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Building Capability By Defying Best Practices: The Case of China
World Bank Conference“Enhancing the Quality of Service Delivery”
January 16-17, 2017
Yuen Yuen Ang
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Connection to Conference Theme
CONFERENCE THEME: building state capability to implement solutions to complex problems
EXISTING ARGUMENTS: PDIA, pragmatism, incremental problem-solving, trial-and-error
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My Argument: A Radical Brand of Pragmatism
Leverage what appears to be weak institutions or wrong practices to kick-start development in developing countries.
For example: corruption, patronage, profit-sharing within public sector, piracy, communist political structures, tribal networks, etc.
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What’s the Logic?
We may only spark change in poor societies with what they have… not with what we wish they had.
Normatively weak/bad institutions can be functionally strong.
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Sources
Book: How China Escaped the Poverty Trap (CUP, 2016)
Article: “Beyond Weber: Conceptualizing an Alternative Ideal-Type of Bureaucracy in Developing Contexts.” (Regulation & Governance)
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THE CASE OF CHINA
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Local development paths are distinct yet interconnected.
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Forest Hill City, Fujian Province
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Economic Wealth
Good governance/strong
institutions
Chicken-and-Egg Problem of Development
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A multi-step, co-evolutionary
sequence of development
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1993: Central government accelerated market liberalization
Adopt en masse,
personalized investment promotion
Establish a specialized, professional investment
agency
OR
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GOALS.
CONSTRAINTS.
RESOURCES.
Defining Conditions of Early Development
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1993: Central government accelerated market liberalization
Establish a specialized, professional investment
agency
Adopt en masse,
personalized investment promotion
ORGOAL“In the past, our goal was to
push for rapid economic growth, so we welcomed any
investor.”
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1993: Central government accelerated market liberalization
Establish a specialized, professional investment
agency
Adopt en masse,
personalized investment promotion
ORCONSTRAINTS
Bureaucracy left over from Maoist era. Can’t fire anyone.
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1993: Central government accelerated market liberalization
Establish a specialized, professional investment
agency
Adopt en masse,
personalized investment promotion
ORRESOURCE“Businesses invest here
because of personal relationships.”
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1993: Central government accelerated market liberalization
GOALS.
CONSTRAINTS.
RESOURCES.
En masse, personalized investment promotion (bee hive campaign)
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Back then, our commercial parks had no plan. A tofu factory sat beside
another factory making fiberboards. How was that going to work?
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CHANGE OF PRORITIES REFLECTED IN ANNUAL
GOVERNMENT WORK REPORT
Prior to 2003, work reports emphasize “speed” and
“expansion.”
Word “quality” first appeared in 2003
“Quality” appeared in first line in 2007
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CHANGE IN DESIGN OF AGENCY TARGETS OVER TIME
Agencies evaluated by amount of investments…
Then by number of projects that exceeded certain scale
Then by number of projects in state-selected sectors
Investment targets abolished altogether
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In essence, what’s the simple—but not simplistic—
story of development?
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Step 1:
Harness existing weak institutions to
build markets
Step 2:
Emerging markets stimulate strong
institutionsStep 3:
Strong institutions
preservemarkets
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Cross-national extension of theory
Late medieval Europe:
Communalproperty rights
Antebellum United States:Risky taxless
financing schemes
Contemporary Nigeria: Piracy as
distribution channel
Unlike China, none are centralized authoritarian regimes, yet markets were built through normatively weak institutions or wrong practices.
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Conclusions
1. A radical brand of pragmatism, tailored to poor, traditional, weak societies Go beyond saying that we should adapt, experiment, incrementally solve
problems.
2. Normatively weak/bad institutions can be functionally strong Think about institutions functionally rather than normatively
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Thank You