Rethinking Absorptive Capacity
Rethinking Absorptive Capacity A New Framework, with Applications to Security, Justice, Education, and Health
Robert D. Lamb, Program Director | [email protected] | (202) 775-3263 Kathryn Mixon | [email protected] | (202) 775-3170
Tuesday, April 30, 13
Allyn A. Young (1928) • “An industrial dictator, with foresight and knowledge, could hasten the pace [of economic progress] somewhat, but [even] he could not achieve an Aladdin-like transformation of a country’s industry so as to reap the fruits of a half-century’s ordinary progress in a few years.” o Allyn A. Young, “Increasing Returns and Economic Progress,” The Economic Journal 38, no 152 (December 1928), p. 534
www.csis.org |
Tuesday, April 30, 13
2
Millikan and Rostow (1957) • “It does little good to supply money to build plants if there are no skilled workers to operate them, no competent administrators to manage them, inadequate transport to bring in their raw materials and carry away their product, no repair facilities to maintain them, inadequate power to run them, and insufficient purchasing power to buy what they produce.” o Max F. Millikan and W.W. Rostow, A Proposal: Key to an Effective Foreign Policy (New York: Harper and Brothers, 1957), p. 45
www.csis.org |
Tuesday, April 30, 13
3
World Bank (1949 and 2011) • “Perhaps the most striking lesson the Bank has learned in the course of its operations is how limited is the capacity of the underdeveloped countries to absorb capital quickly for really productive purposes.” o International Bank for Reconstruction and Development, Fourth Annual Report to the Board of Governors, 1948–1949 (Washington: IBRD, 1949), p. 8
• “With deficits in the quality of governance in many sectors in most fragile situations, the best approach may seem to be rapid, across-the-board institutional transformation. But the scope and speed of reform are themselves risk factors—and attempting to do too much too soon may actually increase the risk of resumed conflict.” o World Development Report: Conflict, Security, and Development, World Bank, 2011, p. 145 www.csis.org |
Tuesday, April 30, 13
4
Albert O. Hirschman (1965) • “If a country lacks one of the conventional ‘prerequisites’ [to development,] it can overcome this lack in two distinct ways. One consists in inventing its own substitute for the prerequisite . . . The other possibility is that the purported ‘prerequisite’ turns out to be not only substitutable, but outright dispensable; nothing in particular needs to take its place, and we are simply proven wrong in our belief that a certain resource, institution, or attitude needed to be created or eradicated for development to be possible. In other words, the requirements of development turn out to be more tolerant of cultural and institutional variety than we thought on the basis of our limited prior experience.” o Albert O. Hirschman, “Obstacles to Development: A Classification and a Quasi-Vanishing Act,” Economic Development and Cultural Change 13, no. 4 (July 1965), pp. 385–393 www.csis.org |
Tuesday, April 30, 13
5
Luis Crouch et al (2009) Potential sources of absorptive capacity constraints: • inadequate knowledge or skills relative to aid size or complexity (includes knowledge of donor processes) • emigration or donor poaching of government personnel • donors’ misunderstanding of a ministry’s actual capacity, or refusal to recognize progress in capacity-building • poor training, planning, oversight, collaboration • use of “blueprints” rather than customized plans • donor under-coordination (overburdening ministry personnel) or over-coordination (creating herd mentality) • excessive ambitions (goal that could be achieved only if outperforms 99 percent of every other attempt in history) o Luis Crouch et al, “Absorptive Capacity: From Donor Perspectives to Recipients’ Professional Views,” EFA paper, 2009 www.csis.org |
Tuesday, April 30, 13
6
Insights from other fields Organizational learning and knowledge/tech transfer • Cohen & Levinthal: absorptive capacity as firm’s ability to identify, value, assimilate, and apply external knowledge • Lane & Lubatkin: transfer depends on kind of knowledge offered, similarity between existing practices of both firms, student firm’s prior experience with teacher firm
Foreign direct investment and positive spillovers • capturing positive spillovers: contributing factors include education, financial system, income, infrastructure, institutions, research investment, skills, technology
Environmental ecosystems and adaptive capacity • C.S. Holling (1973): “resilience” as a system’s ability to “absorb change” in a way that enables it to persist, at the same or perhaps a lower level of functioning www.csis.org |
Tuesday, April 30, 13
7
Measuring Absorptive Capacity (MAC) Phase 1. Model the theory of change • identify inputs, activities, outputs, participants, outcomes • identify input and output prerequisites • product: a validated model of intervention design/intent
Phase 2. Identify missing prerequisites & model flaws • field research to find missing prerequisites • case research to determine parameters of the possible
Phase 3. Revise the intervention design • modify to incorporate missing prerequisites • redesign to minimize missing prerequisites • rethink the intervention to a more realistic
Phase 4. Monitor, evaluate, iteratively revise www.csis.org |
Tuesday, April 30, 13
8
Phase 1. Modeling and validation • 1A. Model the theory of change implicit in program design o identify inputs, activities, outputs, participants, desired outcomes – review documents/data, interview stakeholders (HQ and field) – determine relations among factors (linear, dynamic, complex)
o identify input and output prerequisites – sometimes called “assumptions,” “dependencies,” “risks,” “external factors” – input prerequisites: capabilities, resources, knowledge that donors do not provide, but that the recipient requires to make productive use of the donor’s inputs (traditional understanding of absorptive capacity: missing inputs) – output prerequisites: capabilities, resources, knowledge that donors do not provide, but that must be present in the recipient system in order for the intervention’s outputs to contribute to the desired outcome – drawn from needs assessments, technical requirements, political economy analysis, common sense
• 1B. Validate and refine the model o interviews, workshops: accurately reflect program design/intent? o make initial recommendations – based on any obvious shortcomings of theory of change – flaws in logic, impossibilities, obviously missing prerequisites
www.csis.org |
Tuesday, April 30, 13
9
Phase 2. Field and case research • 2A. Field research based on model prerequisite structure o each input and output prerequisite identified in phase 1 becomes a research question: is it actually present in the field? – input prerequisites: capabilities, resources, knowledge that donors do not provide, but that the recipient requires to make productive use of the donor’s inputs (traditional understanding of absorptive capacity: missing inputs) – output prerequisites: capabilities, resources, knowledge that donors do not provide, but that must be present in the recipient system in order for the intervention’s outputs to contribute to the desired outcome
o report results: what prerequisites are missing?
• 2B. Case research o compare performance requirements to historical record – have similar programs succeeded elsewhere? – what has the recipient institution accomplished in past?
o report results: does design/intent require recipient to significantly outperform the historical record? www.csis.org |
Tuesday, April 30, 13
10
Phase 3. Make recommendations/revisions • 3A. Analyze donor capacity to assimilate knowledge, adapt to local conditions, plan, and implement o knowledge, cultures, incentives, internal processes for personnel, security, contracting, budgeting, planning, leadership functions
• 3B. Make recommendations o modify the intervention – supply missing prerequisites, or coordinate with others to supply them – needed for missing prerequisites that are simple, technical, concrete
o redesign the intervention (iteratively) – find approach that minimizes missing prerequisites – allow implementers to experiment with design in field – needed for bypassing binding constraints, political economy issues
o rethink the intervention – – – –
are the objectives appropriate to the recipient society/institution? would achieving them require unprecedented performance? are the missing prerequisites actually necessary? needed if performance requirements unrealistic, poor donor delivery capacity
www.csis.org |
Tuesday, April 30, 13
11
Phase 4. Monitor progress, iteratively revise • As intervention is revised, redesigned, rethought o o o o
model the new theory of change and validate the new model update the field and case research to test the new model report any new missing prerequisites found as a result iterate the process to minimize missing prerequisites
• Continuously look for evidence of local adaptive capacity o locals might find way around missing prerequisites (see Hirschman) o more complex systems produce surprising results; monitor closely
• Address donor underperformance in delivery capacity o personnel, security, contracting, budgeting, planning, leadership, all have own challenges/obstacles: help them solve their problems o implementers might find way around missing prerequisites
• Quarterly reports, ad hoc topical reports
www.csis.org |
Tuesday, April 30, 13
12
Discussion: Haiti’s Education Sector • Summary of design/intent of Haiti education program • Progress to date (good and bad) • Challenges/obstacles o simple, technical, concrete (conventional absorptive capacity) o binding constraints, political economy (how social change happens) o donors’ delivery capacity
• Opportunities to modify, redesign, rethink?
www.csis.org |
Tuesday, April 30, 13
13
Disruption / Intervention Q
toward objective
tx
pre state
ty adaptation
resources / capabilities
resources / capabilities no effect on objective
gaps
neutral absorption
maladaptation
Tuesday, April 30, 13
gaps
stressors
stressors
away from objective
post state
Source: Ellen Taylor-Powell and Ellen Henert, “Developing a Logic Model: Teaching and Training Guide,” University of Wisconsin–Extension, February 2008, http://www.uwex.edu/ces/pdande/evaluation/pdf/lmguidecomplete.pdf
Tuesday, April 30, 13
outcomes
inputs
Intervention
pre state resources / capabilities gaps
outputs
post state resources / capabilities
1st input prerequisit es
gaps
1st output prerequisit es
stressors
Tuesday, April 30, 13
stressors 2nd input prerequisit es
2nd output prerequisit es
3rd input prerequisit es
3rd output prerequisit es
etc.
etc.
adaptation
Robert D. Lamb, Program Director | [email protected] | (202) 775-3263 Kathryn Mixon | [email protected] | (202) 775-3170
Tuesday, April 30, 13
Allyn A. Young (1928) • “An industrial dictator, with foresight and knowledge, could hasten the pace [of economic progress] somewhat, but [even] he could not achieve an Aladdin-like transformation of a country’s industry so as to reap the fruits of a half-century’s ordinary progress in a few years.” o Allyn A. Young, “Increasing Returns and Economic Progress,” The Economic Journal 38, no 152 (December 1928), p. 534
www.csis.org |
Tuesday, April 30, 13
2
Millikan and Rostow (1957) • “It does little good to supply money to build plants if there are no skilled workers to operate them, no competent administrators to manage them, inadequate transport to bring in their raw materials and carry away their product, no repair facilities to maintain them, inadequate power to run them, and insufficient purchasing power to buy what they produce.” o Max F. Millikan and W.W. Rostow, A Proposal: Key to an Effective Foreign Policy (New York: Harper and Brothers, 1957), p. 45
www.csis.org |
Tuesday, April 30, 13
3
World Bank (1949 and 2011) • “Perhaps the most striking lesson the Bank has learned in the course of its operations is how limited is the capacity of the underdeveloped countries to absorb capital quickly for really productive purposes.” o International Bank for Reconstruction and Development, Fourth Annual Report to the Board of Governors, 1948–1949 (Washington: IBRD, 1949), p. 8
• “With deficits in the quality of governance in many sectors in most fragile situations, the best approach may seem to be rapid, across-the-board institutional transformation. But the scope and speed of reform are themselves risk factors—and attempting to do too much too soon may actually increase the risk of resumed conflict.” o World Development Report: Conflict, Security, and Development, World Bank, 2011, p. 145 www.csis.org |
Tuesday, April 30, 13
4
Albert O. Hirschman (1965) • “If a country lacks one of the conventional ‘prerequisites’ [to development,] it can overcome this lack in two distinct ways. One consists in inventing its own substitute for the prerequisite . . . The other possibility is that the purported ‘prerequisite’ turns out to be not only substitutable, but outright dispensable; nothing in particular needs to take its place, and we are simply proven wrong in our belief that a certain resource, institution, or attitude needed to be created or eradicated for development to be possible. In other words, the requirements of development turn out to be more tolerant of cultural and institutional variety than we thought on the basis of our limited prior experience.” o Albert O. Hirschman, “Obstacles to Development: A Classification and a Quasi-Vanishing Act,” Economic Development and Cultural Change 13, no. 4 (July 1965), pp. 385–393 www.csis.org |
Tuesday, April 30, 13
5
Luis Crouch et al (2009) Potential sources of absorptive capacity constraints: • inadequate knowledge or skills relative to aid size or complexity (includes knowledge of donor processes) • emigration or donor poaching of government personnel • donors’ misunderstanding of a ministry’s actual capacity, or refusal to recognize progress in capacity-building • poor training, planning, oversight, collaboration • use of “blueprints” rather than customized plans • donor under-coordination (overburdening ministry personnel) or over-coordination (creating herd mentality) • excessive ambitions (goal that could be achieved only if outperforms 99 percent of every other attempt in history) o Luis Crouch et al, “Absorptive Capacity: From Donor Perspectives to Recipients’ Professional Views,” EFA paper, 2009 www.csis.org |
Tuesday, April 30, 13
6
Insights from other fields Organizational learning and knowledge/tech transfer • Cohen & Levinthal: absorptive capacity as firm’s ability to identify, value, assimilate, and apply external knowledge • Lane & Lubatkin: transfer depends on kind of knowledge offered, similarity between existing practices of both firms, student firm’s prior experience with teacher firm
Foreign direct investment and positive spillovers • capturing positive spillovers: contributing factors include education, financial system, income, infrastructure, institutions, research investment, skills, technology
Environmental ecosystems and adaptive capacity • C.S. Holling (1973): “resilience” as a system’s ability to “absorb change” in a way that enables it to persist, at the same or perhaps a lower level of functioning www.csis.org |
Tuesday, April 30, 13
7
Measuring Absorptive Capacity (MAC) Phase 1. Model the theory of change • identify inputs, activities, outputs, participants, outcomes • identify input and output prerequisites • product: a validated model of intervention design/intent
Phase 2. Identify missing prerequisites & model flaws • field research to find missing prerequisites • case research to determine parameters of the possible
Phase 3. Revise the intervention design • modify to incorporate missing prerequisites • redesign to minimize missing prerequisites • rethink the intervention to a more realistic
Phase 4. Monitor, evaluate, iteratively revise www.csis.org |
Tuesday, April 30, 13
8
Phase 1. Modeling and validation • 1A. Model the theory of change implicit in program design o identify inputs, activities, outputs, participants, desired outcomes – review documents/data, interview stakeholders (HQ and field) – determine relations among factors (linear, dynamic, complex)
o identify input and output prerequisites – sometimes called “assumptions,” “dependencies,” “risks,” “external factors” – input prerequisites: capabilities, resources, knowledge that donors do not provide, but that the recipient requires to make productive use of the donor’s inputs (traditional understanding of absorptive capacity: missing inputs) – output prerequisites: capabilities, resources, knowledge that donors do not provide, but that must be present in the recipient system in order for the intervention’s outputs to contribute to the desired outcome – drawn from needs assessments, technical requirements, political economy analysis, common sense
• 1B. Validate and refine the model o interviews, workshops: accurately reflect program design/intent? o make initial recommendations – based on any obvious shortcomings of theory of change – flaws in logic, impossibilities, obviously missing prerequisites
www.csis.org |
Tuesday, April 30, 13
9
Phase 2. Field and case research • 2A. Field research based on model prerequisite structure o each input and output prerequisite identified in phase 1 becomes a research question: is it actually present in the field? – input prerequisites: capabilities, resources, knowledge that donors do not provide, but that the recipient requires to make productive use of the donor’s inputs (traditional understanding of absorptive capacity: missing inputs) – output prerequisites: capabilities, resources, knowledge that donors do not provide, but that must be present in the recipient system in order for the intervention’s outputs to contribute to the desired outcome
o report results: what prerequisites are missing?
• 2B. Case research o compare performance requirements to historical record – have similar programs succeeded elsewhere? – what has the recipient institution accomplished in past?
o report results: does design/intent require recipient to significantly outperform the historical record? www.csis.org |
Tuesday, April 30, 13
10
Phase 3. Make recommendations/revisions • 3A. Analyze donor capacity to assimilate knowledge, adapt to local conditions, plan, and implement o knowledge, cultures, incentives, internal processes for personnel, security, contracting, budgeting, planning, leadership functions
• 3B. Make recommendations o modify the intervention – supply missing prerequisites, or coordinate with others to supply them – needed for missing prerequisites that are simple, technical, concrete
o redesign the intervention (iteratively) – find approach that minimizes missing prerequisites – allow implementers to experiment with design in field – needed for bypassing binding constraints, political economy issues
o rethink the intervention – – – –
are the objectives appropriate to the recipient society/institution? would achieving them require unprecedented performance? are the missing prerequisites actually necessary? needed if performance requirements unrealistic, poor donor delivery capacity
www.csis.org |
Tuesday, April 30, 13
11
Phase 4. Monitor progress, iteratively revise • As intervention is revised, redesigned, rethought o o o o
model the new theory of change and validate the new model update the field and case research to test the new model report any new missing prerequisites found as a result iterate the process to minimize missing prerequisites
• Continuously look for evidence of local adaptive capacity o locals might find way around missing prerequisites (see Hirschman) o more complex systems produce surprising results; monitor closely
• Address donor underperformance in delivery capacity o personnel, security, contracting, budgeting, planning, leadership, all have own challenges/obstacles: help them solve their problems o implementers might find way around missing prerequisites
• Quarterly reports, ad hoc topical reports
www.csis.org |
Tuesday, April 30, 13
12
Discussion: Haiti’s Education Sector • Summary of design/intent of Haiti education program • Progress to date (good and bad) • Challenges/obstacles o simple, technical, concrete (conventional absorptive capacity) o binding constraints, political economy (how social change happens) o donors’ delivery capacity
• Opportunities to modify, redesign, rethink?
www.csis.org |
Tuesday, April 30, 13
13
Disruption / Intervention Q
toward objective
tx
pre state
ty adaptation
resources / capabilities
resources / capabilities no effect on objective
gaps
neutral absorption
maladaptation
Tuesday, April 30, 13
gaps
stressors
stressors
away from objective
post state
Source: Ellen Taylor-Powell and Ellen Henert, “Developing a Logic Model: Teaching and Training Guide,” University of Wisconsin–Extension, February 2008, http://www.uwex.edu/ces/pdande/evaluation/pdf/lmguidecomplete.pdf
Tuesday, April 30, 13
outcomes
inputs
Intervention
pre state resources / capabilities gaps
outputs
post state resources / capabilities
1st input prerequisit es
gaps
1st output prerequisit es
stressors
Tuesday, April 30, 13
stressors 2nd input prerequisit es
2nd output prerequisit es
3rd input prerequisit es
3rd output prerequisit es
etc.
etc.
adaptation
