Institutional Analysis of Development Administration

The book assesses the institutions of Japanese official development assistance (ODA). Based on an analysis of reasons for the deficiencies, possible solutions are discussed. They include a restructuring of new project management techniques.
A theoretical approach based on organisation theory (contingency theory) and new institutional economics (agency theory) has been used to structure the empirical research. The theories were further developed to enable operational working hypotheses for the empirical data. Through this theory-based approach, new insights are gained on the complex empirical phenomenon of Japanese development assistance administration. The combination of theoretical and empirical research also helped to develop theory itself.

1 Introduction and Objective.- 1.1 Introduction: The Need for Institutional Analyses of Donor Administrations.- 1.2 Approaches to Institutional Analysis.- 1.2.1 New Institutional Economics and Organization Theory.- 1.2.2 Combining Two Different Research Approaches.- 1.3 The Case of Japan’s Development Assistance.- 1.4 Objectives and Research Method of the Study.- 2 Development Administration and Organization Theory.- 2.1 Approaches to Organization Theory.- 2.1.1 Classical and Specialized Organization Theories.- 2.1.2 Systems Theory.- 2.1.3 Contingency Theory.- 2.2 Operationalization of Contingency Theory.- 2.2.1 Dimensions of Organizational Structure.- 2.2.2 Phases of the Project Cycle.- 2.2.3 Dichotic Management Approaches to Each Project Cycle Phase.- 2.2.4 Relevant Context Factor.- 2.3 Conclusion.- 3 The Procedural Structure Of Japan’s Development Administration.- 3.1 Project Identification.- 3.1.1 Active Versus Reactive Role of the Donor.- 3.1.2 Perception in Japan.- 3.1.3 Actual Operations.- 3.2 Preparation and Appraisal.- 3.2.1 Multidimensional Analysis Versus Technical-Economic Focus.- 3.2.2 Perception in Japan.- 3.2.3 Actual Operations.- 3.3 Selection.- 3.3.1 Goal-Oriented Versus Inductive Approach.- 3.3.2 Perception in Japan.- 3.3.3 Actual Operations.- 3.4 Detailed Design.- 3.4.1 Topdown-Blueprint Versus Participative-Incremental Planning.- 3.4.2 Perception in Japan.- 3.4.3 Actual Operations.- 3.5 Implementation.- 3.5.1 Target Orientation Versus Institutional Learning.- 3.5.2 Perception in Japan.- 3.5.3 Actual Operations.- 3.6 Monitoring.- 3.6.1 Control Versus Mediator Mechanism.- 3.6.2 Perception in Japan.- 3.6.3 Actual Operations.- 3.7 Ex-Post Evaluation.- 3.7.1 Institutional Learning Versus Justification.- 3.7.2. Perception in Japan.- 3.7.3 Actual Operations.- 3.8 Termination/Follow-up.- 3.8.1 Extended External Financing Versus Complete Termination.- 3.8.2 Perception in Japan.- 3.8.3 Actual Operations.- 3.9 Conclusion for the First Working Hypothesis.- 4 The New Institutional Economics Approach.- 4.1 The Need for an Extension of Contingency Theory.- 4.1.1 Assumptions of Contingency Theory.- 4.1.2 Discretion of Bureaucrats.- 4.1.3 Discretion in Development Administrations.- 4.1.4 Extension of Contingency Theory.- 4.2 Different Behavioral Assumptions and Their Consequences.- 4.2.1 Behavioral Assumptions of New Institutional Economics (NIE).- 4.2.2 The Principal-Agent Problem.- 4.3 Economic Bureaucracy Theories.- 4.3.1 Niskanen’s Model.- 4.3.2 Criticism of Niskanen’s Model.- 4.3.2.1 Production at Minimal Cost.- 4.3.2.2 Budget Maximization.- 4.3.3 Extensions of Niskanen’s Theory.- 4.3.4 Remaining Criticism of the Models in the Niskanen Tradition.- 4.3.4.1 Monopoly Assumption.- 4.3.4.2 Consistently Unproductive Discretion.- 4.3.4.3 Passive Politicians.- 4.4 A Principal-Agent Approach to Bureaucracy.- 4.4.1 Agency Theory and Agency Cost.- 4.4.2 Institutional Devices for Reducing Agency Cost.- 4.4.3 Agency Cost of Control Versus Incentive Strategy.- 4.4.4 Multiple Agencies.- 4.5 Conclusion.- 5 The Multiple Agency System In Japan’s Development Administration.- 5.1 The Importance of Trust and Informal Trade in Japan.- 5.1.1 Administrative/Organizational Culture in Japan.- 5.1.2 Informal Trade in Japanese Organizations.- 5.2 Organizations Responsible for Grant Aid and Technical Assistance.- 5.2.1 Ministry Level.- 5.2.1.1 Ministry of Finance.- 5.2.1.2 Ministry of Foreign Affairs.- 5.2.1.3 Ministry of International Trade and Industry.- 5.2.1.4 Line Ministries.- 5.2.1.5 Judgment of the Situation at the Ministry Level.- 5.2.2 Implementation Level in Japan.- 5.2.2.1 Japan International Cooperation Agency.- 5.2.2.2 Quasi-Nongovernmental Organizations.- 5.2.2.3 Judgment of the Situation at the Implementation Level.- 5.2.3 Japanese Organizations in the Recipient Country.- 5.2.3.1 Japanese Embassy.- 5.2.3.2 The Local JICA Office.- 5.2.3.3 Japan External Trade Organization (JETRO).- 5.2.3.4 The Japanese Private Sector.- 5.2.3.5 Judgment for Japanese Organizations Abroad.- 5.3 Conclusion to the Second Working Hypothesis.- 6 The Effects of Institutional Innovations.- 6.1 The Introduction of Project Cycle Management (PCM) in Japan.- 6.1.1 PCM Methodology.- 6.1.2 Integration of the ZOPP and PCM Methodologies in the Project Cycle.- 6.2 PCM and Contingency Theory.- 6.2.1 Identification.- 6.2.2 Preparation.- 6.2.3 Selection.- 6.2.4 Detailed Design.- 6.2.5 Implementation.- 6.2.6 Monitoring.- 6.2.7 Evaluation.- 6.3 PCM and New Institutional Economics.- 6.4 Conclusion.- 7 Summary and Final Remarks.