Democracy Lab

Make Way for the Hybrids

Yes, institutions are important. But institutions that actually work are even better.

Development experts are often quick to focus on the role of institutions. They are, simply put, the "rules of the game" derived over time that drive politics, economics, and other social interactions. Social scientists like Douglass North, Daron Acemoglu, and Jim Robinson have shown that these rules strongly influence how countries grow and develop. Over decades, theorists and development practitioners have compiled what one might consider a script of the "right" rules and institutions needed to foster economic growth and open societies with good governments that advance the needs of their citizens. But despite all the good intentions, this western-created game plan hasn't quite worked out as expected.

Organizations like the World Bank have supported institutional reforms in developing countries for more than two decades now, often making it the backbone of their development agendas. Such work accounts for billions of dollars of development spending each year, devoted to creating democratic electoral processes, robust public financial management systems, effective anticorruption regimes, and other new rules of the game in countries ranging from Afghanistan to Uganda.

At first glance, many of these reforms seem to have yielded success. In Afghanistan, for example, new laws adopted after 2003 have modernized the government's budgeting and financial management system. The system's quality was ranked "higher than a middle-income country" in a 2008 assessment using the multi-donor Public Expenditure and Financial Accountability (PEFA) framework, which compares countries' governance systems with what is considered "international good practice." Similarly, Uganda's anticorruption reforms have produced new laws that donors tout as world-class. The think-tank Global Integrity rated these laws as best in the world in 2008, giving them a perfect 100 score. Canada scored 90; Italy got 82.

When one examines these reforms more closely, however, the picture is less impressive. While Afghanistan's public financial management system may look like one in a middle-income country, donors still express reservations about whether funds are actually spent where the budget says they are. Allegations of corruption are rife, and financial controls that work in the central ministry of finance buildings in Kabul are still not operational in many sectoral ministries (especially those located outside the capital) where most spending remains outside of the national budget. The gap between appearance and reality becomes evident upon examination of the PEFA data used to assess the system, which shows that laws and budgets on the books bear little relationship to their implementation. Similarly, while Uganda's anticorruption laws may look perfect, that's hardly how they function in practice. Corruption is commonplace, and a string of high-profile corruption cases have caused donors to withdraw funding from the country as recently as November 2012. This is reflected in the data from Global Integrity, which scores the country's anti-corruption laws at a perfect 100 but rates implementation of laws at only 51, leaving a "huge" implementation gap of 49.

Such gaps between what institutions look like and how they're put into practice are commonplace in developing countries. They reveal the limits of institutional reforms in development and suggest the need to correct the way these reforms are currently done.

My research shows, for instance, that over 80 percent of developing countries experience major implementation constraints after years of public financial management reform. Countries make budgets better after reforms but commonly fail to execute the budgets as they are written. They draw up best-in-class procurement regulations that are seldom implemented, and adopt internationally accepted accounting standards required by donors -- but with little hope of actually doing their accounting in accordance. What's more, studies suggest that there is little reason to believe this gap between form and function closes over time. In fact, the limited existing evidence shows that the gap widens with the years, as reforms help countries craft ever-better laws and formal procedures instead of focusing on better implementing the laws and procedures that already exist.

When looking at Global Integrity data, for instance, it appears that the average gap between the quality of anti-corruption laws and their actual implementation widened for developing countries between 2008 and 2011, from 32 to 35, regardless of institutional reforms. (I'd argue, in fact, that the reforms may have exacerbated the problem.) This gap is more than twice that in richer countries, where corruption is less of a problem.

My research shows that blind confidence in the "best practice" institutional approach often leads reformers to devise plans without any real attention to the context. External reform planners promote internationally "appropriate" institutions but neglect to ask if these new rules of the game can actually be implemented.  Developing countries are being pressured to introduce international accounting standards, for instance, even when there are no internationally accredited accountants in the country, the idea of an accounting "profession" is not established, and businesses do not accept the high levels of disclosure demanded by these new standards. Officials in the developing countries  have every incentive to act as champions of reforms focused on introducing such poorly fitted institutions  to garner external support (like funding from a donor). But they either never intend to fully implement the new institutions (knowing from the outset that they won't work), or soon run into problems when they attempt to carry them out. In this kind of game -- where incentives are tied to measuring what the funding institution can tangibly evaluate -- it should not be surprising that the real and often hidden rules of the game remain unchanged and dysfunctional even after reforms are completed. What you see is not what you get after reforms.

Not all efforts at institutional development have failed, however. Consider, for instance, Rwanda's tradition-based Imihigo initiative to increase the delivery of government services. This reform emerged over the past fifteen years in order to dramatically improve provision of basic services in districts where deficient services had led to dissatisfaction and violence in the 1990s. Initiative to take action began after 1995 through the engagement of many parties, including (though not dominated by) international organizations. In contrast to many institutional reform experiences, these parties did not start with a script for "institutional reform." Instead, they tackled a specific problem: The lack of service delivery in local governments, which had fed tensions that led to the country's genocide.

Spurred by common concern over this problem, groups of officials began meeting in the late 1990s. Those involved included the president, the minister of local government, other civil servants, and international development specialists. They built on lessons from prior (failed) efforts to establish local governments and, in 1998, started experimenting. Using a small World Bank loan of $5 million, they financed different service delivery initiatives in a variety of districts. The results and lessons of these experiments inspired a second wave of experiments in the early 2000s, which led to a rolling process of policy formulation and decentralization (supported by a range of external organizations and donors). Every few years the government assessed the lessons learned in this process, adjusted what it was doing, and took another step forward.

Progress made from Rwanda's problem-driven and history-minded approach became evident by the mid-2000s. Reforms matured to a point where district administrations were well established, financial flows had been structured to fit Rwandan realities, and districts were starting to lead service provision. But there was no way to monitor performance or create incentives for the districts to pursue high levels of performance. The reform group started looking for ways to address this specific problem. They eschewed many "best practice" modern models of performance management as poorly fitted to their context, and looked instead to a forgotten Rwandan tradition called Imihigo. According to this tradition, monarchs used a simple reporting and rewards process to ensure that regional appointees were managing their regions well. These appointees gathered together at various points of the year and had to report, in a group, on what they had done. If the monarch deemed their performance acceptable, they could drink from a common calabash and were publicly recognized. If not, they were publicly passed over.

A version of this was adopted on an experimental basis in 2006. It involved mayors reporting in a public space to the president or prime minister; and providing photographs, testimonies, and other visible evidence of performance. Early lessons were captured, and the Imihigo process was improved and diffused throughout the country, at first on the district level, and more recently on the national government level. It is a peculiar-looking Rwandan performance management hybrid that does not fit any best practice script, but that addresses specific problems and enhances functionality.

The Imihigo example points to various principles common to many institutionally-focused reforms that do yield more functional governments. First, they're problem-driven, meaning that they're not informed by pressures to adopt a script of the "right" rules. Second, they emerge through iterative, trial-and-error processes of experimentation and learning (with tight feedback loops) that allow adjustment -- rather than rigidly programmed projects that lock a "best practice" reform design into place for five to ten years. Third, they involve groups of leaders distributed across the government, not singular champions sitting atop a closed hierarchy.  

My colleagues Lant Pritchett, Michael Woolcock, and I merge these principles into a new way of thinking about doing institutional reform in development, called "problem-driven iterative adaption" (PDIA). PDIA embodies our belief that context has to be taken into account if we wish to promote institutional reform and good governance in developing countries. It eschews the idea of generic "right" rules, and instead promotes flexible processes that allow countries to find the kind of hybrids that are accepted and implementable in their particular contexts. These kinds of institutions actually work (by influencing and shaping behavior), and are vital for development.



Is This a Pandemic Being Born?

China's mysterious pig, duck, and people deaths could be connected. And that should worry us.

Here's how it would happen. Children playing along an urban river bank would spot hundreds of grotesque, bloated pig carcasses bobbing downstream. Hundreds of miles away, angry citizens would protest the rising stench from piles of dead ducks and swans, their rotting bodies collecting by the thousands along river banks. And three unrelated individuals would stagger into three different hospitals, gasping for air. Two would quickly die of severe pneumonia and the third would lay in critical condition in an intensive care unit for many days. Government officials would announce that a previously unknown virus had sickened three people, at least, and killed two of them. And while the world was left to wonder how the pigs, ducks, swans, and people might be connected, the World Health Organization would release deliberately terse statements, offering little insight.

It reads like a movie plot -- I should know, as I was a consultant for Steven Soderbergh's Contagion. But the facts delineated are all true, and have transpired over the last six weeks in China. The events could, indeed, be unrelated, and the new virus, a form of influenza denoted as H7N9, may have already run its course, infecting just three people and killing two.

Or this could be how pandemics begin.

On March 10, residents of China's powerhouse metropolis, Shanghai, noticed some dead pigs floating among garbage flotsam in the city's Huangpu River. The vile carcasses appeared in Shanghai's most important tributary of the mighty Yangtze, a 71-mile river that is edged by the Bund, the city's main tourist area, and serves as the primary source of drinking water and ferry travel for the 23 million residents of the metropolis and its millions of visitors. The vision of a few dead pigs on the surface of the Huangpu was every bit as jarring for local Chinese as porcine carcasses would be for French strolling the Seine, Londoners along the Thames, or New Yorkers looking from the Brooklyn Bridge down on the East River.

And the nightmarish sight soon worsened, with more than 900 animal bodies found by sunset on that Sunday evening. The first few pig carcass numbers soon swelled into the thousands, turning Shanghai spring into a horror show that by March 20 would total more than 15,000 dead animals. The river zigzags its way from Zhejiang province, just to the south of Shanghai, a farming region inhabited by some 54 million people, and a major pork-raising district of China. Due to scandals over recent years in the pork industry, including substitution of rendered pig intestines for a toxic chemical, sold as heparin blood thinner that proved lethal to American cardiac patients, Chinese authorities had put identity tags on pigs' ears. The pig carcasses were swiftly traced back to key farms in Zhejiang, and terrified farmers admitted that they had dumped the dead animals into the Huangpu.

Few Chinese asked, "What killed the pigs?," because river pollution is so heinous across China that today people simply assume manufacturing chemicals or pesticides fill the nation's waterways, and are responsible for all such mysterious animals demises. The Yangtze, which feeds Shanghai's Huangpu, has copper pollution levels that are 100 times higher than U.S. safety standards, and leather tanning facilities along the river have notoriously been responsible for toxic waste, including chromium. And across China -- especially in Beijing -- air pollution was so bad in January and February that pollution particulate levels routinely peaked at higher than 10 times the U.S. safety standards set by the Environmental Protection Agency. When I was in Beijing in late January, the air pollution was so thick that it visually looked like fog, obscuring all sunlight and even skyscrapers located less than three city blocks away. So, hideous as the pig carcasses might be, Shanghai residents tended to shrug them off as yet another example of the trade-offs China is making, pitting prosperity against pollution.

But 12 days after the first Shanghai porcine death flow was spotted, pig carcasses washed up along the shores of Changsha's primary river, the Xiang -- also a Yangtze tributary, this one located hundreds of miles west of Shanghai. Known as "the Sky City" for its 2,749-foot-tall central tower, Changsha is home to more than 7 million people and capital of Hunan province. Along with some 50 dead pigs, authorities collected a few thousand dead ducks from the Xiang on March 22 and 23.

Two days later, another mass duck and swan die-off was spotted, this time along the Sichuan River hundreds of miles to the north, near Lake Qinghai. The lake is the most important transit and nesting site for migratory aquatic birds that travel the vast Asia flyway, stretching from central Siberia to southern Indonesia. In 2005, a mass die-off of aquatic birds in and around Lake Qinghai resulted from a mutational change in the long-circulating bird flu virus, H5N1 -- a genetic shift that gave that virus a far larger species range, allowing H5N1 to spread for the first time across Russia, Ukraine and into Europe, the Middle East and North Africa -- it has remained in circulation across the vast expanse of Earth for the last seven years.

On March 25, Chinese authorities seized manufactured pork buns that were found to be made from Zhejiang pigs that had died of the mysterious ailment. The possibly contaminated pork was in the Chinese food supply. By the end of March, at least 20,000 pig carcasses and tens of thousands of ducks and swans had washed upon riverbanks that stretch from the Lake Qinghai area all the way to the East China Sea -- a distance roughly equivalent to the span between Miami and Boston. Nobody knows how many more thousands of birds and pigs have died, but gone uncounted as farmers buried or burned the carcasses to avoid reprimands from authorities.

While environmental clean-up and agricultural authorities scrambled to remove the unsightly corpses and provide the anxious public with less-than-believable explanations for their demise, a seemingly separate human drama was unfolding. On Feb. 19, a man identified by Xinhua, China's state news agency, only as Li, an 87-year old retiree, was hospitalized in Shanghai with severe respiratory distress and pneumonia. On March 4, Li went into severe cardio-respiratory failure and succumbed.

On Feb. 27, a man identified only as Wu, a 27-year-old butcher or meat processor, fell ill with respiratory distress, was hospitalized, and died on March 10. The day Wu succumbed a third individual, a 35-year-old woman identified as Han, was hospitalized in the city of Nanjing, though she came from distant Chuzhou City, in Anhui province, about 300 miles northwest of Shanghai. Han is reportedly in critical condition, in intensive care. To date, no connection between the three individuals has been found.

The elderly Li may have been part of a family cluster of illness, as his 55-year old son died of pneumonia in March, and another 67-year-old son suffered respiratory distress, but has survived.

On March 31 -- Easter in the United States -- China's newly created National Health and Family Planning Commission (which includes the former Ministry of Health) announced that 87-year-old Li, Wu, and Han all were infected with a form of influenza denoted as H7N9 -- a type of flu never previously known to infect human beings. The commission insisted that Li's two sons (one dead, the other a survivor) were not infected with the flu virus -- their ailments were reportedly coincidental, though they occurred at the same time as the elder Li's demise.

So much for the backstory: What is going on?

According to Chinese authorities, some of the dead pigs tested antibody-positive for circoviruses, or PCV-2, and samples of the virus were isolated from Huangpu River. The implication was that the Shanghai pigs died of PCV-2, a type of virus that is harmless to human beings, as well as birds. Photographs of the carcasses reveal that the animals were large adult hogs, but PCV-2 does not kill adult pigs -- it is lethal to fetuses and newborn piglets.

The Chinese health authorities have to date offered no cause of death for the ducks and swans, failed to describe any unusual genetic features that might have turned the PCV-2 into an adult pig-killer virus, and insisted there is no connection between the pigs, people, and birds. Though the surviving woman, Han, had some contact with live chickens, according to Xinhua, neither Li nor Wu had any known contact with birds. Wu has been identified variously as a butcher, meat processor, and employee of a meat plant -- all of which might imply he had contact with pigs.

Influenzas are named according to the specific nature of two proteins found on the virus -- the H stands for hemaggluntinin and the N for neuraminidase. These proteins play various roles in the flu-infection process, including latching onto receptors on the outside of the cells of animals to transmit the virus into their bodies. Those receptors can vary widely from one species to another, which is why most types of influenza viruses spreading now around the world are harmless to human beings. As far as any scientists know, the H7N9 forms of flu have never previously managed to infect human beings, or any mammals -- it is a class of the virus found exclusively in birds. It is therefore extremely worrying to find two people killed and one barely surviving due to H7N9 infection.

One very plausible explanation for this chain of Chinese events is that the H7N9 virus has undergone a mutation -- perhaps among spring migrating birds around Lake Qinghai. The mutation rendered the virus lethal for domestic ducks and swans. Because many Chinese farmers raise both pigs and ducks, the animals can share water supplies and be in fighting proximity over food -- the spread of flu from ducks to pigs, transforming avian flu into swine flu, has occurred many times. Once influenza adapts to pig cells, it is often possible for the virus to take human-transmissible form. That's precisely what happened in 2009 with the H1N1 swine flu, which spread around the world in a massive, but thankfully not terribly virulent, pandemic.

If the pigs, people, and birds have died in China from H7N9, it is imperative and urgent that the biological connection be made, and extensive research be done to determine how widespread human infection may be. Shanghai health authorities have tested dozens of people known to have been in contact with Wu and Li, none of whom have come up positive for H7N9 infection. Assuming the tests are accurate, the mystery of Li and Wu's infections only deepens. Moreover, if they are a "two of three," meaning two dead, of three known cases, the H7N9 virus is very virulent.

"At this point, these three are isolated cases with no evidence of human-to-human transmission", the WHO representative in China, Dr. Michael O'Leary, told reporters on Monday. But, O'Leary added, the possibility of a family cluster of illness could not be ruled out, and, "We don't know yet the causes of illness in the two sons, but naturally, if three people in one family acquire severe pneumonia in a short period of time, it raises a lot of concern."

But Hong Kong authorities, smarting from years of outbreaks spread from mainland China including H5N1 (1997) and SARS (2003), have put the territory on health alert. "We will heighten our vigilance and continue to maintain stringent port health measures in connection with this development," the Centre for Health Protection in Hong Kong stated in a press release on Monday.

The Chinese National Influenza Center has posted the H7N9 genetic sequences of viruses from Li, Wu, and Han on the WHO flu site. A number of H7N9 sequences found in birds over the last few years are also posted: The human and bird strains do not match, though none of the birds strains were obtained from animals in 2013.

The mystery is deep, the clock is ticking, and the world wants answers.

If we were imagining how a terrible pandemic would unfold, this could certainly serve as an excellent script.

Timeline of Events

Feb. 19

Feb. 27

March 4

March 9

  • First female patient, 35, from Anhui province became ill with H7N9 (Telegraph).

March 10

  • Initial report of over 900 dead pigs in Shanghai's Huangpu River as of Saturday, March 9 (China Daily)

March 11

  • Count of dead pigs in rivers near Shanghai reaches nearly 3,000 (Business Insider).
  • Laboratory tests find porcine circovirus (PCV) in one water sample from Huangpu River (Xinhua News)

March 13

  • Officials say the number of pig carcasses in Huangpu River has risen to 6,000 (BBC).

March 14

  • Workers continued to haul dead hogs from a river in the Shanghai suburbs Thursday, where the pig body count now exceeds 6,600, according to the municipal government (USA Today).
  • Farm in Zhejiang province confesses to dumping pig carcasses into river (Bloomberg)

March 20

  • The number of dead pigs discovered in Chinese rivers around Shanghai has risen to almost 14,000 (BBC).

March 22

  • 50 pigs wash up onshore in Changsha, Hunan province; ~1,000 dead ducks are also discovered (NTDon China via YouTube)
  • Number of dead pigs found in Shanghai river rises to 16,000 (Independent)

March 25

  • China pulls 1,000 dead ducks from Sichuan river (BBC).
  • Government officials say that 1,000+ rotten duck carcasses pose no threat to human and livestock along river banks (Xinhua News).

March 26

  • Dumping of thousands of dead pigs linked with Chinese crackdown on pork black market (Business Insider)
  • More than 1,000 dead ducks, in 60 woven plastic bags, are found in Sichuan province (China Daily, Time).

March 31

  • The government's National Health and Family Planning Commission said over the weekend that two men, aged 87 and 27, died in Shanghai in early March after being infected with H7N9 avian influenza (AFP).

April 1

  • Widespread reporting about two human deaths and one severe casualty of a "lesser-known bird flu virus" (USA Today, AP).
  • Dr. Michael O'Leary, World Health Organization, says that there is no evidence to show that a type of bird flu which has killed two Chinese men can be transmitted between people (Reuters).

April 2

  • Shanghai Animal Disease Prevention and Control Center tested 34 samples of pig carcasses pulled from Huangpu River and found no flu viruses (Shanghai Daily).


China Photos/Getty Images