Is There Room for Case Studies in Development Practice?

Amid the current much-needed revolution in (quantitative) evidence-driven development practice, is there room for case studies?

Michael Woolcock at the Bank says yes:

The frequency and sophistication with which case studies are deployed by social scientists has greatly expanded in recent years. The goal now is not merely to document or describe, but to diagnose, explain, interpret, and inform a basis for action. Professional schools across the disciplines – from medicine and engineering to business and public policy – now routinely use ‘the case method’ not only to teach but to generate practical knowledge.

As an example, Woolcock cites a report with case studies of successes achieved in the Ministries of Finance and Education in The Gambia (I should add, despite Yahya Jammeh):

Despite facing formidable political, economic, and capacity challenges, The Gambia has recorded sizable advances in the education sector in a relatively short time frame. Since 2000, enrollment has more than doubled in secondary schools, while the number of students enrolled in basic education has increased by 40 percent, with notable growth in the madrassas schools. Gender equality and completion rates in basic education have continued to improve across the board and surpass the regional averages. Simultaneously, the number of teachers formally trained and the number of students enrolled in the Teachers’ College has grown considerably since 2005.

Screen Shot 2015-02-25 at 4.30.59 PMThese gains are directly linked to the scaled-up investment in the sector, which has translated into a greater number of schools, larger number of qualified teachers and monitors, and the introduction of innovative programs catering to hard-to-reach groups. In turn, these achievements have been made possible by the organizational and management changes introduced by the Ministry of Basic and Secondary Education (MoBSE) and its ability to remain focused on a small set of goals, report results, and mobilize domestic and external support to realize them, while generating and renewing its leadership cadre. To achieve this, the institution has had to navigate and solve numerous challenges in its internal organization and in the governance environment.

This is how development happens. Specific segments of governments get it right and, with some luck, generate positive spillovers into other departments. In Gambia it is happening in the Ministries of Finance and Education. In Kenya, the Kenya Revenue Authority (KRA) and, to some extent, the Treasury are doing much of the heavy-lifting in the quest to rationalize the Kenyan economy.

Rating Kenya’s Presidents

Jomo Kenyatta’s regime was corrupt, illiberal and competent. Moi’s was corrupt, illiberal and mediocre. Kibaki’s was corrupt, liberal and competent. So, Moi scores zero out of three. Jomo scores one out of three. Kibaki scores two out of three. Now it adds up!

Jubilee’s [Uhuru Kenyatta] stock has fallen not just because it is seen as corrupt, but because it comes across as also illiberal and incompetent. Like Moi’s regime, it scores zero out of three.

….. Which is more harmful to society, mediocrity or corruption? Mediocrity is by definition below average. It stands to reason that all other things equal, mediocrity is more costly than corruption.

It goes without saying that a corrupt mediocracy is even more deleterious. When mediocre rulers are also corrupt even their corruption is mediocre. Because they are unable to generate sufficient returns, they eat into the capital. That’s what the decay of our infrastructure during Moi was — they ate the capital.

What’s more, what mediocre corrupt leaders steal they squander. Mobutu’s billions have never been traced.

That is the ever-insightful Kenyan economist David Ndii writing in the Daily Nation.

And of course Kibaki was the best president Kenya ever had. He went to Mang’u High School (along with many other key people in his government).

But on a more serious note, can Kenyatta’s administration be redeemed?

I think so. Part of the problem has been the total breakdown of constructive communication between the moderate elements in Kenyan society and State House. The ensuing siege mentality at State House has left the president open for capture by the thuggish elements that are rapidly criminalizing the Kenyan state. But progressive Kenyans need not concede the presidency to these corrupt, incompetent and illiberal characters. There is still room for constructive engagement.

Unlike Moi President Kenyatta appears to have an instinct to delegate (some say he is clueless at Government). The challenge is how to make sure he delegates to the right people.

Africa as a Living Laboratory

Science is said to have two aims: theory and experiment. Theories try to say how the world is. Experiment and subsequent technology change the world. We represent and we intervene. We represent in order to intervene, and we intervene in light of our representations….

This book explores the points at which “representations” turned into “interventions,” as theory and research were applied in practice. Defined this way, interventions, including development projects, are part of an ongoing process of knowledge formation and reproduction.

That is Helen Tilley in an excellent book on imperial/colonial Africa as a Living Laboratory. The book focuses on scientific research (both in the natural and social sciences) in Africa between 1870-1950 and is a must read for practitioners and academics interested in International Development.

Slide from Easterly's Book Tour Talk

Slide from Easterly’s book tour talk

Chapter 2 is on Africa as “A Development Laboratory” (and the origins of the Africa Survey – see image), and will leave you feeling like there is, at least for the most part, nothing new under the sun in International Development. William Easterly makes this point as well in the Tyranny of Experts.

Oh, and Tilley’s book has some good data on the intensity of colonial administration and public goods provision in areas such as medicine, agriculture and infrastructure development.

The Anatomy of Tax Evasion in Africa

Africa Confidential has a great piece analyzing leaked documents from PwC, the professional services firm, showing the various arrangements that enable multinational companies to evade taxes in Africa. You can read the whole piece here (gated).

  • One of the measures PwC advised multinationals to take was to create a wholly-owned Luxembourg-based subsidiary which would hold the rights to intellectual property used by the rest of the group. The rest of the group would then pay licensing fees to the Luxembourg-based subsidiary which, by agreement with the authorities, would be granted tax relief of up to 80%……
  • A second tax avoidance mechanism simply involved the companies becoming incorporated in Luxembourg. In 2010, Luxembourg concluded an agreement with several companies of the Socfin (Société financière) agribusiness group, which was founded during the reign of Belgian King Leopold II by the late Belgian businessman Adrien Hallet. The companies chose Luxembourg as their base and made an agreement under which their dividends were subject to a modest 15% withholding tax, a lower figure than those in force where their farms are located (20% in Congo-K and Indonesia, 18% in Côte d’Ivoire).
transfer-pricing

The art of hiding profits

Altogether, Socfin subsidiaries in Africa [in Sierra Leone, Nigeria, Liberia, Cote d’Ivoire, and Cameroon] and Indonesia produced 123,660t. of rubber and 380,770t. of palm oil in 2012. The combined turnover of its main African subsidiaries reached €271 mn. in 2013. The list also includes the 100%-owned Plantations Socfinaf Ghana Ltd. (PSG) and Socfin-Brabanta (Congo-Kinshasa). Socfin also holds 88% of Agripalma in São Tomé e Príncipe and 5% of Red Lands Roses (Kenya).

  • A third mechanism involves cross-border lending within a group of companies. Companies registered in Luxembourg are exempt from tax on income from interest.

According to the Thabo Mbeki High Level Panel report between 1980 and 2009 between 1.2tr and 1.4tr left Africa in illicit flows. These figures are most likely an understatement. Multinationals, like the ones highlighted by Africa Confidential, accounted for 60% of these flows.

Alex Cobhan, of the Tax Justice Network, has a neat summary of the various components of illicit financial flows (IFFs) and how to measure them. He also proposes measures that could help limit IFFs, including: (i) eliminating anonymous ownership of companies, trusts, and foundations; (ii) ensuring that all bilateral trade and investment flows occur between jurisdictions which exchange tax information on an automatic basis; and (iii) making all multinational corporations publish data about their economic activity and taxation on a country-by-country basis.

Alex Cobham blogs here.