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The London School of Economics and Political Science Brokering The London School of Economics and Political Science Brokering Development Policy Change: The Parallel Pursuit of Millennium Challenge Account Resources and Reform Bradley Christopher Parks A thesis submitted to the International Relations Department of the London School of Economics for the degree of Doctor of Philosophy, London, September 2013 Declaration I certify that the thesis I have presented for examination for the MPhil/PhD degree of the London School of Economics and Political Science is solely my own work other than where I have clearly indicated that it is the work of others (in which case the extent of any work carried out jointly by me and any other person is clearly identified in it). The copyright of this thesis rests with the author. Quotation from it is permitted, provided that full acknowledgement is made. This thesis may not be reproduced without my prior written consent. I warrant that this authorisation does not, to the best of my belief, infringe the rights of any third party. I declare that my thesis consists of 91,511 words. Statement of conjoint work I confirm that Chapter 5 was jointly co-authored with Mr. Zachary Rice and I contributed 60% of this work. 2 Abstract A small body of mostly anecdotal evidence suggests that governments have undertaken legal, policy, institutional, and regulatory reforms to enhance their chances of becoming eligible for assistance from the Millennium Challenge Corporation (MCC). But we know little about the strength and scope of the so-called "MCC Effect”—in particular, why it seems to exert varying levels of influence across time, space, and policy domains. I collect two novel sources of data on the MCC Effect in order to explain the conditions under which the MCC eligibility standards have influenced the reform efforts of developing country governments. Through formal coding of archival data, I construct a database of more than 14,000 country- policy-domain-year observations that measures whether and how governments change their policy behavior in order to achieve or maintain MCC eligibility. I then employ logit, rare event logit, and three-level random intercept modeling techniques as well as propensity score matching methods to explain the policy responses and non-responses of governments to the MCC eligibility criteria. I also draw on data from a first-of-its-kind survey of 640 development policymakers and practitioners in 100 low income and lower-middle income countries to "ground truth" inferences drawn from analysis of the archival data. My findings suggest that a range of factors influence the probability that a government will pursue reform activities in response to the MCC eligibility criteria. However, the central contribution of this thesis is the theoretical and empirical argument that the network positions of change management teams shape whether, when, and how externally inspired reforms get adopted and implemented. In this regard, I call attention an underappreciated factor that shapes the adoption and implementation of externally-influenced reforms: the presence of a policymaking team that has sufficient autonomy to introduce disruptive changes to the status quo, but also sufficient embeddednesss to overcome domestic political opposition. 3 Preface I was part of the initial team that helped establish the MCC. As a member of the Policy and International Relations Department, which administers the agency's annual competition for funding, I had a front row seat to the policy reform dialogue between the USG and senior policymakers from nearly 120 low income and lower-middle income countries. My duties at the MCC included documenting the responses and non-responses of developing country governments to the Millennium Challenge Account (MCA) eligibility criteria. As such, I spent thousands of hours between 2005 and 2010, taking detailed notes in meetings with finance and planning ministers; reviewing letters of interest, disinterest, and opposition from senior officials in MCA candidate countries; reading cables from U.S. Embassy staff responsible for engaging developing country officials on MCA eligibility issues; collecting information from USAID, MCC, and US Embassy staff with country-specific responsibilities; and scouring MCA-related media coverage in candidate, threshold, and compact countries. My observations from this insider's perch inspired the data collection project and analysis that reside at the center of this thesis. In anticipation of the fact that my period of service at the MCC would open up the analysis in this thesis to special scrutiny, I assembled a twelve-person team to systematically collect and independently code as much data as possible from public sources. I also employed transparent and replicable procedures to analyze these data. I recognize that there is a tradeoff between having access to insider knowledge about "how things really work" and the ability to definitively refute criticisms of bias. Thus, I have taken great pains to ensure that the evidence presented in this thesis is collected and analyzed in an even-handed manner, but I cannot categorically rule out the possibility that my experiences at the MCC have colored my views about the MCC's influence or lack of influence vis-à-vis specific countries. I make no apologies that I allowed my period of public service to directly inform and influence my scholarship. I view my experiences and observations at the MCC as one of the principal virtues of this thesis. First, it informed my theoretical development work and guided my selection of hypotheses. Second, it made it vastly easier to trace causal processes within individual country cases. Third, it afforded me an extraordinary opportunity to assemble a comprehensive body of evidence about how countries formulated policy responses to the 4 MCA eligibility incentive between 2004 and 2010. Without access to this evidence, I would not have conceived of the MCC Effect coding scheme described in Chapter 3 or the MCA Stakeholder Survey described in Chapter 5, which underpin my empirical analysis. Nor would this analysis have been possible if I had not crossed the policy-academy divide, which remains controversial within the international relations discipline (Nye 2009; Krasner 2009a; Keohane 2009; Parks and Stern 2013). When one sets out to write an ambitious thesis like this one, debts are inevitably accumulated. First and foremost, I am hugely indebted to my thesis adviser, Jeff Chwieroth, for the intellectual guidance and mentorship that he has provided since 2010. I also owe a tremendous debt of gratitude to a team of research assistants at the College of William & Mary, including Robert Mosolgo, Lauren Hoy, Alyse Prawde, Katherine McGinnis, Salil Singhal, Nakul Kadaba, James Page, Justin Anderson, Austin Strange, Suzanne Reed, Joe Lahouchuc and Anca Cretu. They spent thousands of hours collecting, collating, synthesizing, and coding the information used to construct the dataset introduced in Chapter 3. The analysis in Chapters 3 and 4 would not have been possible without their assistance. The 2012 MCA Stakeholder Survey described in Chapter 5 was also a team effort. First and foremost, I thank my colleague and co-author, Zachary Rice, who helped design and oversee implementation of the survey. I also thank Ashley Napier, Jake Douglas, Greg Kirwin, Taylor Wilson, Arvin Alaigh, Paul Burgess, Waly Faye, Sarah Mellman, Loïc Tchoukriel-Thébaud, Salvi Magilirane, Dimelza Gonzales-Flores, Henrique Passos Neto, and Sarah Parks for their outstanding research and translation assistance. I am also grateful to a team of expert advisers who provided feedback on the design and content of the survey questionnaire. This team included Julia Maciel, the former Minister of Planning of Paraguay; Mishkat Al Moumin, Iraq's former Minister of the Environment; Victor Borges, the former Minister of Foreign Affairs of Cape Verde; Luis Cosenza, the former Minister of the Presidency of Honduras; John Evans, the former U.S. Ambassador to Armenia; Lucrecia Palacios, the former Director of the Policy Indicators Department in the Technical Secretariat of the Presidency of El Salvador, and Said Abdou Salime, the former Secretary General of the Ministry of Economy and Commerce of the Comoros. I also received valuable feedback on the survey questionnaire from several current and former staff and faculty at the Center for Global Development, the London School of Economics and 5 Political Science, and the World Bank, including Sheila Herrling, David Wheeler, Sarah Jane Staats, Casey Dunning, Sarah Rose, Jeff Chwieroth, and Steve Knack. This thesis was also made possible by the generous financial and in-kind support that I received from the Smith Richardson Foundation, the John Templeton Foundation, the Research Committee of the World Bank's Development Economics Vice-Presidency (DEC), the London School of Economics and Political Science, and the Institute for the Theory and Practice of International Relations at the College of William & Mary. Finally, it must be acknowledged that in the absence of an MCC leadership team committed to evidence-based policymaking, this thesis would have never come to fruition. The MCC afforded me the time, space, and intellectual freedom to document the responses and non- responses of developing country governments without any agenda other than the pursuit of knowledge that might inform future policy and programming decisions. In particular, I would like to thank John Danilovich, Paul Applegarth, Daniel Yohannes, Rodney Bent, Maureen
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