In many developing countries (and beyond), public sector workers are not just simply implementers of policies designed by the politicians in charge of supervising them -- so called agents and principals, respectively. Public sector workers can have the power to influence whether politicians are elected, thereby influencing whether policies to improve service delivery are adopted and how they are implemented, if at all. This has implications for the quality of public services: if the main purpose of the relationship between politicians and public servants is not to deliver quality public services, but rather to share rents accruing from public office, then service delivery outcomes are likely to be poor. This paper reviews the consequences of such clientelism for improving service delivery, and examines efforts to break from this "bad" equilibrium, at the local and national levels.
The World Development Report 2017 Governance and the Law (World Bank, 2017) highlights the intimate connection between the effectiveness of policy reforms and governance. The Report argues that power asymmetries play an important role in ensuring that policy reforms are credible and overcome collective action problems; with one particular manifestation being clientelism. Further, it notes that in order to expand the set of implementable policies, there is need to change the policy arena by: (a) changing incentives; (b) reshaping preferences; and (c) increasing the contestability of the decision-making process. In this background paper, The author focusses on how power structures affect incentives for policy reforms and ultimately outcomes in the context of public service delivery. Here, It have a particular power structure in mind, namely when public servants themselves hold power. In many developing countries (and beyond), public servants are not just the agents tasked with delivering services by the principal (the clients of the service, usually represented by politicians), they are also elites, in the sense that they can have direct influence on policy design and implementation. This has implications for the quality of public services: if the main purpose of the relationship between principal and agent is not to deliver quality public services, but rather to share rents accruing from public office, then service delivery outcomes are likely to be poor. Breaking such an equilibrium may be difficult and successful policy reform needs to take these kind of power constraints into consideration. In the first part make the case that public servants – aside from delivering services – may capture rents in a multitude of ways : through the allocation of jobs, through above market wages, and through low performance on the job, including with absenteeism or moonlighting. This research also suggests why public sector reform may be so difficult: if rent-sharing arises as part of a tacit agreement between politicians and public servants in which rents are transferred in exchange for political support, then any reform that tries to make public servants more accountable and reduce their rents will likely be seen as reneging on such an agreement and be met with opposition.In the second part of the paper, we review research that has focused on making public servants more accountable. This, mainly experimental literature, usually takes the political power constraints as given, and highlights the importance of information and the identity of those monitoring the public servant. We discuss to what extent such local reforms can be successful.
Child fostering is a practice widespread in Sub-Saharan Africa whereby children are temporarily sent to live with a host family. Using a rich household survey conducted in Senegal in 2006-7, the paper aims at describing the selection into fostering of both households and children and at examining the impact of fostering on the wellbeing of children (host, foster- and siblings left behind) measured through their school enrollment, labour and domestic work. Results suggest a wide heterogeneity among foster children, inducing differences in their wellbeing. The main sources of such heterogeneity come from the child's gender and his duration of stay in the host household. Whether the fostering has been formally arranged between parents also seems to matter. Results are reassuring regarding the well-being of fostered children relative to their host siblings, even if they might not fare as well as children not involved in fostering. On average, education and labour outcomes of foster children are not different from those of their host siblings. In particular, results do not support the idea that fostered girls might be overloaded with domestic tasks: they do not seem to spend more time at it than their host sisters.
In this paper, the authors use the lab to test a series of policy proposals designed to constrain rent-seeking behaviour in a policymaking context. The baseline governance game is conducted in the following way: subjects are randomly assigned to groups of four, with one subject randomly selected to be the "policymaker", while the other three are the "citizens". Citizens are informed that they can use their endowments to contribute to a group account. Any amount contributed to the group account are doubled. Once citizens have made their contribution decisions, the policymaker observes the contribution decisions of each citizen, and the total amount in the group account. The policymaker formulates a distribution "policy" to distribute the tokens among all four group members. The game is repeated for 20 rounds. With this basic framework, the authors implement and test the effect of three institutions designed to constrain policymaker rent-seeking behaviour: voting, policy commitment, and punishment. The results show that voting and enforced commitment are the most effective policy mechanisms to constrain rent-seeking, and improve citizen welfare. The authors find policymaker punishment regimes to be largely ineffective, both in reducing rent-seeking and improving welfare of citizens.
