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If donors cannot even agree about what institutions are and do not clearly understand how to promote deliberate institutional change, then what are ideas and assumptions that inform their institutional reforms? In each wave of reforms, donors’ interventions and practices have been grounded in layers of unjustified assumptions – explicit or implicit – on the nature of institutions and institutional change, rather than on robust empirical research and analysis of lessons from previous reforms. These assumptions, despite evidence from previous reforms that they are misguided, have been accumulated and passed on to newcomers in the donor community. These assumptions are referred to here as myths.

This chapter describes how public sector reform (PSR) became important following the ‘Doi Moi’ (renovation) programme in 1986. Restructuring of state-owned sector was regarded as crucial for ensuring the quality of economic growth, and the Vietnamese government (www.chinhphu.vn/portal/page/portal/English) put considerable effort in PSR. The 8th Party Congress (1996) emphasized the urgent need for a more transparent, capable and modern public sector, including efforts to improve law-making process and capacity, reducing burdensome bureaucracy, fighting corruption, increasing leadership by senior officials and improving public service delivery. The government specifies the national PSR Master programme, and the Ministry of Home Affairs coordinates its implementation among ministries, central agencies and provincial governments. Local political leaders (party leaders) determine reforms based on guidelines of the party and government. The author writes that in spite of ambitious public service reform programmes and some positive achievements, the quality of public sector remains poor. The professional capacity of civil service is low, pay is low, corruption is high and processes and structures seem ill-fitted for the market economy. Reform scope is too broad, the capacity of public agencies and civil servants is limited and existing monitoring, evaluation and reporting systems are weak. In some successes, leaders use appointment and promotion to encourage lower level to implement reforms and training to increase understanding. They believe that Vietnamese leadership has become less proactive and vigorous in practicing or embracing bold reform experiments.

This chapter examines one of the specific manifestations of political–administrative relationships, namely the delegation of powers to managers. The first part of the chapter is a literature review of political–administrative relationships in both developed and developing countries. This is followed by a discussion of the framework for delegation in South Africa that was laid down in the late 1990s. Next is an analysis of the implementation of delegation in the 2000s, along with the National Planning Commission recommendations in 2012, which has led to a resurgence in delegation initiatives. There is a well-developed government monitoring system of delegation that has led to some improvement in compliance with delegation, but the overall delegation levels are on the low side. Delegation to officials is often thwarted by Ministers who wish to retain control and/or promote patronage. Further, in some cases, managers lack capacity or are unwilling to manage and take responsibility for delegated authority.

A confluence of several factors influenced donors’ decision to launch a new wave of institutional reforms that, on the surface, appeared to be the opposite of what the second wave of reforms were about. One of the main contributors to this shift was the increasing amount of evidence pointing to the limits of relying purely on market policies. Contrary to donors’ prescriptions, not all the countries that followed the “Washington Consensus” prospered as a result of the reforms. If anything, the Asian crisis, the experiences of transition from command to market economy, and situations in much of the poorest regions of the world provided examples of the human costs of neglecting the proper role of public sector institutions.²

The term capacity development, and to a lesser extent, capacity building, started to be substituted for institutional development and institution building in donors’ vocabulary for the last couple of decades. As mentioned in the book, capacity development is used along with capacity building,¹ institutional development, public sector reform (PSR), and governance reform, frequently to mean the same thing. For example, capacity development is understood as building and strengthening human, organizational, institutional, and societal capabilities in developing countries mainly focused on their public administration systems (IMF, 2007). The World Bank's Strategy for Reforming Public Institutions and Strengthening Governance defines capacity building as “building effective and accountable [public sector] institutions to address development issues and reduce poverty in borrowing countries,” and emphasizes its importance as the core of the World Bank's activity (2000a, p. xii).

Kyrgyzstan's government policies are reflected in its national programs, strategies, and concept papers (conceptcii), which are supposed to inform various government bodies’ work. In most cases, these documents are implemented through drafting and adoption of laws and other legislative documents, including by laws of the cabinet, ministries, and other government entities. There are no formal requirements for the content and process of creating programs, strategies, and concept papers. They often have national scope, although they can be either generic or focused on specific policy areas. Generic policy documents include several national development strategies, such as the National Poverty Reduction Strategy 2003–2005 promoted by Akaev and the 2009 National Development Strategy adopted during Bakiev's term. The current government is working on a new medium-term development strategy. Examples of policy documents focused on specific policy areas include “Health,” a national program for 2012–2016, which the Ministry of Health is currently drafting. Another example is Kyrgyzstan's Youth Policy – drafted by the Youth Ministry with contributions from local experts – which was released for public discussion through media and round tables. The next section reviews how such policies are made, implemented, and assessed.