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Institutional Capabilities and Reform Ownership in Africa

by Steve Kayizzi-Mugerwa

There is not a single African government that has not attempted public sector reform, including retrenchment, in the past decade. Decentralization is back on the agenda: governments no longer see themselves as sole suppliers of social services, and now frequently opt for partnerships with the private sector. Efficiency and choice have entered the language of the planning and implementation units of Africa’s line ministries, and privatization is no longer the controversial subject it was a decade ago. The civil service is itself at a crossroads: the old ways of doing government business are now clearly inadequate, while upgrading the skills of the ‘new’ civil service is only just beginning. However, in spite of the recent and related moves towards democracy, African leaderships have been more willing to open up economies than political systems.

Are Reforms Owned?​

The issues addressed in the WIDER project ‘Institutional Capabilities, Reform Ownership and Development in Sub-Saharan Africa’ include the extent to which reforms undertaken in Sub-Saharan Africa (SSA) in recent years have enhanced institutional capabilities across the breadth of government. To what extent have the reforms been ‘owned’? In other words how have donor-recipient relationships evolved? Can ownership and financial dependency coexist? The project also looks specifically at the impact of public sector reforms on economic development in SSA.

Looking at the evolution of public sector reforms in the past decade, it is relatively easy, with the benefit of hindsight, to criticise African governments for poor implementation strategies and for lack of commitment. However, in light of the nature of the reform tasks, African countries were probably more overwhelmed than uncommitted. Thus while the failure of reforms to improve policy implementation and generate growth has been blamed on the intransigence of African governments, the donor community shares some of the blame. Both sides clearly underestimated the serious lack of capacities in individual countries as well as the time required for completing the reform process.

Another problem relates to external financing and its implications for ‘ownership’. Donor assistance has been a precondition for the success of public sector reforms in Africa. Many of the interventions, including retrenchment of the civil service, creating agencies for revenue collection, privatisation and utility regulation, have been very capital and skill intensive and few governments would have been able to undertake them without external support. However, financial dependency and domestic ownership are not compatible. Few countries can establish real ‘ownership’ when donors finance the bulk of their budgets (as in Mozambique for example).

Broad Participation and Democratization are also Important for Ownership

The idea that populations must be involved in the formulation of policies that affect them is very attractive. This in turn demands the devolution of power to increase the proximity of local populations to policymakers and to make it possible for citizens to monitor the performance of their leaders. However, mere proximity is not enough. Local democracy must be encouraged in order to strengthen local governments in their dealings with the centre. On the other hand, central governments must also learn when to let go. Many have held onto the purse strings claiming that this is the only way of ensuring accountability at the local level. Decentralization without local responsibility, including over finances, is bound to fail (see Table on decentralization in Uganda).​

The above issues also relate to those of transparency and accountability. The lack of both has been blamed on poor remuneration in the civil services. However, since corruption continues to be a problem even in the new agencies where wages and other benefits are far superior to those in the normal public sector, the causes of corruption are much more deep seated. Financial controls within the public sector remain weak. For example, the security sector continues to be a financial black hole in many countries. Although it claims substantial budgetary resources, military spending is often not subject to official auditing procedures. Parliamentary committees for public expenditure are often ineffective while the offices of the auditors general are poorly funded in many African countries.

Rule of Law is Crucial

But perhaps more serious is the lack of a relevant body of law to ensure that corrupt officials are punished in a manner bound to be a deterrent. It is not surprising to find cases of corrupt officers punished under statutes from the 1960s. Thus besides the modernization of the financial and accounting systems, and raising the technical capacities for budgeting and financial analysis, the upgrading of laws relating to public sector functions will also be necessary. Second, governments have weak budgeting systems. In recent years, some attempts have been made to relate budgeting procedures to programme targets. Much hope currently rests on the donor supported medium term expenditure framework (MTEF), which it is believed will help countries to target their resources to poverty reduction. But this is a daunting agenda, nevertheless.

The current state of African institutions is thus conflict-ridden and predictions about the future must be guarded. The irony for Africa is that countries that seem to be making progress in their reforms are not necessarily those that were well endowed in earlier decades or those that had a capitalist base (for example Nigeria, Angola, Kenya and Zimbabwe). It is often countries that suffered serious setbacks in earlier decades, caused by civil war and natural catastrophes, that have made the most impressive institutional and economic turnarounds (for example Uganda, Ghana and Rwanda).

Ultimately, successful reform demands strong political leadership. However, where influential bureaucrats remain largely indifferent or even cynical, reforms will make little headway. Examples of successful institutional reforms are characterized by enthusiasm across the board and not just at the top.
 

Steve Kayizzi-Mugerwa is a WIDER research fellow and the project director for the WIDER project on ‘​Institutional Capabilities, Reform Ownership and Development in Sub-Saharan Africa’. He is an associate professor in development economics at Gothenburg University, Sweden, and has also worked at the African Development Bank in Abidjan, Côte d'Ivoire.