Lant Pritchett gave this presentation in Chile at Instituto de Políticas Públicas UDP. Link to original source: http://www.politicaspublicas.udp.cl/noticias/detalle.tpl?id=201

1. Lant Pritchett
Universidad Diego Portales
Instituto de Políticas Públicas
October 11, 2011

2. “Development” is a four-fold transformation of
‘rules-systems’ (with complex interacting pieces)
Figure 1: Development as a four-fold modernization process
• ECONOMY • POLITY
• Enhanced • Accurate
productivity preference
aggregation
Transforming
Rules
Systems
• SOCIETY • ADMINISTRATION
• Equal social • Rational,
rights, professional
opportunities organizations

3. Chile has been one of few
complete development successes
Only 10 countries in the Country Region
post WWII period that Japan East Asia
have managed to have: South Korea East Asia
Spain Europe
Extended episode of rapid Portugal Europe
economic growth (>4 Ireland Europe
ppa in GDP per capita) Israel ?
Austria Europe
Electoral Democracy (high
France Europe
POLITY rating)
Finland Europe
Capable Bureaucracy (high
Chile South America
BQ, low corruption) Source: Pritchett and Werker 2011

4. A much more common experience
is failure in at least one dimension
of the “development” process
 Economic stagnation
 Lack effective polity so that citizens do not control the
state (even with elections)
 Failure of a transformation to national identity and
social cohesion/basic equal rights
 Failure of the state to acquire the institutional and
organizational capability to implement policy

5. At the launch of an institute of public policy, an
important question is what is “public policy?”
Official or de jure public policy is
a mapping from states of the
world to actions by an authorized
agent of the state with intended outcomes
Realized States
of the World Actions by agents
(Ω) of the state
(A)
Intended
Outcomes
EE
(Everything
else)

6. Outline of my talk:
Failures in Policy Implementation
 Gap between “policy” and “policy”: the de jure-de facto gap
 “Capability traps” as slow progress in the acquisition of the
capability for effective policy implementation
 Escaping “baby ontology”
 The camouflage of “isomorphic mimicry”
 Sabotaging the natural camouflage with:
 Performance measurement
 Authorization of positive deviation
 Disruptive innovation as the path to OECD

7. “Looking like a state” in India: Nobody is there
but no one is absent either
 Super whiz-bang program
Both treatment and control to improve nurses with
present on ‘monitored’ better technology, better
days about a third the time
incentives, civil society
engagement, failed
completely as physical
attendance was 30 percent.
 The state cannot control
the mapping “If its
Monday be at work”
Source: Banerjee, Duflo, Glennerster, 2008 ( figure 2)

8. The initiative changed the juridical or official reality from
“absence” to “exemption” without transforming actual policy
100%
implementation—presence was unchanged
Machine problems
80%
Exempted days
60%
40%
Absent
Half day
20%
Present
0%
Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May-
06 06 06 06 06 06 06 06 06 06 06 07 07 07 07 07
M onth
Source: Duflo presentation

9. De facto or “realized” policy is driven by agent choice, which is an
endogenous outcome of a system and de jure “policy” is only one
element—and “realized” policy matters to outcomes
De jure Policy
Realized Actions by agents
(de facto) of the state
Realized States (Publicly Policy (A)
of the World authorized)
Agents
Intended
Outcomes
EE
(Everything
else)

10. Comparing what “legal compliance” would
take versus what firms say they actually do
 Comparing “legal time for compliance” and actual firm responses—no correlation,
consistently less
Source: Hallward-Driemeier and Pritchett 2010

11. Huge gaps in what firms report: for instance, of
191 firms in Chile where the DB reports 155 days
to get construction permit…
10th: 7 days 25th: 20 days
90th: 360 days
75th: 120 days

12. What is “administrative capability
of the state”?
 Organizations of the state able to induce behavior of
implementing agents consistent with carrying out the
stated objectives of the organization
 Perhaps a narrow gap between de jure and de facto policy, or
 Location of country in the gap in outcomes between optimal
actions of agents of the state versus outcomes with purely
selfish objective function maximizing actions by agents of the
state (allowing for “street level bureaucrats” actually doing
better than de jure)
 Somehow aggregated across the organizations of the state
(e.g. tax, police, education, regulation, health,
infrastructure)

13. “Capability Traps” are when there is stagnation in the
pace of acquisition of state capability for policy
implementation: How long till Haiti reaches Singapore?
At that pace Haiti reaches
Singapore in 2,000 years
Been independent for 200 years
and is only this far about Somalia
(complete anarchy)

14. Using available time series from ICRG to extrapolate
scenarios of progress—current progress is slow
Country Bureaucratic Quality Corruption
Years to Singapore
Current Years to Singapore (4) at: Current (4.5)
Level Own past Average Pace of Level Own past Pace of
(scale 0 to pace, country fastest 20 (scale 0 to pace, fastest 20
4) 1985-2009 pace improvers 6) 1985-2009 improvers
0.0080 0.075 0.061
Haiti 0 Infinity 503 53 1 84 57
Nigeria 1 Infinity 377 40 1.5 Infinity 49
Sudan 1 72 377 40 1 Infinity 57
Iraq 1.5 120 314 33 1.3 Infinity 52
Nicaragua 1 Infinity 377 40 2.5 Infinity 33

15. How (not “why”) are capability
traps sustained?
 What are the techniques of successful failure?
 How do organizations manage to sustain a lack of
progress while maintaining legitimacy, surviving as an
organization, and even attracting more and more
resources?
 How is the gap between rhetoric and performance
sustained?

16. The camouflage of isomorphic
mimicry
(Remember: Red and black, friend of Jack, Red and Yellow, Kill a Fellow

17. An expertise in public policy avoids
explanations that rely on baby
ontology
Babies understand the world in terms of
Agents: things with “will” that act
teleologically
Stuff: things that are acted upon by
agents
Which is why they laugh at balloons, as
they are baby ontologically weird
Most of us, nearly all of the time, operate in the world successfully with
“baby ontology”—outcomes are explained because some agents wanted ir
or the properties of the natural world
But systems are an ontological third category that explain outcomes
without teleology.

18. Evolutionary ecosystem: Agents,
organizations, systems
System Space for
Closed Open
Characteristics novelty
(Context, Environment
for Organizations) Agenda (E)Valuation of Functionality
Conformity novelty
Organizations Isomorphic Organization Goal: Demonstrated
(firms, ministries, Mimicry Legitimation Success
NGOs) choose (mimetic or normative) (growth, resources)
strategies
Organizational Leadership Value Creation
Agents Perpetuation
(leaders, managers,
Front-line workers Front-line worker Act with Concerned
Compliance Choices Flexibility

19. Why economists love markets like we do when
we do: Good markets are a system that leads to
ecological learning
System Space for Firms
Closed Open
Characteristics novelty can enter
(Context, Environment Consumers
for Organizations) Agenda (E)Valuation of Functionality vote with
Conformity novelty their
feet/dollars
Organizations Isomorphic Organization Goal: Demonstrated
Motivates innovation and
(firms, ministries, Mimicry Legitimation Success
“creative destruction”
NGOs) choose (mimetic or normative) (growth, resources)
strategies
Organizational Leadership Value Creation
Agents Perpetuation
(leaders, managers,
Front-line workers Front-line worker Act with Concerned
Compliance only Choices Flexibility

20. The dangers of public systems: it can align
on isomorphism as an optimal strategy
Monopoly providers (as
Space for Open
users of public Closed
novelty
resources) risk averse
“more of the same Agenda (E)Valuation of Functionality
(alignment of political
Conformity novelty
interests) but better”
weal leadership, front-line
Isomorphic Organization Goal: Demonstrated
organizational strategy,
Motivates isomorphic
Mimicry Legitimation Success
(growth, resources)
mimicry as an
(mimetic or normative)
malaise
Organizational Leadership Value Creation
Perpetuation
Front-line worker Act with Concerned
Compliance Choices Flexibility

21. Chile’s problem?
 Chile has successfully avoided the problems of
Afghanistan, Somalia (complete state failure) or even
of India, or other Latin American states of a “flailing”
state with weak capability to implement policy and
hence slippage (e.g. corruption, ineffectiveness)
 But… in making the final push to its legitimate
aspirations as an OECD country, what are the dangers
of isomorphic mimicry?

22. To catch the OECD Chile has to do it better
than the OECD…it cannot win a race of
“more of the same”
This way be (fiscal)
Dragons…imitating other
OECD systems leads to high
cost isomorphic mimicry….
“We’ll have OECD performance
when we have OECD inputs”

23. Education for instance: “normative
isomorphic mimicry” is not a strategy
for OECD performance
Empirical illustrations from Mexico or Brazil that expanding spending, at existing
associations of spending with learning outcomes leads to very little gain—even at
FIVE TIMES higher absolute spending only 20 points of the gap is closed (or at
Denmark’s ratio of spending to GDP only about 20 points gain)
Source: Pritchett (forthcoming), chapter 4

24. Can Isomorphic mimicry
camouflage be sabotaged?
 How can the space for innovation be created for
scalable ideas?
 How can performance measures get real traction over
behavior of organizations?
 De-legitimization of “looking like a state” or merely
looking like success
 Authorization of directed positive deviation: swap
freedom to innovate for higher performance
accountability

25. Mixture of “orthodoxy”—foundations in
“compliance”—but need “positive deviations”
to be authorized and evaluated
Mark Morris dancing the female lead in Dido and
Aenas—classic tradition—Greek myth, Baroque
opera but with innovation

26. Policy Makers
Design policy based on
global “best practice”
Organizations & Agencies
Implement according to local constraints
Policies Process
include Rent Seekers Bureaucrats Innovators controls
process also prevent
barriers to potentially
prevent Space for useful
malfeasance Achievable process
Practice deviations
Lower Higher
Outcome Outcome
Outcome

27. Policy Makers
Design water/sanitation program
Typical Practice
on local “Best Fit ”
Internal authorization of positive deviation
Rent Seekers Bureaucrats Innovators
Policy Deviation
Space for
Achievable
Practice
Feedback on
Outcomes
Lower Standard Better
outcomes outcomes outcomes

28. “Modern” State,
Disruptive innovation
Weberian Ideal, (Christensen 2007)—
High Appropriate for surpass leaders from
“high-end” users
below—not head to head
21st Century State,
Context specific,
Appropriate for
most users
Capability
Pursuit of
“Best Fit”
“Disruptive
Weak processes technology,
or technology Appropriate for
“low-end” users
Low
Low Affordability High

29. Summary
 Successful outcomes from policy depend on policy
implementation not just policy
 Policy implementation is determined by the structures of
systems—not the will of agents
 Isomorphic mimicry—the imitation of the trappings of
functional systems without their drive for performance is a
constant risk in public systems
 Sabotage of camouflage is de-legitimation of just “looking
like a state” and creating space and evaluation of scalable
systemic innovations—performance measurement and
positive deviation
 Disruptive innovation—jumping past best practice rather
than imitating one’s way to success

30. My work drawn on
 Andrews, Pritchett, Woolcock, 2010, “Capability Traps? The
Mechanisms of Persistent Implementation Failure”
http://www.cgdev.org/content/publications/detail/1424651
/
 Spartans, Paper Tigers and Keystone Cops: The
Financial Crisis of 2008 and Organizational Capability
for Policy Implementation
 Hallward-Driemeier and Pritchett, 2011, “Doing
Business and How Business is Done: Measuring the
investment climate when firms have climate control”
 The Rebirth of Modern Education (chapters available
at http://www.hks.harvard.edu/fs/lpritch/