Doing Investment Climate Reform Differently. Why, what and how? LASER 2015
|Implementing agency(ies)||Law and Development Partnership|
|Funding agency(ies)||Department for International Development (DFID)|
|Date completed||May 2015|
|Issues/challenges||Why do Investment Climate Reform differently? Donor supported IC reform programmes have had limited success. Furthermore, where success has been claimed, it has often been based on flimsy evidence. A causal link between IC reform and growth has not been sufficiently established to-date. What remains particularly unclear is which IC reforms are most likely to succeed and deliver growth.|
What does doing Investment Climate Reform differently mean in practice for donor programming? Using the flexibility provided by DFID’s SMART rules, there is potential for DFID’s IC programming to take a new approach which, based on emerging and growing evidence, would enable DFID to engage with supporting IC reforms that are more likely to be successful. The new approach focuses on donor programming that starts with locally identified problems, rather than with attempting to reform IC institutions; to ‘take the money off the table’ (at least initially); to be locally (rather than donor) led; to be politically informed and context specific; and to be designed and implemented in a highly flexible and adaptive way.
This implies significant change to traditional donor programming mechanisms including: much more extended design (6-12 months) through ‘scoping / designing by doing’; flexible (not over-designed) programmes with log frames focused on ‘stories of change’ rather than on locking down precisely what changes will occur; and short planning cycles with the expectation of frequent log frame and theory of change updating as the context changes and assumptions underlying the programme logic are tested. DFID’s framework of businesses cases, log frames and payment by results all support this new approach, which DFID is now beginning to deploy in relation to major programmes.
The new approach implies that practitioners designing and implementing donor IC programmes should be ‘development entrepreneurs’ – passionate and highly innovate, with the primary role of facilitators and enablers, rather than drivers of reform; that they should develop relationships of trust and respect with local counterparts, with strong political astuteness.