An outstanding new paper from Jaime Faustino and David Booth takes up that challenge in one particular context – advocating reforms in the Philippines – that has much wider implications. Jaime works for The Asia Foundation in the Philippines, and has become something of a TWP celebrity. At the ODI, David has been an influential voice in rethinking governance work. Their paper is crisply written, full of concrete suggestions, and thoroughly engrossing.
Their focus is ‘development entrepreneurs’ (DEs) – not grandstanding politicians, or Tahrir Square type revolutionaries, but the usually-invisible reformers working within the system, in this case to introduce substantial reforms in education, taxation, civil aviation regulation or property rights (I’ve covered some of these stories in a previous post). The paper is aimed at the big bilateral agencies, but has clear implications for NGOs too.
Here’s how the authors summarize the role of DEs
‘Their focus is on identifying objectives that are technically sound and politically possible. Technical soundness is assessed in terms of:
1. Impact: The likelihood the measure will change the incentives and behavior of people and organizations sufficiently, so development outcomes improve;
2. Scale: The prospects the reform will spread well beyond the initial project site; and
3. Sustainability: The likelihood the reform will continue without additional donor support.
Experience in the Philippines suggests, in addition, there is particular value in aiming for reforms that are ‘self-implementing’ in the sense that they lock in new market dynamics or patterns of behavior. This is most likely to be achieved by measures that alter the incentives of politicians, officials, firms and/or citizens without requiring them to redefine their interests or values in a fundamental way. In addition, the selected objective needs to be politically possible, meaning there is a reasonable prospect of the change being introduced, given the prevailing political realities.
The second distinctive feature of the model is the use of an entrepreneurial logic that encourages iterative ‘learning by doing’. Navigating through complex development challenges to discover possible pathways to reform must involve a great deal of trial and error.
Entrepreneurial logic involves making a series of small bets instead of seeking large all-or-nothing opportunities. Decisions at each stage depend on educated guesses, drawing on an equal combination of science, the results gained with small bets and imagination. This involves embracing error as a vital source of learning and the willingness and ability to adjust to new information in a dynamic environment.
Part of the attraction of the DE concept is that it builds on a lot of research and experience in the private sector. Jaime and David summarize ‘five principles of entrepreneurship’, each of which raises important challenges for NGOs (summarized in the square brackets):
1. Bird in Hand: An acceptance of how the world is, what resources are at their disposal and whom they know. [NGO angle: tension with normative/transformational agenda – too much acceptance of status quo here?]
2. Affordable Loss: Recognition that failures and setbacks are part of the process of finding and determining the ‘winning formula’. Instead of making large bets at the start, entrepreneurs make a series of small bets. Based on feedback and assessment, further actions are taken. [NGO angle: who absorbs losses – partners, NGOs or their funders?]
3. Strategic Partnerships: Understanding that collaboration, working with others, is essential for success. Entrepreneurs build partnerships with self-selecting stakeholders. By obtaining these commitments from key partners early on, entrepreneurs reduce uncertainty and co-create with interested partners. [NGO angle: that doesn’t sound very inclusive – what about voices that are not already at the table? And what are implications for attribution and proving impact?]
4. Leveraging Contingencies: Awareness that new developments and surprises can be turned into opportunity. For entrepreneurs, the correct response to surprises is ‘adjust and embrace the change’. [NGO angle: a big challenge – see you can’t take a supertanker white-water rafting]
5. Pilot in the Plane: Entrepreneurs tend to focus on activities within their control. ‘An entrepreneurial worldview is based in the belief that the future is neither found nor predicted, but rather made.’ [NGO angle: when you’re small, fewer things are within your control – the danger is that seeking to be in charge reduces your ambition by making you focus on easily measurable impacts, rather than ‘riding the wave’]
The key to this way of working is failing and learning faster – can NGOs do speed?
DEs are leaders, but of a different sort from the national Big Men (Kagame, Meles) who I’ve previously criticised David for being too keen on. Above all, they work in small teams (the paper quotes Amazon’s Jeff Bezos: If it takes more than two pizzas to feed the team, it is too big). They add some fascinating suggestions (see box) for the kind of skills that a team needs to bring together.
What can external supporters (aid agencies, INGOs etc) do to help/not hinder Development Entrepreneurs? The paper recommends backing ‘intermediary organizations’ with the skills to spot and support DEs (which probably means cloning Jaime), and spending more via flexible grant agreements. ‘As one development entrepreneur put it to us, ‘We are going to do this anyway, so giving us resources is a bonus and makes it a little easier.’’ I suspect that was Jaime too. Maybe the next paper should be entitled ‘where there is no Faustino’……
And my favourite quote of the paper (and 2015 thus far): ‘Everybody has a plan until they get punched in the mouth’ – from Mike Tyson (and he should know).