Contracting out institutional reform: Does it work?

The new Executive Building in Malacañang compound in Manila, Philippines. Can contract- and grant-based governance and institutional reform work lead to sustainable improvements? Photo by: Malacañang website

A study commissioned by the U.K. and Australian aid agencies suggests ways the international community can help developing countries advance institutional reforms, based on a review of the Asia Foundation’s work in the Philippines.

The tips apply to other countries as well, according to the report, published this week by the Asia Foundation and the Overseas Development Institute and commissioned by the U.K. Department for International Development and Australia’s Department of Foreign Affairs and Trade.

The report suggests that the international community “should avoid as far as possible contracts or grants that include pre-specified outputs” in highly unequal and poorly governed developing countries — a position supported especially by the Asia Foundation — but instead liberate and harness the potential of local reformers to shape and steer processes of change “in flexible, politically attuned ways.”

Here are some of the researchers’ tips on “effective reformism”:

     •   Avoid as far as possible those kinds of reform that are likely to incur greatest resistance.

     •   Go for good second-best policy changes.

     •   Keep it simple and prioritize.

     •   Do not underestimate the resistance to reforms that are promoted frontally.

     •   Even if it wants to, the executive branch of government may well not be able to drive
        through a reform on its own.

     •   Consider seriously working with the structure of government, even when dysfunctional.

     •   More generally, work with the interests that people and organizations have.

     •   Ideas matter.

     •   Build tacit coalitions in a pragmatic way.

     •   Above all, do not try to follow a blue-print of the process of reform.

This is the first case study in the series sponsored by the DFAT-TAF Partnership. Followup studies over the coming 18 months will examine Asia Foundation programs in Bangladesh, Mongolia and a third country that has yet to be identified.

Earlier this year, Andrew Parker, social development adviser at the Australian Embassy in Manila and co-editor of “Room for Maneuver” told Devex that “if social reform — anywhere in the world — is about meaningful and often hotly contested issues, it will always be political and highly contentious.”

Can contract- and grant-based governance and institutional reform work lead to sustainable improvements? Let us know what you think by leaving a comment below.

Instituting reforms, inspiring conversations and tackling major development issues in the region will be some of the key topics that will be discussed in the upcoming Devex Partnerships and Career Forum in Manila from June 10 to 11.

About the author

  • Lean 2

    Lean Alfred Santos

    Lean Alfred Santos is a Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. Prior to joining Devex, he covered Philippine and international business and economic news, sports and politics. Lean is based in Manila.

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