Missing the Point: Accountability and Aid Effectiveness in Tanzania Panel 15: The Future of Development Management - Making Development Management more effective: dream or possibility? Helen Tilley PhD Candidate, SOAS 3 September 2009

1. Introduction Concepts of accountability Missing the point 2. The lens of political economy: wheres the focus? Accountability at home: the viewfinder Accountability in aid: the periscope 3. Analysis: rent seeking and policy space Domestic accountability influences and the budget Conditionality in budget support 4. A policy perspective: focusing on relational accountability

Many concepts of accountability in the literature - this paper develops and applies procedural and relational accountability: Procedural accountability focuses on the contractual mechanisms for regulating behaviour between autonomous parties who are either principals or agents. It is impersonal and embedded within formal institutions. Relational accountability is complex, highly personalised and based on clientelistic political and social relations, underpinned by implicit and informal rules. Not mutually exclusive – dominance of either type. These concepts of accountability are applied to the budget process and cases of conflict between donors and government around conditionality in budget support. 1. Introduction – Concepts of accountability

1. Introduction 2. The lens of political economy: wheres the focus? Accountability at home: the viewfinder Accountability in aid: the periscope

2. The lens of political economy Accountability at home: the viewfinder The political economy context in Tanzania can be categorised as neo- patrimonial. In contrast to Webers legal-rational bureaucracy, the administrative system is personalised and accounts to the Presidency. Patrimonialism co-exists with rational-legal institutions (Bratton and van de Walle 1997). Drawing on the work of North, Wallis, Webb and Weingast (2007) and Lindemann and Putzel (2008/9): the ruling party defines access to rents which provide an incentive to be peaceful. The risk of losing these rents results in cooperation with the dominant coalition and integrates the elite. This coalition of elites command authority and maintain legitimacy through coercion and persuasion. Consolidation of the inclusive elite bargain has its roots in the ruling partys (CCMs) centralised authority. This inclusive patronage has lead to state resilience. Patronage is not centrally coordinated or organised; instead there are a small number of powerful groups who are competing with one another (Khan and Gray, 2006). It is centralised, yet uncoordinated amongst competing interests: centripetal patronage. Close ties between politics and business redistribute resources to buy and maintain the support of the elite for the ruling party - the cooptation of the private sector into the patronage relationship.

2. The lens of political economy Accountability in aid: the periscope Aid relations involve a view through the periscope, above the surface, that differs from the policy space that is negotiated through ex-post manoeuvring below the surface. Increase in the formal, reduction in the informal. International aid agreements have embodied procedural accountability. Increased formalisation has allowed the Tanzanian government to maintain policy space to respond to domestic political interests. Increased ownership but at the expense of partnership. The formalised dialogue structure has become a control mechanism through which the influence of donors is reduced. General budget support (GBS) conditionalities function to allow the illusion of accountability and justify continued disbursements. Much of the conflict between donors and government that arises around key issues or events appears to be related to fundamental differences in their frames of reference.

1. Introduction 2. The lens of political economy: wheres the focus? 3. Analysis: rent seeking and policy space Placing international aid in the context of domestic political economy, how does the state negotiate space to maintain the support of the winning coalition? Applying the concept of relational accountability, how do domestic influences interact with foreign aid?

3. Analysis Conditionality in budget support How do domestic influences interact with foreign aid? Conditionality in GBS and the Performance Assessment Framework (PAF) as examples of policy formulation, influence and power in Tanzania. The increasing demand from within the international aid agenda to report on results abstracts from the domestic political economy context. The government retains space through: i) maintaining a strategic ambiguity whereby some room to manoeuvre is retained which creates the space for later reneging upon agreements (Richey, 1999); ii) slippage in implementation; or iii) policy reversal. In the context of a strategic game, the use of GBS is the only effective tool that donors have to send signals to the government that they are serious. As the dominant strategy for D is to disburse, in a repeated game G is able to employ strategies to gain the policy space to satisfy the winning coalition. Conflict with D may result but pacifying measures are taken to ensure that the strategy to disburse still remains dominant.

1. Introduction 2. The lens of political economy: wheres the focus? 3. Analysis: rent seeking and policy space 4. A policy perspective: focusing on relational accountability

3 key messages: 1.Donors approach accountability and development from a procedural perspective. Looking through the wrong lens they miss the point of how accountability, and society, work in Tanzania and the murky reality of how state and society function below the surface. 2.In the context of increased formalisation and procedural accountability in the international aid agenda, the recipient government uses their relational accountability dominant approach to gain ex-post policy space. 3.This allows the support of the winning coalition to be maintained through off-budget redistribution along centripetal patron-client networks.

4. A policy perspective: focusing on relational accountability What is the impact of donors missing the point? The procedural accountability dominant approach of donors results in an underestimation of the political constraints to development and high expectations of reform. Recent episodes of conflict have resulted in a deterioration of trust on both sides. What are the policy recommendations? Adopting a more relational approach donors could better understand the government, understand how they can most effectively contribute to development and subsequently move to a higher trust environment.

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