How organisational interests and capacities play a role in shaping development

Case studies

Case Study , 2020 , 12 Pages , Grade: 1.7

Politics - Topic: Development Politics

Less attention, however, has been paid to the role of organisational interests and capacities for shaping development outcomes. In the following, their role as well as that of surrounding factors will be illuminated. It will be argued that comprehensive analyses of a development organisations behaviour-outcome-nexus has to rely on structural aspects, including contexts, trends, organisational logics and goals.

First of all, in order to understand the behaviour-outcome-nexus, one has to take a step back and shed light onto the structures in which these development organisations (DOs) operate. As it is frequently pointed out, the higher the number of (I)NGOs in a transnational sector such as development , the higher the (in)direct transaction costs. This includes, for example, costs related to selecting recipients, monitoring aid projects and collecting information and funds more generally. Consequently, and acting in both directions, the higher the transaction costs for a respective DO, the higher the uncertainties and competition.

In the last few decades, the proliferation of (transnational) development organisations (DOs) reached ever unprecedented new levels.¹ Consequently, the sector was rendered ever more complex and its internal dynamics increasingly difficult to be comprehensively understood. In 2013, around 40,000 international non-governmental organisations ((I)NGOs) alone were counted (Ben-Ari 2013) of which a vast number is directly or at least indirectly engaged in development processes. It can be expected that since then this number further increased significantly, as most aid donors are not particularly specialised, neither in countries nor sectors (World Bank 2003). Unsurprisingly, the competition for resources between the development actors equally increased since the mid-1970 - and with it ever more debates about the efficiency of aid as such were sparked. Less attention, however, has been paid to the role of organisational interests and capacities for shaping development outcomes. In the following, their role as well as that of surrounding factors will be illuminated. It will be argued that comprehensive analyses of a DO’s behaviour-outcome-nexus has to rely on structural aspects, including contexts, trends, organisational logics and goals.

First of all, in order to understand the behaviour-outcome-nexus, one has to take a step back and shed light onto the structures in which these DOs operate. As it is frequently pointed out, the higher the number of (I)NGOs in a transnational sector such as development², the higher the (in)direct transaction costs (e.g. Cooley & Ron 2002, Acharya et al. 2006). This includes, for example, costs related to selecting recipients, monitoring aid projects and collecting information and funds more generally (e.g. Martens 2005). Consequently, and acting in both directions, the higher the transaction costs for a respective DO, the higher the uncertainties and competition that it faces. Less surprisingly, this is exacerbated with the degree of fragmentation of the development sector.³

Considering these circumstances, focusing on (historical) contexts, Taiwan is frequently considered a "best practice”-example and even claimed to be ‘[the] greatest success [of development aid]’ (Acharya et al. 2006, p.1). The East Asian state experienced a rapid economic development in the 1950s and 1960s which some authors (e.g. Jacoby 1966, Easterly 2006) ascribe mostly to the concerted actions of one single (US-American) aid programme. In those decades, Taiwan’s development sector could be considered rather homogeneous than fragmented and the USA as single donor followed an interventionist and authoritative approach towards the recipient’s government regarding the use of aid (Jacoby 1966). Crucially, even though the correlation is striking, the (channels of) causation remain(s) unclear. This is since Taiwan’s rapid economic development can hardly be compared to a potential control group (i.e. a state similar in multiple aspects) that would have rendered the comparison into a so-called “(quasi)natural experiment”. Furthermore, the (historical) context drastically changed, exacerbating the difficulties with counterfactuality and replicational research.

By the same token, focusing on trends, a plethora of existing incentives may lead DO’s to pursue predominantly the donor’s agendas rather than solutions to what appears most urgent “on the ground”.⁴ This not only includes the prevalence of shortterm contracts and the practice of renewable contracting between donors and contractors, but equally the increasing marketisation of DO activities. Belonging to the latter and potentially changing an organisation’s own interests and capacities, "managerialism” can be considered an ever more expanding phenomenon among International Organisations (lOs). Crucially, weighing out the benefits that an increase in the number of external consultants as transnational professionals may have for an organisation in the short- or even medium-term, it can be argued that this rationalisation process produces manifold longer-term tensions within these bureaucratic organisations (Seabrooke and Sending (2019). Even though not changing the bureaucratic form of IOs themselves, how they perform key tasks and relate to member states can be significantly affected by the increased reliance on consultants. This includes, similar to the already mentioned notion of "short-termism” in the donor-contractor-relations, the consultants’ incentives to behave in ways most likely to secure their future contracts first (Ibid.). In addition to that and particularly detrimental in the long run, an increased reliance on consultants may potentially also undermine the respective IO’s own staffs’ "cognitive authority” in their fields of expertise (Broome & Seabrooke 2012) as well as the institutional memory more generally (Seabrooke & Sending 2019).

It must be stressed that not only IOs are affected by this trend as part of marketisation practices. DOs and other kinds of organisations more generally are similarly affected by what Meyer and Bromley (2013, p. 374) define as the "rise of abstract managerialism”: a world cultural frame promoting organisation via ‘strategic planning, quantitative program evaluation, audits, and the use of consultants’. Similar to the case of IOs in particular, they (p.379) further argue that abstract managerialism can lead to drastic changes in an organisation’s identity and even shifts towards "means-end-purposiveness”. What may (un)intentionally result is the shrinking of "development space”, originally defined by Wade (2003, p. 622) in reference to the ‘diversification and upgrading policies in developing countries’. Whilst Wade exemplified his argument with the World Trade Organisation as an IO as such, Seabrooke and Sending (2019) shine light on the intra-organisational micro-processes that may lead to shrunk development space, as it is illustrated in Figure 1 (Ibid., p. 4):

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Figure 1: How a recent trend can have (un)intended consequences.

It must be highlighted, however, that development space is anything but equal to development outcomes. To the best knowledge of the author, until now no further attempts were taken to elaborate on Wade’s (2003) concept, despite its promising potential to explain the latter on a macro-/state level. On the micro- and meso-level, in turn, the resembling notion of organisational capacities is fundamental for explaining development outcomes. Rather than being solely constituted by the sum of all parts of an organisation, its capacities themselves are subject to intra- and extra-organisational logics.

For the case of foreign aid agencies (FAAs), this includes the fundamental question of why they exist in the first place. Unsurprisingly, in a world with no transaction costs and fully shared preferences between donors and recipients, there would be no need for them. As this ideal is far from reality, however, it can be argued that FAAs’ main role lays in solving the so-called ownership problem originating from the broken feedback loop between donors and recipients (Martens 2005). More precisely, since the recipients of transnational aid programmes usually live outside the donors’ own political constituency, the latter can hardly be held accountable, for example in elections. FAAs, thus, to some extent help create this feedback loop by mediating between their diverging preferences. In doing so, and despite their own funding requirements, FAAs furthermore reduce overall transaction costs and uncertainties on both sides by creating institutional arrangements (Martens 2005). Frequently, however, this leads to the inglorious practice of "aid conditionality”, as it was most prominently practised by the World Bank and the International Monetary Fund with their so-called structural adjustment programmes particularly in the 1980s. Although being anything but undisputed, on the one hand, the conditionality of aid depending on the quality of policies may increase its impact on the economic growth of recipient countries (Burnside & Dollar 2000). On the other hand, input- or outputcentred aid conditionality itself may distract from more pressing issues "on the ground”. This is excellently illustrated by Easterly (2006) in his critique of how the international community attempted to eradicate HIV/AIDS and the role that visibility played in it.

Although making international headlines as early as the mid-1980s, it took until the early 1990s that efforts were concertedly taken to limit the proliferation of the human immuno-deficiency virus originating from the African continent. Crucially, for years the plethora of actors ranging from local NGOs to the UN-program UNAIDS were guided by visible outcomes easily communicable to their (Western) donors, particularly the focus on treating already infected patients rather than prevention programmes (Ibid.). On the one hand, major publications as early (or late?) as 2002 unambiguously suggested that prevention programmes both in the short- and in the long-term would help saving hundreds of thousands of lives and millions of USD, compared to the more cost-intensive treatments (e.g. Creese et al. 2002). On the other hand, Easterly’s (Ibid.) attempt to advocate for the (almost) complete re-channelling of resources from treatment to prevention may appear morally questionable as antiretroviral treatment

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¹ For the sake of this essay, DOs can be understood as including, among others, international organisations as well as bilateral and multilateral (aid) agencies such as development banks.

² It remains doubtful as to whether a comprehensive definition of the development sector can be formulated due to the sector’s complexity of actors and interests.

³ Interestingly, this may be further exacerbated in the future if more states are to be considered “developed” as bilateral aid programmes are often set up to demonstrate a country’s own status of development (Archarya et al. 2006).

⁴ Unsurprisingly, to what extent this can even represent a shift of advocacy approaches is highly variable.

• College: School of Oriental and African Studies, University of London (Development Studies)
• Course: Development Practice
• Grade: 1.7
• Author: Max Schmidt (Author)
• Publication Year: 2020
• Pages: 12
• Catalog Number: V978882
• ISBN (eBook): 9783346339478
• Language: English
• Tags: case