- FX- --Africa Region Working Paper Series
Number 36
i        J'tterri   of Governance
in- Africa
13rian- Levy
SeptemL2er 2002
The World Bank
4, 



PATTERNS OF GOVERNANCE IN AFRICA
Africa Region Working Paper Series No. 36
September 2002
Abstract
This     paper   outlines  a   systematic       managerial and organizational reforms is
framework for considering govemaance            appropriate   in  countries   where   the
comparatively    across  counltr-ies.  The      institutions  of   political  governance
resulting typology   distinguishes among        already  are  quite  strong. But where
different   country     starting   points       adequate political institutions are not yet
according to the quality of political and       'locked-in', reforms should focus more
administrative    governance.        The        on demand-side, participative initiatives
typology is applied across 22 African           which     foster    civic    participation
countries (usino data from   1996).  The        (including    user    participation   and
paper explores how to fit the design of         oversight in service delivery, and system
programs of action to strengthen public         re-orientation to empower and build the
sector performance to divergeent country        capacity of local governments).
starting points. It concludes that a focus
on
Author
Brian D. Levy
Sector Manager
Public Sector Reform & Capacity (AFITPR)
E-mail: BlevyWworldbank.org
The Africa Region Workinlg Papdr Series expedites dissemination of applied researchi and policy stuidies
withi potential for improving economic performanlce anid social coniditionzs in Suib-Salarani Afirica. The Series
publishes papers at preliminary stages to stimuitilate timiiely discuissioni wLithin thie Region anid anmong clienit couniitries,
dontors, and the policy researclh communiiiiiiity. Tlhc editorial boardfor the Series conzsists of representatives firom
professional families appoinited by the Regioni's Sector Directors. For additioinal information, please contact Paulla
Wh ite, managing editor of the series, (81131), Emlail: pzt?hite2@vorldbank.org or visit the Web site:
littp:/hAtonzt.zo-ldbank.org/afrAe'v7s/inzdex.lihtl.
The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s),
they do not necessarily represent the views of the World Bank Group, its Executive Directors, or the countries
they represent and should not be attributed to them.



PATTERNS OF GOVERNANCE'
IN AFRICA
Brian Levy
September 2002
The term 'governance' tends to be very loosely used, with no consistent definition. A definition consistent with
this paper is "the manner in which power is exercised in the management of a country's economic and social
resources" (World Bank, Governance and Development, 1992). More broadly, for the purposes of the present paper
governance should be interpreted as encompassing both the 'rules of the game' (i.e. institutions), and the players of
the game (i.e. bureaucrats and politicians). Indeed, the distinction between the institutional and organizational
dimensions of governance is a central theme of the paper.



LAcknowledgements
am grateful to Paula Donovan, Alan Gelb, Phil Keefer, Brian Ngo and my colleagues in AR's
eoPublic Sector Reform and Capacity Building Group (AFIPR) for comyents on earlier versions
oof this paper. Remaining er-rors and misinterpretations are, of course, my own.



PATTERNS OF GOVERNANCE IN AFRICA
Table of Contents
1.    Introduction ......................................................1
2.    The Governance of African States: Some Empirical Patterns ..........................................2
Assessing the Extent of Formal Rule-Bound Governance ......................................................      2
Assessing the 'Credibility' of Political Authority ......................            ................................4
Assessing the Quality of Bureaucracy ...........6..........................................6
3.    Meeting the Challenge of Governance and Bureaucratic Reform ....................................9
Strengthening governance .....................................................                                  10
Improving the Quality of Bureaucracy ..................................................... 13
Institutional options when governance is "weak" .....................................................           16
Annex 1: Dimensionalizing Governance - Some Antecedents .................................................... 18
Annex     2: Characteristics of the WDR Africa Sample .....................................................        21
Annex 3: The Robustness of the Governance Indicators .....................................................           22
Bibliography .....................................................                                                 26






1.     Introduction
In recent years, researchers and practitioners have made major strides in understanding
some of the key institutional attributes of effective states. While a wide variety of institutional
arrangements are workable, well-functioning public institutions are generally thought to have
certain important characteristics in common. Decision-making processes and the resulting
decisions are in general transparent and predictable. Oversight mechanisms (i.e. checks and
balances) guard against arbitrariness and ensure accountability in the use of public resources, but
do not eliminate the flexibility and delegation that is needed to respond quickly to changing
circumstances. Public officials are committed to the achievement of social goals, and the
efficient delivery of public services, and manage the interface between the public and private
realms in a streamlined, transactionally efficient way. The political process is broadly viewed as
legitimate, and provides an anchor of predictability for business decision-making. Property rights
are protected.
Underlying much of this work has been the implicit presumption that careful
specification of what works will be sufficient to conjure well-developed institutions into being.
Yet reality does not play out on some tabula rasa upon which we are free to enact grand designs.
On the contrary, reform must contend with pre-existing institutional arrangements, and
entrenched, powerful interests in government and civil society. The successful reformer must
thus pay close attention to the "initial conditions" of the to-be-reformned environment.
Attention to initial conditions complicates the challenge of reform, by requiring the
reformer to wrestle with country-specific realities rather than directly transplanting lessons of
reform from one country into some different setting. Yet it does not follow that cross-country
comparisons are irrelevant. What is needed is a coherent framework for distinguishing among
countries, a typology - one that goes beyond simplistic bifurcations between, say, "markets"
versus "controls" or "dictatorship" versus "democracy". As Annex 1 summarizes, a very rich
literature, across multiple intellectual disciplines, has endeavored to develop more conceptually
meaningful distinctions. In line with that literature, this paper aims: first, to lay out a typology
for distinguishing among states, anchoring that typology in variables which can be proxied
empirically; second, to apply that typology empirically to 22 African countries (as of 1996); and,
third, to probe some characteristic patterns of change from different starting points within the
typology, and hence some implications for action in individual countries. Put differently, the aim
of the paper is, principally, to provide a systematic framework for considering governance
comparatively and, secondarily, to examine the relevance of the framework by applying it in a
historical and heuristic empirical fashion across African countries. The aim is not to undertake a
country-specific benchmarking of governance quality.2
2   An advanced draft of this paper was completed by mid-1999. However, given his professional responsibilities,
the author judged that it was prudent to postpone publication for long enough to ensure that the country-specific data
would be widely recognized as being of historical and heuristic value - and not be misinterpreted as offering
operational indicators of the currently prevailing governance conditions in the 22 included countries.
1



2.     The Governance of African States: Some Empirical Patterns
The typology developed here is organized around three distinct characteristics of states.
The first two comprise key political dimensions of governance:
* The extent offormal rule-bound governance; and
* The 'credibility' of political authority.
The third characteristic focuses on the administrative dimension, namely:
* The quality of bureaucracy.
The next three subsections of the paper define, in turn, each of these three characteristics,
and proxy them empirically for 22 African countries (as of 1996). The data are drawn from a
survey conducted for the 1997 World Development Report (WDR), The State in a Changing
World. The WDR survey explored the perceptions of over 3,600 entrepreneurs as to the
character and quality of the public institutions which underpin market transactions in each of 69
countries -- including 22 in Africa. Annex Table 2 details the characteristics of the WDR African
sample.
Firms scored their perceptions as to the severity of various institution-related obstacles to
doing business on a 1 to 6 scale, with a score of 1 signaling that the relevant constraint was no
obstacle, and 6 signaling that it was a very severe obstacle. The survey as a whole comprised 25
questions, many of which had multiple parts. Averaging the responses for all firms within
individual countries yields an average country score for each question. Though the results are
not strictly comparable across countries,3 they nonetheless provide an initial indicator of
different patterns of strength and weakness. Kaufmann, Kraay and Zoido-Lobatan (KKL 1999)
assess the robustness of a variety of distinct indicators of governance, including the survey used
here. Annex 3 details their results - and highlights some of the potential biases of the WDR data
set. (For readers interested in updating the data, Annex 3 also includes some more recent
indicators provided in KKL (2001).
Assessing the Extent of Formal Rule-Bound Governance
Formal rule bound governance (FRBG) is defined here to comprise the explicit
transparent rules, processes, and organizations - the formal institutions -- which are intended to
govern the relationship between a state and its citizens in ways which restrain arbitrary authority.
These institutions include: judiciaries; constitutions and other check and balance mechanisms;
plus regulators and other executive agencies responsible for monitoring and enforcement of
3   The data report the perceptions of entrepreneurs, rather than "objective" indicators. Entrepreneurs need not have
comparative knowledge of their country relative to others, and may differ in their propensity to claim about their
government, so in theory these perceptions need not be correlated with the underlying realities. In practice, as
Brunetti, Kisunko and Weder (1997) have shown the results of the WDR perception survey are indeed correlated
with investment and performance, although some outliers (for example, the substantially greater dissatisfaction of
Zimbabwean entrepreneurs with the quality of public services as compared with, say, their Zambian counterparts)
point to the potential limitations of these perceptual measures.
2



compliance with formal rules. As discussed later in this paper,4 underlying effective FRBG is a
political structure in which citizens participate in governance, in the sense that there exist
institutional mechanisms which empower them to monitor and enforce restraints on arbitrary
action by political and bureaucratic leaders.
Two variables from the WDR survey provide an empirical basis for grouping the 22
African countries according to the extent of FRBG. The first variable measures perceptions of
respondents as to the quality of African judicial institutions. Judicial institutions are useful
proxies for the quality of FRBG both directly and indirectly - directly in that they play a key role
in the enforcement of rules, and indirectly in that judicial institutions can function well only in
settings in which executive authority is sufficiently constrained so that judicial independence is
respected. The survey posed the following question to firms:
"Unpredictability of the judiciary presents a major problem for my business operations. To
what degree do you agree with this statement?" (1=disagree; 6=agree)
The second measure of FRBG comprises the perceptions of respondents as to the
pervasiveness of corruption as a business practice. Why can corruption be viewed as a proxy for
the quality of FRBG? Ideally, politicians and bureaucrats at all levels work to pursue social ends
-- defined by the political choices of citizens, as translated into action by politicians and
successive layers within a bureaucratic hierarchy. In practice, politicians and bureaucrats (like
all people) also have personal interests and aspirations.    In the absence of appropriate
institutional arrangements (both between citizens and politicians, and between politicians and
bureaucrats) for resolving   these  principal-agent problems5, some     will choose   to  act
opportunistically - including engaging in corruption, defined as abusing public office in pursuit
of private ends. To proxy corruption, the survey probed:6
*   "It is common for fims in my line of business to have to pay some irregular 'additional
payments' to get things done." [1= never pay; 2=seldom; 3=sometimes; 4=frequently;
5= mostly; 6= always pay]
Table 1 reports the 1996 scores and rankings for the 22 African countries for each of the
judicial quality and corruption variables. The distribution of the judicial quality scores was
similar among the African countries to the 69 country global sample (for which the median score
was 4.34); but corruption was perceived to be more severe in Africa than for the sample as a
whole: 15 of the 22 African countries scored worse than the global median score of 3.4. The
rank correlation for the judicial and corruption measures was 0.65 - providing grounds both for
the proposition that both are measures of FRBG, and for the ordering of the countries in Table 1
according to an overall ranking of FRBG (an average of the rankings for each of the two
variables).
4 See the discussion of 'strengthening political governance' in Section 3, and also Annex 1.
5 See Sappington (1991) for an overview of these problems.
6   Note that this question focuses on "petty" corruption, the day-to-day bribes that in some countries can be a part
of getting anything done. "Grand" corruption - the extraction of very large payoffs from (inevitably less frequent)
large initiatives by political leaders - is a different type of problem which the survey does not address. This
distinction may be part of the reason for some of the seeming disconnects (e.g. for Nigeria during the Abacha era)
between the WDR survey results on the one hand, and common perception (plus the estimates of Kaufmann et. al.)
on the other.
3



Table 1: Estimates of FRBG for 22 African countries
Corruption          Judicial Quality     Overall
Score     Rank        Score      Rank       JIRank
Zimbabwe           2.4         2        3.67         3         2.5
Mauritius         2.85         5          3          1          3
Malawi            2.67         3        4.17         7          5
Zambia            2.84         4        4.09         6          5
South Africa      1.93         1        4.43        11          6
Ghana             3.65        10        3.55         2          6
Nigeria           3.20         7          4          5          6
Guinea Bissau     3.07         6        4.25         8          7
Kenya             3.63         9        4.26         9          9
Uganda            3.73        14        3.84         4          9
Togo              3.46         8        4.47        12          10
Mali              3.67        11        4.61        14         12.5
Mozambique        3.68   1    13        4.64        15          14
Tanzania          4.22        18        4.49        13         15.5
Cameroon          4.35        21        4.29        10         15.5
Senegal           3.67        12        5.28        21         16.5
Benin             4.17        17        4.86        16         16.5
Chad               4          15        5.08        19          17
Cote d'Ivoire     4.13        16        5.07        18          17
Madagascar        4.24        19        5.18        20         19.5
Congo             4.36        22          5     I   17         19.5
Guinea            4.35        20        5.56    [   22          21
Source: WDR 1997
Assessing the 'Credibility' of Political Authority
The notion of FRBG has become so much a part of the modem conception of the state,
that we tend to ignore that it rests on a prior foundation of political authority; for much of history
in much of the world the challenge has been building that prior foundation. This central
dimension of govemance is defined here as the 'credibility' of political authority -- the
predictability and consistency of the actions of the sovereign authority, and the 'reach' of its
power.7 This notion of credibility is evident in the classic definition of states as well-defined
territories in which the sovereign authority enjoys a monopoly of coercive authority (in the sense
that it is-capable of imposing its will on the people in the relevant territory). Annex 1 examines
the intellectual pedigree of this second dimension of political governance.
The differences are stark between countries where both FRBG and the credibility of
political authority are strong, and those where both are weak. Where both are strong, formal
institutions provide a powerful foundation for transparency and accountability, restraining
arbitrary authority, and thereby protecting the rights of citizens, and ensuring the credibility of
private-to-private contracts. But where both are weak, formal (and informal) institutions are
7. Bomner, Brunetti and Weber (1995) provide an extended discussion of credibility, highlighting its importance
for economic development (chapter 2), distinguishing it from other dimensions of governance (chapter 3), and
exploring its political foundations.
4



thoroughly dysfunctional. Citizens and firms live in a world rife with both arbitrariness and
corruption. Public services are not delivered. Side payments to obstructive officials and
politicians are necessary to get anything done, even in the private realm. Yet corruption itself
proves insufficient to secure credibility: sometimes recipients of bribes lack the influence to
follow through on their promises; sometimes they reverse themselves capriciously; sometimes,
before they can follow through, they lose hold entirely of their fragile grip on power.
Note that FRBG and the credibility of political authority are analytically (and hence
potentially empirically) quite independent of one another. Polities in which FRBG is weak, and
consequently which are rife with agency problems and opportunism may nonetheless provide a
moderately credible foundation for development, insofar as the informal "rules of the game"
remain reasonably predictable (if perhaps inefficient).  Key here is the time horizon of
politicians. Political leaders with a long-time horizon have an incentive to support economic
growth, private investment and hence a stable policy environment, if sometimes in
nontransparent and somewhat corrupt ways.8  But if politicians' time horizon is short, their
interests might best be served by acting in ways that are destabilizing in the longer term. Firms
could be subjected to arbitrary pressures -- and in consequence are likely to refrain from
investing.
Three questions in the 1996 WDR survey probed a country's credibility:
* "Do you regularly have to cope with unexpected changes in rules, laws or policies
which materially affect your business"? [1= completely predictable... 6= completely
unpredictable]
* "Do you expect the government to stick to announced major policies?" [l=always;
6=never]
* "How problematic is policy instability as an obstacle to business activity?" [1= no
obstacle; etc....]
Averaging the answers to these three questions yields a single score for each country of the
credibility of state action. Table 2 summarizes the results, and associated country rankings. The
distribution of credibility scores was similar for the African countries and for the overall sample
(global median = 3.63). The rank correlations between credibility on the one hand, and judicial
quality and corruption on the other are 0.16 and 0.02 respectively, supporting the hypothesis that
FRBG and credibility are analytically independent of one another.
8 Olson (1991) develops the model of the long-lived, unconstrained leader as a 'stationary bandit' - predatory,
but with national wealth creation increasing the present value of the leader's private returns.
5



Table 2: Policy credibility in 22 African countries
-Credibiiity                         `Credibility
Score        Rank                    - Score       Rank
Cote dlvoire       2.65         1     Togo               3.63       12
Mali               2.97         2     Kenya              3.67       13
Senegal            2.97         3     Mozambique         3.67       14
Mauritius          3.06         4     Cameroon           3.77       15
Guinea             3.08         5     Zambia             3.77       16
Ghana              3.12         6     Congo              3.83       17
Malawi             3.19         7     Guinea Bissau      3.83       18
Benin              3.25         8     Zimbabwe           3.88       19
Uganda             3.34         9     Madagascar         4.14       20
South Africa       3.05        10     Nigeria            4.16  j    21
Chad               3.58        11     Tanzania           4.34       22
Assessing the Quality of Bureaucracy
Bureaucracy - the administrative arm of government - comprises the means whereby
public decisions are translated into action. Bureaucratic quality comprises the extent to which a
bureaucracy delivers high quality services, carries out its regulatory and other control functions
(e.g. taxation) at low transactions costs.
Bureaucracies do not function in a political vacuum: while at times, they may break loose
of political control and pursue independent agendas; the politician-bureaucracy relationship is
best interpreted as one of bureaucratic "agents" and political "principals.9 Nonetheless, there is
no necessary one-to-one relation between bureaucratic quality and the quality of political
governance:
*  Political authority can be entirely unconstrained, but can invest in a well-functioning
bureaucracy as a way of extending its will - either to pursue ideological ends, or for
more self-interested goals of political leaders.
*  Political authority can be effectively constrained, through formal rules, but unable to
effect its will in the face of bureaucratic weakness. The internal rule-based,
hierarchical system of "Weberian" bureaucratic order may break down (or never
adequately have been put into place). Separate bureaucratic fiefdoms may each begin
to impose their own sets of rules, with little attention to their overall consistency.
Citizens and firms may find themselves trapped in a Kafkaesque morass of non-
transparent rules, with little way of knowing which are likely to be enforced at a
given point in time.
*  'Warlord' politicians might have absolute authority within the domain subject to their
direct coercive control, but lack the administrative apparatus needed for them to
effect their will for tasks that require more than direct coercion.
9 A seminal article is McCubbins, Noll and Weingast (1987).
6



The WDR survey included questions which explored both the extent of 'red tape' related
bureaucratic overload, and the quality of services. The two questions which measured the extent
to which bureaucratic overload ('red tape') is a constraint on business activity were:
*  What percentage of senior management's time is spent on negotiation with officials
about changes and interpretations of laws and regulations? [Less than 5% (score = 1);
5-15% (2); 15-25% (3); 25-50% (4); 50-75% (5); more than 75% (score = 6)l
*  How problematic are entry regulations, price controls, regulations on foreign trade,
labor regulations, foreign currency regulations, and safety or environmental
regulations as obstacles for doing business? [Firms gave a separate score for each
regulation on the 1-6 scale; averaging these scores yields an overall score of the
extent to which individual firms perceived regulatory constraints as a problem].
These two metrics of bureaucratic 'red tape' are not strictly commensurate. Consequently, to
obtain a single metric, countries were ordered according to their rank correlation in each
subscore and the rank correlations were then averaged. The individual scores for each measure,
and the resulting composite ranking are reported in Table 3.
Table 3: Bureaucratic quality 1: the extent of 'red tape'
Bureaucracy: time      -Bureaucracy: barriers.  --Overll - 
Score        Rank        Score         Raiik    ik-..
Malawi             1.79          3           2.9            3            3
Zimbabwe           1.72          2          3.01            4            3
Zambia             2.26          8           2.6            1           4.5
Mauritius          1.68          1          3.22            9            5
Uganda              2.5         10          2.84            2            6
Ghana              2.26          7          3.05            6           6.5
Cameroon           1.95          5          3.37           13            9
Kenya              2.61         14          3.07            7          10.5
Togo               2.09          6          3.43           15          10.5
Guinea Bissau      2.27          9          3.37           14          11.5
South Africa       1.94          4          3.81           21          12.5
Chad                 3          21          3.04            5           13
Mali               2.82         18           3.1            8           13
Benin              2.79         17          3.31           11           14
Senegal            2.51         11          3.48           17           14
Nigeria            2.55         12          3.64           19          15.5
Tanzania           3.13         22          3.27           10           16
Guinea             2.93         20          3.32           12           16
Cote dlvoire       2.68         16          3.43           16           16
Madagascar         2.66         15          3.56           18          16.5
Mozambique         2.56         13          3.71           20          16.5
Congo              2.88         19          3.85           22          20.5
Two questions focused directly on the quality of services. The survey posed the following
to firms:
* Inadequate supply of infrastructure represents a major obstacle to my business. To
what degree do you agree with this statement? (1=disagree; 6=agree)
7



* How would you generally rate the efficiency of government in delivery services?
(1=very efficient; 6=very inefficient)
Averaging the answers to these two questions (the correlation coefficient of the two scores was
0.65) yields the indicator of service quality reported for the 22 countries in Table 4.
Table 4: Bureaucratic quality 2: service delivery
-Service quality                    . Sernice quality
-Score       Rank                   -Score..     Rank
Cote d'Ivoire    3.51    1    1      Zambia           4.25   T    12
Ghana            3.53    1    2      Guinea           4.26   t    13
Guinea Bissau    3.53    1    3      Nigeria          4.37   7    14
Mali             3.68         4      Mozambique       4.45    !   15
South Africa     3.71    !    5      Zimbabwe         4.63   !    16
Mauritius        3.75   1     6      Madagascar       4.65   T    17
Togo             3.92         7      Malawi           4.79   t    18
Uganda           3.94    l    8      Cameroon         4.82    1   19
Senegal          3.95   j     9      Kenya            4.91        20
Benin            3.97         10     Congo            4.99        21
Chad             4.21         1 1    Tanzania         5.02        22
Table 5 details the rank correlations between the 'red tape' and service quality measures,
and between these measures and the measures in Tables 1 and 2 of FRBG and credibility. Three
striking patterns are evident:
Table 5: Bureaucratic quality and governance: some rank correlations
Judicial    Corruption,      Policy      Regulatory
:___-___-___:_      quality     -_: credibility              -quality
Service quality      0.12          0.32          0.61           0.21
Regulatory quality   0.72          0.60          0.23            x
* the correlation among these two dimensions of bureaucratic quality is low;
* the bureaucratic red tape measure has a high correlation with FRBG, but a low
correlation with credibility; and
* the service quality measure is strongly correlated with credibility, but more weakly
correlated with the two measures of FRBG.
The next section of the paper endeavors to make sense of these patterns - and their implications
as to what might be workable paths of reform in different country settings.
8



3.     Meeting the Challenge of Governance and Bureaucratic Reform
The typology in Table 6 details the joint distribution of countries as of 1996 among the
variables described above. The columns group countries according to whether governance was
good (i.e. both strong credibility and strong FRBG), weak (in both dimensions), or mixed (i.e.
strong in one governance dimension, but weak in the other). The rows group countries according
to whether bureaucratic quality was good, weak or "mixed" (i.e. strong in one bureaucratic
dimension but weak in the other). The median is used as the 'cut-off point: for each category,
the highest ranking 11 countries are defined as "strong", while the lowest ranking 11 are defined
as "weak"'0.
Table 6: Governance in sub-Saharan Africa - a Typology 1'
WEAK             MDiED GOVERNANCE       ;      GOOD
GOVERNANCE      Informal,         FRBG but    GoVERNANCE.
but Credible   low credibility   -
WEAK                Congo           Guinea         Nigeria
BUREAUCRACY         Madagascar      Chad
Mozambique
Tanzania
MIXED               Cameroon                      [Zambia         Malawi
BUREAUCRACY:                                       Zimbabwe
weak service; OK                                 Kenya
en 'red tape'
eaStrong service;                   Benin                         South Africa
--excess 'red tape'                 Cote d'Ivoire
Senegal
GOOD                                Mali           Togo           Ghana
BUREAUCRACY                                        Guinea Bissau  Uganda
I__ _ _ _ _ _ _ _ _ _ _ __   _M auritius
1/ As footnote 9 details, comparison with KKZL suggests the italicized countries might reasonably be positioned in
different governance columns.
This section explores how reformers - people committed to changes in the rules of the
game in a direction supportive of sustainable development - might proceed in diverse country
settings. Reformers may be top political leaders, or ordinary citizens. They may be high-level
technocrats, or they may work in lower tiers of the bureaucracy. They may be nationals, or
outsiders. Whatever their positions, they must contend with the institutional starting points as
10 The allocation of countries in Table 6 is based on the WDR data set, which as discussed in Annex 3 is subject to
a variety of potential biases. As Annex 3 details, using the Kaufmann, Kraak and Zoido-Lobaton (1999) data set
Cote d'Ivoire and Senegal would unambiguously be 'promoted' in Table 6 into the 'good governance' column and
Madagascar and Tanzania into the 'mixed governance' columns (the former 'informal but credible', the latter
'FRBG but low credibility'). By contrast, Nigeria, Kenya and Chad each would migrate from 'mixed' to 'weak
governance'. Any other changes would be 'borderline calls'. Note also that for seven countries - Benin, Ghana,
Mali, Mauritius, Mozambique, Togo and Uganda - the KKZL and WDR rankings are virtually identical
9



they find them - and the trajectories of change that are most likely to be associated with these
starting points. Based on assessments of these realities, they must then choose from a variety of
distinctive approaches to reform. What specific trajectories of change are most likely for the
diverse starting points identified in Table 6? And, given the plausible trajectories for each
starting point, what reform initiatives are most likely to yield sustainable gains in institutional
capability? Specifically, how should the emphasis between governance reforms and reforms to
improve bureaucratic performance vary across different country settings?
Exploring these questions for each of the sixteen cells - and thus potential starting points
- identified in Table 6 is an intractable exercise. Simplifying somewhat (without, as it turns out,
losing much by way of analytical richness) the discussion which follows focuses on four groups
of countries, corresponding to the four columns in the table:
* Group A: the 'good governance' countries (comprising, in the 1996 WDR data,
Ghana, Malawi, Mauritius, South Africa and Uganda);
* Group B(frbg): the 'mixed governance -strong frbg, but low credibility - subset'
(comprising, in the 1996 WDR data, Guinea Bissau, Kenya, Nigeria, Togo, Zambia
and Zimbabwe)
* Group B(infc): the 'mixed governance - informal, but credible - subset' (comprising,
in the 1996 WDR data, Benin, Chad, Cote d'Ivoire, Guinea, Mali and Senegal); and
* Group C: the 'weak governance' countries (comprising, in the 1996 WDR data,
Cameroon, Congo-Brazzaville, Madagascar, Mozambique and Tanzania)
The next sections explore three sets of reforn challenges -- strengthening governance;
improving bureaucratic quality; and achieving 'traction' in settings where governance is
especially weak. As will become evident, the preferred approaches to reform vary systematically
with each of the four groups highlighted above.
Strengthening governance
The presumption in this section is that the preferred institutional pattern is strong
credibility and strong FRBG. And a central conclusion of the section is that, for Group B
countries which have not yet 'locked-in' this preferred institutional pattern,1' the key to
sustainable improvements in governance comprises a focus on demand-side, participative
reforms which foster civic participation.
As noted, using the WDR survey, five of the 22 countries - Ghana, Malawi, Mauritius,
South Africa and Uganda -- fit in Group A, in the sense that they were perceived to enjoy both
strong credibility and strong FRBG. All five are Anglophone, consistent with the emphasis
which the British placed on building a foundation of law (even if one that was applied
unevenly12) during the period of colonial rule -- and pointing to the powerful influence of history
in shaping institutions. To be sure, even these five countries did not emerge in the survey as
" Preferred approaches appear different for Group C countries, and are discussed in the final subsection of the
paper.
2 See Mamdani (1995).
10



unequivocal paragons of good governance: Ghana and Uganda, for example, both scored worse
for corruption than the global median. Nonetheless, in contrast with the other countries surveyed,
their institutional task seems to be more one of consolidation - for which a variety of supply-side
technocratic reform initiatives can be helpful13 - than the more fundamental challenge of
building a stable governance foundation for economic development.
Turning to the Group B countries (both subsets), their governance systems are of a kind
generally described by African scholars as 'neopatrimonial' 4. In neopatrimonial settings,
though the outward features of institutionalized administrative states are in place, political power
is exercised through informal channels, built around relationships of patronage, not through
governance systems which are both formal and credible. Within the overall neopatrimonial
pattern, there are interesting differences between the two Group B subsets, reflecting perhaps the
different post-independence trajectories to neopatrimonialism of Anglophone and Francophone
countries. Four of the six Group B(frbg) were Anglophone. By contrast, all of the Group
B(infc) countries were Francophone. At independence Anglophone countries inherited strong
FRBG institutions - which initially appeared also to enjoy substantial credibility. The post-
independence weakening of these institutions in many Anglophone African countries (not just.
Kenya, Nigeria, Zambia and Zimbabwe, but also the Group A countries, Ghana and Uganda)
suggests that, where the social consensus in favor of FRBG is not deeply embedded in society,'5
the risks are high that a political leader can 'defect' from FRBG, undermining the credibility of
pre-existing formal institutions.
This Anglophone route to neopatrimonialism may help explain why neopatrimonial
Anglophone countries scored lower on credibility than did their Francophone counterparts. In
part, the explanation may simply be one of perception - with Anglophone respondents
registering their loss of confidence in FRBG, rather than their perceptions as to the (informal)
predictability of the system. But the difference in scores may also reflect something more
fundamental: As FRBG declined in Anglophone countries, the system of governance may have
operated with a "dual logic", with formal and informal systems operating in parallel to one
another, rendering each somewhat unpredictable.
For all of the possible differences in the paths to neopatrimonialism, the fundamental
governance challenge seems similar for the GroupB(frbg) and Group B(infc) countries.
Weingast [1993] identifies the key analytical problem, and provides the key insight. The
problem is the fundamental paradox of political economy -- namely that credible FRBG depends
on states which have a monopoly on coercive authority, but whose political leadership
nonetheless abides within formal restraints on the untrammeled use of state power. What, then,
restrains the sovereign? Weingast's key insight is that restraints are only credible if they are self-
enforcing: those in power need to weigh the gains of breaking restraints (i.e. of "defecting")
against the costs of organizing to promote such actions, including the costs of fending off
opposition. Ultimately what matters are patterns of civic engagement in the public arena and
hence the perceptions of citizens as to the merits of restraining the sovereign.
13 See the discussion below of 'improving service quality'.
14 See Dia (1993) for a detailed discussion of the impact of 'neopatrimonialism' on African public management,
and Lewis (1996) for a review of the burgeoning academic literature on neopatrimonialism in Africa.
1  SeeHyden,[19871



Consider three notional starting points. [These do not correspond directly to Groups A-
C.] A first starting point is one where FRBG appears to work well, and is broadly perceived to be
credible. Where the social consensus in favor of this institutional framework is strong, the self-
enforcing conditions highlighted by Weingast as necessary for sustainability will be present.
Post-apartheid, and post-Mandela, South Africa provides a hopeful example. By contrast where
(as suggested above, may have been the case in many post-independence Anglophone countries)
the social consensus in favor of FRBG is not deeply embedded in society the risks of leaders
defecting from FRBG are high. Taken together, these divergent examples point to the very high
returns of investing in civic engagement as a way of reinforcing the credibility more broadly of
'rule of law' institutions.
Now consider the opposite starting point - one where the credibility of FRBG is weak,
and political leaders remain committed to absolutist rule. As North, Finer (plus many other
historians) have detailed, such a starting point was the reality in monarchical Europe. Civic
engagement indeed was central in moving from monarchical absolutism to credible FRBG - but
the process evolved over centuries, and took many difficult and violent turns.
The third starting point is one where the credibility of FRBG has been eroded, but a
political leader with seemingly unrestrained authority commits to an institutional revitalization
based on a readiness to abide by formal check and balance mechanisms.'6  The key here is
explicit, demand-side investment in civic engagement, for which a wide variety of measures are
available. These include:
* Constitutional reforms -- decentralization for example -- which aim to deepen
participation;
* Programs to fight corruption, especially approaches which include efforts to mobilize
civic support for clean government; and
* (As discussed further below) initiatives to engage citizens in improving the quality of
service delivery.
In the short-term, the restraints on the arbitrary use of political power implied by
measures such as these will necessarily be self-imposed by the political leadership itself. But
over time, insofar as the leadership acts in ways which strengthen civic engagement and
commitment to the rule of law, the costs to political leaders of defecting from FRBG will rise.
What had begun as a discretionary act of political leaders to abide by rules could evolve into a
genuinely self-enforcing system.
Nurturing civic engagement seems a challenge common to both the Group B(frbg) and
Group B(infc) countries. However, the different starting points of Anglophone [predominantly
Group B(frbg)] and Francophone [predominantly Group B(infc)] countries do point to some
differences in what might plausibly follow. To illustrate, consider the historical experience of
two Group A countries -- Ghana and Uganda. Viewed from the vantage point of the mid-1980s,
16 Bruce Ackerman (1996) describes this process as 'constitutionalizing charisma'. His depiction emphasizes the
role of charismatic political leaders (such as Nelson Mandela) in giving legitimacy to explicit constitutional
conferences, rather than the day-in, day-out decisions of political leaders to refrain from the arbitrary use of their
authority.
12



neither would have been considered potential paragons of institutional strength: the former
seemed trapped in a cycle of populist politics and military rule; the latter seemed unable to shake
loose the legacy of the murderous rule of Idi Amin. Yet the data presented in this paper suggests
that less than fifteen years later, both countries had managed to effect a remarkable turnaround.
These rapid turnarounds suggest that, for Group B(frbg) countries, pre-existing FRBG forms can
rapidly re-assert themselves, even after a long period of decay.
Group B (infc) countries, with weaker legacies of FRBG, may need to invest more
heavily - both in the formal structures of FRBG, and in civic knowledge as to the potential
benefits of such structures. But they also may have more to lose in attempting to effect the
transition to credible FRBG. For all of its limitations, credible informality comprises a form of
institutional capital: it can provide a basis for both social order and private investment. This
institutional capital may not be directly transferable to an FRBG framework. On the contrary, the
risk needs to be recognized that externally-initiated, demand-side reform efforts to promote
FRBG could undermine a socially-ordered, informal system of discretionary allocation - without
being able to establish a credible system in its place.
Improving the Quality of Bureaucracy
As highlighted earlier, this paper considers two distinct dimensions of bureaucratic
quality: the extent to which excessive bureaucratic 'red tape' imposes transactions costs on firms,
inhibiting private sector development; and the quality of service delivery. The next subsections
consider each in turn. A common theme in both discussions is the inter-relationship between
bureaucratic quality and political governance - both the ways in which governance arrangements
constrain the options for improving bureaucratic performance, and the ways in which reforms
whose proximate purpose is to improve bureaucratic performance can also be supportive of
governance reforms more broadly.
Reducing bureaucratic excess.  Prima facie, reducing bureaucratic excess through
deregulation is the simplest of supply-side reforms, in that (except, as discussed in the final
section of this paper, in some of the weakest states) it can be achieved by a stroke of the pen.
What complicates the challenge is that excess regulation generally is part of a broader system of
political governance. Regulatory restrictiveness can confer benefits on specific business, social,
and bureaucratic interests: incumbent firms gain where regulations increase the costs of entry,
and reduce competition; some social groups gain where regulation protects, say, the
environment, or confers benefits on workers employed in the formal sector; and bureaucrats gain
where regulation functions as a hurdle to firms which can be overcome with appropriate "side
payments". Each of the constituencies which gain from 'red tape' potentially can constrain
efforts at reform.
The correlations in Table 5, and the corresponding associations for the 'mixed
govemance' group in Table 6, highlight the inter-relations between bureaucratic excess and
governance. Red tape emerges as a problem for 5 of 6 Group B(infc) countries. This strong
correlation raises the possibility that regulatory dysfunction - and its corollary opportunities for
rent extraction, for political control, and for informal intervention - is a necessary part of a
'credibly informal' neopatrimonial system of political governance. If so, the implication follows
that, in such countries, efforts to tackle bureaucratic excess directly are unlikely to succeed.
13



By contrast, excess red tape emerges in Table 6 as a problem for just 1 of 6 Group
B(frbg) countries. Prima facie, this relationship suggests that strength in FRBG provides a
buttress against the accretion of excess red tape (or, conversely, that red tape, for all of its
seeming bureaucratic origins, in practice is a means of providing the discretionary authority -- of
exceptions - on which informality thrives). Yet for all of the allure of this inference it would be
a mistake to conclude that there is a strong central tendency for FRBG and streamlined
bureaucracy to be associated with one another. For one thing, 'red tape' was substantially more
constraining in the mid-80s than it was in 1996 in virtually all FRBG countries (including those
in Group A), with Ghana, Zambia and Zimbabwe especially clear examples. For another, the
possibility cannot be ruled out that in some FRBG countries, 'red tape' was indeed an integral
part of the pre-adjustment system of governance - and that the loosening of bureaucratic controls
may have contributed to the unraveling of a political equilibrium, with an attendant loss of
credibility."'
Recognizing the inter-relations between bureaucratic 'red-tape' and governance implies
that programs of deregulation generally need explicit demand-side strategies for overcoming
bureaucratic, political and business interests which gain from regulatory restrictiveness.
Initiatives to foster civic empowerment -- specifically inclusive business-government
consultative mechanisms -- can help to build a constituency for reform, capable of overcoming
the resistance of entrenched interests. Such fora were important in promoting bureaucratic
reform in both Ghana and Uganda. The external pressure of conditional reforms linked to donor
funding can also be helpful. While in the short-run, these conditions will be viewed by dominant
elites as an external imposition, as new entrants become able to participate in the economy, local
ownership of liberalizing reforms is likely to grow.
Yet, sometimes, domestic consultative processes and external pressures may not be
sufficient to eliminate bureaucratic excess. In these circumstances, it may be helpful to begin
with roundabout approaches - easy-to-implement mechanisms for insulating export-oriented
firms from a difficult local environment, such as export processing zones or bonded warehouse
programs. Such initiatives can create "space" for efficient, outward-oriented private firms to
emerge without challenging entrenched interests directly. In time, if such initiatives are
successful, the constituency for liberalizing reforms of the business environment will grow. A
process along these lines played a major role in the early industrial drive of many of Asia's
newly industrialized countries, as well as in Mauritius.!8
Improving service quality. Improving the quality of public services was long perceived
to be largely a supply-side technocratic problem, which could be adequately addressed by the
relevant sectoral specialists: road and bridges by civil engineers; health care by medical experts
etc. This 'stovepipe' approach has proven inadequate in a variety of ways. For one thing, it is
increasingly being recognized that the constraints to public delivery of services often lie not at
the front-line of delivery but in pervasive dysfunctions in public budgeting, personnel and
financial control practices; systemic, rather than partial reforms may be needed. For another,
new approaches to service provision have moved beyond efforts to improve public hierarchies,
17 Zimbabwe comes to mind as a possible example of such a process. For an elaboration of the argument, see Levy
(1997).
18 For a detailed discussion of these mechanisms as roundabout ways of circumventing difficult local
environments, see Levy (1991).
14



and have focused increasingly on improving performnance via increases in competition, in private
participation and in public voice (notably including moves towards political decentralization and
community empowerment).19 Moving from hierarchical delivery to these more pluralistic
approaches has brought to the forefront the interface between service delivery and political
governance. Public officials and other groups which benefit from hierarchical approaches have
resisted change. Further, the institutions necessary for the pluralistic approach to succeed (e.g.:
regulatory and judicial mechanisms to resolve disputes with private providers; feedback
mechanisms from citizens to higher-level bureaucrats and politicians) often are missing.
The data summarized in Tables 4, 5 and 6 suggest some cross-country differences in how
to approach the challenges of improving service delivery. Countries in Group A appear to have
had a workable platform for moving forward - both in that they were perceived to have workable
governance, and in that 4 of the 5 countries (Ghana, Mauritius, South Africa and Uganda)
already were perceived to offer adequate services. These countries seemed well positioned to
proceed directly with "supply-side" reforms - strengthening the systemic public management
underpinnings of service delivery, and experimenting with new approaches, both system-wide
and at the level of the services themselves.
By contrast, improving service delivery among Group B countries - both Group B(frbg)
and Group B(infc) - seems likely to require addressing governance as well as technocratic,
"supply-side" constraints.20 The options here parallel those for reforms to reduce bureaucratic
excess. As with bureaucratic reforms, "enclaving" the delivery of key services - for example,
through quasi-independent delivery mechanisms -- can be a way around governance constraints
which cannot be addressed directly. The dilemma, though, is that enclaving specific service
delivery initiatives adds to the fragmentation of already dysfunctional public management
systems, thereby creating difficulties down the road of improving the overall public management
system.
More broadly, efforts to improve the quality of public services can be a powerful impetus
for systemic changes in governance in Group B countries. While efforts to roll back an
overextended bureaucracy often prove controversial politically, there is generally an
overwhelming social consensus that public services can and should be improved. Further, the
evidence is increasingly compelling that beneficiary participation is a powerful engine of service
improvement. Taken together, these features of service delivery may enable reformers to
leverage governance reform even in quite difficult environments by initiating a variety of
demand-side participatory approaches, including:
9 See Girishankar (1999) for an in-depth discussion of these new approaches to service provision, and their
relation to political governance.
20 Some differences in the perceived quality of service delivery among the Group B(frbg) and Group B(infc) are
noteworthy: service delivery performance was generally weak in Group B(frbg) countries - but there seemed to be
important pockets of strength in Group B(infc) countries. One possible explanation for the latter might be that the
provision of adequate infrastructural services to the private sector (who comprised the respondents to the WDR
survey) was part of the neopatrimonial "bargain" in these countries. Certainly, it would be mistaken to conclude
from the WDR survey that service provision to the full range of Group B(infc) citizenry was of good quality.
15



* Undertaking - and making the results publicly available -- user surveys and other
quantitative "scorecards" of the quality of public services;
*   User participation in service delivery and oversight: empowering parents to
participate in the governance of schools; placing user groups at the center of
irrigations systems management; involving community groups in the delivery of
urban water and waste systems;
* Social funds to support efforts by communities and non-governmental organizations
themselves to deliver services to, say, the poor;
* Bringing government closer to the people by decentralizing responsibility for the
delivery of front-line services (or, more broadly, for decisions on the allocation of
some portion of scarce public resources) from central to local governments.
Where initiatives such as these take hold, the net result can be an increase in both the legitimacy
and accountability of states - key steps along the path to credible FRBG.
Institutional options when governance is "weak"
Table 6 categorized 4 countries as belonging in Group C, the "weak governance" group.
This categorization needs to be handled with care. As a comparison with other indices of
performance shows,2' the selection of sub-Saharan African countries for the 1996 WDR survey
was biased in that it included virtually none of the worst performing third of African countries.
Within a more encompassing "weak governance" category, there is thus a spectrum of weakness.
At the stronger end of the spectrum are countries whose differences from those with 'mixed
governance' are differences of degree, rather than of kind. As of 1996, using the WDR sample
(and defining weak as ranking below the median in all four categories scored) these included
countries (e.g.: Tanzania) with a prior history of workable FRBG, subsequently eroded, but with
evident potential for a turnaround;22 and countries (e.g. Mozambique) which had successfully
emerged from civil conflict, and were on the road to rebuilding credibility. At the other end of
the spectrum were countries (not in the sample) enmeshed in civil conflict or its fragile
aftermath; and, at the limit, geographic entities (e.g. Somalia, also not in the sample) where the
formal political order had disintegrated to the point that they were essentially stateless.
Even as differences within the "weak" category are recognized, it seems broadly to be the
case that there exist a variety of reform options which are plausible for countries with "mixed
governance", but which countries with especially weak governance may find difficult to
undertake, even with willing political leadership. For example, rolling back an overextended
bureaucracy presupposes a capability to impose hierarchical discipline on public officials; weak
states may lack the 'reach' to impose such discipline. Along similar lines, whereas active civic
engagement can be useful in restraining absolutist political leaders in mixed governance settings,
in countries where political control remains very fragile, civic activism may also have the
unintended side effect of contributing to continued state weakness.
21 See Annex 3
22 Tanzania's continuing commitment in recent years to an ambitious program of institutional reform suggests that
such a turnaround is underway.
16



What, then, are potentially workable options in countries with weak governance? While a
2002 World Bank taskforce on Low-Income Countries Under Stress has addressed this question
directly, two specific insights from the present analysis of 'less-weak' settings may add some
value. First, consistent with the worldwide experience noted earlier (and considered further in
Annex 1), the immediate task in very weak states may be less. to strengthen the "demand-side" of
civic voice, than to build a baseline of political authority. With political authority in place, the
process of "constitutionalizing charisma"23 has a chance of proceeding - although, even then, the
time horizon of political leaders may be too short for them to be willing to act only within (self-
imposed... and externally encouraged...) FRBG restraints. Nonetheless, in the absence of
coherent political authority, it is difficult to see how FRBG can take root.
Second, 'quick wins' will be key in buttressing the position of political leaders who seek
to build legitimacy, and some sense of possibility, among citizens. And these quick wins may
best be achieved by enclaving: using social funds to facilitate the provision of basic services
even in the absence of any semblance of bureaucratic coherence; using special economic zones
to create 'hassle free' spaces within which private economic activity can begin to take hold; and
providing special incentives to tax administrators as a way of beginning to generate public
revenues.
Neither of these approaches offers a direct route to well-functioning public institutions of
the kind described in the first paragraph of this paper. But in countries where governance is
especially weak, the direct approaches - focusing on check and balance mechanisms, and on
comprehensive overhauls of public management systems - are unlikely to bear fruit. 'Goodness
of fit' with a country's institutional starting points- not consistency with some a priori notion of
'best practice' - seems key to getting results on the ground.
23 See Ackerman (1996) and footnote 15.
17



Annex 1: Dimensionalizing Governance - Some Antecedents
A key feature of this paper is that it considers governance as a multi-dimensional
phenomenon - both in its distinction between political governance and bureaucratic quality and,
within political governance, in its distinction between credibility and the quality of FRBG. This
annex summarizes some other contributions which aim to provide some 'dimensionality' to
governance. The intent is simply to place the present paper into a broader context of literature on
political development - both to highlight for readers who may be less familiar with that literature
the intellectual pedigree of efforts to move beyond a single-variable continuum of governance,
and to highlight that there can be a variety of different ways of building dimensionality into the
analysis.
Immediate antecedents - new institutional analysis. As noted in the text, the most direct
antecedent of the present approach is Bomer, Brunetti and Weber (BBW; 1995), who focus in
depth on credibility as a distinct feature of political governance. BBW draw on the new
institutional economics -- especially the contributions of North (1991) and others who have
focused on the role of formal law as a basis for protecting property rights in transactionally
efficient ways, and Olson (1991) who draws the distinction between 'stationary' and 'roving'
bandits. BBW, though, make explicit in ways that others do not the distinction between credible
rules (which can be assured by 'stationary bandits') and efficient rules (which, in complex
market economies, require a well-developed legal and judicial system). Note that the distinction
between credibility and FRBG has a direct parallel in a classic debate in political philosophy -
notably Hobbes depiction of the state as Leviathan, which nonetheless offers a way out of the
'nasty, brutish and short' state of nature, versus Locke's (and Rawls') depiction of the state as a
constitutional order reflecting consensual win-win agreements.
'History of Government'. Finer's three volumes, The History of Government (1997)
represents the remarkable, twenty-years in the making 'post-retirement' capstone to a career of
over fifty years in comparative history and politics. His goal was 'to provide a history of
successive forms of government throughout the world from the earliest times to the present
day.... to identify similarities and differences between the forms of government described,
according to a standard typology' (VI, p.1). Finer draws the following distinctions of special
relevance to the present paper:
* Between its decision-making personnel/processes and its decision-implementing
personnel/processes (pp.35-6); and
* Amongst decision-making processes, between governments that are unconstrained by
'man-made restrictions' and governments that are constrained by substantive and/or
procedural rules (pp. 74-78).
Given the focus in the present paper on the inter-relation between credibility and FRBG,
of special relevance is Finer's historical analysis, first, of the emergence in Europe of secularized
absolute monarchical states out of medieval, religious feudalism (in the 13th-15w centuries), and
then of the process whereby absolute monarchies became progressively constrained, evolving
18



into modem states, governed by law and, increasingly, democratic control. Here, Finer
distinguishes usefully between:
*  'Palace and palace/nobility polities' (think: 'the divine right of kings'), which
dominated much of Europe for much of the 16th-18th centuries, though even in this
period their rule was constrained by 'law-boundedness, and the survival (in weak
form) of 'intermediate' bodies of aristocrats (pp. 38-43; 1455-1460);
*  'Pluralistic palace/forum polities' - authoritarianism - characterized by rule from
above, with authority conferred by popular consent (with, in the 19kh and 20th century
European context, the consenters comprising the nobility, the church, as well as
organized labor and organized capital, acting in their corporatist capacity) (pp. 1567-
1568);
*  'Monistic palace/forum polities' - 20th century totalitarianism (p. 1568); and
*  'Pluralistic forum  polities' -- into which category Finer incorporates (and
distinguishes between) liberalism (whose 'hard core of principle [comprises] ring-
fencing certain liberties against state intrusion'), constitutionalism ('a fundamental
law or set of principles to restrict arbitrary power and ensure limited government'),
and 'liberal democracy' ('qualified democracy.. .where the ultimate right of the
majority to have its way is conceded....but with institutional devices for the slowing
down of the decision-making processes so as to give time for a minority to persuade
the majority....') (pp. 1568-1571).
As Finer explores - and as was also examined in depth by Barrington Moore (1966) -- which
type of polity emerges in a specific country setting will depend in substantial part on the relative
strength of different social actors.
Viewed from the perspective of the present paper, all four types of polities can be
credible, but they differ from one another in their extent of law-boundedness and participation:
totalitarian polities may have the form of law but in practice are not law-bounded; palace and
palace/nobility polities are implicitly, but not explicitly bounded by law; pluralistic palace/forum
and forum polities both are characterized by FRBG, with forum polities more inclusive in their
protections of individual rights.
'Political modernization' in developing countries. In the 1960s and 1970s a rich
literature emerged on the dynamics of contemporary political modernization. Though it became
to be regarded increasingly skeptically in the 1980s (for reasons similar to the debunking of Walt
Rostow's narrow and mechanical approach to 'stages of growth') many of its themes continue to
influence contemporary thinking on development.
Huntington (1968) comprises a seminal contribution that is of particular relevance to the
present paper. Citing Parsons, Huntington notes that power not only has to be allocated, but also
has to be produced (p.143). Thus, viewed through the rubric of the present paper, Huntington
can be interpreted as distinguishing between two dimensions of credibility: whether power is
concentrated or dispersed; and whether the amount of power is small or large. Thus, Huntington
argues that "the first challenge of modernization to a dispersed, weakly articulated and
organized, feudalistic traditional system is to concentrate the power necessary to produce
19



changes in the traditional society and economy. The second problem is then to expand the power
in the system... .this challenge is the predominant one in the modernizing world today. At a later
stage, the system is confronted with the demands of the participant groups for a greater
dispersion of power and for the establishment of reciprocal checks and controls among groups
and institutions" (p. 146). Huntington highlights "institutionalization" - both political and
bureaucratic (with the former in particular corresponding to FRBG) - as the key way to expand
power. Note that, in Huntington's rubric, once such institutionalization has taken place,
credibility can be achieved even when power is dispersed.
Michael Mann's recent (1995) set of distinctions emerges in this context as a direct
descendent of the earlier work by Huntington. Mann distinguishes between "despotic" power
and "bureaucratic" power. He notes that in many developing countries, there is no lack of
"despotic" power (including corrupt despots), but that society is only weakly embedded in
networks of formal and informal institutional arrangements. Following Huntington, Mann argues
that, in the absence of bureaucratic power, the reach - even of despots - is weak. Strengthening
bureaucratic power is thus the crucial development challenge.
20



Annex 2: Characteristics of the WDR Africa Sample
Country:  G  B   G. G   C  C   C  C. K   M   T  N  S   M  M  M   T  M   S  U   Z  Z
U   E  B   H  A   0  H  D' E   A   0   1  E  A   0  A  A   A  0   G  I   A
I   N  I   A  M   N  A   I  N  L   G  G   N  D   Z  U  N   L  U   A  M M
N   I   S  N  E   G  D   V  Y   1  0   E  E  A   A  R   Z  A   T  N  B   B
E   N  A   A  R   0      0  A         R   G  G   M  I  A   W  H   D  A   I
A       U     0          1             1  A  A   B  T  N   I  A   A  B   A
0         R             A   L  S   1  I  1      F      W
N         E                    C  Q   U  A      R      E
A   U  S         I
R  E             C
I          ~~~~A
Sample    20 1 47 1181 92 142 146 [13 145 1601 100  11241 90 150 197 1471 48 6 4 103  104  25  32
size (n)  I  
Company Sie(L-              -*T-*W                     347130        8361       29
less than 50  55  81 [71 137  10 6  1 6  8 7  8 2       0 4       0  8  3   61  2  1
employees     ~-             -               I-
>50 and <200  40 1 5 1 2 27 26 26 54 24 30  19 13 49 72 28 23 44 36 2 1 1 9 2 1 484 1
employees  ].   1..l                        i 
more than 200     030   21  1 1 1 5  7 32  752 1 1 0 41 30 46 34 7 1 43 14 404 1
employees   1.I........                          _I_
Industry ()
Manufacturing  1601 34  1 2 149 J241  371 3 1  1  571_28]  25 T 481 74 [ 49 132 j 52  521 581 521 41 1881 97
Services  1 40 5 1129 401 52 59~1 621 61 43 341 581 38 1141 28 16014  3  4  250  23
Agiulture I10191 35[8j 191 2 1 0 1201 0 1 321 6 1 14 1121 20 1 2 1 4 1 0133  4 ___  
Location of man gIn:(%)
Capital city  85  53  24 (70  24  48  100  84 ( 621 45  81  27  9  61 8 56 2 17f 6 45 67 r 31
Largecity  0O  28147  15  60  50  0  7 122  28_  1  70  0  29 14 110  10  58 t 43  34  21  47
Small city or  10  13  1 12  1 3  12  2  0  7  17  23  0  3  4  8  6  33  8  25 [29  16  13 f22
countr side __ _ _ _j_ _ __ _I       ..!.-                                         -
Foreign participation (%)
yes      140  36 118  57  52 1761 691 22  35  231 391  131 541 54  55  291 461 61  34  23  1481 47
no       155  60  182  42  145  1241  311  731 631  731  561 871 461 45  1451 691 521  391 63  72  1521 50
Exports:(%
yes       55  29 112  29  153  1301 461  511 541  281 44  221 721 64  1331 641 451  831  53  19  1831 47
-no        45  71 188  7 11  48  1701 541 491 461  721  56  781  281 36  1671 361 551  1 7  47  8 11  1 7  53
21



Annex 3: The Robustness of the Governance Indicators
An important limitation of much empirical research on governance (including the present
paper) is that the data are measures of subjective perception. As footnote 1 noted, this generates
a variety of different types of measurement "noise" -- for example contamination of the results
by the way questions are formulated, subjective judgements in relation to 1-6 scales, and
difficulties in making cross-country comparisons. An innovative recent (1999) paper by
Kaufmann, Kraak and Zoido-Lobaton (KKZL) addresses this problem of "noise" by combining
each of the many instruments (including the WDR survey) and variables which have been
devised to measure governance into a single set of six composite 'meta-variables'. For each of
their six composite variables, they generate mean country estimates, plus measures of the
standard error of each estimate. (Their choice of units is structured so that each variable has a
mean estimated value of 0, a standard deviation of 1, and a range for the full set of almost 150
countries from - 2.5 to +2.5.). As compared with the WDR survey, the KKZL indicators have
the advantage of greater robustness - both in that the measures come from multiple sources, and
in that the KKZL methodology enables them to generate standard errors of mean estimates for
individual countries. The disadvantage of the KKZL approach is that the composite nature of
their variables blurs to some extent the distinctions among the different governance variables.24
Three of the six KKZL composite variables measure elements of governance similar to
those which are the focus of the present paper.25 These are:
* Government effectiveness. This variable combines perceptions of the quality of
public service provision, the quality of the bureaucracy, the competence of civil
servants, the independence of the civil service from political pressures, and the
credibility of government's commitment to policies.
*  Rule of law. This variable includes perceptions of the incidence of both violent and
non-violent crime, the effectiveness and predictability of the judiciary, and the
enforceability of contracts.
*  Graft, defined as the exercise of public power for private gain. The particular aspect
of corruption measured by the various sources ranges from the frequency of
additional payments to 'get things done' to the effects of corruption on the business
environment.
Annex Table 3-1 reports the mean values, standard errors (and number of instruments for which
data was available in the relevant country) for these three variables for each of the 22 African
24 In a cross correlation matrix among the six KKZL variables, none of the variables have correlations below 0.51,
with all but one of the cross-correlations falling in the 0.5 - 0.7 range.
5 The other three KKIM  variables are "voice and accountability", "political instability and violence", and
"regulatory burden". While prima facie the last of these corresponds to the' "bureaucratic quality/red tape" variables
used in the body of the paper, in practice KKZL measure something very different: their composite includes "the
incidence of market unfriendly policies such as price controls or inadequate banking supervision, as well as
perceptions of the burdens posed by excess regulation in areas such as foreign trade and business development".
The cross-correlations between the KKZL measure and the three red tape measures in this paper - time, barriers, and
overall ranking - are 0.06, 0.36 and 0.25 respectively.
22



countries examined in this sample (as of 1997/8). (Annex Table 3-2 reports updated indicators
produced by KKZL using 2000/1 data).
Annex Table 3-1: the KKZL indicators for 22 African countries, 1997/8
.  Government Effectiveness           Rule-of.Law_    _    _ __Graft           _
Estimate  Standard    #      Estimate  Standard    #      Estimate  Standard
Error   Indicator            Error   Indicator            Error    Indicator
Benin       -0.066     0.564      1       -0.422    0.450      2      -0.781     0.537       I 1
Cameroon     -0.645    0.240      5       -1.015    0.253      6      -1.105     0.211      5
Chad         -0.714    0.564      1       -0.827    0.450      2       -0.587    0.537       I
Congo        -0.580    0.385      3       -1.435    0.371      3       -0.596    0.485      2
Cote         -0.180    0.240      5       -0.335    0.253      6       -0.079    0.211      5
d'lvoire            .         .          _                 .                  .
Ghana        -0.287    0.222  T   6       0.014  , 0.253       6      -0.301     0.211  ,   5
Guinea       -0.029    0.510  T   2       -0.762    0.371      3      -0.848     0.485  T   2
Guinea-      -0.334    0.510      2       -1.615  T 0.371      3      -0.176     0.485  T   2
Bissau              :         :                  :         '                  :         :
Kenya        -0.899    0.222      6       -1.220    0.253      6       -0.651    0.211      5
Madagascar   -0.295    0.385      3       -0.825    0.371      3      -0.469     0.485      2
Malawi       -0.625    0.239      5       -0.409    0.281      5      -0.195     0.224      4
Mali         -0.052    0.510      2       -0.465    0.371      3      -0.476     0.485      2
Mauritius    0.172     0.268      3       1.279     0.311      4       0.336     0.228      3
Mozam-       -0.331    0.288      4       -1.046    0.363      4      -0.535     0.311      3
bique               .         .                  .         ._.__
Nigeria      -1.321    0.222      6       -1.097    0.253      6      -0.954     0.202      6
Senegal      0.047     0.286      4       -0.097   0.285       4      -0.235     0.268      3
South        -0.010    0.206      8       -0.351   0.206       9       0.299     0.171      9
Africa              :         :                  : _                          :
Tanzania     -0.485    0.222      6       0.161     0.253      6       -0.924    0.211      5
Togo         -0.374    0.510      2       -0.799    0.371      3       -0.242    0.485      2
Uganda       -0.251    0.222      6       -0.013    0.253      6      -0.466     0.211      5
Zambia       -0.399    0.222      6       -0.402    0.253      6       -0.614    0.211       5
Zimbabwe     -1.129    0.222      6       -0.146    0.233      7       -0.319    0.185      7
The three composite variables described in Annex Table 2-1 correspond to - and are
quite highly correlated with -- the WDR measures in the body of this paper of policy credibility,
judicial quality, and corruption. The KKZL government effectiveness measure also is quite
highly correlated with the WDR measure of the quality of service delivery26. As such, a
comparison for each matched pair of the differences in how the 22 countries rank in the WDR
and KKZL measures highlights for which countries the WDR estimates can be viewed as
reasonably robust, and for which there is a strong reason to treat the WDR scores (and hence the
categorization of a specific country in Table 6) with caution. Country rankings differed by 8 or
more positions in the following:27
26  For the 22 African countries, the correlation coefficients for the WDR-KKZL    pairs are: 0.62 for
credibility/government effectiveness; 0.46 for judicial quality/rule of law; 0.62 for corruption/graft; and 0.59 for
g7uality of service delivery/government effectiveness.
2'Note that, in addition to measurement error, shocks which occurred only after the 1996 WDR survey (but before
some of the other measures incorporated in KKZL) can also account for differences in ranking between the WDR
and KKZL data. To cite three examples: by 1998 Zimbabwe was in the throes of a macroeconomic crisis; Guinea
23



* For the graft/corruption matched pair, Cote d'Ivoire and Madagascar emerge in the
KKZL data set as less corrupt than in the WDR (ranked 3rd and 1 Ith, rather than 16th
and 19th), but Nigeria, Zambia, and Kenya emerge as more corrupt (ranked 21st,
16th, and 17th, rather than 7th, 4th, and 9th).
* For the rule of law/judicial quality matched pair, Cote d'Ivoire, Senegal, Guinea and
Tanzania emerge as stronger in the KKZL data (ranked 7th, 5th, 13th, and 2nd) than
in the WDR data (ranked 18th, 21st, 22nd, and 13th) - although these differences
may reflect in part the broader definition of the KKZL variable, and some
corresponding 'non-judicial' sources of social stability of the four countries. By
contrast, the KKZL data ranks Guinea-Bissau and Nigeria (8th and 22nd) worse than
the WDR data (8th and 22nd).
* For the government effectiveness/credibility and government effectiveness/service
quality matched pairs, the comparison is less straightforward since one KKZL
variable maps into two of the WDR variables used in the present study. Even so,
Madagascar emerges unambiguously, as stronger in the KKZL data (ranked 10th)
than in the WDR data (ranked 20th for credibility and 17th for service quality), and
Chad (ranked 19th ini KKZL versus 11th for both WDR variables) as unambiguously
weaker.28
Put differently, using the KKZL rankings, Cote d'Ivoire and Senegal would unambiguously be
'promoted' in Table 6 into the 'strong governance' column and Madagascar and Tanzania into
the 'mixed governance' columns (the former 'informal but credible', the latter 'FRBG but low
credibility'). By contrast, Nigeria, Kenya and Chad each would migrate from 'mixed' to 'weak
governance'. Any other changes would be 'borderline calls'. Note also that for seven countries -
Benin, Ghana, Mali, Mauritius, Mozambique, Togo and Uganda - the KKZL and WDR rankings
are virtually identical for all four matched pairs.
Bissau had plunged into civil war; and Zambia had concluded a massive privatization of its copper mine in ways
which raised questions over its transparency.
28 Other noteworthy comparisons: Malawi's KKZL ranking (17'h) straddles its two WDR rankings (7th for
credibility, and 18"' for service quality, as do Guinea Bussau's (12"' versus 18"' and 3rd).
24



Annex Table 3-2: the KKZL indicators for 22 African countries, 2000/1
Governnent Effectiveness      Rule of Law                  Graft
Estimate  Standard  #    Estimate  Standard |     Estimate  Standard
Error  Indicator         Error  Indicator         Error  Indicator
Benin           0.12    0.52      1      -0.57   0.43      2
Cameroon       -0.40    0.25      5      -1.02   0.25      6     -1.11    0.25      5
Chad                                    -0.86    0.52      1 1
Congo          -1.580   0.40      2      -1.11   0.37      3     -0.49    0.39      2
Cote d'Ivoire  -0.81    0.25      4     -0.54    0.25      5     -0.71    0.26      4
Ghana           -0.06   0.25      5     -0.01    0.25      6     -0.28    0.25      5
Guinea          0.41    0.53      1      -0.59   0.43      2      0.13    0.65      1
Guinea-Bissau   -1.48   0.40      2      -1.50   0.37      3      0.10    0.39      2
Kenya           -0.76   0.222     6      -1.21   0.24      6      -1.11   0.22      6
Madagascar     -0.35    0.37  t   3      -0.68   0.34      4      -0.93   0.32      3
Malawi          -0.77   0.26      4      -0.36   0.29      5      0.10    0.26      4
Mali           -1.44    0.40      2      -0.66   0.37      3      -0.41   0.39      2
Mauritius       0.76    0.26      3      1.00    0.26      4      0.49    0.26      3
Mozambique      -0.49   0.40      4      -0.32   0.37      3      0.10    0.39      2
Nigeria        -1.00    0.21      7      -1.13 T 0.20      8      -1.05   0.20      7
Senegal         0.16    0.26      4     -0.13 T 0.29       5     -0.39    0.26      4
South Africa    0.25    0.18     10      -0.05   0.18     10      0.35    0.18     10
Tanzania        -0.43   0.23      5      0.16    0.24      6      -0.92   0.23      5
Togo            -1.32   0.53      1     -0.82    0.43      2     -0.48    0.65      1
Uganda          -0.32   0.23  l   5     -0.65    0.24      6     -0.92    0.23      5
Zambia         -0.75    0.23      5      -0.39   0.24      6      -0.87   0.23      5
Zimbabwe        -1.03   0.22  l   5      -0.94   0.21      7      -1.08   0.23      5
25



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27



Africa Region Working Paper Series
Series #      Title                                          - Date             Author
ARWPS 1      Progress in Public Expenditure Management in Africa:  January 1999  Christos Kostopoulos
Evidence from World Bank Surveys
ARWPS 2      Toward Inclusive and Sustainable Development in the  March 1999    Markus Kostner
Democratic Republic of the Congo
ARWPS 3      Business Taxation in a Low-Revenue Economy: A     June 1999        Ritva Reinikka
Study on Uganda in Comparison with Neighboring                    Duanjie Chen
Countries
ARWPS 4       Pensions and Social Security in Sub-Saharan Africa:  October 1999  Luca Barbone
Issues and Options                                                Luis-Alvaro Sanchez B.
ARWPS 5      Forest Taxes, Government Revenues and the         January 2000     Luca Barbone
Sustainable Exploitation of Tropical Forests                      Juan Zalduendo
ARWPS 6      The Cost of Doing Business: Firms' Experience with  June 2000      Jacob Svensson
Corruption in Uganda
ARWPS 7      On the Recent Trade Performance of Sub-Saharan    August 2000      Francis Ng and
African Countries: Cause for Hope or More of the Same             Alexander J. Yeats
ARWPS 8      Foreign Direct Investment in Africa: Old Tales and New  November 2000  Miria Pigato
Evidence
ARWPS 9       The Macro Implications of HIIV/AIDS in South Africa: November 2000  Channing Arndt
A Preliminary Assessment                                           Jeffrey D. Lewis
ARWPS 10      Revisiting Growth and Convergence: Is Africa Catching  December 2000  C. G. Tsangarides
Up?
ARWPS 11      Spending on Safety Nets for the Poor: How Much, for January 2001  William James Smith
How Many? The Case of Malawi
ARWPS 12      Tourism in Africa                                February 2001    lain T. Christie
Doreen E. Crompton
ARWPS 13      Conflict Diamonds                                February 2001    Louis Goreux
ARWPS 14      Reform and Opportunity: The Changing Role and    March 2001       Jeffrey D. Lewis
Patterns of Trade in South Africa and SADC
ARWPS 15      The Foreign Direct Investment Environment in Africa  March 2001   Miria Pigato
ARWPS 16      Choice of Exchange Rate Regimes for Developing   April 2001       Fahrettin Yagci
Countries
28



Africa Region Working Paper Series
Series #     Title                                            Date             Author
ARWPS 17     Export Processing Zones: Has Africa Missed the Boat?  May 2001    Peter L. Watson
Not yet!
ARWPS 18     Rural Infrastructure in Africa: Policy Directions  June 2001      Robert Fishbein
ARWPS 19     Changes in Poverty in Madagascar: 1993-1999      July 2001        Stefano Paternostro
Jean Razafindravonona
David Stifel
ARWPS 20     Information and Communication Technology, Poverty,  August 2001   Miria Pigato
and Development in sub-Saharan Africa and South Asia
ARWPS 21     Handling Hierarchy in Decentralized Settings:    September 2001   Navin Girishankar
Governance Underpinnings of School Performance in                 Abebaw Alemayehu
Tikur Inchini, West Shewa Zone, Oromia Region                     Yusuf Ahmad
ARWPS 22     Child Malnutrition in Ethiopia: Can Maternal     October 2001     Luc Christiaensen
Knowledge Augment The Role of Income?                             Harold Alderman
ARWPS 23      Child Soldiers: Preventing,Demobilizing and     November 2001    Beth Verhey
Reintegrating
ARWPS 24     The Budget and Medium-Term Expenditure Framework  December 2001   David L. Bevan
in Uganda
ARWPS 25     Design and Implementation of Financial Management  January 2002   Guenter Heidenhof
Systems: An African Perspective                                   Helene Grandvoinnet
Daryoush Kianpour
Bobak Rezaian
ARWPS 26     What Can Africa Expect From Its Traditional Exports?  February 2002  Francis Ng
Alexander Yeats
ARWPS 27     Free Trade Agreements and the SADC Economies     February 2002    Jeffrey D. Lewis
Sherman Robinson
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ARWPS 28     Medium Term Expenditure Frameworks: From Concept  February 2002   Philippe Le Houerou
to Practice. Preliminary Lessons from Africa                      Robert Taliercio
ARWPS 29     The Changing Distribution of Public Education    February 2002    Samer Al-Samarrai
Expenditure in Malawi                                             Hassan Zaman
ARWPS 30     Post-Conflict Recovery in Africa: An Agenda for the April 2002    Serge Michailof
Africa Region                                                     Markus Kostner
Xavier Devictor
29



Africa Region Working Paper Series
Series #      Title                                           Date             Author
ARWPS 31      Efficiency of Public Expenditure Distribution and  May 2002      Xiao Ye
Beyond: A report on Ghana's 2000 Public Expenditure              Sudharshan Canagaraja
Tracking Survey in the Sectors of Primary Health and
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ARWPS 32      Promoting Growth and Employment in South Africa  June 2002       Jeffrey D.Lewis
ARWPS 33      Addressing Gender Issues in Demobilization and  August 2002      Nathalie de Watteville
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ARWPS 34.     Putting Welfare on the Map in Madagascar        August 2002      Johan A. Mistiaen
Berk Ozler
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ARWPS 35      A Review of the Rural Firewood Market Strategy  August 2002      Gerald Foley
in West Africa                                                   Paul Kerkhof
Djibrilla Madougou
ARWPS 36      Patterns of Governance in Africa                September 2002   Brian D. Levy
30












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