A fascinating article on the power of compassion on economics.
Inspirations from Paul Collier´s seminar in Lisbon: “Effective Organizations In Africa. Why Scarce? What can be done?”
When a new year starts there is always an unconscious sense of renovation that drives us to change behaviours and reformulate our lives. In this sense what better thing to do than to attend an inspiring seminar led by Paul Collier. Indeed on the 9th of January Paul Collier visit us in NOVASBE Uni in Lisbon to discuss: Effective Organizations in Africa. Why they are scarce? What can we do about it?
Unexpectedly the discussion that could focus on general governance issues and specificities of African institutions followed a surprising reasoning much more intricate and sophisticated than expected. It went deeper and wider looking at what drives positive behaviours in institutions and ultimately in societies.
Those acquainted with Africa will always be eager to understand why in this continent institutions struggle so much to fulfil their purpose. Much has been said and done on how to allocate resources to African development through public reforms, aid programs, infrastructure and health and education policies, but there is always this sensation that something is missing. Most of us try to avoid it but there are still fundamental questions to be answered that go deeper. After the huge investment in recent years why do we have schools where teachers do not turn up although they are paid? Why instead some teachers are just illiterate? Why a government secretary officer supervising anti-HIV health programs (funded by donors) decides to establish a company to import retroviral medicines and in addition they are fake? These are disturbing questions that become a torment on the daily life of a development worker but avoiding this reality is a denial that will not pay in this future that intends to eradicate poverty by 2030. But what can be done to ultimately change behaviours particularly in Africa.
Mainstream Adam Smith economics first showed us that scale and specialization was the solution to shape effective organisations. However scale encouraged free riding behaviour and specialisation instead only works if there is cooperation and unfortunately it is mostly not an instinct. Looking at evidence in corporate institutions in Africa examples from Kenya showed that different ethnic groups hardly cooperate and instead they tend to sabotage each other. Thus as cooperation is far from being automatic economists created the famous incentives along with monitoring performance to reinforce it and create result´s driven attitudes. Again experience has shown that incentives were a misinterpretation of the problem creating other type of issues. For example as the Israeli nursery story shows incentives sometimes remove a norm undermining cooperative behaviours. In the Israeli nursery story most people consistently arrived late to the nursery which made school program to start late and be consistently interrupted. The solution built on incentives implemented a payment fee each time they were late. The result was that late arrives increased exponentially destroying the norm and demoralizing the act of being late because I pay the fee!
Furthermore motivating positive and effective behaviours implies monitoring performance but due to operational costs this tends to be constrained to follow only a limited index or indicators and not the overall spectrum of real effort and results. In addition monitoring has also adverse effects that go beyond not monitoring what really matters. For instance sometimes it inadvertently signs distrust from the employer undermining cooperation among collaborators.
Thus conventional economics seem to be too simplistic to handle the human behaviour that sustains common economic decisions. Classic models ignore culture, believes, social networks and relationships, trust and expectations that ultimately shape everyday life of economic agents. Leaving these preferences out of the premises of most economic models treating it exogenously is ignoring a crucial part of the story that strongly influence economic outcomes particularly in Africa.
New approaches based on Kalof and Benton studies give a new perspective on how to build effective organizations promoting efficient and ethical behaviours. According to them one organization will only be successful if its objective is internalized in an efficient or ethical behaviour through a personal identity process of norms. In other words for example if one plumber internalizes the idea that he is a good plumber he will perform better and on behalf of an organization that considers him a good plumber. In the case of Africa where institutional efforts and financial investments are often drained out and undermined by consistent illicit and unethical behaviour by the public officers but also by beneficiaries of programs (such as poor people) one fundamental question comes into our mind: how can we promote good aid programs that engage program providers and poor people while simultaneously discouraging corrupt or dysfunctional behaviour? Corruption is usually curbed in Africa by drafting anti-corruption action plans, strategic papers or law regulations that very superficially change behaviours of daily lives of public officers or program aid recipients. The work of Kalof and Benton can be inspiring to understand how to promote transparency by internalizing organizational objectives in collaborators. But how to we achieve this complex task of promoting identity of personal features with overall objectives? Several options: one is through the selection process picking the best and more likely to engage in effective and ethical behaviours; other solution may be to invest on post-recruitment doctrine to reinforce a consistent positive philosophical environment throughout time.
Another interesting strategy that has been studied is the power of narratives on motivation, this process of storytelling has been very efficient in engaging communities in aid programs or public officers to fulfill their function, because it is a simplified way of reasoning that improves rapid absorption of causal relations leading to better internalization of objectives. Multidisciplinary studies based on neurology for example show that brain storing of information is based on narratives and stories that are more easily memorized and therefore internalized. A study in Engaging Student Teachers in Sustainable Praxis in Aotearoa by Sue Smorti, Madeleine Peters-Algie, Cheryl Rau
New Zealand Childcare Association, New Zealand has shown that using an indigenous Maori narrative named whakapapa (our connectedness to all things, both living and non-living), was very successful in integrating a Māori perspective of sustainability into students behaviours. The use of local believes of enlightenment and universal understanding was more effective than classic dissemination programs of sustainability because it gave a transcendental purpose to the community converging their efforts and actions. It has shown that to create a transcendental organization with a higher purpose it’s an exercise that goes beyond money. All we do is money is absolutely bankrupted! Another good example is the Uganda Health Story in which a Hospital based on the Church of God, paid less to their employees but had better outcomes. The sense of mission and transcendental objectives are better incentives to effectiveness than money or monetary benefits.
Furthermore particularly in Africa internalizing objectives may be interesting to block believes, norms and networks that are locally stable and rigid and highly dysfunctional like corruption, violation of human rights and ethnic discrimination. But how do we disrupt these dysfunctional norms? There is the need of a big push that shall use and touch identity and norms to change behaviours. Interesting studies have shown the importance of leadership, role models or multiple trend setters as extraordinary tools that effectively promote mindset changes. A panoply of influential drivers can be used such as charismatic leaders as Mandela, or role models as football stars, educational narratives from soap operas, or simply fashion trends.
One of the caveats of this approach is that Africa is a continent with very uncertain and erratic environments that tend to promote short run views built on opportunistic behaviours. In addition these opportunistic behaviours usually prevail because they are associated with very low reputational costs. But however hard, it is possible to believe that building organisations with a transcendental purpose may promote ethics and moral behaviour in Africa through positive narratives that shall accumulate a reputational heritage crucial to engage people out of poverty.
It is challenging, mindblower and out of the box, but however difficult to implement, this idea of building moral economics by internalizing positive behaviours is definitely a refreshing inspiration to start a new year cycle!