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Mainstreaming Institutional Development: Why is it Important and How Can it be Done?

Author: J Bossuyt
Date: 2001
Size: 17 pages (78.9KB)

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Summary

Institutional development is a vital tool in the struggle for sustainable development and structural poverty reduction. Though there is consensus on this from donor agencies, and this has been reflected in new policy, in terms of practical implementation, there is still a long way to go. Often the traditional supply-driven techniques of quick-fix technical solutions are still used, with the consequence of de-capacitating local institutions. Is there a danger that donor agencies will become irrelevant if they do not focus on institutional issues and work in partnership with the countries they are there to help?

This document is from the European Centre for Development Policy Management (ECDPM). Focusing on structural poverty reduction, it aims to stimulate debate on whether institutional development should become the central element of the cooperation strategy and asks how it can be mainstreamed.

The document highlights the following factors that are key to the debate:

• Donor agencies are still locked into outmoded operational methods. They measure their success in terms of bureaucratic effectiveness, for example accounting for aid resources. No one is measuring the results or sustainability of their work.
• Donor agencies work to deadlines that are based on factors that are irrelevant to front-line workers, but those external pressures undermine the workers’ ability to deal with the changing situation in the field.
• Developing countries are themselves demanding institutional reform to increase the legislative and regulatory effectiveness of their public institutions. This can reduce poverty by making the creation of pro-poor policy possible and by creating a competitive private sector.
• New cooperation practices in institutional development are being created, such as Sector-Wide Approaches (SWAps) and donor support to decentralisation. These are higher-risk strategies for donor agencies.

Mainstreaming institutional development requires donor agencies to change. Their strategies and practices are still typical of the traditional, supply- driven, technocratic management approach. To fully implement the new approaches to development assistance, such as SWAps and donor support to decentralisation, donor agencies require a paradigm shift at an institutional level.

• The aims of donors need to take account of local institutional conditions. Local ownership levels need to be increased.
• Incentives for staff within donor agencies and overall agency ambitions need to change focus away from short- term projects that work within fixed budgets. Instead accountability must be results based and agencies must accept that delay and failure may occur.
• A systemic approach is advocated that focuses on improving the institutional capabilities of developing countries.
• Cooperation must become demand focused.
• Institutional development must be mainstreamed so that donors deliver more effective assistance and can respond to changes in the type of support required.
• The implementation process will need to rely on support and participation from those at a high political level and also from key actors and stakeholders.

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Source: Bossuyt, J., 2001, 'Mainstreaming Institutional Development: Why is it important and how can it be done?', European Centre for Development Policy Management (ECDPM).
Author: European Centre for Development Policy Management (ECDPM), http://www.ecdpm.org