State Capacity for Realists
In my previous post on State Capacity, I argued that its organisational dimensions deserve attention. The specific tasks, processes, and skills needed matter at least as much as the motivation and the investments in the ability of the government to deliver on its functions. The implications are substantial as Nigeria makes another political transition and faces some big economic, political, and security decisions that will spotlight the administration’s capacity. The president-elect campaigned on the platform of competent appointments and scaling the much-talked-about ‘’Lagos model’’ (more on that soon, trust me).
But things can be easily derailed if the government does not know how and where to strengthen capacity. I think these three things are important as governance heuristics when it comes to capacity;
Capacity evolves over time: It is tempting to ‘’go heavy’’ in building capacity by trying to make wholesale changes too quickly. No country starts with the best institutions — but countries that have transformed in the last few decades managed to harness their ‘’weak institutions’’ for development. Focus on delivering transformative economic growth, and structure bureaucratic incentives to learn to deliver that first.
Foolproofs can be quick wins: I applied the concept of O-ring and foolproof sectors/jobs to the question of state capacity. Economist Tyler Cowen implied that some O-ring sectors can become foolproof by using Public Health as an example.
‘’In other words, the quality of the most important part of health care treatments bypassed the rest of the problems in poor economies and grew rapidly, even in countries with only so-so economic growth. The rate of reduction in child mortality has tripled in many countries since the 1990s, and by no means are those locales major economic winners as say Singapore and South Korea were.
Therein lies one of the most important (and under-reported) global changes in the last twenty years. It is now possible to have a decent public health system in a country with poor or mediocre political and economic institutions.
In other words, public health is no longer such an O-Ring service, an O-Ring service being one where everything has to go right for the service to be of decent quality. And advances are much, much easier when the O-Ring structure no longer rules.’’
It will be worthwhile to know how Public Health made this transition, but even more worthwhile to know which other sectors have made similar transitions and how it can improve the delivery of public services in low-income countries. The recent examples of exceptional performance in public service in Nigeria were during public health crises (e.g. the Ebola outbreak). Note that the state of healthcare delivery in Nigeria is still very bad, and the country has even regressed in the gains made in public health outcomes. The point is that if public health has indeed become foolproof, then rapid improvements can be made at low cost. We can also try to identify other foolproof sectors where the competence to deliver good service has dispersed widely.
3. Do What Works: Low Capacity can place a ceiling on what the government can achieve. And because capacity takes time to build (there may be quick wins, but no magic bullets), not getting immediate results can create its own challenges. ‘’Strengthening’’ institutions without getting results can lead to waste and create an incentive for predation. It can also prioritise form over function — where the government ‘’looks’’ competent but cannot get anything done. In a low-capacity setting, sometimes it is better to do what works than to do what is best. For example, economists found that lowering tax rates can increase revenue when tax enforcement capacity is low — of course, there are limits to how much one can generalise such results.
But the point is many governments shun creative options that might get results because they are counterintuitive or do not conform to idealised best practices.