors began to redefine the process of attaining policy goals such as poverty and debt reduction as more dynamic and uncertain. What has been going on is no less than a change in their ontology: they began to view the world with which they were engaging in very different terms, seeing poverty, debt and economic health as more volatile phenomena. Moreover, they began not only to view the objects of their efforts differently, but also to develop new techniques for managing them. Central to these new governance practices were two concepts: risk and vulnerability.

As I have discussed elsewhere,3 risk is not as an objective thing but a way of translating the unknown into something calculable.4 Risk assessment techniques allow institutional actors to evaluate the likelihood of certain problems, to convert their assessments into numbers, and to reduce those risks (in theory, if not always in practice).5 Much has been written in recent years about the increasing prevalence of the idea of risk and risk management in almost every area of modern life, from finance to security to the environment.6 It should therefore come as no surprise that the IFIs and donors have also begun to think about the risks of development finance. As I discussed in Chapter 4, staff in the World Bank’s Operations Evaluation Department (OED) began to evaluate program risks beginning in the mid-1990s in an effort to increase success rates.7 The International Monetary Fund (IMF) also began to pay more attention to the problems of financial risks in the late 1990s, introducing its Financial Sector Assessment Program (FSAP) in the aftermath of the Asian financial crisis.

In the late 1990s and particularly after the 2008 global financial crisis, the IMF, World Bank, Organisation of Economic Co-operation and Development (OECD) and donors like the United Kingdom’s Department for International Development (DFID) had also become interested in a second related concept: vulnerability. Whereas many of the initial risk-management policies focused on reducing the risks to the lenders' own programs, the concept of vulnerability shifted the focus to potential difficulties faced by others – both countries and individuals.8 It is these two concepts – risk and vulnerability – that I will focus on in this chapter. In the mid-2000s, the IMF and World Bank began focusing on LICs’ vulnerability to risks associated with excessive debt; a few years later, after the global financial crisis, the IMF started evaluating poor countries’ vulnerability to further shocks. The World Bank, followed by DFID and the OECD, also began in the late 1990s focusing on the vulnerabilities faced by poor people. Rather than relying on traditional social welfare policies, World Bank staff adopted a new, more proactive strategy for social protection designed to prepare poor individuals and families to respond more effectively to risks, transforming “safety-nets into springboards.”9 These policies not only brought together the concepts of risk and vulnerability but also extended them to the country and individual level in order to reduce the likelihood of failure in an increasingly uncertain context.

This new institutional attempt to govern risk and vulnerability is a meso-level phenomenon that cuts across a range of organizations and actors, and is therefore a very appropriate subject for the theoretical framework that I develop in this book. Although the policies that I will examine in this chapter – debt vulnerability assessments, vulnerability assessment exercises, and the social risk approach to social protection – are all quite different, they involve similar changes in the ideas, actors, techniques and forms of power and authority involved in governing. These new policies focused on risk and vulnerability emerged out of separate processes of debate and problematization; yet the ideas that ultimately underpinned the new policies have all drawn on institutionalist economics and public choice theory. And although these policies aim to enrol very different actors in governing risk – national governments or poor individuals – they both seek to make those actors more active and self-responsible, drawing them more deeply into the process of global governance. The techniques involved in both social risk frameworks and vulnerability assessments are designed to be performative, promotive and pre-emptive, preventing rather than simply reacting to shocks. The strategy of managing risk and vulnerability also distributes expert authority more widely and supplements it with more popular forms. Finally, these policies mobilize indirect forms of power to achieve their ends, working to produce particular kinds of actors and behaviours, differentiating among different classes of states and individuals, and excluding those who do not fit.

Increased efforts to manage risk and, above all, vulnerability, point towards the emergence of a more provisional style of global governance. At the heart of this new form of governance is a more reflexive preoccupation with the problem of failure, and increasingly sophisticated strategies for managing it. These strategies for managing risk and vulnerability are both more pre-emptive and indirect in their relationship with their objects, seeking to prevent failures before they manifest themselves. It is also provisional in its increasing reliance on more symbolic and therefore contestable techniques, as it seeks to translate increasingly complex phenomena into simple indexes. Finally, this new strategy is provisional because its practitioners are also increasingly cautious: less ambitious than past initiatives in their efforts to predict and respond to crises, thus hedging against the possibility of failure.

Assessing poor countries’ vulnerability to shocks

Once institutional actors began to see the world as a less certain place, they sought new ways of making sense of it by developing new practices for determining the kinds of shocks that might occur and for predicting their likely consequences. Despite a long history of surveillance at the IMF in particular, it was only after the most recent 2008 global financial crisis that serious attention was directed towards assessing the financial risks faced by LICs.10 All of the new policies on risk and vulnerability discussed in this next section were designed to better understand the risks facing LICs and the vulnerabilities that are likely to affect their response to shocks.

Understanding the shift

Why the increased interest in the effects of global economic shocks on low-income countries? While several crises played a role in precipitating this new concern, the particular policies that emerged were the result of a more gradual process of problematization and debate that included economists, institutional actors and external pressures.

Part of this process of problematization was a shift in thinking both within and around the IFIs, as policy-oriented economists began to pay more attention to the problem of economic volatility.11 An increasing number of economists and policymakers began to recognize that extreme volatility was not an aberration in an otherwise smooth global economic system, but was increasingly the norm; as Craig Burnside put it in a research paper prepared for the World Bank, “one of the shortcomings of fiscal sustainability analysis is that it often does not take into account the effects of uncertainty.”12 Economists including Burnside and Claudio Raddatz also began to write about the importance of exogenous shocks for LICs’ economic development, examining the effects of increased external volatility. Such shocks had become more of a concern in recent years, Raddatz argued, because LICs’ macroeconomic and institutional policies had improved significantly, reducing the role of domestic factors, but greater integration into the global economy had made them more vulnerable to external pressures.13 Economists also began to recognize the very serious consequences of external shocks on LICs, since these governments and their citizens had fewer resources to draw on, making it much harder for them to recover.14

In addition to identifying volatility and shocks as universal challenges for low-income countries, policy experts began focusing on a second related problem: the crucial differences among LICs’ ability to respond. Whereas in the past, LICs were seen as a relatively homogeneous category with a few exceptions that could be addressed through ad hoc measures, the crises of the 1990s and 2000s made it clear that the same external shock could have very different effects on different countries. Economists like Dani Rodrik, Paul Collier and Daron Acemoglu began to investigate the reasons for these differences. Although their answers varied, they all emphasized structural and institutional (even political) factors as key determinants’ of countries’ resilience in responding to shocks.15 These findings suggested that any attempt to assess countries’ vulnerability to shocks and propose ways of reducing them would have to differentiate between stronger and weaker countries. No single approach would be likely to work.

Institutional dynamics and external political pressures also played roles in the debates about how to address risk and uncertainty, revealing some significant differences of opinion among key actors. Several of these new policies sought to determine how much debt LICs could sustain: a low-risk classification meant access to additional non-concessional financing, while a high-risk rating severely limited such options.16 During debates about the new policies to manage debt-vulnerability, Executive Directors from low-income countries and NGOs were faced with a dilemma: they wanted the IFIs’ policies to be more flexible, to allow poor countries to take on more debt to fund crucial domestic priorities, but they were concerned that donors would use LICs’ right to borrow more on non-concessional terms as an excuse to cut back their concessional aid.17 There was also considerable ambivalence among some IMF Directors about the very idea of classifying countries based on their debt vulnerability: as one senior IMF staff member put it, one of the mantras of the Board was that “we are not a ratings agency.” The staff did manage, however, to slip this policy through.18

The crises of the 1990s and 2000s precipitated a process of debate and negotiation that ultimately problematized the effects of shocks and volatility for LICs. These dynamics combined with both institutional and political pressures to set the stage for a series of new policies designed to cope with LICs’ vulnerability in an increasingly volatile global economy.

Three new policies

As they began to focus more on LICs’ vulnerability to external financial shocks, Fund and Bank staff developed or revised a number of their policies. The first serious initiative to address the problem of LIC vulnerability was the World Bank and IMF’s development of a joint debt sustainability framework (DSF) in 2005.19 This framework was designed to assess the extent to which poor countries are capable of taking on non-concessional loans without going into debt distress. The key policy technique used is the debt sustainability analysis (DSA), which rates LICs’ risk of such distress: low, moderate, high or in debt distress.20 Staff analyse countries’ projected debt burden over the next twenty years, taking into consideration the possibility of significant shocks. They then use the country policy and institutional assessment (CPIA) as a basis for determining whether the country is likely to be able to manage that level of debt.21 As I discussed in Chapter 6, the CPIA was developed by the World Bank to quantify poor countries’ economic performance. Today, over two-thirds of the score is based on governance-related criteria, and the IFIs and some donors often use the index as a proxy for institutional capacity – i.e. as a measure of a government’s ability to manage economic resources and respond to problems effectively.22

This debt sustainability analysis process has several effects on borrowers. IFI staff hope that DSAs will provide borrowing countries with more information so that they can “monitor their debt burden and take early preventive action,” and “provide guidance to creditors” so that they will lend in a way that is “consistent with countries’ development goals.”23 More concretely, the ratings are used by the World Bank to determine the mix of loans and grants for International Development Association (IDA) recipients.24 In 2009, IMF staff also revised their guidelines on external financing for LICs, making them more consistent with the DSA approach. In the past, the IMF had strictly limited LICs’ access to non-concessional financing as a condition for their loans, fearing that they would borrow more funds than they could reasonably pay back.25 Fund staff did allow for a measure of flexibility through case-by-case exceptions, but otherwise treated LICs relatively uniformly. The new guidelines are more flexible about external financing by differentiating among different low-income country situations. The main criteria used are the level of countries’ debt vulnerability (determined using the DSA discussed above),26 and their “macroeconomic and public financial management capacity.”27

A country’s capacity is defined in terms of the strength of its institutions, but somewhat more narrowly than the DSA; rather than using the full CPIA to assess capacity (an idea that some IMF Directors resisted on the grounds that it was too broad), IMF staff use a “sub-CPIA” based on five components of the index, together with another index, the public expenditure and financial accountability (PEFA) framework.28 The IMF’s rating process operates like a matrix, scoring countries as either higher or lower in both debt vulnerability and capacity, and then establishing limits on external borrowing on that basis. The lower a country’s vulnerability and the higher its capacity, the more non-concessional funds they are allowed to borrow without losing access to IMF financing.

The IMF has also recently developed a third set of policies aimed at managing risk and vulnerability: “vulnerability assessment exercises” designed to determine how different low-income countries would be affected by different exogenous shocks. The assessments combine both quantitative and qualitative assessments. In the first quantitative stage, staff assess countries based on their analysis of the likely effects of certain kinds of shocks (e.g. financial, commodity price, etc.) combined with a vulnerability index. This vulnerability index once again includes the CPIA as one of its key indicators of countries’ vulnerability.29 The second, qualitative, stage of the process brings IMF area departments in to provide their judgment on the specific challenges facing individual countries. The goal of these assessments is to identify potential problems “before they materialize” by uncovering underlying vulnerabilities that are likely to amplify the impact of shocks.30

The thinking behind the three policies discussed above and the techniques involved in each are somewhat different; yet all are characterized by common conceptions of the volatility of policy environments and of the nature of risk and vulnerability, parallel concerns with evaluating and ranking LICs’ vulnerability, and a similar reliance on institutional criteria (chiefly the World Bank’s CPIA) to do so.

Changing governance factors

What is striking about the documents on these new policies is their continual references to the fact that we now live in unsettled times in which volatility, uncertainty and shocks are an ever-present possibility. This new emphasis on risk and vulnerability involves an ontological change: from a conception of the world as relatively stable to one that is far more changeable, and from a conception of policy time that is linear to one that is far more uncertain and unpredictable. It should come as little surprise that the ideas, actors, techniques and forms of power needed to govern such a world are themselves also in the process of changing.

Small “i” ideas

Economists’ and policymakers’ attention to the role of external factors in determining poor countries’ economic success is in sharp contrast with earlier reports like the 1981 Berg Report discussed in Chapter 3, or the 1989 report on sub-Saharan Africa discussed in Chapter 6, both of which blamed most of LICs' difficulties on their own economic mismanagement and poor governance.31 This does not mean that these new policies ignore the role of domestic institutions. Instead, economists and policymakers have begun to study the interaction between internal institutional factors and external economic pressures – hence the continual emphasis on countries’ “capacity” to manage risk. Those economists whose work inspired and justified these new policies – including Collier, Acemoglu and Rodrik – all draw on institutionalist economics and public choice theory in order to explain the central role of institutions in determining countries’ vulnerability to external shocks.32 Acemoglu, for example, draws on a public choice conception of political institutions to argue that weak property rights and rule of law, and lack of social entitlement, allow self-interested elites to expropriate resources from the economy, producing increased economic volatility.33 Both Collier and Rodrik, in different ways, link institutional factors to vulnerability to external shocks, Collier focusing on macroeconomic structural factors, and Rodrik emphasizing the importance of political institutions for managing social conflict.34

Several things are worth noting about the influence of these two small “i” ideas – new institutionalist economics and public choice theory – in the development of IFI policies on risk and vulnerability. First, these policies clearly continue the trend that I have discussed throughout this book of bringing institutions into the heart of development thinking and practice at both the World Bank and the IMF. Yet the way that they do so is also distinct from the good governance and ownership strategies discussed in previous chapters. Whereas these other strategies sought explicitly to act on and change institutional practice, the risk and vulnerability assessments have a more minimalist approach – using institutional capacity as a criterion for allowing extra borrowing and only very indirectly seeking to influence institutional quality. This minimalism is reinforced by the reliance on the CPIA as a technical proxy for institutional strength, as the messiness of good-quality institutions gets translated into a single number – the ultimate “black box” in Michel Callon’s terms.

The IFIs’ increased recognition of the role of institutions and their acknowledgement of the risks and vulnerabilities faced by poor countries indicates a growing awareness of the complexities of governance efforts. Yet the very thin way in which IFI staff have understood these concepts works to domesticate the difficult and the unknown, making it tractable, if not fully predictable.


All three policies seek to engage LIC actors more fully in managing their own risk and vulnerability, and differentiate more clearly among various categories of low-income countries and their respective capacities. The vulnerability assessment exercises are designed to provide LICs with better information to enable them to take “pre-emptive policy action to reduce vulnerabilities.”35 By increasing the flexibility of the limits on external borrowing by LICs, IMF staff are even more ambitious about encouraging a more active role by low-income governments, noting that “over time, an increasing number of LICs would be expected to move to the more flexible and sophisticated approaches as their macroeconomic and public financial management capacity improves.”36 They thus seek to shift more of the responsibility and authority for managing debt portfolios to “capable” LICs.

This emphasis on different capacities is nonetheless worth noting: low-income countries are to play a bigger role “as their macroeconomic and public financial management capacity improves.” These new policies on risk and vulnerability not only seek to involve some LIC actors in the process of government, but they also seek to sort them according to their capacity to do so. One of the defining features of all three of the policies discussed here is their attention to the question of how to differentiate between low- and high-risk countries, between those who can borrow what they need and those who cannot. Not only do these policies therefore seek to enrol more active participants in financial governance, but they also work to discriminate between those more and less able to take on this new role. This new strategy to govern risk and vulnerability therefore involves a reconceptualization of the ontology not only of the global environment but also of individual actors themselves.


These new policies on vulnerability and risk seek to pre-empt or prevent the worst from occurring, all the while preparing for it, just in case. The debt sustainability framework is “aimed to help countries monitor their debt burden and take early preventive action” before it becomes unsustainable.37 The vulnerability exercises are similarly designed to be “pre-emptive,” allowing IMF staff and country authorities to address underlying vulnerabilities before they become too serious.38

Particular kinds of techniques are required to act pre-emptively in the face of such unknowns. The first set of techniques imagine the possible risks that could arise; in both the DSAs and the vulnerability exercises, this is done through “scenario analysis,” a process that involves projecting possible futures with a range of different degrees of volatility. The vulnerability exercises in particular include assessments of “tail risks” – highly unlikely but extreme events that were largely ignored until the 2008 financial crisis.39 As Marieke De Goede has argued, this kind of scenario analysis is a form of “premediation” in which policymakers seek to imagine and prepare for extreme unknowns.40 The second set of techniques evaluate countries’ vulnerabilities to such shocks and translate these assessments into inscriptions to guide policy, including various scores that identify countries as lower or higher risks (of course, these scores depend in turn on prior inscriptions like the CPIA).

The third set of techniques for managing risk and vulnerability bear important resemblances to ones discussed in earlier chapters: techniques for monitoring and communicating countries’ levels of vulnerability. In all three of the policies discussed here vulnerabilities are monitored on an ongoing basis. In the case of the vulnerability exercise, regional assessments are published while country-specific information is shared only between the IFI and the country, for fear that the markets might overreact to a negative assessment. For the two debt assessment policies, on the other hand, the evaluation process is very public: countries’ DSA scores are communicated widely to donors, IOs and market actors.

These are highly symbolic practices that parallel both ownership and standardization strategies by emphasizing the signalling power of risk assessment scores. As the IMF’s factsheet on the DSA notes, “The effectiveness of the DSF in preventing excessive debt accumulation hinges on its broad use by borrowers and creditors.”41 The goal is to get as many lenders as possible to use DSA ratings in their decisions about whether and on what terms to lend to LICs.42 DSAs are thus performative inscriptions: they not only signal better or worse country conditions, but in doing so mobilize key actors to act on the basis of these signs.

Power and authority

IFI staff and Directors’ efforts to engage LICs more actively in managing their own risks and vulnerability, as well as their attempts to encourage donors and other lenders to use key inscriptions like the DSA, both point to indirect and productive forms of power. As one senior IMF staff member put it, the goal of the IMF’s new ranking system is to encourage countries to deal more effectively with their debt through “peer pressure” – a technique that mirrors the logic behind the standards and codes initiative. In fact, IMF staff hope that the publication of the IMF’s risk ratings will work the same way as the World Bank’s “Doing Business” index, to which low and middle income countries pay very careful attention, trying to move their way up the rankings.43 This is a very indirect form of power: IFI staff seek to change behaviour by publishing information in a highly stylized form, creating a tool – a way of assessing and sorting LIC economies – that others can use. Although the ultimate goal is to foster more responsible behaviour by LICs, the means to that end is through the decisions of other actors who, it is hoped, will lend more to good performers and less to poor ones.

These assessments are a perfect example of expert authority: they are highly technical; they translate complex political and economics realities into a set of simplified ratings; and they are carefully justified through staff’s repeated emphasis on the objectivity and neutrality of the processes involved.44 These new policies clearly work to re-establish IFI staff authority as experts on risk and vulnerability in the wake of the crises of the late 1990s and 2000s. Yet these new policies also seek to distribute that authority more widely: by enrolling “good” low-income governments in managing their own vulnerabilities and by encouraging donors, IOs and other lenders to use the rankings in their decisions about countries’ credit-worthiness.

This is not a zero-sum process where IFIs lose ground to other actors, but rather a more complex way of reorganizing the authority to govern.45 For example, although Fund staff and Directors recognize that their new borrowing limits will reduce their more direct influence over many LICs, they also note that “the gate keeping function has led to the perception that the Fund is an obstacle to financing for development;” shifting that function to capable LIC governments will therefore increase the institution’s legitimacy.46 The staff also note “This is why it is critical that these options be used only in countries with high capacity.”47 In other words, this authority can only be shared with the “right” actors – those already demonstrating similar priorities and practices as the IFIs themselves. The legitimacy of this strategy for managing risk and vulnerability, like the other governance strategies discussed in this book, thus rests on a particular combination of expert and popular authority. The goal is ultimately to disseminate the expertise embodied in these ratings so that a wide range of non-IFI actors, including the low-income governments themselves, can play a more central role in the governance process.

This less direct form of power is in stark contrast to the institution’s traditional “gate keeping” role: in the past, governments were forced to comply with the Fund’s determination that they were not in a position to borrow externally if they wanted IMF financing.48 Even as the IMF’s own resources constituted a smaller proportion of official assistance over time, this gate-keeping role hugely leveraged their influence over borrowing countries’ financial activities. Yet, the institution has not entirely given up this tool – merely reduced its scope to those countries as yet “incapable” of taking on this role for themselves. A country’s rating has some very direct consequences: a higher-risk rating means that the IMF retains its gate-keeping role, limiting the opportunity for a government to borrow, effectively reducing their ability to invest in social and physical infrastructure.

More subtly, these various vulnerability assessment processes are all tools for differentiating – discriminating – among LICs. While this is not a black and white, inside and outside form of exclusion, it nonetheless operates as what Giorgio Agamben has called a form of inclusive exclusion.49 Some are excluded from the possibility of additional borrowing by virtue of their location at the very bottom of the ranking system; yet they are still a part of that system – the least capable against whom better performers are compared.

Redefining poverty as social risk and vulnerability

While some of the IMF’s new policies have conceptualized poor countries as vulnerable to the risks of a more volatile global environment, the World Bank has taken this insight even further and began to see poor people in similar terms. Through their reconceptualization of poverty as social risk, key actors in the Bank’s Social Protection Unit have redefined poverty as a more dynamic and uncertain phenomenon, and developed provisional governance strategies aimed at pre-empting potential failures in poverty reduction efforts. This risk-based approach to poverty has since been taken up by the OECD and DFID.50

Understanding the shift

Although the World Bank now views poverty reduction as its most important goal, this has not always been the case. In fact, Bank staff and leadership have treated the problem of poverty in a wide variety of ways over the course of the institution’s history.51 As I discussed in Chapter 3, Robert McNamara was the first Bank President to seriously challenge the trickle-down approach to poverty adjustment, treating poverty reduction as a distinct challenge requiring its own programs.52 By the 1980s, however, under the leadership of A. W. Clausen as President and Anne Krueger as Chief Economist, the Bank’s focus shifted heavily towards growth, which it sought to achieve through liberalization, privatization and structural adjustment – a triumvirate of policy prescriptions that came to be known as the Washington Consensus.53 Poverty dropped largely from the agenda. Where it did appear, the assumption was that growth would resolve it: the trickle-down thesis had made a comeback.

In 1987, UNICEF published a highly critical report, Adjustment with a Human Face, detailing the social costs of structural adjustment, sparking a broad debate on the Bank’s policies.54 It was in this context that the 1990–1 World Development Report (WDR), Poverty, was prepared, a report that sought to outline the Bank’s renewed strategy for tackling poverty.55 Despite its nod to some of the costs of adjustment for the poor, the 1990–1 WDR remained a product of the structural adjustment era. The report proposed a two-pronged strategy for reducing poverty: enabling the poor to use their principal “asset,” labour, more effectively, and increasing the productivity of that asset, through education, primary health care, family planning and nutrition.56 As the report points out, these policies are consistent with the objectives of structural adjustment, as they both seek to use labour more efficiently.57 The report includes a chapter on transfers and safety nets, but treats them as a peripheral part of the poverty reduction strategy designed primarily for those too ill, old or remote to participate in growth.58

This structural adjustment-friendly approach to poverty held sway for some time, but it eventually came to be contested and replaced. The dynamics underpinning this shift were similar to those discussed above, with contested failures leading to a process of problematization and renegotiation, as policy-oriented economists and internal actors struggled to redefine both the problem of poverty and the way to respond to it.

Three key failures played a crucial role in precipitating the shift to a new poverty reduction strategy: the lost decade, the Asian crisis and the AIDS crisis. The persistence of poverty in regions including sub-Saharan Africa, in some cases despite growth in gross domestic product (GDP), challenged Bank economists’ assumptions about the straightforward link between growth and poverty reduction. The effects of the Asian crisis, including the sudden immiseration of huge swathes of the population that had achieved a reasonable standard of living, revealed how fragile income security could be. The devastating impact of AIDS in Africa as well as the proliferation of civil conflicts made it increasingly clear that poverty was linked to community-level or even nation-wide shocks. These events forced Bank staff to recognize the potential for unexpected events to disrupt development plans. If shocks played a significant role in people’s lives, then Bank staff needed to pay more attention to the vulnerability of poor people and take a closer look at ways of addressing it.59

These events did not automatically translate into new poverty reduction strategies, but instead sparked an intense series of debates among development practitioners and economists. These were the kinds of debates that might be called “hot” debates, following Michel Callon, as it was not only the question of how to reduce poverty that was up for grabs, but also far more fundamental questions about what counts as poverty, how to measure it, and the nature of the relationship between poverty and growth.60 Two debates in particular played a crucial role in redefining poverty at the World Bank and in the wider development community: one set of debates on the relationship between poverty and growth, and another on the social policies needed to respond to poverty.

By the late 1990s, a growing number of economists, at the Bank and elsewhere, were challenging assumptions about the benefits of neoliberal growth-oriented policies for the poor: they included Dani Rodrik, who called the growth versus poverty reduction controversy a “hollow debate,” as well as François Bourgignon, Ravi Kanbur, who was lead author on the 2000–1 WDR, and Joseph Stiglitz, then Chief Economist at the Bank.61 They pointed to the inconsistent relationship between growth and poverty reduction: as Bourgignon noted, the extent to which poverty could be reduced through growth was highly elastic, depending on domestic factors including the level of inequality.62

Ranged against them was a group of economists committed to the belief that, as the title of one controversial article put it, “Growth is Good for the Poor.”63 Although Dollar and Kraay, the authors of this article, have since argued that they did not intend their paper to be seen as a manifesto for growth alone, they did set out to make a case for the virtues of neoliberal growth. Other Bank economists and a large number of IMF-based economists, as well as leading figures in the US Treasury, supported their position.64 Over time, a partial compromise was achieved around the idea of “pro-poor growth” – which became something of a mantra at the OECD and DFID: an approach that focused on the conditions in which growth produced reductions in poverty.65

A second, less publicized, debate was also under way around this time among economists interested in social protection. Thinking in this area began to shift in the 1980s and early 1990s, following Amartya Sen’s work on famines, which showed that they are often the result of failures of social entitlements to food, rather than in the actual supply of food.66 Sen’s work influenced the growing literature on hazards and disasters, which focused on individuals’ vulnerability to their effects – a literature that also began to influence social policy thinking.67 These studies lead to social policy experts beginning to shift from social welfare to social protection as their organizing framework. In the process, they redefined the goals of social protection as more dynamic, not only designed to protect individuals from poverty but also to prevent their falling into poverty and to promote their capacity to respond to risks.68

Although contested failures and external debates played a necessary role in creating the conditions of possibility for new policies to emerge, the specific shape that they took also depended on the particular dynamics within the World Bank. In the end, the strategy of social risk became a way of moving the social protection agenda ahead without provoking too much opposition from more conservative elements within the Bank, and without straying from a market-oriented approach to development.

Within the World Bank, the Social Protection and Labor unit was the key advocate for redefining poverty as social risk. This unit is one of the newest at the Bank, created in 1996 to bring together pensions, labour market policy and safety nets under one roof. Robert Holzmann was hired as director of this new unit to lead the process of developing a strategy for the sector, and became a powerful driving force behind the idea of defining poverty in terms of social risk.69 The concept of social risk allowed its advocates to redefine social transfers as productive investments, increasing the relative importance of social protection within the institution. Although, as I will discuss in the Conclusion, these efforts met with resistance, they also achieved some success. As a later report on the effects of the social protection strategy notes:

Social protection (SP) is moving up on the development agenda. Dismissed as ineffective, expensive or even detrimental to development in developing countries, it is now increasingly understood that assisting individuals, households and communities in dealing with diverse risks is needed for accelerated poverty reduction and sustained economic and human development.70

The focus on social risk and vulnerability was also a way of countering certain country representatives’ ambivalence about social protection. Many Executive Directors, including those from East Asia, saw pensions and safety nets as expensive luxuries. The focus on social risk and vulnerability reframed these expenses as investments.71 As Holzmann, the Director of Social Protection at the time, noted:

Social protection strategies were usually a headache to have to bring to the Board: everybody has an opinion and it tends to be an uphill battle (for every two countries, there are five opinions). We used risk management as an organizing framework to appeal to those not always supportive of social protection – those who focus more on efficiency. On the other hand, those who supported redistribution were okay with this approach.72

Emphasizing social risk and vulnerability was a strategy designed to address the problem of poverty without provoking too much opposition. Yet its advocates did face some resistance from within the Bank’s bureaucracy. Social protection was, after all, a new unit in the Bank; moreover, those economists with the most intellectual capital in the organization were those working for the Research Department and the poverty reduction and economic management (PREM) network, few of whom had any background in social protection.73 Holzmann notes that when he first explained the idea of social risk to Martin Ravallion, now the Director of Research at the Bank, he responded “Robert, this is rubbish.”74 Other staff saw the effort to redefine poverty as vulnerability and social risk as an attempt to take over other units’ territory – for example, those in PREM tasked with measuring poverty using other methodologies.75 Although the social risk framework ultimately gained influence through its inclusion in the social protection strategy (SPS) and the WDR, it was nonetheless contested within the institution.76

The social risk and vulnerability framework

What form did this new conception of poverty as risk and vulnerability take? Although the fullest statement of the social risk and vulnerability approach is articulated in the SPS, it is useful to examine it together with the 2000–1 WDR, Attacking Poverty, which included social risk as one of its key concepts, because it allows us to compare it with the 1990–1 WDR discussed earlier.

In contrast to the unabashedly neoliberal tone of the 1990–1 WDR, the 2000–1 report is a much subtler document. The three main “pillars” of the WDR strategy are opportunity, empowerment and security. “Opportunity” bears the most resemblance to the earlier report, as it is focused on “making markets work better for poor people.”77 Yet much of the analysis in the more recent WDR, as well as in the SPS, focuses on the ways that markets can fail poor people if they are not managed effectively.78

One way of resolving such market failures is by focusing on increasing poor people’s “security,” which the 2000–1 WDR authors define as reducing their vulnerability and increasing their ability to cope with risks and shocks. The concepts of security, risk and vulnerability are closely related:

In the dimensions of income and health, vulnerability is the risk that a household or individual will experience an episode of income or health poverty over time. But vulnerability also means the probability of being exposed to a number of other risks (violence, crime, national disasters, being pulled out of school).79

The report spends a significant amount of time describing the different risks that poor people face.80 It maps out the different sources of risk – economic, political, environmental, health – as well as the different levels of society that they affect. In both the WDR and the SPS, Bank staff identify two different kinds of risk: idiosyncratic risks that affect individuals or small groups, such as job loss or illness, and covariant risks that affect a larger group simultaneously, such as environmental, political and health crises.81 Of course, poor people are not at the mercy of risks and have their own coping mechanisms. In fact, the second pillar of the 2000–1 WDR, “empowerment,” focuses on ways of engaging poor people more actively in the management of their economic situation.

Where the 1990–1 WDR did discuss the problem of shocks, it emphasized the importance of informal and market-based mitigation strategies for all but the most vulnerable.82 The 2000–1 report, in contrast, because of its focus on risk in general, and covariant risk in particular, raises doubts about that strategy: large crises tend to undermine informal efforts, since everyone is affected simultaneously.83

Reconceptualizing poverty as social risk and vulnerability has had a concrete effect on World Bank development practices: over time, policies in each of the three areas covered by social protection – labour, pensions and safety nets – have been reframed around risk and vulnerability. In the labour market sector, for example, thinking at the Bank has shifted away from the belief that macroeconomic stabilization and liberalization are sufficient to ensure labour market access by the poor.84 Bank staff now argue that the various informal and private mechanisms that poorer people use to respond to shocks (e.g. taking children out of school to work), can lead them to under-invest in their human capital: “Thus, public intervention is needed.”85 Another new social protection policy initiative with clear affinities with the social risk approach is the conditional cash transfer (CCT) strategy. Although CCTs were not invented by the Bank, they are now seen as a useful way of managing social risk.86 CCTs are funds provided to poor households on the basis of certain conditions – usually that they keep their children in school and send them for regular health checkups. The cash transfers thus provide two ways of managing risk: in the short term, they provide funds to help cope with shocks, while in the longer term they seek to foster a population that is healthier and better educated, and thus able to manage future risks more effectively.

Changing governance factors

Just as we saw in the vulnerability assessment policies discussed above, this new conception of poverty as social risk puts the dynamic and changeable character of its object front and centre. The 2000–1 WDR is illustrative:

As traditionally defined and measured, poverty is a static concept – a snapshot in time. But insecurity and vulnerability are dynamic – they describe the response to changes over time.87

Reconceptualizing poverty as dynamic happened in part because of technical developments: as researchers began to categorize the poor into two groups – the “always poor” and the “sometimes poor” – they rapidly realized that the second group was quite large.88 Rather than assuming that the poor and the non-poor were static categories, it therefore made sense to try to measure the movement of people into and out of poverty, as well as to investigate what was driving that movement.

Conceptualizing the poor as mobile transforms poverty from a state of being into a process. This is a new ontology of poverty: it radically transforms the object of development policy. (To borrow a metaphor from physics, this is like changing our image of the electron from a particle into a wave.) This more dynamic conception of poverty also involves a different idea of time. An individual's or a community’s vulnerability is something that develops over a long period of time; efforts to reduce it must also take a long view. Coping with risk is a short-term challenge; mitigating and even preventing risks requires longer-term planning. In some ways, this extension of the time horizon merely deepens the trend in development thinking towards focusing on human capital in the form of education and health. Yet the emphasis on risk and vulnerability adds a further dimension to the reconceptualization of time, in its emphasis on the unpredictability of the future: the future becomes an uncertain territory filled with hazards, shocks and risks.

Small “i” ideas

This new approach to poverty as social risk is underpinned by new institutionalist economics. From the late 1980s until the mid-1990s, more narrowly neoclassical schools of thought dominated macroeconomic thinking at the Bank and the Fund. These theories assumed perfectly efficient markets and rational individuals, and generally concluded that most governmental interventions in the economy were counterproductive. As I discussed in Chapter 4, although institutionalist economists remain within the neoclassical tradition, they focus on what causes market failure. Rather than assuming that market-based solutions are necessarily the most efficient, institutionalist economists emphasize the centrality of institutions in reducing transactions costs and making markets work better.

Both advocates of pro-poor growth and of the new approaches to social protection see poverty as a sign of market failure: the fact that poor people do not have access to the benefits of the market, such as credit and jobs, is an indication that the market is not working properly. Even with increased growth, distortions in the market may persist, making it unlikely that growth alone will reduce poverty. Viewing poverty in terms of market failure legitimizes poverty reduction efforts as central to broader economic development: making markets work better for poor people also ensures that markets work. New institutionalist insights thus allow development experts to dig deeper into the causes of poverty without challenging the underlying liberal assumption that the market is the ultimate solution.


Reconceptualizing poverty as a process in time also enables (indeed requires) a new set of proactive governance techniques. It becomes necessary not only to identify those most vulnerable, but also to discover the greatest risks that they face, and develop strategies to deal with shocks long before they have occurred. Those seeking to redefine the Bank’s SPS in the late 1990s discovered

that a new conceptual framework was needed which moves SP [social protection] from a definition by instruments (such as social insurance) to a definition by objectives (that is assisting in risk management); from a traditional focus on ex-post poverty to ex-ante vulnerability reduction; from seeing SP in our client countries largely as safety nets to conceptualizing them as spring boards.89

This new conception of poverty as risk required new measurement techniques – and new ways of translating those measurements into useful inscriptions for policymakers. Among the key techniques that the Social Protection staff developed for this task were the risk and vulnerability assessments (RVAs). Between 2000 and 2007, World Bank staff undertook 132 country-specific RVAs.90 These assessments sought to deliver a comprehensive picture of potential shocks, government, market and community actors’ vulnerabilities, and their current risk management strategies. In theory at least, this four-dimensional map (time is also a necessary factor) can be used to develop more nuanced, targeted interventions to alter the movement of people into and out of poverty.

The examples of social protection policies discussed above all seek to engage more proactively with the target populations, to promote the right kind of practices and to pre-empt undesired outcomes. Hence labour-market policy is no longer only focused on reducing barriers to labour-market flexibility (the classic neoliberal strategy), but is also increasingly focused on fostering a better-trained, more work-ready population.91


Poor individuals themselves are one key group of actors who are now more directly enrolled in managing risk. The social risk framework not only treats poverty as a more dynamic phenomenon but also views the poor themselves (or at least some of the poor) as more active participants in reducing poverty.92 The goal is to provide them with resources and incentives to prepare for and prevent risks (through better education, small accumulations of savings, etc.) and to manage risks more effectively when they do occur (e.g. not remove their children from school).

Poor individuals are not, however, the only actors in this new approach to reducing poverty. The policy also seeks to enrol government, civil society and private sector actors into the process of managing social risk. The prevalence of covariant risks that affect a broader population simultaneously, and the problems of market failure, mean that individual and market-based risk management is not enough. While there is therefore a role for the public sector, the government is seen primarily as a means to “supplement” existing private and individual risk management strategies rather than replace them:93

In an ideal world with perfectly symmetrical information and complete markets, all risk management arrangements can and should be market-based (except for the instruments protecting the incapacitated). However, in the real world, all risk management arrangements will play important roles that are likely to change over time.94

Who are the actors involved in these various “risk management arrangements”? New institutionalist economics provides a particular lens for understanding and engaging with both institutional and individual actors – one that blurs the boundaries between public and private, state and market, and that sees them largely through the lens of service provision. These actors are both public and private (and sometimes both at once): they are private sector actors providing insurance; they are individuals and families demanding protection and developing new forms of self-insurance; they are actors at various levels of government providing traditional forms of social protection; and they are NGOs, acting as service providers and as advocates for better risk management. What matters is not where they are, but what they do.95

The social risk framework reconceptualizes the relationships among these actors through a range of different market-based metaphors, such as competition, supply and demand:

Social protection should contribute to a better match between the supply and the demand of risk management instruments. There are many suppliers of social risk management instruments, such as individuals, households, communities, non-governmental organizations, financial markets, governments at different levels, bilateral donors, and international organizations.96

As one passage from the 2000–1 WDR notes, “This is not an issue of the state versus the market, but of the use of different agents and mechanisms depending on the type of activity.”97 These heterogeneous social actors are represented in very similar terms as parts in a larger, more social or even political kind of market mechanism, in which individuals, NGOs, communities, IOs and others can act as a source of demand for risk management, as well as being sources of its supply.98

Power and authority

The techniques involved in managing risk and vulnerability rely as much on productive as on exclusionary forms of power. The goal of this kind of policy is not just to reduce poverty, but also to constitute a new kind of low-income individual, better capable of managing risk and thus able to gain and sustain a better quality of life.99 Bank staff are themselves keen on the productive and proactive aspects of this new poverty-reduction framework.100 In their 2009 review of social protection, staff note, “The productive, as opposed to the redistributive, role of safety nets is becoming more recognized.”101 Moreover, the concept note and the consultations for the new 2012–22 SPS places even more emphasis on the importance of promoting more resilient communities and individuals.102

Risk is a category rather than a thing: it is a way that we make the world calculable in particular kinds of ways. Risks are beyond our control and yet also very much subject to our understanding: a risk by definition is something that can be understood through a logic of probability (as opposed to uncertainty, ambiguity and other kinds of indeterminacy).103 Risk-based policies are well suited to the productive application of power, particularly in the context of a market economy, in which risk is never viewed as an entirely bad thing. According to the World Bank, risk is an essential tool for understanding poverty, not only because shocks can wreak havoc with efforts to raise incomes (risk as a bad thing), but also because as poor people find themselves with fewer tools for managing risks, they are less likely to undertake riskier activities, and thus forgo the potential gains that they might make (risk as a good thing).104 Risk is thus understood as a double-edged problem: it is not universally bad, but needs to be both mitigated and exploited through careful policy interventions.

As with the policies discussed earlier, the social risk framework relies on a combination of expert and popular authority to underpin its legitimacy. It is not just IFI experts or government bureaucrats who are responsible for applying this new understanding of social risk, but rather a range of public and private organizations, and the poor themselves, who are to take on a more active role in reducing their vulnerability and managing risk. We therefore see a similar process of distributing both expert and popular authority to a wider range of “capable” actors as we witnessed in the debt vulnerability assessments discussed above.

The fact that these forms of power are productive does not make them any less exclusionary, however. As a number of social policy analysts have pointed out, even as the social risk framework engages a wider range of poor people in the process of managing risks, it also tends to neglect those less capable of such active self-governance, leading policymakers to downplay the problems of the chronically poor.105 The strategy’s emphasis on shocks also leads staff to de-emphasize subtler sources of vulnerability, such as those associated with gender, class, ethnicity or other more structural fault-lines.106 More fundamentally, the framework’s tendency to define poverty in absolute rather than relative terms (downplaying inequality) and to view poverty reduction as a “win-win” policy, means that more politically difficult, structural solutions to poverty tend to get short shrift.107 While these new policies on risk and vulnerability may take a less direct approach to their objects, they are therefore no less powerful in their effects – both intended and unintended.

A more provisional kind of governance

It is not just the increasing emphasis on risk but, more importantly, the new focus on the problem of vulnerability, that indicate the rise of a more provisional style of governance among IFIs today. Many of the patterns that I have discussed in this chapter echo the broader trend towards a risk society or the governmentality of risk that scholars such as Ulrich Beck, Mitchell Dean and Nikolas Rose have explored. My study has revealed an increasing preoccupation among IFI actors with calculating, cataloguing and trying to manage the various dangers and possible unknowns posed by the modern world. It has also revealed the increasing reflexivity of IFI actors about the problem of uncertainty, as Beck and Dean have noted in their work, and a growing reliance on individuals’ and communities’ responsibility for self-governance, as Rose has discussed.

Why, then, talk about the turn to a more provisional form of governance rather than simply reading this as another example of the governmentality of risk? The two insights are not mutually incompatible. Yet, I want to argue, the shift by IFI actors from risk to vulnerability points to a more equivocal and less confident approach to governance than that suggested by much of the risk literature. Part of what makes risk such an appealing concept for policymakers is its promise to make indeterminacy calculable. Risk managers tell us that they may not know what will happen exactly, but they can at least tell us the likelihood of certain things occurring. Confidence in this kind of quantitative risk assessment was challenged in recent years by the failure to predict 9/11 and the global financial crisis. Quantitative risk management techniques remain popular but they have now been supplemented by more imaginative processes, like the scenario analyses discussed in this chapter, which seek to imagine and prepare for various “worst-case” situations.108

The new policies examined above point to a second way in which the confidence of traditional risk management has been undermined: through increased focus on vulnerability. Risk and vulnerability are both ontological concepts that encourage their users to see the world differently: as less stable and more prone to shocks and uncertainties. Yet the ontological character of vulnerability is different from that of risk. When IMF and World Bank actors use the concept of risk, they treat it as something “out there” in the form of exogenous shocks or opportunities to be seized. Vulnerabilities, on the other hand, are imagined as lying deep within countries and individuals. They are the inner weaknesses that determine how we react to shocks. The concept of vulnerability is thus both useful and unsettling from the point of view of organizational experts. It is useful, because it allows IFI staff to develop better models of the likely effects of given shocks. But vulnerability is also an unsettling concept because it acknowledges the essential fragility of individuals and countries. Moreover, because it turns out that the various sources of vulnerability are profoundly political and social – linked to institutional quality and social inclusion – such fragilities are difficult to fix through conventional economic expertise.

There is thus an aporia at the heart of these new efforts to govern risk and vulnerability: indeterminacy persists at the very source of the efforts to manage it.109 Despite the veneer of confidence that we find in many IFI documents about their capacity to measure and manage these more pervasive unknowns, there exists an underlying sense of unease, a partial if unconscious recognition of the sheer magnitude of the challenges involved. This unease, in turn, underpins a more provisional approach to governance.

This provisional governance strategy is explicitly focused on the problem of failure. The shocks of the 1990s and 2000s led policymakers to recognize that the volatility of the global political economy meant that failure was always a possibility. The best that could be hoped for was the more effective management of risks and vulnerabilities – a strategy that keeps one eye on the possibility of failure, all the while seeking to prevent or mitigate its worst effects.

One of the key features of these new governance practices is their attempt to act pre-emptively and proactively – to stay one step ahead of this more volatile world. For example, the vulnerability exercises seek “to strengthen the staff’s capacity to spot vulnerabilities and flag potential pressure points in LICs arising from external triggers before they materialize.”110 Similarly, social risk management aims to shift resources towards ex-ante measures focused on preventing and mitigating risks, rather than relying on more costly efforts to cope once the risks have occurred.111 The techniques and forms of power that the IFIs use to achieve these ends, moreover, are increasingly indirect in form. There is less emphasis on formal conditionality and more focus on constituting the right kinds of risk-bearing individuals and governments, and of creating the conditions necessary for them to take on governance tasks themselves.

Many of the techniques used to foster this kind of self-governance, moreover, are highly symbolic: the goal is not simply to use risk assessments to inform concrete domestic policies, but also to use the signalling power of various country risk scores, like the debt sustainability analysis ratings, to change investors’ and countries’ behaviour. Yet these scores are massive oversimplifications of highly complex phenomena. They often rely heavily on other, equally contestable, rankings such as the CPIA. A series of considerable leaps of logic is thus involved in these scores. And while all of these rating systems seek to black-box their many assumptions, they are still vulnerable to criticism. As I will discuss further in the Conclusion, the methodological assumptions underpinning the social risk framework and the various vulnerability assessments remain the subject of considerable contestation within as well as outside the IFIs.

Those involved in developing and defending efforts to manage risk and vulnerability, moreover, are often quite aware of such problems, producing a more cautious kind of governance and a tendency to try to hedge against the possibility of failure. Such an approach is particularly clear in documents on the IMF’s vulnerability assessment exercise, which is the most ambitious of the risk-management policies. The staff note:

The exercise does not aim to predict the timing of crises or acute economic distress. Past attempts at crisis prediction have a mixed record at best. The exercise instead strives to flag the underlying vulnerabilities that predispose countries to economic disruption in the event of external shocks.112

These policies thus support Niklas Luhmann’s contention that risk management is a form of expertise that seeks to inoculate itself against failure; by recognizing the ever-present chance of failure, and by avoiding making any definitive predictions, risk managers are able to promise better chances of success, all the while hedging against the possibility of failure.113

Together, these efforts to manage risk and vulnerability constitute a more provisional form of governance – one that is always aware of the possibility of failure, that seeks to pre-empt and prevent it, often indirectly, but that is forced in the process onto increasingly symbolic and fragile methodological terrain, and as a result becomes ever more cautious in its governance efforts. Underlying this more provisional approach to governance is the aporia I discussed above: an awareness of the fragility of all claims to knowing such profound unknowns. In fact, all three of the new strategies discussed so far in this book rely on a set of methodological gambles on their ability to measure and evaluate highly complex processes like ownership, good governance, vulnerability and risk. The final strategy that I will examine seeks to tackle this problem of measurement head-on, and to develop a new epistemology of development finance: one that hinges on the possibility of measuring something called “results.”

8 Measuring results

Accurate measurement has become something of a holy grail in development finance, viewed as a mythical key to figuring out what works and what does not – and why. The pursuit of better ways of measuring and assessing development successes and failures is not new. Yet the forms measurement takes and the roles it plays have evolved. As the International Monetary Fund (IMF), World Bank and key donors have adopted the new strategies that I have discussed in previous chapters – new standards of governance and transparency, policies aimed at fostering local ownership and reducing vulnerability and risk – they have also developed ever more complex models, indicators and matrixes to try to measure these policies and their effects. In the process, there has emerged a veritable industry surrounding policy measurement and evaluation. These new practices of measurement represent an important new governance strategy – one that not only follows from the other three discussed so far in this book, but which also plays a crucial role in making them possible.

Such efforts to redesign measurement techniques can be seen in a wide range of different international financial institution (IFI) and donor policies – including efforts to define and operationalize ownership, develop new governance indicators, measure compliance with new standards and codes, and assess risk and vulnerability. Different institutions have tackled these challenges in diverse ways. Yet one theme that has been consistent in virtually all of the organizations that I have looked at has been the attempt to reorient measurement around results.1 This new results-oriented approach to measurement and evaluation has played an important role in the shift towards the more provisional form of governance that I have been discussing in this book.

This chapter will move beyond the IMF and World Bank and consider various donors, international agreements and organizations in order to trace the spread of the ideas and practices underpinning the current focus on results. Even more than those of standardization, ownership and risk management, the emergence of the results strategy can only be fully appreciated by moving beyond individual IFIs, tracing the evolution of new practices within a wider community of organizations, and focusing on the meso-level of analysis – the specific techniques, ideas, actors and forms of power and authority through which these institutions have sought to measure results.

Why does measurement matter? I began this book by suggesting that a decade and a half ago, key players in finance and development faced a serious erosion of their expert authority in the context of several contested failures. These failures precipitated significant debates about what constituted success and failure in development finance – debates that were, at their heart, about questions of measurement: if so many past policies that were once deemed successes had in fact resulted in failure, then clearly something needed to be done not only about how development finance was performed, but also about how its successes and failures were measured. One of the key means of re-founding expert authority has therefore been through the development of new ways of measuring and evaluating policies – not just their inputs and outputs, but also their outcomes, or results, providing a new metric for defining success and failure. The hope of the various organizations adopting these measurement strategies is that by demonstrating successful results they will be able to justify their policies, thus re-legitimizing development efforts by re-establishing them on sound methodological grounds.

As I suggested in Chapter 2, the politics of failure is closely linked to the process of problematization. Debates about failure often lead to the identification of new problems and the development of new ways of governing them. In fact, in the case of the practice of results measurement, its history is long enough that we can actually identify two key moments of problematization, the first and more significant of which was triggered by a belief in the failure of government in the 1980s, leading to the introduction of the practice of results management into Western bureaucracies, and the second of which was triggered by the perceived failure of aid, making results a central element of the aid effectiveness agenda in the 1990s and 2000s.

While demonstrating the results of development policy initiatives may sound relatively straightforward, it is in fact a very ambitious undertaking. This effort to develop new kinds of measurement is both a methodological and an epistemological exercise. As different development practitioners, non-governmental organizations (NGOs) and state leaders have debated whether and how to focus on results, they have also been contesting the basis of development expertise. Drawing on the insights of Michel Callon and Bruno Latour in this chapter, I will examine how these new measurement techniques work to create a new kind of fact. While talking about “evidence-based” policies, they have also sought to reconstitute what counts as evidence.2 Results-based measurement involves a promise of a new way of knowing not just how to count economic activities, but also what can be counted, and therefore what counts.

Those involved in developing and implementing the strategy of results-based measurement thus not only draw on particular, small “i” ideas – new public management, public choice theory and participatory development – but also seek to transform the epistemological underpinnings of expertise. They do so using two principle techniques: performative inscriptions such as the “results chain,” and various technologies of community that reach out to civil society and other affected groups. Advocates of the results agenda seek to enrol a range of new actors in the practices of measurement and evaluation, particularly bureaucrats in both lending agencies and recipient countries. Although by engaging new actors the strategy does redistribute a measure of expert authority to a wider group, it also seeks to reconstitute them into more results-oriented kinds of actors, through the development of a “results culture.” Power dynamics thus remain a key dimension of this governance strategy, although they often take less direct forms than in the past.

As measurement techniques have become integrated into the day-to-day work of development policy, international organizations (IOs) and donors are seeking to govern through measurement. They are engaging in a highly provisional form of governance practice: one that seeks proactively to transform the culture of evaluation so profoundly that bureaucratic actors change the way that they develop programs by anticipating their ultimate results. This is an indirect form of governance, operating through the most peripheral and technical of arenas – measurement and evaluation – in an effort to transform the assumptions underpinning the management of development finance. And while results may appear like the most concrete of policy objectives, they in fact depend on a highly constructed and symbolic set of techniques – the results chain – in order to be made visible. The symbolic character of the assumptions underpinning the results agenda does occasionally threaten its credibility. Yet, paradoxically, its proponents are able to exploit these leaps of logic in order to deliver good results in often-questionable circumstances, thus hedging against the risk of failure.

Where it came from

Although results-based measurement has only dominated development lending over the past five years, it has a much longer history. This recent reorientation around results can be linked back to two small “i” ideas and an influential technique – new public management thinking, participatory development and evaluation, and the logical framework or “LOGFRAME” approach to development projects. Current results-based thinking and practice is increasingly driven by top-down new public management and LOGFRAME-style analysis; however, it has integrated a measure of the more bottom-up participatory approach and language. The potency and appeal of the idea of results owes a great deal to the fact that it can be understood from these rather different starting places, even though in recent years the strategy has moved away from its participatory roots.

The “failure” of government and new public management

New public management and results-based measurement emerged in response to a widespread – if contested – problematization of the role of the public sector in the 1980s and 1990s in the wake of the purported failure of “big government.” The public sector had expanded massively after the Great Depression and the Second World War, in order to provide social and political stability to support the economy. Keynesian economic theory, emphasizing the central role for government in smoothing out the wider swings of the business cycle, played a crucial role in both legitimizing and operationalizing the public sector’s role. The oil crises and stagflation of the 1970s seriously undermined elite support for this economic model, and Keynesian economic ideas – and the governments that had sought to implement them – came under increasing attack. Leading the charge were public choice theorists and their supporters in the newly elected conservative governments in the UK and the US, where Margaret Thatcher and Ronald Reagan were now in power.3

The theoretical underpinnings of the new public management ideas that began to transform government practice are relatively straightforward: public management gurus such as David Osborne and Ted Gaebler sought to adapt the insights of public choice theory to the practices of government agencies – and in doing so to transform them from bureaucracies into something that resembled the rapidly changing face of private sector organizations.4,5 As I have discussed in earlier chapters, public choice theory seeks to apply economic conceptions of humans as essentially rational self-interested maximizers to a wide array of different non-economic contexts.6 Doing so leads public choice scholars to the premise that markets are the most effective means for achieving an optimal distribution of goods and economic growth.

While public choice advocates therefore tend to support the transfer of all possible activities to the private sector, they nonetheless recognize the need for some governmental role – particularly for the provision of public goods that would otherwise be underprovided. Yet they remain deeply suspicious of traditional public bureaucracies, seeing them as a source of inefficient rent-seeking and thus a major drag on growth. In the 1980s and 1990s, new public management scholars sought to solve this dilemma by proposing wide-ranging changes to the public sector (symbolized by the shift from “public administration” to “public management” as the preferred term).7 The goal was quite simply to make the public sector operate more like the private sector – by introducing competition, individual responsibility and performance evaluations based on results.

This problematization of results thus emerged out of claims about the failure of government. Amidst the widespread debate about the causes of the economic set-backs of the 1970s and early 1980s, new public management proponents argued that there had been a fundamental failure in how government worked: they saw the traditional public service’s emphasis on collective responsibility and accountability as misguided and sought to develop a way of doing government’s work that would mimic firms by individualizing responsibility. The key to doing so was to link individuals’ or units’ actions to results, making them responsible for their own successes and failures – and thus hopefully reducing the prevalence of policy failure.

This new way of managing the public sector soon took off in the United Kingdom, New Zealand, Canada, the United States and Australia.8 New Zealand became the poster child for public choice advocates, showcased by the World Bank among others as a model of public sector reform.9 Beginning in 1988, the government introduced massive institutional reforms, transforming relationships between government and public service into a series of contractual arrangements in which managers were responsible for the delivery of specific results but had significant discretion over how to meet them. As Alan Schick, a consultant with the World Bank’s Public Sector Group, noted in a 1998 paper, “New Zealand has brought its public management much more closely into line with institutionalist economics and with contemporary business practices.”10

The first wave of interest in results-based management was as much neoliberal as it was neoconservative in flavour, driven by a belief in reducing the size of government. Results-based measurement thus survived the end of the Thatcher–Reagan era and, in the mid-1990s, began to take a more widespread hold among Organisation of Economic Co-operation and Development (OECD) countries, becoming, for example, the centrepiece of Vice President Al Gore’s National Performance Review in the United States and of Paul Martin’s Program Review in Canada.11 The OECD championed the spread of such policies to all industrialized nations, arguing for “a radical change in the ‘culture’ of public administration” in order to improve public sector “efficiency and effectiveness.”12

Results in development agencies

The growing popularity of new public management soon took hold in development organizations, particularly among bilateral donors. Performance management became the watchword, and results the key determinant of success. This new enthusiasm for measuring results combined with two other already-present trends within the aid community – LOGFRAME analysis and participatory development.

Back in 1969, the US Agency for International Development (USAID) had commissioned a group called Practical Concepts to develop the program design framework that became the LOGFRAME.13 Although results matrixes have evolved over time, this initial framework established many of their crucial elements. The LOGFRAME (Figure 8.1) encouraged development planners to focus on outputs rather than inputs, and required them to identify “objectively verifiable indicators,” the “means of verification” and the “important assumptions” for each step in the process. Within a few years of its development, thirty-five other aid agencies and NGOs had begun to use the LOGFRAME in their work.14

Figure 8.1 The LOGFRAME16

Two and a half decades later, as new public management thinking spread across the Western world, the US Government Performance and Results Act, which tied budgetary decisions to measurable results, was passed with bipartisan support and was soon applied to USAID.15 If anything, the pressure on development agencies was even more acute than other areas of government policy, since it was believed that financing for development was even less good value for public money than that spent on domestic programs. If the initial focus on the problem of results was a response to the perceived failure of the public sector, the later concern with development results was linked to the more specific belief that development aid in particular was inefficient. Yet, despite these considerable pressures, the move to results-based management was a contested one. In fact, Andrew Natsios notes that the USAID Administrator at the time, Brian Atwood, saw the performance-based legislation as contrary to the needs of his agency. Yet he ultimately decided to accept the lesser of two evils (the first being the abolition of the agency, proposed by conservative members of Congress), hoping that “he could prove to USAID’s adversaries that foreign aid works and could produce quantitatively measurable program results.”17

The World Bank also began to focus on results management in the 1990s, championing its spread to low- and middle-income countries. The Bank had a long history of focusing on public-sector reform in borrowing countries.18 By the late 1990s, its staff were focusing on its good governance agenda, convinced that institutional reform was vital for policy success. It was in this context that the staff involved in public sector management – now located within the poverty reduction and economic management (PREM) area – began to emphasize the adoption of new public management-inspired reforms in developing countries, including results-based measurement.19

The spread of these new public management-inspired ideas into development policy was not entirely smooth, however, for it encountered a second, somewhat different approach to evaluation – one that emphasized local knowledge and participation. Participatory approaches to project evaluation had existed for many years, particularly among NGOs, but became increasingly popular with the publication of Robert Chambers’ work on participatory rural appraisals (PRA) in the mid-1990s.20 PRAs were a more participatory version of the earlier Rapid Rural Appraisals (RRAs) which emphasized the cost-effectiveness and usefulness of project evaluations that relied on local knowledge (often through interviews) rather than more formal quantitative analyses.21 The chief difference of participatory evaluations was that they were to be driven by locals themselves, and organized around their concerns. The objective of participatory appraisals was not simply to extract information from local populations, but to empower them to identify their own needs and assess development programs’ success in meeting them.22 Here then was another strategy for measuring and evaluating the success of development programs, but one that focused on meeting poor people’s needs rather than on ensuring organizational efficiency.

Development organizations struggled with these tensions. At the World Bank, different units adopted different approaches to measurement and evaluation, with the PREM focusing on public-sector reform and public choice-inspired results management, while those involved in social development relied more on participatory approaches inspired by Chambers’ work.23 At the Canadian International Development Agency (CIDA), which introduced its first results-based management policy around the same time as USAID in the mid-1990s, there were also discussions about how to reconcile different approaches to measurement and evaluation.24 One 1996 CIDA paper made a careful distinction between top-down, donor-controlled management by results and a more bottom-up, indigenized management for results.25 While the first was often focused on more bureaucratic objectives such as reporting back to stakeholders, the second was designed to improve performance in the field. The authors noted that most CIDA policies and practices to that point had been dominated by the first of these approaches. While the paper’s authors supported results-based management in principle, they made a strong case for developing a more dynamic, even experimental approach which they felt was better suited to meeting CIDA’s increasing concern with institutional development.

Analysing early results-oriented approaches

Despite their differences, these earlier versions of measurement and evaluation had similarly ambitious objectives: to transform development governance by creating new kinds of facts, enrolling new participants, redistributing expert authority, and using productive power to constitute new, more proactive actors.

The New Zealand-inspired approach to results management required a new kind of counting and accounting to ensure that public sector managers had achieved the targets set out in their contracts. At the heart of results-based management is a particular kind of inscription: the causal chain, or logical framework, which seeks to create logical connections between inputs, outputs and outcomes (Figure 8.2).26 In creating such a framework, public sector or IO staff must develop a results chain that links each step in the policy process, effectively identifying causal relationships between a particular input (such as training more doctors), an expected output (more doctors in a region), and a range of desired outcomes (a healthier population). At each stage, it is also necessary to identify indicators that will allow for the measurement and monitoring of each step in the causal chain (e.g. counting the number of doctors). The objective of this system is to establish a direct link between bureaucrats’ actions and the outcomes that result, in order to make public-sector actors accountable for the services rendered (or not).

Figure 8.2 CIDA’s results chain28

PRAs also sought to create a new kind expertise using new techniques. Chambers sought to replace statistical techniques with participatory processes that produced their findings by talking to the local population. It took time for these new fact-producing techniques to be widely accepted; as Chambers notes, the earliest practitioners who used RRA-like techniques felt obliged to do more traditional, quantitative and time-consuming studies after the fact, in order to persuade development agencies that their results were credible.27 It was only over time, as Chambers’ ideas began to gain momentum, that the kinds of facts that RRAs and PRAs collected – interview data, stakeholders’ opinions, drawings and other kinds of non-verbal information – began to be viewed as authoritative.

Both policy approaches also sought to enrol new actors in their results-oriented techniques and, in doing so, to transform the culture of development organizations. In the case of the new public management-driven approach, the goal was to train borrowing-country bureaucrats to use the results chain in their own policy development. The PRAs sought to enrol local community actors in the processes of evaluating and refining development policy, and to change the way in which development professionals interacted with local actors. Both results approaches sought to involve new actors and transform them by changing the culture in which they operated. In both cases, the transformation that they sought to achieve in bureaucratic actors was quite profound: in the first case, bureaucrats were to become more entrepreneurial, driven by rational incentives rather than traditional notions of public service, more adaptive to change and accountable to their political masters. In the second, development agency staff were to renounce their efforts to control the evaluation process and act as facilitators for the voices of others. In both cases, a profound cultural transformation was the goal.

Of course, the forms of expertise that each kind of strategy sought to create and authorize, the actors they sought to enrol and the changes in culture that they sought to foster were quite different. Yet some initial points of contact did exist even in the infancy of these two result-oriented approaches; moreover, they were to begin to converge further as time went on and the results agenda came to dominate the global governance of development over the next decade.

Recent developments

The results-based measurement strategy initiated in the 1990s has gained significant new impetus over the past decade, as the idea of results has been enshrined in three key international agreements: the millennium development goals (MGDs) (2000), the Monterrey Consensus (2002) and the Paris Declaration (2005). As their name suggests, the MDGs establish concrete goals towards which the state signatories agree to work in order to reduce poverty. These goals are not only broadly defined, such as the goal of reducing extreme poverty and hunger, but are also broken down into more concrete targets, such as that of halving the proportion of people who suffer from hunger by 2015. Moreover, movement towards reaching each of these targets is measured through more specific indicators, such as the prevalence of underweight children.29 This kind of practice of linking measurable indicators to intermediate targets and longer-term goals is central to results-based strategies.

If the MDGs established a kind of preliminary methodology for measuring global results on poverty reduction, then the Monterrey Consensus articulated the rationale for integrating results-orientation as a key element of developing country public sector reform. It was at the Monterrey Conference on Financing Development that an agreement was reached on the principles that were to underpin the global governance of development aid: the key principle was mutual responsibility, whereby industrialized countries agreed to bring aid levels closer to the level needed to meet the MDGs in exchange for developing countries’ promise to take responsibility for developing “sound policies, good governance at all levels and the rule of law.”30 Three years later, when OECD countries agreed on the Paris Declaration on Aid Effectiveness, results-measurement and evaluation were seen as the central mechanism for achieving these better development outcomes.31

If advocates for results-based management in the 1980s justified this radical shift in public sector governance by claiming that big government had failed, those pushing for this more recent problematization of results have pointed to the failure of aid effectiveness. As Patrick Grasso, a member of the World Bank’s independent evaluation team, noted in a recent presentation, the Bank’s emphasis on results emerged in response to the “quality crisis” of the 1980s and 1990s as programs’ success rates declined precipitously.32 The World Bank President, Paul Wolfensohn, who was preoccupied with the institution’s declining success rates, reorganized the Operation Evaluation Department (OED) in the mid-1990s, leading to its identification of results-based management as one of its strategic objectives.33 The adoption of results-based management at the Bank and among aid agencies was thus driven in part by fear of increasing rates of policy failure and a desire to demonstrate tangible policy success to their critics. As Grasso notes, “[The] move to results focus and concentration on effectiveness means that evaluation matters more than ever,” not only for internal reasons, but also because of external pressures, as “[s]hareholders want to know whether they are getting ‘value for money.’”34 Aid agencies and IFIs now need to be able to show the effects of their expenditures in order to be able to sell their programs to their leaders and publics.

Who were the external and internal actors pushing for the results strategy? There is little doubt that the US Administration played a major role in demanding that all multilateral development banks including the World Bank be accountable for results.35 As Natsios notes, one of President Bush’s mantras was that his three priorities were “results, results, results.”36 Other countries also pushed for results measurement, although with somewhat different objectives in mind: the Nordic countries, for example, were interested in providing more output-based aid in the health sector,37 while Latin American countries were keen on assessing the impact of World Bank, IMF and donor policies.38 UK representatives were generally supportive of greater focus on results at the World Bank in the early 2000s. Yet they were careful about what was actually achievable in this regard, cautioning against being overly ambitious by seeking “the attribution of success to each agency or to individual projects”;39 and arguing that “we are focusing on managing ‘for’ rather than ‘by’ results,” echoing the earlier CIDA working paper discussed above.40

States were not the only key actors mobilizing behind the new results agenda. Internal advocates also played an important role in pushing for the results agenda, with not only Wolfensohn but also the Bank’s Chief Economist, François Bourgignon, playing leading roles.41 NGOs provided another source of support, although in a somewhat tangential way: critical NGOs like Eurodad and Oxfam had long argued that the IFIs should assess the impact of their policies, championing the Poverty and Social Impact Assessment (PSIA) tool at the Bank and the Fund.42 Although the goal and form of the PSIA is different from results-based management, its focus is nonetheless on measuring outcomes and relies on similar claims about the value of “evidence-based policy.” Although many of these same NGOs have since become more critical of the results agenda, their criticisms have been primarily focused on what kinds of results are being measured, rather than on the measurability of results more generally.43 Finally, the Washington-based think tank, the Center for Global Development (CGD) has played a crucial role in moving ahead the results agenda through its development and advocacy for a “cash on delivery” (COD) approach that links financing with measurable outcomes.44 The COD approach has caught on at the World Bank, and the CGD has been very active in training Bank staff in this policy.45

Donors get more quantitative

As I discussed earlier in this chapter, donor agencies were among the first to integrate results-based measurement and evaluation techniques into their policies as part of broad-based public-sector reforms. Yet in many of these cases, the market-based approach to results was an uncomfortable fit for organizations seeking to achieve more complex, process-oriented and long-term reforms such as institutional development. These organizations were also interested in using more participatory evaluation techniques that were sometimes at odds with the techniques or objectives of the public-choice approaches. The agencies’ response in many cases was to try to find a compromise between the donor and recipient-driven approaches and to create more space for flexibility within the results-framework. In the late 1990s and early 2000s, DFID, for example, relied on more qualitative indicators that better captured the complexities on the ground.46 These adaptive strategies helped resolve the tensions in results-based management techniques between the goals of reporting (to the donor government) and of improving policies (for the recipient community). Yet they did so by reducing the clarity of reporting, since numbers were often replaced by more complex accounts of successes and failures.

This particular resolution of the tensions in results management did not, however, provide the kind of shot in the arm to the legitimacy of development governance that key actors had hoped for. Politicians did not just want results, but measurable ones, so that they could take them back to their constituencies and explain why the money had been spent. In 2004, the Bush Administration was the first to translate this desire for quantifiable results into a new kind of development organization: the Millennium Challenge Corporation (MCC). All of this agency’s loans were to be tied to borrowers achieving a passing score in several quantitative indicators, including indicators on governance. The assistance in turn was to be linked to clear objectives, and results were to be regularly reported to Congress. While the agency ultimately had to fudge things a little (after almost no country qualified for financing), and created a new category of threshold programs designed to help countries meet the minimum targets, it had nonetheless dared to do what no other agency had: to develop quantitative governance-based criteria for aid. In the words of one former advisor to the DFID Minister, Claire Short, the MCC’s willingness to create hard quantitative criteria was “the elephant in the room” that all of the other agencies tried to ignore, but could not.47 Many other governments also dearly wanted to be able to show results and justify lending through the clarity of numbers.

While no other agency has been willing to tie its aid so strictly to quantitative measures of country results, many have moved towards more rigid kinds of results-based measurement. Both CIDA and DFID, which had been more cautious and conflicted in their application of measurement and evaluation in the 1990s, were asked by their respective ministers to impose a stricter kind of results-based management. At CIDA, a new results-based management policy statement was issued in 2008 that updated the policy adopted twelve years earlier. This new policy makes it very clear that the central objectives of results management are entirely focused on bureaucratic objectives: better “planning, implementation, monitoring and evaluation,” together with more transparent reporting to its key stakeholders – Parliament and the Canadian public.48 Just six years before, the organization was still struggling with the complexities involved in applying more traditional results-based management approaches to development programs.49 By 2008, however, the difficult debates that had earlier preoccupied the organization had gone underground.50 What took their place was a very straightforward form of top-down results management, or what CIDA staff earlier called a “donor-oriented” rather than “field-oriented” approach.51

DFID was similarly pressured to provide clearer data on results to its political masters, particularly in the context of growing pressure on government budgets.52 As the Overseas Development Institute’s David Booth noted in an interview conducted before the 2010 election, aid has come to be seen by both Labour and Conservatives as a vote-winner – but only if claims about aid making a difference are verifiable.53 DFID’s 2007 Results Action Plan begins with a mea culpa of sorts:

DFID needs to make a step change in our use of information. We need to use evidence more effectively in order to ensure we are achieving the maximum impact from our development assistance. We also need to be able to demonstrate its effectiveness more clearly.54

Demonstrating effectiveness, moreover, means basing more development program decisions on quantitative information: this is the number one priority of the reforms proposed in the action plan. In fact, as Booth noted, “senior managers at DFID headquarters adopted a ‘results orientation’ that placed a strong emphasis on monitoring quantifiable final outcomes, which put a new kind of pressure on program design and delivery in country offices.”55 The Action Plan is also quite frank about what its authors believe were the reasons for the decline in the use of quantitative information, suggesting that “as our work has moved progressively away from discrete project investments, we have made less use of tools such as cost-benefit analysis.”56 As DFID moved from projects to program-based, longer-term and more country-owned support, they also lost the ability to easily link causes and effects, and to compare costs and benefits. Decisions were thus no longer easily linked to quantitative evidence and it became more difficult to communicate the results of development assistance to the public. This new results action plan seeks to rectify these perceived failures. As I will discuss further in this book’s Conclusion, this attention to “hard” results has only gained ground over the past few years, not only in the UK but also in several other key donor countries with conservative governments, including Canada and the Netherlands.

The World Bank’s recent initiatives

In the past decade, the World Bank has also “mainstreamed” results-based measurement. Before this shift occurred, the results-based approaches of PREM’s public-sector teams and the social development groups were not well integrated into the core of Bank operations. Integration first began in the context of the organization’s development of Poverty Reduction Strategy Papers (PRSPs) together with the IMF, in 1999.57 The PRSP was supposed to include general objectives and more specific targets and indicators that could then be monitored by both the borrowing government and the lending institutions. The idea of results was thus integrated into the PRSP: countries were asked to develop a detailed matrix prioritizing their poverty objectives and outlining the longer-term and shorter-term results that they were seeking to achieve, as well as how they would achieve them. The PRSP thus sought to combine top-down and bottom-up forms of results management, by linking participatory input to more bureaucratic forms of measurement and evaluation.

The results-orientation of PRSPs has had several important effects on development practice for both borrowers and lenders. As I will discuss further in the Conclusion, reviews of the early PRSPs indicated that the prioritization and results orientation of many documents were uneven.58 This has lead to increasing pressure on countries to develop more results-oriented poverty reduction strategies. Since the same reviews made it clear that many countries do not have the capacity to produce the necessary statistics, nor to integrate results management into their public service, this has also increased emphasis on institutional capacity building and on results-based public-sector reform more generally.

Donors have also pushed for results-based management at the country level, particularly through their role in the World Bank’s International Development Association (IDA). IDA funds are provided to low-income countries (LICs) in the form of long-term interest-free loans and grants, and are made possible through contributions (known as fund replenishments) from industrialized states. During the negotiations over IDA13 in 2002, the thirty-nine donors agreed that their support was contingent on borrowers’ being able to demonstrate specific results. Outcome indicators were developed to track progress towards achieving targets in areas such as health and private sector development.59 Ultimately, the Bank created a system of “performance based allocation” (PBA) that linked the level of IDA funding that each country could receive to a score that was a combination of a country’s demonstration of need and its performance as determined through the country policy and institutional assessments indicators (or CPIA – as discussed in Chapters 6 and 7).60 Three years later, IDA14 took this results-oriented approach one step further and developed a Results Measurement System at the Bank that monitors broad country-level outcomes, IDA’s contribution to those country outcomes and changes in statistical capacity in LICs.

Most recently, the Bank has proposed yet another results-based instrument: the Program for Results (P4R) lending. The P4R, which was adopted by the Board in 2012, is designed to provide a third form of World Bank lending, somewhere between investment lending (for specific projects) and development policy lending (for broader government reforms). Bank management seeks to use this lending instrument to directly tie the disbursements of funds to the achievement of agreed performance indicators, such as a percentage reduction in the mortality rates of children under five, or the length of time that it takes to start a new business.61 One of the primary goals of the Bank’s new results-oriented programs is to focus on building country capacity – particularly their capacity for results measurement, fiduciary oversight and risk management (all the technical capacities needed for a results-based approach).62 Interestingly, one of the main arguments presented in the Bank’s Revised Concept Note in favour of P4R is the fact that other already existing lending instruments cannot be fully tied to results; the document’s authors make no attempt to justify the usefulness of focusing on results per se, but rather seek to explain why this particular instrument is needed in order to allow a results focus. Results management is thus becoming black-boxed as an operational concept in development assistance: a general good that needs no justification.

Analysing governance factors

The path towards the current quantitative approach to results-based measurement and management has therefore not been a straight line from public-choice textbooks to the current action plans and results strategies. Instead, it was only after a decade of trying to modify the stricter forms of results-based management to suit the complexities and uncertainties of development programs, to reconcile it with the goals of country ownership and to integrate some of the insights of participatory evaluation, that we have now seen a turn to a more donor-driven kind of measurement strategy. In this final section, I will trace the ways in which the results strategy involves significant changes to the factors of governance.

I have suggested throughout this chapter that results-based management is above all about creating a new kind of knowledge. For if one wants to manage for and by results, one also needs to know those results; this in turn means determining what results are desirable and how to measure them, and deciding what constitutes a result in the first place. This process of creating new kinds of facts called indicators, targets and results is as much material as it is ideational: it involves a new set of measurement and inscription techniques to make them possible. All of these elements – the starting point, the objectives and the indicators – must be translated into facts, of either quantitative or qualitative kind. They have to be made into paper – or more precisely into tables, graphs, charts or, best of all, numbers. Of course, development practices have always had to translate complex information into various kinds of inscriptions – chiefly reports. What is different about this kind of inscription is its attempt to make this new slippery object – the result – visible, and to do so in a way that manufactures clear causal connections between specific policy actions on the one hand and a number of concrete development outcomes on the other. Although the promised results appear to be very concrete, they are in fact based on a set of highly symbolic practices that make the links between action and outcome visible.

The development of these new measurement and inscription techniques has concrete effects on how policy is conducted. Results-based measurement involves a shift from focusing on inputs and outputs to emphasizing results. Yet it is also a shift from processes to outcomes, as many of the critics of results-based management have pointed out.63 It is easier to count the number of women who show up for participatory evaluation sessions than to determine whether their voices carried weight.64 The focus on results – and more specifically on results as translated into quantifiable indicators that can be compared and aggregated into appealing reports – thus has specific costs and consequences for the ways in which development is conceptualized and practised.

The contemporary results strategy also relies on a second set of techniques that seek to produce new knowledge through the solicitation of public feedback via various technologies of community. This is where the LOGFRAME meets some of the ideals of participatory development. These techniques seek to connect policymakers to particular publics through the logics of demand and accountability. In some cases, results-based approaches involve direct participation by local groups affected by development policies – either to identify desired outcomes or to evaluate success in meeting them. The PRSP is the most obvious example of this linking of participation and results, since it was designed to funnel broad-based consultation processes into a set of objectives that can be prioritized and set out in a results matrix.65

The publication of results links these two techniques through the same kind of symbolic logic that we saw in the strategies of ownership, standardization and risk management: result scorecards make visible the complex (and often highly problematic) links between policy action and outcome, and in the process signal better or worse performance. Such symbolic practices are also performative: the goal here, as in the other strategies, is not only to rank performance but also to mobilize governments and NGOs to pay attention to the results and respond accordingly.

These techniques thus seek to enrol new actors and ultimately to transform them. The first and most obvious group of actors to be enrolled is bureaucratic staff, in both donor organizations and recipient governments. Results-based measurement involves subjecting the calculators themselves – development organization staff – to a new kind of institutional culture. New public management advocates are quite explicit about the fact that one of their central goals is to create a “results culture” in which staff will change not only their behaviour but also their sense of identity as they become more entrepreneurial in their effort to achieve results. One senior World Bank staff member who has run workshops on results measurement suggested that a results focus changes policy, but not in a mechanical way: instead, the process of thinking about results actually changes people’s mind-sets.66

These workshops and training programs do not only target IFI and donor government staff, but are also oriented towards developing and emerging market bureaucrats. This effort has been underway for a good number of years, in the context of IFI and donor pressures for public-sector reform. Yet it is only more recently that developing public-sectors statistical capacity has become a key priority for development efforts – as it is in the Bank’s proposed P4R instrument. The goal is ultimately to train people to view their activities through the lens of results measurement, identifying the objective, mechanisms and indicators on their own. Results-based management thus seeks not only to make up facts, but also to “make up people” – transforming the bureaucratic hack of old into a new kind of subject capable of certain kinds of calculation and responsible for his or her specific policy effects.67

At the other end of this measurement process, however, these techniques seek to constitute and enrol another kind of new actor in governance activities: the public. This public not only includes the individuals who participate in certain forms of evaluation and measurement, but also refers to a more abstract public invoked by both public choice theorists and development policy documents: the public that demands accountability in the form of visible, measurable results. This public exists in both donor and borrower countries, and plays a crucial role (at least in theory) in demanding better and more clearly demonstrated results. Results-based management thus seeks to involve the public in governing development by creating the kinds of facts that they need to hold donor and borrowing governments to account. Results-based management techniques, like the good governance reforms and risk management strategies that I discussed in earlier chapters, are to be based not just on IO and donor supply but also on country-level demand. Results-based measurement thus seeks to redistribute some of the authority for governing development to domestic government bureaucrats and the wider population through their capacity to hold the government to account for policy results.

These new techniques of creating new kinds of facts, reshaping institutional cultures and encouraging certain kinds of public participation all involve particular forms of power. Some of these are highly exclusionary: performance-based allocation is probably the clearest example of this kind of power, creating as a does a new kind of ex-ante conditionality. The performance-based allocations use CPIA measurements of country performance to determine how much aid a country can receive. A poor score can mean a 40 per cent drop in funding for a country desperately in need of aid.68 With the development of results-based P4R lending at the World Bank, more financing will be tied to performance. No matter how it is dressed up, this is a highly exclusive kind of power. Yet even where power appears relatively obvious, as it is in this case, it is also quite indirect. Although results seem to be a very direct object to target, they are always several times removed from those seeking to attain them, and may not be entirely within their control. The very fact of focusing on results and outcomes as the basis for allocating aid (e.g. number of days it takes to open a business), rather than on specific policies or efforts (e.g. passing legislation to facilitate new business start-ups), means that it is much harder to determine responsibility for a country’s improving or worsening score; the ultimate results may be caused by local inefficiency, cultures of non-compliance, broader economic changes, or any number of other factors not within the direct control of the government. The effect of this kind of performance-based financing is rather similar to the informalization of conditionality that I discussed in Chapter 5: even though the conditions are explicit in this case, it is not at all clear how to ensure compliance.

Why would donors and IOs create conditions without making it clear how to go about complying with them? Why should A tell B what they should achieve without telling them how to do so? Clearly, the object of power in this case is not simply the achieving of the result, but the process of getting there: of having to figure out how to obtain it. By rewarding and punishing specific results, the hope is to encourage a change in the behaviour of those pursuing them. This is a kind of productive power that encourages a new kind of responsibility in developing countries.69 Borrowing governments are thus lent a certain degree of authority in determining how to obtain the outcomes, but are not given the right to determine what those outcomes should be. Of course, it is not just borrowing governments who are the objects of this kind of productive power. Organizational staff are also key targets: the goal of results management is quite explicitly to transform bureaucratic cultures both within developing countries and in the agencies that lend to them.

Perhaps most interesting of all, however, are the transformations to expert and popular authority enabled by results-based management techniques. These new techniques are designed to re-found the expert authority of international and domestic development agencies by creating a new kind of fact that promises to show the definitive links between policy actions and their effects. This manoeuvre is absolutely essential for organizations whose internal cultures and external legitimacy have always rested on claims to expertise. Less obvious, but just as important, is the way in which the results strategy also seeks to redistribute authority to a wider group of actors, including the general public, and, in the process, to bolster lenders’ expert authority with claims to popular legitimacy. The public choice theory that underpins results-based management has always involved a particular (narrow) conception of the public: as an aggregation of rational maximizing individuals who demand value for money from their civil service.70 The gamble then is that the publics in both borrowing and donor countries will see their needs and priorities reflected in development targets and results, and thus grant the organizations the legitimacy to continue their work.

A more provisional style of governance

I have argued throughout this book that the various changes that we are currently witnessing in how development is financed add up to a shift towards a more provisional form of governance – a kind of governance that is more proactive in its engagement with the future, often indirect in its relationship with its object, reliant on increasingly symbolic techniques, and above all aware of and evasive in the face of the possibility of failure. If we believe what many of the advocates of the results agenda say about it, we would have to conclude that results measurement is the least provisional of these new strategies of governance. After all, it promises direct and transparent access to the truth about which development policies succeed and which fail in delivering concrete results. Yet, as my examination of the results strategy in this chapter has shown, the way that results measurement works is far more complex – and provisional – than this straightforward account suggests.

Although those who advocate results-based management focus on the end-point of development finance – its outcomes – they do so in order to change the way that practitioners approach any project, by changing the way that they conceptualize and plan the work at hand. This is a highly proactive form of governance that seeks to inculcate a particular kind of awareness of the future. Whereas in the past, measurement and evaluation was more episodic and often relegated to specialized units, it has now become all-pervasive in space and time. Although some bureaucratic actors and units remain evaluation specialists, all are required to engage in the process of identifying, anticipating and measuring results. Results measurement is thus an indirect form of governance, focusing on gradually altering bureaucratic measurement cultures in order to change their actions over the longer term. When the bureaucracies targeted are in LICs, this effort to transform the culture of development finance becomes a very potent but indirect form of power.

Results measurement is also a strategy that is preoccupied with the problem of failure. In recent years, as development agencies and IFIs have made it a top priority, they have done so in order to respond to their stakeholders’ concerns about past failures of aid effectiveness. At the same time, the strategy’s strong ties to public-choice theory and its suspicion of the public sector mean that it is always haunted by an awareness of the possibility of yet more failures. It is hard to ignore the underlying assumption that if it is not possible to show visible results, then the policy is just another public-sector failure. Hence the importance of making any successes visible by clearly demonstrating the actual results of particular organizations’ actions.

Yet in practice, as I will discuss at greater length in the next chapter, the results measurement strategy has encountered some of its own limits and failures. Although the pressure to adopt results management is immense, there is nonetheless significant resistance within many agencies and IFIs – with the IMF being the most notable example. Underlying much of this resistance is an awareness of the fragility of many of the expert claims on which results management is based. This fragility in turn is linked in large measure to the symbolic and highly constructed character of the key inscriptions at the heart of the strategy. In one sense, results are very real: they may involve a certain number of early-childhood deaths, or a particular level of inflation. Yet results are also symbolic insofar as they signal a kind of achievement based on a claim that this particular set of deaths or level of prices is a direct result of specific lender actions – causal links that are often highly questionable given the multitude of lenders, programs and exogenous factors affecting such complex outcomes. We should therefore not be too surprised that there is a growing debate about whether the new “facts” that results strategies promise to create have any validity: a growing number of institutional staff and commentators are questioning the plausibility of efforts to establish causality and attribution – drawing a line between policy input and outcome.71 Thus, ironically, even as results measurement appears to be getting more definitive and factual, it is actually becoming more fictitious and symbolic, as claims about results achieved slip further away from reality.

Paradoxically, these methodological and epistemological weaknesses in the results strategy provide an opportunity of sorts for institutional actors – creating a certain amount of fuzziness in the results matrixes and therefore some room to hedge against failure. Despite renewed emphasis on hard numbers, because of their often-symbolic character, the careful identification of indicators and elaboration of results chains are subject to a certain amount of fudging, as both borrowers and lenders have significant incentives and opportunities to “game” the numbers and demonstrate positive results. This is particularly the case at the World Bank, where the incentive structure remains focused on the disbursement of as many dollars as possible, regardless of results.72 Organizations have clear incentives to publish positive results and can often find ways of making less than perfect results appear satisfactory. For example, as Stephen Brown points out, the Canadian government’s document on their aid commitments indicates that everything is “on target” even when the evidence suggests that results have slipped in several categories.73

However ingenious the attempts to game the system may be, and however ubiquitous the call for results, the strategy remains fragile and subject to considerable tensions. The wager that it is based on – that the demonstration of measurable results will re-establish IFI and donor authority – is thus far from certain to pay off. Yet all of the various strategies’ efforts to bolster institutional authority hinge to some extent on their promise of providing measureable results. The uncertain destiny of the results agenda thus raises important questions about the direction and sustainability of the new more provisional logic of global economic governance, as I will discuss in the Conclusion.

Figure 0

Figure 8.1 The LOGFRAME16

Figure 1

Figure 8.2 CIDA’s results chain28