Enhancing Governance for Development: Why Policies Fail

Abstract

Identifies commitment (supporting consistent policies over time), coordination (shaping expectations to enable complementary action), and cooperation (limiting opportunistic behavior to prevent free-riding) as three core functions of institutions needed to ensure rules and resources yield the desired development outcomes, with policy effectiveness depending on whether and how well institutions perform these functions. Policy making and policy implementation entail a bargaining process among different actors, and the distribution of power in the policy arena can prove a fundamental enabler of—or constraint to—policy effectiveness. Overcoming harmful power asymmetries by adopting rules that change incentives, reshape preferences and beliefs, or enhance contestability may prove difficult because those currently in power have incentives not to introduce reforms, but history has shown many societies in which power in the hands of a few have managed to develop into more open, more prosperous, and more secure ones. Spotlights public office corruption and the governance challenges of managing risks.

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