HKS Center for International Development Publications

Professional football clubs are ubiquitous in Europe. Every small to medium sized city has one. But most cities do not have an F.C. Barcelona or Bayern Munich or Manchester United. These are among the ‘super clubs’ of Europe: they win more games, attract more supporters, and make more money than other clubs. These clubs were not always the juggernauts one sees today, however. This paper looks at how they emerged. It tells more of an economic story than a sporting one, recounting a narrative similar to that one might tell about the emergence of successful multinational companies. According to this narrative, super clubs rise by producing increasingly more complex products because of expanding productive capabilities, providing growing opportunities for economic spillovers in the process.

As indicated, this narrative focuses particularly on the ‘capabilities’ that have helped super clubs emerge. This focus draws on an emerging theory about economic complexity, which is used to frame the paper and is briefly introduced in section two (following an introduction to super clubs). The theory posits that production results from the creative combination of economic capabilities—or know-how. Some products require few common capabilities, are produced by everyone, and have relatively low value: like the average football club. Other products require many capabilities (including some that are rare), have high value, and are produced by a select group: like the super club. This theory is used to suggest two hypotheses about how football clubs become super:

• First, clubs do not become super by just producing better versions of the same products (a successful football team). Instead, over time, these clubs produce more complex, higher-value, globally consumed products.
• Second, clubs become super by accumulating new capabilities (or know-how) over time, manifest in new skills and people accessed through a range of ‘catalyst capabilities’ that source the skills. The catalyst capabilities include engagement mechanisms (through which skills are located and contracted), capital, infrastructure, and adaptive leadership.

These hypotheses are put to the test in this study. Section three discusses the method used in such analysis, which is a version of systematic process analysis. It involved tracking the rise of four (generally agreed) super clubs—F.C. Barcelona, Bayern Munich, Manchester United, and Real Madrid—and two clubs that are potentially rising into this group—Manchester City and Swansea City. The work centered on identifying and examining key moments in the histories of the clubs, flushing out the factors that influenced their rise, and translating evidence into common narratives about how super clubs emerge. The findings are contrasted with evidence from historical experience in clubs that enjoy close proximity to the focal clubs but are (arguably) not ‘super clubs’ (like Espanyol, TSV 1860 Munich, Stockport County and Bury, and Rayo Vallecano).

Section four offers findings from the analysis. It shows, first, that all of the super clubs have indeed seen a ‘complexification’ of their product lines—moving progressively towards a more complex and diverse set of services and products revolving around the club ‘brand’. Second, the changes in production are clearly facilitated by expanded capabilities. These include expanded skills and people and catalyst capabilities like engagement mechanisms, capital, infrastructure, and adaptive leadership, which have all been growing with time:

• For instance, all of the clubs started with generalist players and managers but gradually employed specialist players and managers. This has led to the clubs now having large and highly diversified playing and non-playing personnel. The catchment area of this talent has also grown, with skills increasingly sourced from other countries and professions and sectors (showing that skills needed to be super come from a broad community).
• The engagement mechanisms through which new ‘skills and people’ were found are impressive. They include factors outside of the clubs’ control—like economic and political and legal changes that fostered the mobility of skills and people. They also include club-specific global scouting mechanisms, internal football academies, and networks of feeder clubs. Commercial linkages have also helped engage new business skills.
• Capital matters in all cases, and is manifest in both direct contributions of money and in the more general support of paying customers and sponsors willing to contribute to club coffers. Capital sources have diversified and became more complex over time in all the super clubs.
• Infrastructure capabilities also matter a great deal. Super clubs started out with small, locally accessible stadiums where they met, trained, played, and did everything else. Over time, however, the stadiums grew in size, were connected to transportation infrastructure that allowed greater accessibility beyond the local community (through regional roads and trains and even international airports) and added properties to allow for separated match, training, development, and business activities.
• A set of supporting capabilities inside and outside the clubs has also proved vital to foster the emergence of the more complex production in these clubs. These are called ‘adaptive leadership’ capabilities and manifest in clear actions of people in club and local government leadership—to respond to threats and opportunities, learn from other experiences, promote new vision in the face of opposition, establish formal and informal negotiation mechanisms and partnerships, and more.

A conclusion summarizes the paper’s findings by suggesting a simple acronym describing capabilities that foster the rise of super clubs: Special (Skilled People, Engagement mechanisms, Capital, Infrastructure, and Adaptive leadership). It summarizes the story about how emergent and expanded capabilities have fostered production complexity in these clubs, and draws conclusions about the likely capability differences between today’s average and great clubs. The ending commentary discusses how this study adds to literature on sports economics and the economics of complexity. It suggests ways in which future work can build on these contributions.

We divide the 102 historically developing countries (HDCs) into those with ‘very weak’, ‘weak’, ‘middle’, and ‘strong’ state capability. Analyzing the levels and recent growth rates of the HDCs’ capability for policy implementation reveals how pervasively “stuck” most of them are. Only eight HDCs have attained strong capability, and since most of these are small (e.g., Singapore, UAE), less than 100 million (or 1.7%) of the roughly 5.8 billion people in HDCs currently live in high capability states. Almost half (49) of these countries have very weak or weak capability, and thus their long-run pace of acquiring capability is also very slow. Alarmingly, three quarters of these countries (36 of 49) have experienced negative growth in state capability in recent decades, while more than a third of all countries (36 of 102) have low and (in the medium run at least) deteriorating state capability. At current rates, the ‘time to high capability’ of the 49 currently weak capability states and the 36 with negative growth is obviously “forever”. But even for the 13 with positive growth, only three would reach strong capability by the end of the 21st century at their current medium run growth.

March 2021, the Confederation of African Football’s President, Patrice Motsepe, insisted that “An African team must win the World Cup in the near future.” This visionary statement is infused with hope—not just for an African World Cup victory but for a fuller future in which African men’s soccer competes with world soccer’s elite. This paper asks if there is any chance of this happening. It suggests a simple method to assess how a country competes as both a ‘participant’ and a ‘rival’ and uses this method to examine how Africa’s top countries compete in world soccer. This analysis points to a gap between such countries and the world’s best, which has grown in recent decades—even though some African countries do compete more over time. The paper concludes by suggesting that Africa’s hope of winning the World Cup is not impossible but demands more active work, focused particularly on ensuring top African countries compete with more high-quality competition more often. The conclusion also suggests that the research approach might be relevant beyond a study of African soccer. It could particularly help shed light on how well African countries compete (as participants and rivals) in the world economy.

Many public sector reforms in developing countries fail to make governments more functional. This is typically because reforms introduce new solutions that do not fit the contexts in which they are being placed. This situation reflects what has recently been called the 'capability trap' in development—which results in many interventions producing new forms that are not functional in states across the globe. The work on capability traps suggests that reforms can yield more functional influence in even the most complex states, however; if reformers adopt non-traditional approaches to doing reform. In particular, the work suggests that reforms will tend to be more contextually fitted if: (i) They are driven by problems that agents in the context care about; and (ii) They are introduced iteratively—through a stepwise process where ideas are tried and lessons are learned and used to adapt (or fit) ideas to context.

The capability traps work embeds these ideas into an approach to doing reform called Problem Driven Iterative Adaptation (PDIA). This approach has deep roots in various literatures but many observers still ask how PDIA-type reforms could work to foster successful reform in complex hierarchical developing country governments and whether these approaches really help foster reforms that better fit such complex contexts. This paper responds to such question by describing an action research study where PDIA is being used to retell a story of reform that has to date been limited. The action research study is in Mozambique’s judicial sector and will examine whether and how a problem driven iterative approach can (i) flush out the contextual factors that often limit reform success, (ii) provide a viable route to find and fit reforms that actually foster greater functionality, and (iii) promote the authority needed to ensure change is implemented and institutionalized.

Efforts to build state capability often take the form of commonly used, highly designed and engineered best practice solutions that have worked in many other places and that we suspect (and hope) will work again in many contexts. Such interventions do sometimes work, especially when the treatment actually addresses problems that fester in the context. Where the contextual problems are different, however, the treatment is just isomorphic mimicry—it looks good but will not be a solution to problems that actually matter. Development organizations often cannot see this, however, and offer the same solution again and again—hoping for a different outcome but imposing a capability trap on the policy context, where a new diagnosis and prescription is actually needed. In some countries the treatment has an even worse impact, fostering premature load bearing—where the context cannot actually handle what is prescribed. How can development experts identify in advance where they will have such negative impacts, and how can they identify in advance where they need to do development differently? This paper addresses such questions, and introduces an approach to building state capability in the latter contexts (called 1804 contexts), called problem driven iterative adaptation.

Development involves change, but many development initiatives produce unimpressive results. The authors ask why and consider how to close the gap between the intended change and what we actually see in the evidence. This paper presents the findings of a study, initiated by the multi-donor Global Leadership Initiative and led by the World Bank Institute (WBI), to examine leadership in the change processes of fourteen capacity development interventions in eight developing countries, through 140 in-depth structured interviews. It explores what it takes to make change happen and in particular, the role leadership plays in effecting change. The authors propose that leadership contributes to change when it builds "change space" by fostering acceptance for change, granting authority for change, introducing or freeing the abilities necessary to achieve change. This "change space" is required to ensure contextual readiness for change and foster progress through the difficult stages of the change process. An analytical framework is introduced to illustrate the dimensions of this "change space" and its limits in organizational and social change. The authors argue that a lack of "change space" in many development contexts may be overlooked, contributing to failure. The paper concludes that leadership manifests in different ways in different contexts, depending on the contextual readiness and factors that shape change and leadership opportunities; but the key characteristics of plurality, functionality, problem orientation and "change space" creation are likely to be common to all successful leadership-led change events.

International organizations like the International Monetary Fund and World Bank have been supporting reform initiatives in developing country governments since at least the 1980s. Various authors have criticized this support, arguing that international organizations use their influence to impose common models of government on developing countries—infringing on the sovereignty of these nations and frustrating domestic processes of finding and fitting government structures to local contexts. Some suggest that a modern new public management model of government is being imposed on developing countries, whereas others claim that developing countries are being forced to adopt a broad-brush neoliberal script. Such claims are seldom reinforced by empirical evidence showing the extent or nature of this influence, however. This leaves one asking, "Do international organizations really shape government solutions in developing countries?" This article explores such question and finds that international organizations do have a major (and growing) influence on government structures in developing countries and that this influence does impose a common model on these countries.

Many of the challenges in international development are complex in nature. They involve many actors in uncertain contexts and with unclear solutions. Our work has proposed an approach to addressing such challenges, called Problem Driven Iterative Adaptation (PDIA). This paper is the most recent in a series intended to show how one can do PDIA, building on the first paper, "Doing Problem Driven Work." The current paper addresses a key part of the approach one moves to once a problem has been identified, performing real-time experimental iterations. This is intended as a practical paper that builds on experience and embeds exercises for readers who are actually involved in this kind of work.

We often observe that more successful efforts to establish complex state capabilities are problem driven; focused relentlessly on solving a specific, attention-grabbing problem. This is the first principle of Problem Driven Iterative Adaptation, which we are introducing in pieces in a series of working papers over the coming months. The current working paper starts with a discussion about why problems matter as entry points to complex state capability building challenges. It then offers practical ideas and tools to help those trying to use problems to foster change (given the need to construct problems, deconstruct problems and then promote problem driven sequencing). The working paper should help readers who wonder why we emphasize problems as entry points and positive motivators of change (we don’t agree that problems demotivate or disempower) and how we work practically to define and tackle problems.

This paper synthesizes the approach I take to looking at governance in nations states. The approach emphasizes ends as the starting point for any view of governance. (Asking about what governments do rather than how they do them). I also emphasize means; but in thinking about what it takes to produce ends, not as stand-alone factors. I provide some detail on the specific ends and means I look at in nation states and promote the idea of using governance dashboards and narratives to look at governance (not hold-all indicators). I also discuss how my approach might be useful in the current discussions about including a governance indicator in the post 2015 development goals. I expect that some will disagree and even disapprove with the approach I discuss, but I hope that the approach nonetheless offers a useful contribution to current discussions.

Many reform initiatives in developing countries fail to achieve sustained improvements in performance because they are merely isomorphic mimicry—that is, governments and organizations pretend to reform by changing what policies or organizations look like rather than what they actually do. The flow of development resources and legitimacy without demonstrated improvements in performance, however, undermines the impetus for effective action to build state capability or improve performance. This dynamic facilitates 'capability traps' in which state capability stagnates, or even deteriorates, over long periods of time despite governments remaining engaged in developmental rhetoric and continuing to receive development resources. How can countries escape capability traps? We propose an approach, Problem-Driven Iterative Adaptation (PDIA), based on four core principles, each of which stands in sharp contrast with the standard approaches. First, PDIA focuses on solving locally nominated and defined problems in performance (as opposed to transplanting pre-conceived and packaged "best practice" solutions). Second, it seeks to create an 'authorizing environment' for decision-making that encourages 'positive deviance' and experimentation (as opposed to designing projects and programs and then requiring agents to implement them exactly as designed). Third, it embeds this experimentation in tight feedback loops that facilitate rapid experiential learning (as opposed to enduring long lag times in learning from ex post "evaluation"). Fourth, it actively engages broad sets of agents to ensure that reforms are viable, legitimate, relevant and supportable (as opposed to a narrow set of external experts promoting the "top down" diffusion of innovation).

Public sector reforms are commonplace in developing countries. Much of the literature about these reforms reflects on their failures. This paper asks about the successes and investigates which of two competing theories best explain why some reforms exhibit such positive deviance. These theories are called 'solution and leader driven change' (SLDC) and 'problem driven iterative adaptation' (PDIA). They are used to analyze data emerging from a case survey involving thirty cases from Princeton University's Innovations for Successful Society (ISS) program. The bulk of evidence from this study supports a PDIA explanation, but there is reason to believe that SLDC hypotheses also have value. It seems that PDIA and SLDC are two viable paths through which positive deviance can emerge; although PDIA seems to provide the wider path for more positive deviance.

Industrial policy initiatives demand a lot of knowledge from policymakers. Knowledge is often limited, however, especially when policies emerge from top-down technical experts or outsiders with limited contextual experience. Such policies are prone to mistakes. These can, however, be avoided by developing policies through collaborative ‘discovery processes’. Establishing organizations to do ‘discovery’ work is challenging, however, especially when challenges are urgent, resources lacking, and corruption concerns rife. In such settings, it may be more practical and effective to build listening and response capabilities into incumbent policy systems through rapid, temporary discovery processes. This paper provides a case narrative of an experiment with this idea, recounting the story of a problem-driven learning and discovery-oriented approach undertaken to reinvigorate a struggling sector in Albania in 2014.

As with all public policy work, education policies are demanding. Policy workers need to ‘know’ a lot—about the problems they are addressing, the people who need to be engaged, the promises they can make in response, the context they are working in, and the processes they will follow to implement. Most policy workers answer questions about such issues within the structures of plan and control processes used to devise budgets and projects. These structures limit their knowledge gathering, organization and sense-making activities to up-front planning activities, and even though sophisticated tools like Theories of Change suggest planners ‘know’ all that is needed for policy success, they often do not. Policies are often fraught with ‘unknowns’ that cannot be captured in passive planning processes and thus repeatedly undermine even the best laid plans. Through a novel strategy that asks how much one knows about the answers to 25 essential policy questions, and an application to recent education policy interventions in Mozambique, this paper shows that it is possible to get real about unknowns in policy work. Just recognizing these unknowns exist—and understanding why they do and what kind of challenge they pose to policy workers—can help promote a more modest and realistic approach to doing complex policy work.

Leadership is an under-studied topic in the international development literature. When the topic is broached it is usually in support of what might be called a "hero orthodoxy:" One or other individual is identified as the hero of a specific achievement. The current article offers a three part argument why this orthodoxy is problematic and wrong for many developing countries, however. It suggests first that heroes have not emerged in many countries for a long period and individuals who may have been considered heroes in the past often turned out less than heroic. It posits second that heroes are actually at least as much the product of their contexts as they turned out to be the shapers of such. It proposes third that the stories about hero-leaders doing special things mask the way such special things emerge from the complex interactions of many actors—some important and some mundane. Leadership, it appears, is about multi-agent groups and not single-agent autocrats. The conclusion posits that romantic notions of heroic-leadership in development become less convincing when one appreciates these three arguments. It calls development theorists and practitioners to go beyond the heroic-leader perspective.

Governance indicators have come under fire in recent years, especially the World Governance Indicators (WGIs). Critics present these indicators as a-theoretical and biased. Critics of the critics counter that no better alternatives exist. We suggest otherwise, arguing that more appropriate 'governance' indicators will (i) have theoretical grounding, (ii) focus on specific fields of engagement, (iii) emphasize outcomes, and (iv) control for key contextual differences in comparing countries. Such measures can help indicate where countries seem to have governance problems, allowing second stage analyses of what these problems are. We present under national five mortality rates adjusted for country income groups as an example of such measure, presenting data for contextually controlled outcomes in this specific field to show where governance seems better and worse. The United States is shown up as relatively weak, whereas a country like Pakistan seems to have better governance in this sector than other low income countries. The indicator allows questions about why governance of this sector might be problematic in certain contexts and easier in others.

Public financial management (PFM) reform is a common part of many development initiatives. It generally involves promoting "good practices" in developing countries, embedded in frameworks like the Public Expenditure and Financial Accountability (PEFA) assessment (PEFA 2006). These include multi-year budgeting, competitive procurement, modern internal audit, and more. Such practices have proved effective in selected contexts and promise solutions to common problems in governments. Unfortunately, a growing literature shows that many governments do not solve their problems after years of adopting such solutions. Data reveal that governments commonly produce new laws that are not enforced and budgets that are not effectively executed, and suffer from weak capacities in distributed units (like line ministries and local governments) after many finished projects (Andrews 2006, 2011, 2013; Porter et al. 2011; Wescott 2009).

Studies tie these limits to a lack of realism in reform design and implementation (Andrews 2013; Andrews, Pritchett and Woolcock 2012; Booth 2011; Levy 2013; World Bank 2012). They argue, essentially, that reforms commonly fail to allow for necessary adaptation of external ideas to the realities in targeted contexts, often because the reform processes focus too narrowly on introducing the external good practice in principle and pay little attention to the practical difficulties of doing so in practice. Studies suggest, for instance, that such reforms pay insufficient attention to the political and administrative difficulties of effecting change, and that these difficulties commonly undermine reform results. Where studies see more effective and far reaching reform they often find that the externally nominated "good practices" are fitted to the targeted context through more adaptive processes that emphasize the real and practical issues of doing reform (like building reform support, testing and adjusting reform designs, and continually matching solutions and capacity realities and needs) (Andrews 2015; Andrews et al. 2014; Cabri 2014; Levy 2013).

These studies call for approaches that allow more realism in reform processes in developing countries, especially those supported by multilateral and bilateral donors. They do so knowing that similar calls have been made before; and that there are already many examples of such realism in the development community. There is, however, a challenge to identify these examples and describe what such processes look like in practice. This search leads quickly to a focus on bilateral donors. A small and interesting set of work suggests that such donors might have a comparative advantage in introducing more realism to PFM-type reforms in developing countries, given their own country’s recent experiences with doing such reforms. The argument is simply that development agencies from these countries can leverage the real experiences with doing reform in their own contexts when engaging with reformers in developing countries. They can, for instance, access experienced reformers to share lessons on issues like building demand for change, establishing political support for reform, and adapting reform ideas to context. Such lessons are often learned best through experience and remain tacit in those who have been through the experience. Bilateral agencies arguably have an advantage in accessing such people and their lessons, and can more effectively incorporate this valuable knowledge into their reform support than multilateral agencies.

This paper offers a novel analysis of this theory, asking whether Swedish development agencies working in the PFM field have leveraged the potential comparative advantage of the country’s own experience in supporting reform. The country’s own reforms have resulted in effective Sweden-specific adaptations of many of the good practices being promoted in developing countries today (including multi-year budgeting and modern accounting and audit). Academic descriptions of these reforms emphasize the processes by which they were adopted and the realism involved in such, and suggest the presence of many applied and tacit lessons one could see as valuable in developing countries (about testing reform ideas, for example, progressing gradually in reform processes, creating an urgent pressure for change, and building support for reform). The question asked here is whether Swedish development agencies bring these lessons into their support for PFM work, building on a potential advantage to promote realism in reform.

After introducing this question in an opening section, the paper provides a study of Swedish development agency engagement with PFM, in three domains: at the global level (where the development community has identified what "good" reforms should entail) and in two country-level experiences (Mozambique and Cambodia). The study uses process analysis to examine Swedish engagement in these domains (and reflects on "Swedish" involvement broadly, not on any one development agency3). This approach offers a historical rendering of engagements since the late 1980s, based primarily on documentary evidence. There are limits to this kind of study, discussed in the methods section, but its strength is in allowing a view of reform support over time.

A conclusion notes that this view shows repeated attempts by Swedish development agencies to bring realism into their reform engagements. This has sometimes involved drawing on their own country's reformers and reform experience, although there does seem to be less of this than one might expect given the scope and success of the country’s own reforms. One explanation for this centers on evidence that Swedish reform engagements attempt to bring realism into their engagements by promoting a process-oriented way of doing development within its development agencies and with partner countries (not just by drawing on their own-country experience). This finding leads to a revision of the argument about how bilateral and multilateral agencies can promote realism in development. Another concluding observation notes that all efforts to bring realism have been less prevalent and effective in the past decade. Explanations are offered for this as well, including the growing importance of budget support in developing countries and the focus on highly specified and generalized PFM products—rather than process.

Governments can play great roles in their countries, regions, and cities; facilitating or leading the resolution of festering problems and opening new pathways for progress. Examples are more numerous than one might imagine and raise an important question: How do governments get great? This paper identifies 10 cases of great governments to answer 4 dimensions of this question: What kinds of interventions or changes help governments achieve greatness? Who leads these interventions or changes, and how? When do the interventions occur, and why? How are these changes sustained and implemented to ensure they yield results? The paper suggests two sets of answers to these concerns, combining such into rival theories that could explain how governments get great: "Solution and leader driven change" (SLDC) and "Problem driven iterative adaptation"(PDIA). It proposes using these two theories in future research about how governments foster the kinds of achievements one could call great and argues this research should employ a version of Theory Guided Process Tracking (TGPT) called systematic process analysis.

This paper asks how strong African Public Financial Management (PFM) has become, after a decade and more of reform. How well do African PFM systems in place now facilitate effective public financial management? Where are the next challenges and how can they be met? It analyzes recent PFM assessments in 31 governments to answer these questions, identifying patterns of strengths and weaknesses across the PFM system and across countries. In respect of the former, the study finds that budgets are made better than they are executed, practice lags behind the creation of processes and laws, and processes are stronger where concentrated actors are engaged. In respect of the latter, the study finds that different countries fall into different 'PFM performance leagues' and countries in the different leagues look very different to each other. A range of factors influence which league a country is associated with; including economic growth, stability, reform tenure and colonial heritage. On the basis of this evidence, the paper argues that existing reforms face limits that can only be overcome with adjustments in reform approach; with less focus on pushing reform technicalities and more on creating 'space' in which reform takes place, less concentration of engagements with small sets of actors and more on expanding engagements, and less emphasis on reproducing the same reform models and more on better understanding what context-appropriate reforms look like.

This study asks the question, “Is Black Economic Empowerment a South African growth catalyst?” It addresses the question with reference to the theoretical literature on economic and organizational structures. This literature argues that structures reflect values and influence patterns of behavior, empowerment and opportunities for economic growth. The paper shows that South Africa’s economic structures have had negative influences on both racial access and economic opportunity, creativity and responsiveness. The proposition is that transformation and growth require change in economic structures; the same BEE-induced changes will work for both goals. However, some observe that BEE is not effecting change. This raises a counter proposition that BEE will not catalyze growth. The two propositions are examined in a study of BEE responses in twenty-five JSE listed firms. The basic finding is that while firms are actively responding to BEE requirements they are also doing so within a static structural context, where firms keep looking to established networks for solutions. This limits the number of beneficiaries of BEE. It also exacerbates constraints on the number of people in these groups—especially manifesting in added pressure on skilled groups. A number of firms are also not developing vertical connections that might open opportunities for entrepreneurs. Firms that are developing vertical connections are creating capacities to bridge the network divides that exist. The payoff seems very high in these initiatives, evident in trained and screened talent, new jobs and new enterprises. These findings lead the paper into a discussion of what could be done to improve BEE—such that it does become a policy that catalyzes growth.