‘State capability is more important than economic growth’

Published April 3, 2021
A session under way on the opening day of the conference.—White Star
A session under way on the opening day of the conference.—White Star

KARACHI: The first three-day international conference on economics and sustainable development organised by the Institute of Business Administration (IBA) began online on Friday morning.

Director at the Blavatnik School of Government, University of Oxford, Dr Lant Pritchett delivered the keynote address. His topic was ‘Building state capabilities: dos, don’ts and donuts’.

He started off by giving an overview of his talk. He said the dos were to do with paying attention to state capability in achieving high level of human well-being. The don’ts were about not ‘to seek to adopt the best policy’. And the donuts homed in on the existing state organisations which were devoid of a core (in the shape of a donut) and were there like zombies.

IBA’s online conference begins

On the first point, Dr Pritchett said the focus should be on state capability. Once we measure state capability of countries, it turns out that nearly every goal about human well-being is dramatically furthered by having a more capable state — a state that is more capable of achieving its goals. And within that is the relationship with capability rather than programme design (the ability to adopt policy).

Developing the argument that economics is not the key thing in development, he remarked, “State capability is more important than economic growth for achieving human well-being.”

‘Governance is also important’

He pointed out that for some developing countries economic growth is the biggest factor but governance is also important. He then raised the question whether policy or capability matters more for improving outcomes in sectors such as health, schooling, infrastructure and tax collection, underlining that what matters is expanding the array of space of policy design.

Dr Pritchett, touching on the second point (don’ts) said do not seek to adopt the best policy. In that regard he gave the example of the number of days to get a construction permit in a country if one follows the law. Explaining with the help of quite a few slides, he claimed there’s a massive difference in the number of days across countries [to get a construction permit]. In some, the number is 15, and in others: 190 days. It led him to highlight that the focus should be on achievable practices. The inexorable dynamics of good law, low capability for implementation [could] result in bad outcomes.

On the final point about the donuts, the scholar said organisations are effective from the inside out (core) through a combination of a shared purpose and the set of technical practices that the organisation uses. Therefore, the core of the organisation is commitment to purpose and the set of practices that provoke that purpose. Things such as the legal aspect, the human resource, finances, the IT, etc, are driven from the inside out. All of those things are meant to support the technical core.

Dr Pritchett said organisations can lose their core and become a donut in one of two ways. Either they lose track of their purpose from the inside and from the outside when it’s affected by viruses and parasites to invade the organisation and use it for other purposes. Or they can lose commitment to the set of technical practices when people working for it stop believing in them. Either of those or both create a donut organisation. Donut organisations can become like zombies; they can survive forever.

“Losing your core does not necessarily kill the organisation” but it ends up in a shell. If the organisation becomes a donut it’s susceptible to hijack. Then (evils such as) patronage, corruption, etc, set in, and “if you’re an organisation that doesn’t have the immune system of a committed purpose, then it will be invaded and used for other purposes.”

The virus will fill the heart of the core — a police force, for example, can easily become organised crime, he added.

Published in Dawn, April 3rd, 2021

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