Jean-Paul Faguet

The Spanish encomienda, a colonial forced-labour institution that killed indigenous people and destroyed their societies, is linked to better economic, human, and institutional development across Colombia today. How did violent extraction in the 1500s promote greater development today? By providing strong incentives for Spanish lords to build local institutions that provided public goods and promoted development during the following 450 years.

For developing countries, decentralising power from central government to local authorities holds the promise of deepening democracy, empowering citizens, improving public services and boosting economic growth. But how and when it will work is unclear. Under the wrong conditions, decentralised power can be captured by unrepresentative elites or undermined by corruption and clientelism. We still do not understand enough about what factors can contribute to creating better local government, and to what effect. 

Decentralised Governance brings together a new generation of political economy studies that explore these questions analytically, blending theoretical insights with empirical innovation. Individual chapters provide fresh evidence from around the world, including broad cross-country data as well as detailed studies of Bangladesh, India, Pakistan, China, Indonesia, Ghana, Kenya and Colombia. They investigate the pros and cons of decentralisation in both democratic and autocratic regimes, and the effects of advances in technology, citizen-based data systems, political entrepreneurship in ethnically diverse societies, and reforms that improve transparency.

Why is there so much institutional reform in the world? If institutions are the deep rules of the game that determine how societies are governed, collective decisions taken, and resources mobilized for public purposes, then changing them is bound to have effects that are long-run and multidimensional across politics, the economy and society. Such effects will be unpredictable. Politicians with short time horizons should flee such initiatives, but instead embrace them the world over. Why? Because politicians design reform processes around often unstated private goals that may be orthogonal, or even directly opposed, to a reform’s stated, public goals. We characterize instrumental mismatch as the gap between stated goals and the specific reform instruments politicians deploy. Such reforms lead to incongruous institutions ill-suited to their core purpose, and hence to outcomes that are bad for society. Through 14 case studies from Latin America, India, Rwanda and the UK we test, refine, and significantly expand the theory. A final paper mines this evidence to propose four game-theoretic models of institutional change from a complex systems perspective. Taken together, we call this the complexity approach to institutional reform.

Institutional and policy reforms often produce unintended consequences that result in institutional incongruity. Using the lens of complex systems theory, we describe three potential sources of complexity-induced incongruity: (1) policy multidimensionality, (2) network interactions, and (3) interdependent institutions and culture. Policy multidimensionality can take two forms: (1.1) interdependent policy effects, a top-down phenomenon that arises when policies interact with each other directly; and (1.2) population realignments, a bottom-up mechanism in which individuals re-self-organize according to an additional dimension that suddenly becomes salient. We analyze these complexity effects using game-theoretic and agent-based models and offer two insights related to the origins of institutional incongruity: First, that real-world instances of incongruity depend on complexity. In fact, some complexity may be necessary for incongruity to arise. Second, real-world cases of incongruity typically involve multiple complex causes, such as when policy dimensions become interdependent through population realignments.

Over the past two decades I've had the privilege of working with wonderful PhD researchers. Below are their dissertation topics and snippets of the careers they went on to.

Graduated PhDs

Allison Benson    Obama Fellow, Columbia University. Ministry of Rural Development, Colombia. “Sources of political, financial and social capital in Rural Colombia”

Gustavo Bonifaz  Associate Researcher, Latin American Institute, Free University of Berlin. “The gap between legality and legitimacy: The Bolivian state crisis (2000-2008) in historical and regional perspective”

Anila Channa       Head of Monitoring, Evaluation and Learning, Integrity. “Four essays on eduction, caste and collective action in rural Pakistan”

Luciano Ciravegna  Associate Professor (tenured), Henley Business School and INCAE. “Institutions, social ties and productive collaborations: Lessons from the information and communication technologies cluster in Costa Rica”

María Fernández  Colombian National Program Coordinator, Earth Innovation Institute and Lecturer in Economics, Universidad Nacional de Colombia. “Instituciones y desarrollo regional en Colombia, el caso del café”

Sean Fox               Professor in Global Development, University of Bristol. “The political economy of urbanisation and development in sub-Saharan Africa”

Soren Gigler         Head of Data Economy, GIZ and Adjunct Professor, Georgetown University. “Can information and communication technologies enhance the well-being of indigenous peoples in Bolivia?”

Paula Giovagnoli  Economist, World Bank, Buenos Aires, Argentina. “From preschool provision to college performances: Empirical evidence from a developing country”

Olivia Jensen        Lead Scientist and Senior Research Fellow, Institute of Water Policy, Lee Kuan Yew School of Public Policy, National University of Singapore. “Cooperation and opportunism under long-term public-private contracts: Evidence from water concessions in Asia”

Maria López-U.     Secretary of Economic Development, Municipality of Bogotá, and Assistant Professor, U de los Andes. “Essays on the Political Economy of Development in Colombia”

Laura Munro         Adviser, Agriculture Research Team, UK Foreign, Commonwealth and Development Office (FCDO). “Risk sharing, networks and investment choices in rural India”

Chikako Oka         Associate Professor (tenured), Université Paris-Est Créteil (UPEC), IAE Gustave Eiffel Ecole de Management. “Labor standard compliance and the role of buyers: the case of the Cambodian garment sector”

María Orduz         Lecturer, Universidad Externado de Colombia, and IDB consultant. “Decentralization, public spending, and other structural reforms”

Caroline Pöschl    Manager, Strategy & Economics, PwC South Africa. “Local Government Taxation and Accountability in Mexico”

Nelson Ruiz-G.     Senior Lecturer (tenured) and Head of Political Economy, University of Essex Government Department. Research Associate, Nuffield College, Oxford. Leverhulme Early Career Fellow. “Essays on Violence, Money in Politics, and the Electoral System in Colombia”

Mahvish Shami    Associate Professor in Development Studies (tenured) & Leverhulme Early Career Fellow, London School of Economics. “The road to development: market access and varieties of clientelism in rural Punjab, Pakistan”

Victoria Soto        Research Professor in Public Health, Universidad ICESI (Cali, Colombia). “Colombia fiscal decentralisation: Equity in health outcomes across municipalities”

Gonzalo Vargas   Professor, Universidad de los Andes, Colombia. “Explaining violence against civilians: Insurgency, counterinsurgency and crime in the Middle Magdalena Valley, Colombia (1996-2004)”

Borge Wietzke    Associate Professor (tenured), Institut Barcelona d'Estudis Internacionals (IBEI). “Groups, location and wellbeing: Social and spatial determinants of inequality in Madagascar”