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Learning and policy change : the case of Swedish International Development Cooperation Agency (Sida) 1980-1995

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Learning and policy change : the case of Swedish International Development Cooperation Agency (Sida) 1980-1995
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Ndumbaro, Laurean Josephat Philomena, 1960-
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vii, 256 leaves : ill. ; 29 cm.

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Developing countries ( jstor )
Educational evaluation ( jstor )
Focus groups ( jstor )
Foreign aid ( jstor )
International development ( jstor )
Learning ( jstor )
Personnel evaluation ( jstor )
Political change ( jstor )
Public policy ( jstor )
World Bank ( jstor )
Dissertations, Academic -- Political Science -- UF ( lcsh )
Political Science thesis, Ph.D ( lcsh )
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bibliography ( marcgt )
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Thesis:
Thesis (Ph.D.)--University of Florida, 1998.
Bibliography:
Includes bibliographical references (leaves 245-255).
General Note:
Typescript.
General Note:
Vita.
Statement of Responsibility:
by Laurean Josephat Philomena Ndumbaro.

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LEARNING AND POLICY CHANGE: THE CASE OF SWEDISH INTERNATIONAL DEVELOPMENT COOPERATION AGENCY (Sida) 1980-1995





















By

LAUREAN JOSEPHAT PHILOMENA NDUMBARO













A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF'THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY UNIVERSITY OF FLORIDA 1998

































Copyright 1998

by

Laurean Josephat Philomena Ndumbaro
































To my parents--Josephat and Philomena Ndumbaro--for

their dedication and support to my education, and to my late brother, Deonatus Ndumbaro, for his encouragement and prayers.















ACKNOWLEDGMENTS


I would like to thank God for enabling me complete this program successfully. My sincere regards go to my supervisory chairman, Prof. Goran Hyden, whose guidance, encouragement and patience inspired me to explore my fullest intellectual potential. I also thank him for being a teacher, mentor and, above all, a friend.

I would like to extent my specialithanks to my

committee--Dr. L. Brown, D. Hedge, C. Andrew and W. Francis for their generosity in sharing their knowledge and time. In addition I would like to thank my professors at the University of Florida for helping me to develop my intellectual abilities.

Special thanks go to the Swedish Agency for Research and Cooperation with Developing Countries (SAREC) for financial support, Prof. 0. Elgstrom for his insightful comments, Prof. R. Mukandala for selecting me to join this program, Dr. K. Mease, Dr. S. Snook and Menghua Zeng for their comments in the initial preparation of this study.

I would also like to thank Sida for all the support

they gave to me during my work in Sweden and all the people iv









whose responses make up this dissertation. Special thanks go to Lars Johansson for making my work in Sweden smooth, to Mama Melania for her motherly support, and to my colleagues in the department of political science and R. Uttaro and S. Franco, for being such good friends.

I would like to express my sincere gratitude to my parents--Josephat and Philomena--for their support, encouragement and prayers throughout my entire school life. To my wife, Dolorosa, my daughter, Bridget, and my son, Ivan, I owe them my most profound thanks for their love, support and patience.






























v















TABLE OF CONTENTS



ACKNOWLEDGMENTS . . iv

LIST OF TABLES . . x

LIST OF FIGURES . . xi

KEY TO ABBREVIATIONS . . xii

ABSTRACT . . xiii

CHAPTER 1 INTRODUCTION .. . .

Background . . 1
Significance of the Study . 3
Development Assistance: An Overview . 5
Multilateralization . . 9
The Swedish-Tanzania Aid Relation . 10
Hypotheses . . 17
Dissertation's Organization . 18

CHAPTER 2 THEORETICAL FRAMEWORK . 21

Why Learning Theory? . . 21
Alternative Models . . 23
The Class Theory . 24
Pluralist Theory . 26
Contextual Model . 29
Rational Choice Theory . 31
Bureaucratic Politics . 32
Learning: Conceptualization . 37
Learning: Defined . 38
Organizational Learning . 48.
Learning vis-a-vis Criteria for Information
Processing for Decision Making . 54
Learning and Policy Change . 60
Learning Model . . 66
Feedback Knowledge . 66



vi









Consensual Knowledge .......... 68
Institutional Processes .. .... ........71

CHAPTER 3 METHODOLOGY AND DATA COLLECTION .........78

Case Studies .......................78
Justification for the Case Study Method .. .82 Limitation of the Case study Method .. .....84
Reliability versus Validity .............86
Sampling and Data Collection. ............89
Sampling....................89
Data Collection. ............... 91
Data Analysis....................102
Assessments.....................102

CHAPTER 4 THE DOMESTIC CONTEXT OF THE 1980s SIDA POLICY DECISIONS.........................105

Introduction.....................105
Swedish Aid Administration ..............105
The Parliament.................105
The Cabinet ................... 106
The Ministry for Foreign Affa.irs ........108 Sida .......... ...............109
The Budget Process...............110
Sida's Structural Change ............112
Swedish Aid Politics .......................114
Swedish Aid: The Guiding Principles. ......116
Swedish Aid Versus Changing Government
Leadership .................119
Swedish Aid: What the Public Says,.........124 Swedish Economic Situation ..............129

CHAPTER 5 LEARNING: FEEDBACK, CONSENSUAL KNOWLEDGE AND INSTITUTIONAL PROCESSES .................136

Sida and Learning..................136
Sida: Is it a Learning Organization?. ........ 137
Knowledge Seeking: From Within .........139 Knowledge Seeking: From Outside. ........ 142
Sida: How do they Consider their Work and What
are the Criteria for Decision Making? .143
Why Policy Shifts in the 1980s .......... ...146
Feedback From Tanzania ............. 154
The Rise of Cons'ensual Knowledge in the
Development Field and its Influence on
Sida Understanding of Reality .. 165


vii








The IMF and The World Bank In Closer
Association: Elevating the New Thinking
in Third World Development 168 Sida, Tanzania and the New Consensual Knowledge 172
Learning And Sida's Institutional Processes 180
Is Sida a Slow L.earner? 180 Sida's Bureaucratic Politics and Leade;ship 183 Rules and Procedure for Decision Making 186 Program and Strategies . 187
Budgetary Routines . 189
Ideology . . 191

CHAPTER 6 LEARNING: ITS IMPACT OF SIDA 193

Shifts in Norms and Priority in Aid Objectives 193
Norms . . 193
Goals . . 197
Mainstreaming its Approach . 200
Changes in Nature and Volume of Aid 203 Shifts in Strategies . 208
Rural Development . 208 Non-Governmental Organizations (NGOs) 209 Institutional Capacity Building 210 Import Support . 212
Shifts in Organizational Routines . 213
Structural Change . 213
Evaluation ... . 214
Reporting . . 215
Consultants . . 216
Budgetary Routines . 217
Shift in Technical Competence . 218

CHAPTER 7 CONCLUSION . . 221
Sida and Policy Change I . 221
The Learning Model . 231
Swedish Aid: The Future, and Its Implication to
Policy Makers . 232


APPENDICES . . 237

Appendix: 1, Value of Tanzania's International
Trade (Millions Tshs) . 237
Appendix: 2, Official Government RevenueExpenditure 1975-85/86 (Millions Tshs) 238
Appendix: 3, Tanzania: Exports of Major Crops
1970-84 by Volume (tons) . 239
Appendix: 4, Focus Group Scores . 240

viii








Appendix: 5, Tanzania's Share of Swedish Aid to
Program Countries Of Africa . 241
Appendix: 6, Questionnaire . 242

REFERENCES . . 245

BIOGRAPHICAL SKETCH . . 256












































ix














LIST OF TABLES


Table page

1.1 Sweden's Share of Bilateral ODA to Tanzania on
Percent of Total DAC Aid............14

1.2 Aid Disbursed to Tanzania by Majon Donors (in
US Dollar)...................16

4.1 The Allocation and Disbursement Aid as
Percentage of GNP Versus the Type of the
Ruling Party..................122

4.3 Swedish Economic Situation 1960-1984. ........130

5.1 Factors in the 1980s Sida Policy Shifts .......148

5.2 The Weighing of Variables in Order of
Importance ..... ........ ..... 151
6.1 Average Sectoral Allocation to Tanzania in
Percentage 1975-1995..............204

6.2 Tanzania's Share of Swedish Aid to Program
Countries of Africa 1975-1995. .........207


















x














LIST OF FIGURES


Figures 'Page

Figure 2.1 Sida's Learning Model . 76

Figure 4.1 Swedish Public Opinion Toward Foreign Aid
1981-1995 . . 126

Figure 7.1 State Commitment to Macro-Economic Reform
and its Implication to Policy Makers 233


































xi















KEY TO ABBREVIATIONS



BITS- The Swedish Commission for Technical Cooperation.. CK -Central Committee for Swedish Technical
Assistance to Less Developing Areas. DAC Development Assistance Committee.
DANIDA Danish International Development Agency. DCO Development Cooperation Office.
FINIDA Finish International Development Agency. GNP Gross National Products.
HESAWA Health through Sanitation and Water. IMF International Monetary Fund.
IMPOD The Import Promotion office for Products from
Developing Countries. LP The Liberal Party.
MP The Moderate Party.
NGOs Non-Governmental Organization.
NIB Board for International Assistance.
NU The Swedish Board for Education in International
Development.
ODA Official Development Aid.
PP- Policy Framework Paper.
SAL Structural Adjustment, Lending.
SAREC. -. The Swedish Agency -for Research and Cooperation
with Developing Countries.
SASDA Secretariat for Analysis of Swedish Development
Assistance.
SDLP Social Democratic Labor Party.
Sida Swedish International Development Cooperation
Agency.
SIDA Swedish International Devel9pment.
SIDO The Small Industries Development Organization.
SIP Sister Industries Program.
SWEDFUND -The Swedish Fund for Industrial Cooperation with
Developing Countries. UK United Kingdom.
us United States.





xii








Abstract of Dissertation Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy

LEARNING AND POLICY CHANGE: THE CASE OF SWEDISH
INTERNATIONAL DEVELOPMENT COOPERATION AGENCY (Sida) 1980-1995

By

Laurean Josephat Philomena Ndumbaro August 1998

Chairperson: Prof. Goran Hyden Major Department: Political Science

This dissertation examines how learning relates to

policy change, using the Swedish International Development Cooperation Agency (Sida) as a case study. It argues that faced with dramatically different conditions for foreign aid in Africa, feedback and consensual knowledge were the most important variables for a major policy shifts in Sida in the 1980s. Whereas feedback from Tanzania signaled the necessity for change in Swedish aid policies, the neoliberal policy outlook of the IMF and World Bank provided the most viable alternative. These policy shifts led to multilateralization as manifested in changes in Sida's operational norms, aid objectives, aid approach, nature and volume of aid, organizational routines and technical competence.





xiii















CHAPTER 1
INTRODUCTION


Background to the Study


One of the most notable changes in international development assistance since the 1980s has been the introduction of economic and, more recently, political condit ionalities for providing foreign aid. This has significantly changed the way both bilateral and multilateral donors operate. This study focuses on the Swedish International Development Cooperation Agency (Sida) in an attempt to explain those changes'. Sida is particularly relevant because the changes it has had to undergo have been both more far reaching and painful than those experienced by other bilateral agencies. This is particularly true with regard to Sida's relationship with Tanzania, a favorite recipient of Swedish aid since the 1960s.. In fact, Sida was among the last donors to change its aid policy toward Tanzania.




'The Abbreviation for Swedish International Development Cooperation is in small letters "Sida."








2

T he importance of Sida to this study is further

heightened by the fact that the bulk of Swedish aid to Tanzania has been allocated by Sida, and because Sida has traditionally been the biggest donor in Tanzania. Between 1965 and 1984/85 most (if not all) Swedish aid to Tanzania was allocated by Sida; in the period between 1985/86 and 1994/95 more than 90 percent of Swedish aid to Tanzania was

2
disbursed through Sida

Employing a learning perspective, this study attempts to explain why Sida changed its aid provision behavior to Tanzania in the 1980s. It'also tries to show the implication of those changes within Sida with regard to the agency's objectives and ideology as well as its technical competence and organizational routines. The nature and volume of aid to Tanzania is also examined. Although this study is based on learning perspective, alternative explanations are discussed with the view of assessing their influence on the 1980s Sida policy shifts and the extent to which the policy change is a consequence of organizational learning.







2 Computed from Sweden's Development Assistance in Figures and Graphs 1994195.








3

Significance of the Study


This study attempts to accomplish two objectives. Most studies which deal with the changes in the 1980s have paid particular attention to issues of policy and institutional changes in the Third World countries. Little has been done to account for changes which have taken place within the international development agencies themselves since the 1980s. This study intends to not only fill this gap, but also contribute toward an understanding of the contemporary aid giving process.

At the theoretical level, this study attempts to show how international development agencies fit into organizational learning theories. Determining why international development aid agencies changed their policies in the 1980s is very important for the understanding of the operation of both multilateral and bilateral agencies. Was it simply a result of power politics among concerned interest groups, or classes? Was it caused by the need to maximize self interests? Was it the product of domestic and/or international processes that happened in the 1980s? Or, was it due to politics internal to these agencies?

One important point worth noting here is that

international development agencies are neither prisoners of








4

the structures surrounding them, nor are they always acting on their own will. While they are constrained by other institutions, international development agencies have a number of choices available to them. In cases where international development agencies employ knowledge from experiences and/or epistemic communities in making their choices, the learning perspective is likely to provide a more convincing explanation than others'.

Most studies in international relations that have been grounded in learning theories have focused on general changes in foreign policy (Levy 1994). Those that have dealt with learning theory in international organizations have mainly dealt with multilateral organizations such as the World Bank (Haas 1990 and Le Prestre 1995) and the European Union (Brown 1995). International development agencies, such as Sida, whose policy shifts have considerable impact on the development processes of a number of Third World countries have not been given sufficient attention in the context of learning theories. By examining Sida (a bilateral agency), this study hopes to throw new light on the usefulness of learning theories.






'For the definition of. epistemic community see Chapter Two page 70.










Develo=ent Assistance: An Overview


Development assistance as a conscious and purposeful instrument of intervention in the socio-economic and political processes of developing countries of Africa, Asia,. and Latin America is a post World War II phenomenon. The Marshall Plan is its logical precursor (Arnold, 1979). Although development aid has declined in recent years, throughout the 1980s it grew in volumeland importance. In some developing countries, for example, development aid accounts for more than 50 percent of the national development budget. Under such circumstances, it is difficult to envisage a situation wherein these countries could undertake development without foreign assistance.

In respect to the countries of Sub-Saharan Africa, development assistance has become their life and blood to the extent that it is sometimes assumed that most, if not all, cannot operate without it. Indeed, most sectors of African economies are in one way or another financed by foreign aid. Unfavorable world trade, particularly for primary commodities, and the unavailability of commercial loans explain in part African governments' dependence on foreign aid (Sandbrook 1993). In fact, Africa today not only is more dependent on foreign aid than it was at the time of independence but also is relatively as poor as it








6

was thirty years ago (World Bank 1989 and Morton 1993). The latter may be attributed to the fact that much of the aid disbursed in the Cold War period was not used for development, but rather for ensuring the economic and political survival of governments in power (Arnold 1979, Commons 1988, and Bayart, 1993).

In most cases, that portion of foreign aid used for development was not very effective largely because development assistance during the post World War II era operated on the assumption that states in Third World countries would have the capacity to continue to efficiently run development projects once aid was terminated. In fact, the capacity was not there. As a result, most of these projects were either under utilized or simply died following donor termination. An interesting point here is that the ever growing aid dependence makes what donors do of great signi fi'cance to the socio-economic and political processes of Africa.

Donor agencies have shifted their attention from one

sector of the economy to another since the 1950s in response to changes in the social, economic, and political processes of Africa as well as changes in global power relationships (Sandbrook 1993). Consequently, donor perception of








7

Africa's problems has changed over time as well (Radetzki 1992, Hyden 1994, and Morton 1993).

In the 1950s and 1960s, for example, more emphasis was put on industrialization (the import substitution approach) and "modernization." In the early 1970s, attention shifted from industrialization and modernization to agriculture under an "integrated rural development approach" (Hyden, 1994),. This approach inco.aitporated a more explicit "poverty. focus" (basic needs strategies) than the previous one.

The world-wide economic recession of the 1980s was felt more severely in Sub-Saharan Africa than in any other part of the world (World Bank 1989) The 1680s economic crisis in Africa was partly seen as the failure of the previous approaches to live up to expectations (World Bank 1989 and Hyden 1994) This failure was attributed mainly to the problems of macro-economic policy in these countries (World Bank 1989, 1994) As a result, in the 1980s policy reform came to head the agenda for Third World development.

The policy reform agenda was not introduced easily.

There were considerable economic and political constraints to the introduction of such reforms. In fact, economic and political conditionalities for providing foreign aid had to be introduced to facilitate the acceptability of macroeconomic and sectoral policy reforms such as trade








8

liberalization and privatization in most of the Third World countries. In the case of Sida, for example, Hyden at al, (forthcoming, p.453) write, "... Sida lias fallen in line with the 'Washington consensus'. In its relation with Tanzania in recent years, Sida has followed it quite strictly so as to add pressure on the Tanzanians to take the necessary reform measure." The introduction of macroeconomic and sectoral reforms significantly altered the thinking and the operation of both bilateral and multilateral donors.

These changes were more important than the previous

ones as they paved the way for a fundamental change in the donors' perceptions of their aid goals, Ipolicies, and strategies. It was not just a shift of attention from one sector to another as with previous changes. Changes in the 1980s called for the redefinition of the entire aid program including the reasoning therein. The underlying assumptions of the role of the state in the development process and the ideological logic of development assistance were brought to the test of history in the'1980s (Jackson and Rosberg, 1986,' Migdal, 1988, Evans, et al 1985, and Evans, 1989) The results contradicted existing theories of development and practices.








9

Multilateralization


One of the most significant manifestations of the

changes of the 1980s was the "multilateralization" of what had been bilateral relations in the aid-giving process. The move to conditionally involving a third party--the international financial institution--and embracing its policy outlook in the previous bilateral aid provision process is referred to as "multilateralization" in this study.4

The Swedish-Tanzania aid relationship was

multilateralized beginning in the mid 1980s. Swedish aid to Tanzania began to depend upon not only the agreement between Tanzania and Sida as before, but also the signing of an agreement between Tanzania and the International Monetary Fund (IMF). In other words, Tanzania was required to show a certificate of approval from the IMF before Sida would commit most of its funds (Campbell and Stein 1991).





4 The provision of bilateral aid to Third World
countries, which prior to the eighties was "purely" a matter of agreement between a donor and a recipient (bilateral), experienced the inclusion of important third parties (the IMF and the World Bank) in the matters of policy and conditionality. Aid could not be given to most of the Third World countries without a certificate of approval from that third party (Campbell and Stein, 1991, Lele, 1992, and Radetzki 1992).








10

Other donor agencies, such as the Danish International Development Agency (DANIDA), Finnish International Development Agency (FINIDA), and the United States Agency for International Development (USAID), also introduced similar changes in strategy. It is interesting to note, however, that bilateral donors responded differently. USAID, for example, was quick to embrace the IMF's conditionalities while Sida was among the last to do so. Why this happened the way it did will be discussed later.

To Sida, multilateralization manifested itself in a number of ways, the most significant ones being shifts in Sida's ideology, priorities among aid objectives, and the volume and nature of bilateral aid.5 In this respect, multilateralization also connotes a new vision in Sida's thinking about the aid provision process.

The Swedish-Tanzania Aid Relation


Tanzania won its independence in 1961. Ever since, Tanzania has been one of the major beneficiaries of development aid. In fact, its share of total global development assistance has been around 2.5 percent (SASDA



'Multilateralization discussed here is different from
the process of giving aid through multilateral organizations such as the Bretton Wood institutions and United Nations' agencies. Sweden has always been giving aid through such multilateral agencies, but such support did not require a certificate of approval from either of these agencies.










Report, 1994). According to SASDA (1994), Tanzania received

8 percent of all Development Assistance Committee (DAC) assistance that went to Sub Saharan Africa in the period between 1965 and 1991. In monetary terms, Tanzania received about US $9 billion (current) during that period. Among the major bilateral contributors of development assistance to Tanzania is Sweden.

Swedish aid to developing countries officially started in 19"52 with the establishment of the Central Committee for Swedish Technical Assistance to Less Developed Areas (CK). This Committee was formed by non-governmental organizations (NGOs) Forty-five NGOs of different orientations became members of the CK. They ranged from religious, industrial, and labor to cooperative unions and athletic organizations. CK had two major responsibilities. The first was to establish a Swedish aid program to developing areas. The second was to run programs to help raise public awareness and support for increasing Swedish participation in Third World-development. These goals were implemented through public education efforts and fund raising campaigns. Two national fund raising campaigns and education were organized by CK during a decade of its existence.

Thus, Swedish development aid was initially an

activity of non-governmental organizations. Missionary








12

groups were the Swedish pioneers of the aid endeavor. In this respect, moral considerations and solidarity with the poor have been at the heart of Swedish aid to developing countries. It is not surprising then that foreign aid in Sweden is seen as a moral obligation (Karre and Svensson, 1989) This perception of foreign aid could partly explain why the first decade of Swedish aid was both less systematic and more guided by moral and idealistic principles (Elgstrom, 1992) Moreover, it could also explain why Swedish commercial interests in most cases have taken a back seat in Swedish aid to developing areas, particularly before the late 1970s.

By 1961, the Swedish government saw the need to play a dominant role in the aid process. The'Board for International Assistance (NIB) was created to replace CK. Whereas CK was a Committee for NGOs, the NIB became a separate administrative unit within the Ministry of Foreign Affairs dealing with all bilateral aid. Within four years of its existence, the NIB found itself immersed in managerial and organizational problems which led to its dissolution in 1965 (Jellinek, et al, 1984) The Swedish International Development Authority (SIDA) was formed instead. Thirty years later SIDA changed its name to the Swedish International Development Cooperation Agency (Sida)








13

following its merger with five other Swedish aid agencies6 Unlike the NIB, Sida was created as anlautonomous government agency under the auspices of the Ministry of Foreign Affairs. Sida is responsible for planning, implementing, and monitoring all bilateral cooperation.

While Sida is responsible for administering all

bilateral aid, multilateral aid is handled by the Ministry for Foreign Affairs which has overall responsibility for all government aid. Since its establishment, Sida remains the central agency for Swedish bilateral aid. The relationship between Sida and the Ministry for Foreign Affairs was not particularly harmonious at the beginning partly because the boundary of authority and responsibility between the two was fluid. Over the years these boundaries have been redefined and the relationship between the two has become amicable (Elgstror, 1992).

With respect to Tanzania, Swedish aid officially began in 1964 under NIB. Since then, Tanzania has been one of the main beneficiaries of Swedish aid. For example, in the




'Before 1995 Sweden had five small agencies dealing with specific issues--The Swedish Agency for Research Cooperation with Developing Countries (SAREC), The Swedish Fund for Industrial Cooperation With Developing Countries (SWEDFUND), The Swedish Commission for Technical Cooperation (BITS), The Import Promotion Office for Products from Developing Countries (IMPOD), and the Swedish Board for Education in International Development (NU).








14

period between 1965 and 1995 Tanzania received a total of 20,258,843,000 Swedish Kronor (in 1995 prices). Of this amount, about 19,407,865,000 was disbua sed through Sida. Compared with other countries receiving Swedish aid in this period, Tanzania was given more from the Swedish aid budget than any other country, Tanzania received about 16.6 percent of all Swedish aid disbursed to program countries of Africa between 1965 and 1995.7



Table 1.1 Sweden's Share of bilateral ODA to Tanzania in percent of Total DAC aid

Year Share Year Share Year Share Year Share 1962 0.05 1971 21 1978 19 1985 13

1963 10.80 1972 31 1979 20 1986 21

1964 4.09 1973 36 1980 14 1987 11

1966 6.90 1974 25 1981 16 1988 13

1967 9.90 1975 23 1982 15 1989 13 1

1969 30 1976 24 1983 16 1990 18

1970 118 11977 122 11984 13 11991 19
Source: SASDA Report No. 5, 1994, p.5.

Table 1.1 above further demonstrates the contribution of Sweden's bilateral Offi'cial'Development Aid (ODA) to Tanzania as a percent of total Development Assistance Committee's (DAC) aid. The table shows that Sweden has made



7 Computed from Sweden's Development Assistance in Figures and Graphs 1994/95.








15

a significant contribution to Tanzania's development process. As can be seen in Table 1.1, Sweden's share to Tanzania increased from an average of 8 percent in the 1960s to over 20 percent in the 1970s. It then declined to about 15 percent in the 1980s and rose again to about 20 percent in the early 1990s.

The rapid increase of Swedish aid to Tanzania in the

1970s could be explained by developments which took place in both Sweden and Tanzania. The Ujamaa and self-reliance policy adopted by Tanzania in the late 1960s emphasized development, equality, "we-lfarism," support for liberation movements, and non-alignment. These policies were not only perceived as progressive by Sweden but were in line with Swedish aid objectives. The fact that Swedish aid objectives coincidentally agreed with Tanzania's development aspirations fostered a spirit of friendship and mutual understanding. This spirit explains the generous Swedish contribution to Tanzania's development efforts. Tanzania, as a result became a favorite recipient of Swedish aid in the 1970s and early 1980s. Table 1.2 below shows Swedish aid to Tanzania in comparison with various donors.

Compared with other donors, Sweden has been Tanzania's largest bilateral supporter(Table 1.2). Between 1965 and 1992 Swedish aid averaged about 12.14 percent of all








16

bilateral aid to Tanzania, as shown in table 1.2 above. Sweden exceeded the second placed Netherlands by 4.07 percentage points of the total bilateral aid to Tanzania, and the United States by more than 10 percentage points.



Table 1.2 Aid Disbursed to Tanzania by Major Donors (in US Dollar).

Country 1970s 1980s 1990-92 Total Percent


Sweden 422 780 386 1588 12.4

Nether 246 607 202 1055 8.07
lands

Germany 252 533 205 990 7.57

Norway 150 566 271 987 7.55

Denmark 194 475 263 932 7.13

UK 102 441 197 940 5.66

Italy 4 486 210 700 5.35

Japan 51 453 171 675 5.16

Canada 177 300 96 573 4.38

Finland 70 291 127 488 3.73

IUSA 1 167 1 174 1 101 1 442 1 3.38
Source: SASDA Report, no. 5 1994, p.20. Key: *= Percent of the total aid received since the 1970s


The two tables above show the importance of Sweden to the Tanzanian development process. They also show that the Nordic countries, together with the Netherlands, contributed about 38.53 percent while the contribution of the major western powers--the United States, UK, and Germany--is 16.61








17

percent. It is worth noting that Sweden, both because of the size of its aid to Tanzania and its influence among other donors, particularly the Nordic countries, is a case of particular interest to the student of foreign aid.



Hy-oothes s


The following propositions regarding the 1980s Sida policy shift are based on the discussion provided above'. The propositions that guide this study are as follows.

1) Sida initiated policy changes in the mid-1980s

because:

a) its own projects and program portfolio had

failed to achieve acceptable results (the

feedback criterion);

b) the IMF's and World Bank's policy outlook was

increasingly more persuasive for Sida (the

Consensual knowledge criterion);

c) Sida's institutional processes slowed the

learning process (the institutional criterion).







'Feedback knowledge, consensual knowledge and
institutional processes are theoretical basis from which these propositions are derived. For detailed account see Chapter Two, page 66-78.








18

2) Sida's response to feedback and consensual knowledge

has been:

a) a marked shift in priorities among aid

objectives;

b) growing acceptance of "mainstreaming" its own

approach.

3) The impact on Sida's organizational processes has

been:

a) a relative shift in organizational routines;

b) a shift in technical competence.



Dissertation's OrganizationChapter 2 presents a literature review and discusses the theory to guide this study. Learning theory, which gained momentum in explaining policy change and choice in the 19803, provides the lens through which this study is analyzed. Chapter 2 sets the parameters for discussion by presenting the theoretical and empirical justification for the applicability of learning theory in this study, reviewing alternative theories, defining key learning concepts, levels of analysis, types of learning, and describing some of the debates surrounding learning. The learning model that guides this study is also presented.








19

Chapter 3, discusses methodology and data collection. It shows the strength and weakness of case study, and the justification for using this method in social science research. The whole process of data collection and problems encountered from sampling, interviews, document analysis to focus groups are discussed. This chapter also explains why this study used interviews, focus groups, and document analysis as techniques for data collection. The strengths and weaknesses of each technique and how the combination of these three data collection methods helped to reduce problems associated with each one also are explained.

Chapter 4, examines the Swedish economic and political environment in order to explain the domestic context of Sida's 1980s policy shifts. In particular, this chapter describes how Swedish economic performance, changes in Swedish public opinion about foreign aid, and changes in political leadership have affected Sida aid policy in the 1980s. The Position of Sida within the Swedish government's hierarchical structure is also presented.

Chapter 5 portrays Sida as a learning organization. It explains how feedback knowledge from Sida's programs and projects in Tanzania affected its understanding about development endeavor. In addition, it focuses on why and how the new consensual knowledge in the development field










20

came about in the l980s and the role it played in Sida's understanding of reality. This chapter also discusses the role played by Sida's institutional processes in the 1980s policy shifts.

Chapter 6 presents the impact of learning on Sida as an organization. It argues that lessons drawn by Sida from both feedback and consensual knowledge impacted not only Sida's norms, institutions, and principles but also the nature and volume of aid. Chapter 7 provides conclusions, prospects for Swedish aid, and future research questions.















CHAPTER 2
THEORETICAL FRAMEWORK


Why Learnina Theory?


This chapter presents*learning theory as the lens through which this study is analyzed. The stage for discussion is set in this chapter by presenting a theoretical and empirical justification for the applicability of learning theory to this case study, reviewing alternative explanations, defining key learning concepts and levels of analysis. The chapter ends by providing a learning model which guides this study.

The incentive for the selection of learning theory is partly provided by the nature and intensity of the debate about the Swedish aid process and in-depth aid performance analysis which was carried out by Sida in the period between 1979-84 (Elgstrom 1992). Prior to 1980, there was a political consensus on aid among different actors in Swedish politics. The missionary spirit and solidarity with the poor were the cornerstones of this consensus which ruled out both the possibility of any political challenges from within Swedish politics as well as "interference" in the political 21









22

processes of developing countries. Under such circumstances, policy shifts had to come through learning.

Moreover, the 1980s saw multilateral institutions such as the IMF and World Bank, and bilateral institutions working closer together in development policy than at any other time in history. This closeness created an optimal environment for both the development of consensual knowledge about development aid, and the globalization of that knowledge. This manifested itself in the way development language has been increasingly standardized and key prescriptions for development problems have been homogenized across different aid agencies in the last ten years. These developments, as will be discussed later in this study, provide important variables for organizational learning.

A number of research studies-- Claesson (1982), and

Ekengren (1984), Forss (1985) Lele (1992), Elgstrom (1992)-were initiated in the 1980s and 1990s to evaluate aid performance and to suggest lessons which could be drawn from thirty years of experience in development aid. The underlying logic for initiating these studies was not only that organizations are capable of learning but also that they are devoted to improving their understanding.

The utility of learning theory has been demonstrated by scholars from different fields and methodological








23

backgrounds. Breslauer (1987), Mendelson (1993), Moltz (1993) and Stein (1994), for example, successfully employed learning theories in an-attempt to explain shifts in Soviet foreign policy. Others, such as Leng (1983) and Reiter (1994), explained changes in the Super Powers' perception of international security and cooperation through learning theory. Haas (1990), Brown (1995), and Le Prestre (1995) have also successfully used learning theory in explaining policy changes in international organizations. Argyris and Schon (1978) attempt to provide a theory of action in organizational learning. Thus, the above mentioned issues provide not only the stimulus but also an empirical and theoretical justification for learning theory.

Alternative Models


Learning is not the only theory which is relevant to explain policy change and choice. Scholars from a variety of disciplinary and methodological ori nations have shown increasing interest in explaining policy change and choice in different perspectives. Two major groups can be isolated: those who provide society-centered and those who provide state-centered explanations. Society centric theories include class theory and pluralism and the contextual model, while in state centric theories,









24

bureaucratic and rational choice have been particularly prominent.

The Class Theory

Class theory asserts that policy and policy change is rooted in the relationship of power and domination among

classes'. According to this view, the dominant relations of production in a society sets parameters for both classes and power relationships. Societal conflicts, whether social, political, or economical, are all explained in terms of class, based on economic relationships among groups of people. Policy is seen as instrumental in reconciling class antagonism. An overall objective for any policy, in this view, is to safeguard the interest of the dominant class and/or ensure the persistence of the dominant system of production.

Within this paradigm, policy change is explained in

terms of shift in the dominant class coalition or as a means for ensuring the survival of the capitalist system (Poulantzas 1973). The relative autonomy of the state (visa-vis other classes) grants it the flexibility to deal with any threat arising from subordinate classes (Poulantzas,




9Although class explanations have seemingly been
relegated to the museum of antiquity, some people in both Sweden and Tanzania showed interest on it. For them we include this explanation in this study.











25

1973). In situations where the survival of the capitalist system is threatened, state agencies can initiate a policy or policy change that seemingly contradicts the interest of the ruling class. According to Poulantzas (1973), this is only possible because the relative autonomy of the state allows it to nurse the myth that policy change serves the interest of the society as a whole while in reality the survival of the system is for the interests of the dominant coalitions. As Lenin (1976:45) also, writes:

People always have been the foolish victims of
deception and self deception in politics and they will
always be until they have learnt to seek out the
interests of some class or other behind all the moral, religious, political and social phrases, declarations
and promises.


In the case of Sida's policy shifts during the 1980s, Class explanations seems inadequate. The social democratic government under which Sweden's development aid policies were established in the 1960s and early 1970s was replaced by a conservative government in 1975-82. No significant policy shifts in development aid were witnessed with this change of power and concurrently there were no discernible shifts in patterns of class stratification, i.e. class relationships remained constant during this period. In fact, the 1980s Sida policy shifts came when the government which established it was in power. In other words, the










26

class-which was in power when policy shifts occurred in the' 1980s was the same class which established it. Class explanations would be more convincing if those policy shifts had occurred with a change of government.

Moreover, scholars who have dealt with Swedish aid agree to the fact that until the 1980s Swedish aid was mainly driven by moral and solidarity convictions (Elgstrom 1992). These moral and solidarity motives crisscross Swedish class boundaries and formed the basis for Swedish aid. Class explanations cannot adequately address these issues. Moreover, the deterministic character of Class explanations obscures not only learning but also the role of choice in policy change.

Pluralist Theory

Pluralist theory, on the other hand, situates policy

and policy change within the context of conflict, bargaining and coalition formations among societal interest groups. According to this view, society is made up of a variety of groups which are organized to safeguard the special interests of their members. These groups compete and unite behind common policy issues.

To pluralists, policy change and choice depends on how different interests from the society are mobilized,










27

aggregated, and articulated. Baumgartner and Jones (1993.:1.90) write:

The mobilization of interests changes over time, and
with those changes come difference in the likelihood of
certain issues to hit the public agenda. Interest
groups play an important role in formulating questions, affecting public opinion and defining the terms of the
debates.


Thus, shifts in interest group coalitions and changes in their bargaining competence are instrumental for policy change. In short, the source and content of policy and policy change in this perspective are societal groups. The major function of state institutions, according to the pluralist view, therefore, is to guide and direct interest group competition into a particular policy resolution.

Contrary to this view, scholars including Stepan, (1978), Evans, Rueschemeyer, Skocpol, (1985), and Nordlinger, (1987) argue that state agencies are not arenas lacking interest or power of their own. Skocpol (1982:4), for example, argues that states do 11 ... formulate and pursue goals that are not simply reflective of demands or interests of social groups, classes or society." By denying governmental bodies' capacity to formulate independent policies, pluralists implicitly obfuscate the capacity of the state agency not only 'to make independent policy but also to learn.










28

Like Class explanations, pluralists tend to obscure the role of learning in the policy process in favor of power politics. Our findings show that learning more than anything played an important role in the 1980 Sida policy shifts.1 Findings show that consensus existed among societal interest groups in support of existing aid levels and policies particularly, the non-interference policy. In such circumstances it is unlikely that pluralism can offer adequate explanation. Instead, the relative autonomy which Sida and other Swedish agencies enjoyed was sufficient enough to change policy based on learning without having to seek the approval of domestic interest groups. Moreover, the knowledge base which Sida has in international development, and the multiple, heterogeneous contexts in which it operates, limits the explanatory power of pluralism in regard to the 1980s policy changes". This conclusion is supported by Jellinek, et al (1984) and Elgstrom (1992) who argued that interest groups played a minimum role, if any, in the 1980s Sida policy shifts.









1For more detail see Chapter 5.

"For detailed discussion see Chapter 4.











29

Contextual Model


A general consensus exists among organization theorists that a sound explanation of an organization's actions and decisions cannot-be drawn from.internal factors alone (Moe,. 1985, Tipple and Wellman, 1988, and Henry, 1995). The consensus is more apparent when it comes to public organizations than private organizations.

Henry (1995:67), for example, identifies two factors which make the context of public organization an important variable in understanding organizational decision making.

The high importance of the demands being made on the
public organization by its task environment relative to
internal management needs; the unique impact of the
task environment on the public organization's structure and bureaucracy; its decision making; the motivation of
public managers, their satisfaction with their work;
the public organization's internal management; and even
the performance of it-s administrators.


This is particularly true because public organizations are the product of the political process. As such, they are largely shaped and controlled by the political and economic environments in which they operate. As Gabris (1983:143) emphasizes "Public agencies are subject to and cannot escape their political environments." The impact of environment on the inner workings of public agencies, therefore, is considerably more significant than in private organizations (Chubb and Moe, 1988 and Henry, 1995). This study would










30

fall short of a convincing explanation without paying particular attention to Swedish politics. As a result, an examination of Swedish politics is presented in Chapter 4.

Actions and decisions made by public agencies attain their legitimacy not only from legislation and internal expertise, but also from their domestic constituents (the public). In fact, as public agencies grow, the need for public political support becomes an important issue. Public opinion concerning the actions and decisions of public agencies is very important for their survival. This study, therefore, examines Swedish public opinion on development aid in an attempt to assess its influence in the 1980s Sida's policy shifts.

As most public agencies draw their funds from

government budgets, the state of the national economy becomes an important factor in their actions and decisions. Reduction of government expenditure inIcertain budget areas can affect agencies concerned. An examination of the Swedish economic situation in the 1980s is important in assessing its influence in the 1980s Sida's policy shifts.

The structure of the government and the position of an agency in the governmental hierarchy are also important in agency's decisions., The examination of Sida's position within the government structure and Sida's decision process










31

enables this study to establish the influence of the government and the parliament in the 1980s Sida's policy shifts.Thus, this study examines four variables--aid

administrative structure, Swedish aid politics, Swedish public opinion about development aid, and the Swedish economy--to establish the extent to which contextual factors influenced the 1980s Sida's policy shifts. Rational Choice Theory

Rational choice theory focuses on the individual or

organization acting as rational beings in explaining policy formulation and policy change (Frohock, 1979). Rational choice tends to confine the rationality of decision makers to maximization of their self-interests. While, rational choice can mainly explain policy change in a situation of poor performance in terms of inefficiency of the means, it cannot sufficiently deal with the learning conveyed by feedback and the role played by epistemic actions in policy change. In the 1980s Sida policy shifts where lessons from experience and the consensual knowledge in international development field played an important role rational choice cannot adequately address these issues.

Moreover, rational choice provides limited insight into how factors such as contextual factors, historical










32

experience, ideologies, and alliances, enter decision making circles and shape or even determine decisional outcomes (Grindle and Thomas, 1991). These issues are important in explaining the 1980s Sida policy shifts as chapter 4 and 5 show.

Rational choice theory also has a tendency to disregard the dimension of power. As a result it tends to trivialize institutional processes which not only define power relationship within the organization but also constrain choices. As chapter 5 reveals, Sida's institutional processes, particularly the leadership played an important role in setting and opening parameters for debate which led to the 1980s policy shifts. By belittling or ignoring the dimension of power, rational choice theory cannot adequately account for the role played by institutional processes in the 1980s Sida policy shifts.

Moreover, in the context of Swedish aid, where

altruistic and moral factors played an important role in aid decisions, rational choice theory falls short of a convincing explanation.

Bureaucratic Politics

Bureaucratic politics explain policy change in terms of competition among bureaucratic entities and actors who are constrained by their organizational roles and capacities










33

(Allison, 1971, and Grindle and Thomas, 1991). The resource base for their participation in policy making is the position they hold in the organizational hierarchy, their access to and control of information, and their bargaining competence12

Strategies and tactics employed by proponents and

opponents of the policy under discussion are instrumental for policy decision. Allison (1971:145), for example, in support of this view argues that a policy decision is the result of "... not simply the reasons that support a course of action, or routines of organizations that enact the alternative, but the power and skills of proponents and opponents of the action in question."

All these factors are important for explaining policy change, however, the importance of each one depends upon the issue in question. Three scenarios could be drawn in which one of the factors plays a.more important role than others. The first scenario.is the situation where evidence does not overwhelmingly support or preclude a certain course of action. In such a situation, proponents' and opponents' skills and power are likely to play aniimportant role. The



12 Bureaucratic politics in the context of this study is limited to power relationship and competition of ideas among bureaucratic entities and actors, and the way different bureaucratic entities and actors influence policy decisions.











34

second scenario is a non-controversial policy situation. Here, organizational routines are likely to play an important role. The third scenario is a situation where feedback knowledge or new knowledge regarding a particular issue or both 'are overwhelmingly in favor of a new course of action.' Under such circumstances knowledge that supports a' new course of action is likely to play a more important role.

The last scenario is more evident in the 1980s Sida's policy shift. As this study will show both feedback knowledge from the field and new knowledge in the development field in the 1980s fostered a redefinition of goals, strategies, and policy to address issues raised by that knowledge. In Sida, for example, feedback knowledge from Tanzania, coupled with the new dominant consensual knowledge in the development field in the 1980s, made even those who would have otherwise been opponents of the 1980s Sida's policy shift to Tanzania (for political reasons or emotional attachment to a project in Tanzania or otherwise) accept policy change (Elgstrom, 1992, dnd personal interviews)."

While bureaucratic politics is important for

understanding what is happening within an organization, it


13Questionnaire number 20.










35

is inadequate for this study because it gives only a superficial explanation about ways knowledge is obtained from experience, and how historical contexts shape and influence policy change. Moreover, bureaucratic politics provide "... little analytic capacity to deal with issues such as professional biases and alliances or consensus on technical analyses that cut cross bureaucratic boundaries" (Grindle and Thomas 1991:30), issues which played an important role in the 1980s Sida policy shifts. Learning theory addresses some of these deficiencies. Findings presented in Chapter 5 reveal that in the 1980s Sida policy shifts bureaucratic politics was more of a catalyst than a cause for change. In this respect, bureaucratic politics alone cannot successfully explain the situation.

Further, the study argues that all bureaucratic policy decisions are in one way or another grounded in bureaucratic politics. In this respect, bureaucratic politics is seen as an institutional process which is not only found in all bureaucratic organizations but whose influence on a particular policy also depends on a policy situation. This study, therefore, conceptualizes bureaucratic politics as an institutional process rather than a model for policy making. In this way, learning as a source of policy change is not obfuscated.










36

Summary

Generally speaking, the above explanations can be

grouped into two major camps. State-centric models base their explanations on people working within government institutions. These perspectives view contextual factors as well as historical experiences as playing a limited, if any, role in the initiation of policy or policy change. Society based explanations, on the other hand, mainly focus on societal groups or classes in explaining policy change. In fact, "... most or nearly all public policies are understood as responses to the politically weightiest societal expectations, demands and pressures; the state is almost invariably unwilling or unable to act upon its preferences when these diverge from society's" (Nordlinger 1981:43). The roles and interests of the people working within the government, therefore, are belittled by these explanations. The lens used in this study takes the middle road between the two major camps.

Learning theory asserts that members of an organization do initiate policies and policy change. In the process, they are influenced by both internal and external factors. Internal processes, including organizational routines, leadership, historical experience and ideology, and external factors, inter-alia, feedback and consensual knowledge from










37

the organizational environment, all have bearing on an organization's policy process. The importance of each factor, however, is issue and context specific. Learning theory, as discussed in the context of this study, attempts to address these issues.

Learning: Conceptualization


Learning as a concept has been a subject of controversy among scholars. Scholars from different disciplines and methodological orientations have defined learning in different ways. Learning is defined as: a change of behavior in a manner that enhances effectiveness (Porter, 1980, Argyris and Schon, 1978), a change of behavior as a result of acquisition of information or new knowledge (Jarosz and Nye 1993), the understanding of a particular policy question (Reiter, 1994), a change in belief (Levy, 1994), a change in cognitive structure (Bennett, 1990), increase in cognitive complexity (Etheredge, 1985), a process of specification of causal relationship in new ways (Haas, 1990).

Tetlock (1991), draws.'five definitions from the learning literature with each definition rooted in a specific approach. He identifies the definition of the neorealists, the psychologists and cognitive theorists, the cognitive structuralists, the organizational and political










38

cultural theorists, and the efficiency definition of learning.

As a theoretical framework, learning is also a subject of contention. The controversy is complicated by the lack of a unified theoretical trend, a variety of types of learning (e.g. individual, organizational, governmental, political, social)", different levels of analysis used by different scholars, different levels of learning (single loop vs double loop, simple vs complex, peripheral vs fundamental). Other contentious issues include learning vs unlearning, intentional/conscious vs unintentional/unconscious learning, causal linkage between learning and policy or behavioral change and the distinction between learning and adaptation. Given these contending views, this section discusses each aspect of the controversy in an attempt to locate the current study in a proper perspective.

Learning: Defined

Porter's (1980) conceptualization of learning as an intentional or conscious process is criticized by Huber (1991) who argues that learning need neither be intentional



"For individual learning see Moltz (1993) and Bennett (1990). For political learning see Heclo (1974) and Hall (1987) for social learning. For governmental learning see Etheredge (1985) and Bennett (1990).










39

or conscious nor does it necessarily increase the learner's effectiveness. Argyris and Schon (1978) link learning with increasing effectiveness, however, in their 1996 publication, Argyris and Schon agree that learning need not always increase effectiveness. They recognize the distinction between learning that increases effectiveness and learning that does not. They call the former "'productive learning" and it is the center of discussion in their work.

Despite recognizing the distinction between coming to see things in new ways and behavior change, Jarosz and Nye, (1991), and Argyris and Schon (1996) argue that for learning to be of any theoretical and practical utility it need be conceived in relation to behavior change. To Friedlander (1983), learning can result in change of one's understanding or cognitive structure without requiring a change of behavior. In fact, in certain circumstances learning results in reinforcing an existing behavior.

Levy (1994) sees the conceptualization of learning in a generic sense as having.'more theoretical and practical utility than one that is limited to behavioral or policy change. According to him, this allows students of learning to explain "... when individual learning gets translated into policy and when learning gets blocked by institutional










40

or*po-1-itical constraints" -(Levy 1994:290). 1 agree with Friedlander (1993) and Levy (1994) that there is no need for linking 1 earning with behavior or policy change a priori. The linkage need remain as an empirical question. In other words, the conditions under which learning leads to behavior or policy change needs to be a subject of empirical investigation.

Reiter (1994:492) defines learning as "... the

application of information derived from past experiences to acquire understanding of a particular policy question." This definition is too narrow for this study. As argued above, learning is more than acquisition of an understanding of specific policy questions. Learning can involve coming to see things in new ways without focusing on a particular policy issue. Besides, learning need riot always require the use of information obtained from past experiences. It may also include the application of information derived from the experiences of others (Hedberg, 1981 and Rose, 1991), new knowledge (Haas, 1990 and Jarosz and Nye, 1991) and study (Bennett, 1990).

Levy (1994:283) defines learning 11 ... as a change in belief (or degree of confidence or the development of new skills or procedures) as a result of observation of and

interpretation of experience." Not all change in beliefs as










41

a consequence of observation or experience involve learning. Individuals or organizations can be forced to change their beliefs for fear or many other reasons besides learning.

While this definition may explain changes in foreign policy in general, it falls short of explaining changes in international aid organizations. International aid agencies have specific tasks to fulfil. The overall goal of Sida, for example, is helping to improve the living standard of poor people. The way these agencies carry out their programs depends very much on their understanding of the recipients' socio-economic and political processes. In fact, unfamiliarity with and uncertainty of the recipients' environment make development aid agencies operate their programs mainly on an "experimental" basis (Hedberg, 1981).15 International development agencies repeatedly engage in testing, construction, and reconstruction of their
I
knowledge. In this respect, the definition of learning that focuses on change in beliefs does not capture the reality underlying international development aid agencies.




"This study uses uncertainty in the same meaning that is used by George (1980). The conditions of uncertainty which he identifies include inadequate information surrounding the issue in question or limited available knowledge for assessing the expected outcomes of'different course of action. It seems to this writer the situation under which international development agencies make policy decisions fits George's definition of uncertainty.










42

One important aspect which this study borrows from Levy's definition is "change in a degree of confidence." The uncertainty and unfamiliarity with Third World environments are adequate justifications for this study to include "change in a degree of confidence" in a definition of learning involving international development aid agencies or individuals working in them.

To Bennett (1990:100), learning consists of 11 ... change in cognitive structure ... as a result of experience or study...". When it-tomes international development aid agencies or individuals working in them (as discussed above), change in cognitive structure is just one side of the learning coin. The other side is consolidation of those structures. For example, when a program run by an aid agency is successful, the existing cognitive structures are reinforced; when the program fails, cognitive structures change.

Furthermore, Bennett's (1990) emphasis on study as an important source of information for learning is very relevant to international aid organizations and individuals working in them. Most of these agencies (individually, or in cooperation with others) sponsor a number of studies with the view toward gathering information or knowledge on a particular issue. The use of consultants by these agencies










43

to gather this knowledge falls under information derived from studies.

'Etheredge (1981) sees learning as a process by which

learners increase their intelligence arld sophistication in a way that enhances their effectiveness. To him, learning involves an increase in sophistication in cognitive complexity, evaluative complexity, or cognitive integration. By cognitive complexity, he means a variety of different arguments underlying a set of beliefs. Valuative complexity consists of both a level of inconsistency among them and the manner-into which the inconsistencies and value trade-offs of different arguments are dealt with in a larger framework. In this view, simple policy changes are not a part of learning.

According to Levy (1994), the problem with this

conceptualization is the implicit assumption that increased sophistication in cognitive structures leads to an improved understanding of reality or better skills and effectiveness. In reality, increased cognitive complexity does not necessarily result in learning or in increasing effectiveness. This conceptualization produces also some methodological problems--simple mind versus complex mind. How do we identify and measure simple cognitive structures or complex cognitive structures? Is the complexity or the










44

simplistic cognitive structures across-context or transissue-s or is it constraine-d by-the'context or issue under question? In other words, is the complexity or simplicity of cognitive structures universal or issue and context specific?

Another concept of learning is provided by Haas (1990). In his view, learning is a "... process by which consensual knowledge is used to specify causal relationship in new ways so that the results affect the content of public policy" (p.23). Specification of causal relationship is an important ingredient in linking learning to policy change. For the purpose of this study, however, this definition is inadequate. The major limitation of Haas' conceptualization is that it sees epistemic communities as the sole producer of causal explanations. In this view, members of organizations are passive recipients of new knowledge from epistemic communities.

While this may be true in some contexts, in others such as the development context, organizations work hard to produce new knowledge and establish causal relationships among the variables with which they work. More often than not, an international aid development agency, (or its department), individually, or in collaboration with other agencies (or departments) initiates studies with the view of










45

establishing causal relationships among different issues. Thus it is not necessarily the epistemic community which can provide a causal-linkage.

Drawing from the above discussion, learning for the purpose of this study is defined as a -process whereby information or knowledge derived from experiences, epistemic community or study significantly affec-H the understanding of realiLy. By "significantly" I mean at least part of understanding of reality is reevaluated or confirmed. By experiences I mean own experience and the experience of others. By study I mean own study and studies done by others. This conceptualization recognizes the distinction between acquiring new understanding and translating these new insights into actions. In doing so, it addresses one of the major controversies in the learning literature concerning the relationship between learning and adaptation.

Anderson (1991:101) defines adaptation as "... a switch from one behavioral routine in the repertoire of an individual or organization to another routine." Haas (1990:33) goes further to qualify this change of behavior; he views adaptation as "... the ability to change one's behavior so as to meet challenges in the form of new demands without having to evaluate one's entire program and the reasoning on which that program depends." According to










46

this view, then, if one evaluates just part of the program and the reasoning in which that part is based, it does constitute learning. 16

While scholars such as Hedberg (1981), Haas (1990) and Anderson (1991) maintain the distinction between learning and adaptation, Tetlock (1991) and Levine (1991) contend that the distinction is unimportant. Levine (1991: ), for example, defines learning as 11 ... adap ation to changing circumstances." More cautiously, Tetlock (1991) argues that adaptation can be considered as an outcome of learning. While this study does not equate learning with adaptation as Levine does, it views adaptation as one of the methods organizations use to put their lessons into actions.

In fact, adaptation involves the acquisition of

competency in certain organizational activities. Changes in the environment can force an organization to make simple adjustments to increase competency in its strategies or programs without questioning the underlying assumptions of




"For the purpose of this study, whether the
acquisition of an understanding is a product of the evaluations of ones' whole program and the underlying assumptions, as Haas (1990) maintains, or part of it and that of the reasoning involved, all involve learning. However, as we show in our discussion between learning and policy change (later in this chapter), the first level of learning, or simple learning, in most cases leads to adaptation while the second level of learning, fundamental learning, often leads to basic policy change.










47

those strategies. Sometimes, when an organization faces a unique situation it adjusts to this specific situation to create a fit between itself and its environment without necessarily evaluating part or the entire program; this is an adaptation.

1t. is also important -at this juncture to explain about unlearning. According to Hedberg (1981:18), unlearning is IV ... a process through which learners discard knowledge. Unlearning makes way for new responses and mental process." Unlearning is a big problem with most international development aid agencies. This is partly because it takes years before these agencies accumulate experiences. Likewise, it requires a highly cumulative convincing counter-evidence to make an organization discard its learned knowledge.

It seems to me, when an organizational world view, or myth (Hedberg, 1981), or theory of action (Argyris and Schon, 1978, 1996) reaches a "dead end", an unlearning process is spontaneous as the organizational efforts are directed toward creating new vision, nqw policies, and new organizational routines. Otherwise the process is slow. I agree with Hedberg (1981:19) that "... fund shortages, falling revenues, actual losses, diminishing popular support, or public criticism" and the failure of an










48

organization to achieve acceptable results can trigger organizational unlearning. This study, however, goes beyond H-edberg's (1981) contention. It argues that it is the emergence of a problematic situation and/or a new consensual knowledge in an organization that can switch on the unlearning process.

Orazational Learning

Organizational learning is more controversial than the concept of learning itself. Argyris and Schon (1996) identify three challenges to organizational learning. The first challenge is presented by scholars who maintain that

H..the very idea of organizational learning is

contradictory, paradoxical, or devoid of meaning" (p.xx). The second challenge comes from scholars who accept organizational learning as a meaningful term but who doubt that real world organizations actually engage in it or can be capable of doing so" (p.xx) The third challenge is presented by researchers who "..accept organizational learning as a meaningful notion and agree that organizations do some times learn; what it denies is that organizational learning is always or ever beneficent" l(p.xxi). This study relates primarily to the third challenge. It works under the assumption that organizations do learn but whether what










49

is learned is positive or not is left as an empirical question.

Another controversy in organizational learning is the unit of analysis. Organizational learning theorists are divided on the unit of analysis for organizational learning. Scholars such as Levy (1994) maintain that organizational learning takes place at the individual level. In other words, organizations learn primarily by institutionalizing individual learning into organizational learning practice. As Argyris and Schon (1978) argue, individuals

... reflect on and inquire into previous context for
learning ... They discover what they did that
facilitated or inhibited learning, they invent new
strategies for learning, they produce these strategies,
and they evaluate and generalize what they have
produced. The results become encoded in the individual
images and maps and are reflected in organizational
practice (as quoted by Levy 1994:286).

However, individual learning by itself cannot cause change in organizational behavior or policy, unless such learning is institutionalized in a way that not only reaches policy makers but also is accepted among the dominant coalition of policy makers. This process requires collaborative inquiry and effort rather than individual searches. It is difficult to envisage a situation where an individual in an organization single-handedly can make an organization learn. This is basically because the logic of an organization's operations works against it. Thus this










50

study designate the organization as its unit of analysis. This is particularly important in Sida's case because not only do organizations learn as collective entities but like Sida, they work in a disaggregate fashion through committees.

Organizational learning differs from individual learning. They learn by encoding collectively learned inferences from experience and new knowledge into organizational routines. As Argyris and Schon (1996:16) contend:

In order to become organizational, the learning that
results from organizational inquiry must become
embedded in the images of the organization held in its
members' minds and/or in epistemological artifacts (the
maps, memories, and programs) embedded in the
organizational environment.

To Ravel (1978:28) an organization learns by ".

imposing upon the structure and process of policy choice a set of decision rules ... that will dispose the system to respond in certain ways--presumably better than before--to future contingencies." According to Hedberg (1981:3) organizational learning takes place when "... organizations interact with their envir-on Iments: organizations increase their understanding of reality by observing the results of their acts. ... by imitating other organizations' behavior, or by accepting others' experiences and maps of the environment." Lovell (1984:135) maintains that










51

organizational learning takes place when 11 ... policy experiences become assimilated into organizational doctrine, structure, decision-making procedures, personnel systems, and organizational commitments." To us, unless individual inquiry and effort are translated into collaborative inquiry and efforts no organizational learning will take place.

Thus, the work of learning agents (whether an

individual or group) is unfinished business until the result of the inquiry, that is, the discoveries, inventions and evaluations, become encoded in the organizational processes. If they are not encoded, individual members will have learned, but not their organization. In other words, what members have learned remains an unrealized potential for organizational learning (Argyris, 1978).

While Haas (1990) sees learning as a result of

failures, Argyris and Scho.n (1996:16) treat learning as a result of a problematic situation. In their words:

They experience a surprisingly mismatch between
expected and actual results of action and respond to
that mismatch through a process of thought and further
action that leads them to modify their images of
organization or their understandings of organizational phenomena and to restructure their activities so as to
bring the outcomes and expectation into line ...

In this study, the failure of an organization to

achieve acceptable results, the emergence of a problematic









52

situation, or achievement of success could all result in organizational learning.

Bennett (1990:100) defines organizational learning as "... changes on organizational equivalents of beliefs." To Haas (1990:36), organizational learning is a process whereby IV... an organization is induced to question the basic beliefs underlying the selections of ends.." For the purpose of this study organizational learning is a process whereby collaborative inQuiry by members of an organization (as a result of feedback knowledge or consensual knowledge) generates information or knowledge that significantly affects the organization's understanding of reality.

The common denominator for these definitions is the fact that learning involves information processing and change. Here change is defined in a more generic sense to include change in a degree of confidence in an organization's understanding of reality. In this sense, even learning that may reinforce or consolidate an existing organization's understanding of reality is addressed. This is because even under such circumstances, changes, at least in the confidence level of organizational understanding, will occur. This is more so for development agencies which operate on the condition of uncertainty than for those organizations which operate in a more stable environment.









53

At this juncture, it is appropriate to note that

neither does all information processing involve learning nor is all change is a product of learning. I agree with Bennett (1990) who maintains that a particular way of information processing that assumes decision makers as naivee scientists" who use their "knowledge structures" and "judgmental heuristics" to infer about the socio-economic and political environment fall under the learning paradigm. According to Bannett (1990), the word "scientist" is used to express the fact that when confronted with a problem, policy makers in most cases will employ the same methods used by trained scientists. Policy makers, like trained scientists, sample data, make generalizations, observe covariation, formulate causal linkages, and use them to predict and test strategies against goals. The word "naive" connotes the fact that judgmental heuristics used by policy makers carry with them certain biases which sometimes work against statistical assumptions (Bennett, 1990).

In processing information-for decision making,

organizations employ different criteria which are couched in different assumptions. An understanding of these criteria or procedures and their underlying assumptions in organization's decision making processlis important because it enables this study not only to explain how the process of










54

data collection of these models fit in the learning paradigm but also establish which criteria for information processing fit the 1980s Sida's policy decisions as well as the learning model. Scholars of decision making (e.g. Simon, 1957, Lindblom, 1968, Etzioni, 1964, March and Olsen, 1979, among others), have developed a variety of decision making methods over the years. These methods include the comprehensive rational model, incrementalism, bounded rationality, mixed scanning, garbage can and groupthink. Models developed by these decision making scholars focus on two issues--information processing for decision making and the decisional outcome, i.e. incremental or fundamental change. The Former, in addition to the underlying assumption of decision making model is of interest to this study and will be a subject of discussion in the following section.

Learning vis-a-vis Criteria for Information Processing for Decision Making.


The classical model of rationality assumes decision

making occurs under stable conditions where decision makers have perfect information, goals, means are hierarchically arranged and the cost of decisions are under estimated (Frohock, 1979). The criteria for a rational comprehensive model are considered to be ideal, however, and its










55

unrealistic idealized assumptions, inter alia, unlimited human or organizational capacity, and costs involved in terms of time and attention in gathering all information, have made it less practical (Simon, 1957 and Lindblom 1968). The uncertainty, risks, and information problems associated with the development environment make its utility in the development field highly questionable. In fact, the way Sida policy decisions are made (as shown in Chapter 5) casts doubt on the applicability of this model in policy decisions for Sida.

The incremental model advocated by Lindblom (1968) assumes decision making as a bargaining process among different interested parties. Each interested participant aims at improving his/her resources. Under this model, changes in programs or policies are done incrementally--step by step. Fundamental changes that depart from the status quo are difficult to envisage under incrementalism. This model does not suit this study because the 1980s Sida policy shift was a fundamental departure from its previous aid policies. Besides, the 19'80s policy shifts included not only tangible programs and projects but also abstract goals and policy statements with which incremental solutions have limited capacity to deal (Gortner, et al. 1995).










56

Groupthink ...refers to a mode of thinking that

people engage in when they are deeply involved in a cohesive in-group, when the members' strive for unanimity override their motivation to realistically appraise alternative courses of action" (Janis, 1972:9). Tn this view, high group cohesiveness, structural faults of the organization, provocative situational context and pressure toward concurrence seeking are the basis for the emergence of group think. This leads to the deterioration of a group's mental efficiency, reality testing, and moral judgement. The consequences are-a disasteYt:

... a distorted view of reality, excessive optimism
producing hasty and reckless policies, and a neglect of
ethical issues. The combination of these deficiencies makes these groups particularly vulnerable to initiate
and sustain projects that turn out to be fiascoes ('T
Hart, 1990:6).

Janis (1972 and 1982) delineates eight symptoms that manifest the occurrence of groupthink in an organization. They include the illusion of both unanimity and invulnerability, collective rationalizations, direct pressure on dissenters, self appointed mindguards, self censorship, belief of inherent morality of the group, and stereotypes of out groups.According to Elgstrom (1992), the debate which took

place within Sida before the policy shifts in the 1980s was characterized by openness. Different viewpoints were









57

allowed to compete in that debate. There was no cens worship of deviant arguments and the leadership was more or less impartial. These, together with the mode of decision making employed by Sida, warrant us to conclude that the criteria for a groupthink model was not likely present in the 1980s Sida policy shifts.

The garbage can model contends that the decision making process is ambiguous, unreliable, and anarchic. According to this view, decision making does not fit the assumptions of the more classical decision making models because decisions take place in situation where ... preferences are problematic, technology unclear or participation is fluid (Cohen, March and Olsen, 1988:321). To these scholars, the policy making process serves more as an arena for individual and group expression of conflict, values, myths, friendships, and power, rather than problem solving. Knowledge has little, if any, role in the decision making process. As Cohen, March and Olsen, (1988:296) write:

The mix of garbage in a single can depends on the mix
of cans available, on the labels attached to the
alternative cans, on what garbage is currently being
produced, and on the speed with which garbage is
collected and removed from the scene.

The underlying assumption of this model is that

decision making is a matter of accident or coincidence. As Cohen, et al (1988:297) go on to say, a decision is an










58
outcome or interpretation of several relatively independent streams within an organization." As will be revealed in Chapter 5, the 1980s Sida policy shift involved the interpretation of not only relatively independent streams within the organization but also other independent streams outside the organization.

The mode of policy decision used by Sida, together with the intensity of the debate about Swedish aid within and outside Sida, and critical aid performance analysis which was conducted by Sida in the early 1980s, make it unlikely that this model could explain Sida's aid policy shift in that period. Moreover, the major role played by knowledge in the 1980s Sida policy change make the garbage can model less useful. Another limitfation of the garbage can model in the context of this study is that it does not provide a useful explanation about the way organizational structures define inter- alia who should participate in the decision making process and what issues should come to the agenda (Masuch and LaPotin, 1989). In the 1980Os policy shifts the Sida leadership played a dominant role in setting parameters for debate and by sending a number of missions to Third World countries to get first hand information and evidence for their policy decisions."7



'7For more detail see Chapter 5.









59

The satisficing model, like incrementalism, was

developed as a reaction to the limitations of the classical rational model. The model assumes that goals are not hierarchically arranged, information a-Vailable to decision makers is incomplete, and collection of information is costly. In this view, decision makers always seek a-,course of action that is minimally satisfactory. To reach this end, decision makers do not search every possible choice. Bounded by their own intellectual capacity, time and the resources available to them, decision makers select only a sample 'of possible choices--bounded rationality. An alternative that meets minimum criteria or standards of acceptability is chosen (Simon 1959). In other words, the alternative selected is based on "satisficing."

According to this view, organizations develop routines which simplify information search and issue assessments. Decisions are made after inquiring into issues that seem to be the most relevant for a particular choice. For that matter, decision makers do not seek to exhaustively analyze every choice.. March and Simon (1959) argue that, the level of knowledge of policy makers and information available to them are among the key factors that bound a decision maker. In this respect, this model is likely to fit into learning theory.










60

The satisficing model underlies the way most research is conducted and fits the learning paradigm (Bennett, 1990). When faced with a problem, organizations (particularly development agencies) would in most cases employ a trained scientist or use the same criteria as used by trained scientists. Organizations will define !the problem, collect and analyze data that are relevant to the issue under question, formulate causal linkages and use them to choose an appropriate solution. Organizations, like individual researchers, are bounded by time, resources, and intellectual capacity which make the rationality of their outcome, if at all, bounded. As will be indicated in Chapter 5, the criteria for the satisficing model fits the empirical reality underlying Sida's 1980's policy decisions.

Learning and Policy Change


Learning is by no means the only possible explanation for policy change. Changes in the external environment or political leadership, for example, can lead to policy shifts. More often, organizations change their course of action in an adaptive fashion (Haas, 1990) or through coalition shifts (Anderson, 1991) rather than learning. In this regard, the question of what type of change can be attributed to learning becomes problematic, because a loose conceptualization of learning can encompass any new policy










61

initiative in an organization while a more restricted conceptualization can exclude policy initiatives which in reality involve learning.

Within this problematique, three-major theoretical

trends that try to explain the relationship between learning and policy change in the learning paradigm can be identified. The first is based on analogical reasoning. It combines the ideas of knowledge structure and judgmental heuristic (Reiter, 1994).*18 The second trend, which is couched in consensual knowledge, emphasizes both the conceptual framework through which the interpretation of experience is done and the political process through which the epistemic communities try to shape the actions and decisions of dominant actors (Levy, 1994). 19 The third trend puts more emphasis on the relationship between means and goals. Feedback knowledge and organizational routines are central variables."0

It is a common phenomenon in the learning literature on organizational theories and international organizations to




"8For the discussion and application of this theoretical trend see Bennett (1990).

'9For discussion and applicability of this theoretical trend see Haas (1990).
20Fo discussion and application of this theoretical trend- see Argyris and'Schon (1978).










62

assume that "... organizations have a target level of performance or aspiration level to which they compare their actual performance; in each period, they determine whether they have performed above or below this aspiration level" (Lant and Mezias,,1992:48).. Organizational performance is measured by the difference between actual performance and the accepted goals or aspiration level. International development aid organizations, like any other organizations, have their own goals or aspiration levels and means or strategies to realize those goals. These postulations are very important in the organizational learning literature because it provides the cornerstone for the organizational learning theoretical framework. In fact, most literature on organizational learning and international relations distinguishes between two levels of learning. On one hand is learning associated wit:h means; on the other is learning associated with goals. In most cases, learning atzeach level is translated into different policy actions

The first level of learning focuses on the means rather than ends. At this level, for example, members of an organization individually or collaboratively inquire into the underlying assumptions of their tactics and strategies after repeated failures (Argyris and Schon, 1978) or an emergence of a problematic situation. In other words,










63

participants in an organization come to understand that the existing organizational processes (in terms of organizational framework of action and routines)* do not make it possible for the expected goal(s) to be achieved.Learning which occurs at the level of means is

sometimes called simple learning (Nye, 1987), peripheral learning (Breslauer, 1987), or single-loop learning (Argyris and Schon, 1978 and 1996) At this level, members of the organization collaboratively become the principal agents of learning as they invent new techniques and strategies based on feedback knowledge. The latter is necessary for this level of learning to take place. This level of learning is particularly important in organizations like Sida whose major goal is to support development in an unfamiliar and uncertain environment. Learning at this level of means is likely to lead to simple incremental change or adaptation.

Learning which occur at the second level--goals or

ends--is likely to lead to fundamental policy change. This is particularly true because organizational inquiry is often geared not only toward resolving incompatible organizational norms, goals, and policies by developing new priorities, as well as establishing new weights but also by rethinking the whole process and the reasons therein (Nye, 1987, Breslauer, 1987, and Argyris and Schon, 1978 and 1996). Learning at






Page
Missing or
Unavailable










65

for organizational learning is the subject of empirical test.

While Argyris and Schon (1978 and 1996) give examples where organizations learn and change their policies as a result of feedback knowledge, Haas (1990) presents cases where organizations learn and change their policies as a result Pf new consensual knowledge. A more interesting issue is that in all these cases the organization's institutional processes have either facilitated or hampered organizational learning.

This study provides a case where gn organization learns and changes its aid policy as a result of a combination of feedback knowledge and new consensual knowledge in the development field. The above discussion reveals that a successful organizational learning model needs to include organizational institutional process. Thus, this study takes organizational institutional processes as an intervening variable.

Unlike Schechter (1990), who views learning as a "topdown" process, the conception employed in this study views learning as both a "bottom-up" and a op-down" process. Learning which occurs at the first level is essentially a "bottom-up" process while that associated with the second level is primarily a "top-down" process.









66

Learning Model


This study draws "feedback knowledge" from

organizational theorists, "consensual knowledge" from students of epistemic community, and "institutional processes" from students of institutions to construct a model of learning for Sida in particular and international development agencies in general. These three variables are at the center of-the organizational learning process because they enable us to underscore not only how learning occurs, but also the source of those lessons, and their outcomes. In order to locate the learning model used in this study in its proper perspective each of the three variables is examined in detail below.

Feedback Knowledge

In the context of this dissertation, feedback knowledge is viewed as a relatively formal and established fact, referring to insights or conclusions about effects of past decisions which an organization can use to inform its subsequent decisions.' Organizational learning could simply be viewed as a cyclical process whereby feedback knowledge and/or consensual knowledge leads to collaborative inquiry which in turn leads to collective efforts to change the organization's policies, procedures and strategies leading to further feedback.









67

Although feedback knowledge is a necessary factor for organizational learning, it is not sufficient by itself. For feedback knowledge to play an effective role in the organizational learning process, it requires an open window in the organization's institutional processes, otherwise its impact will be felt slowly. This is so because institutional processes in an organization can either block or facilitate the flow of feedback knowledge.

In addition, institutional processes structure and

institutionalize mechanisms for obtaining and interpreting feedback knowledge (Argyris 1993) In fact, "... Good feedback is unlikely when critical members of the system are motivated to distort or downplay bad news which might be taken as indicative of poor judgement in prior policy selection" (Bobrow and Dryzek, '1987:2O4).

Feedback knowledge is also important because in most cases organizations insulate themselves from the new consensual knowledge unless feedback knowledge has begun to undermine the existing organization's understanding of reality. In other words, consensual knowledge will be more convincing and easily accepted by an organization if feedback knowledge has begun undermining the existing organizational understanding of reality. In this respect,









68

organizational institutional processes intervene with both feedback and consensual knowledge.

The importance of feedback in the organizational

learning process is also recognized by Hedberg (1981) who argues that "Feedback can also challenge ruling myths in cases. where organizations -expect outcomes which do not occur and in cases where organizations misinterpret outcomes which actually should have confirmed the strategies and myths" (Hedberg, 1981:12).

This dissertation studies the way Sida received feedback information from Tanzania and the way this knowledge was used in the 1980's Sida policy shift. The main concern will be the evaluation process employed by Sida to assess, the performance of its own specific projects in Tanzania and the Tanzanian economy in general, and how the knowledge obtained from this process helped Sida to multilateralize its bilateral relations with Tanzania. Consensual Knowledgfe.

H-aas (1991:65) defines consensual knowledge as:

Generally accepted understandings about cause-effect
linkages about any set of phenomena considered
important by society, provided only that the finality
of the accepted chain of causation is subject to
continuous testing and examination through adversary
procedures. Cause-effect chains are derived from
information, scientific or nonscientific, available
about a given subject and considered authoritative by
interested parties-although the authoritativeness is
always temporary.









69


According to Haas (1991:66), organizations are exposed to consensual knowledge through the medium of epistemic communities. An epistemic community is ~* network(s) of professionals with recognized expertise and competence in a particular domain and an authoritative claim to policyrelevant knowledge within that domain or issue-area" (Haas 1992:23),. It is P... composed of professionals (usually recruited from several disciplines who share a commitment to a common causal model and a common set of political values" (Haas 1990:41). It can be a group of scientists or academicians or analysts from varieties of disciplines or organizations. The common denominator for members of an epistemic community is

shared causal beliefs, which ... serve as the basis for
elucidating the multiple linkages between possible
policy actions and desired outcomes; ... shared notions
of validity--that is, inter subjective, internationally
defined criteria of weighing and validating knowledge
in the domain of their expertise; and ... a common
policy enterprise--that is, a set of common practices
associated with a set.'of problems (Haas 1992, as quoted
by Brown 1995:54)


The success of an epistemic community in shaping

organizational learning depends on two characteristics .

(1) the claim to truth being advanced must be more persuasive to the dominant political decision makers than other claims, and (2) a successful alliance must be made









70

with the dominant political coalition" (Haas 1990:42). According to this view, when new consensual knowledge commands an upper hand in the bureaucratic politics in particular and the political process at large it leads to the institutionalization of changes in both goals and causeeffects relationships (H-aas, 1990 and 1991) This institutionalization of change necessarily leads to policy shifts. Therefore, an epistemic community plays-an important role in the occuftence of the second level of learning.

In respect to this study, the 1980s witnessed an increasing acceptance of the IMF and World Bank policy knowledge in the development process. This was in part due to the failure of Keynesian economics and state socialism to stand the test of time. These paradigms claimed that extensive planning under active state management of the economy could lead to rapid economic development in Third World countries. The 1980s worldwide economic crisis, which was more pronounced in countries under state-centric economies, proved otherwise. As a result of this economic crisis, "State worship in its various forms--national integration theory, nationalization, development economics, central planning--suffered a series of hammer blows ... "(Young, 1994:42). The World Bank and the IMF came









71

up with the Berg Report and structural adjustment programs respectively, as a response to this crisis. Reaganism, Thatcherism, the 1982 socialist retreat of Mitterand, economic reforms in both the Soviet Union and People's Republic of China worked for, and in favor, of the IMF' and World Bank new development policy outlook (Young, 1994).

In fact, these organizations represent a dominant consensual knowledge in the development field since the 1980s. That is why in the model below the consensual knowledge in foreign aid is represented by the IMF' and the World Bank's aid policy outlook. Thus, the IMF' and World Bank policy community represent the dominant international epistemic community in Sida's learning process. This study identifies the lessons Sida drew from the international consensual knowledge and the impact of those lessons on Sida's aid policy shifts in the 1980s. Institutional Processes

Students of institutions have placed emphasis on

different issues in defining institutions. North (1990), for example, puts more emphasis on constraints. He defines

institutions as ". .. humanly devised constraints that shape human interactions" (North, 1990:6). To Haas (1990), institutions can be arenas for innovation as well as constraints. I agree with Commons (1934) who sees








72

institutions not only as a constraining force but also as a liberating and expansive force (McDermott and Adrew, forthcoming). In fact institutions can "... forbid, permit or require some actions or outcomes" (Ostrom, 1990:5). Ostrom's (1990) definition of institutions captures the three dimensions of institutions--forbid, permit or require-which are important to this study. Thus, Ostrom's
22
definition of institutions is employed in this study.

Institutional processes, for the purpose of this study, includeorganizational routines (rules, procedures, and programs), leadership, budgetary routines, bureaucratic politics, and organizational doctrine through which conceptions, interpretations, and questioning take place. In terms of structure, for example, decentralized authority, broad discretion, and open interface with other parts of the organization tends to stimulate the learning process. According to Sabatier (1988), a decentralized organization facilitates learning by acting as a catalyst for policy experimentation and realistic points of comparison for evaluating different policy instruments. In the case of


22 She defines institutions as "...a set of working rules that are used to determine who is eligible to make decisions in some arena, what actions are allowed or constrained, what aggregation rules will be used, what procedures must be followed, what information must or must not be provided and what pay-off will e assigned to individuals depends on their actions" (Ostrom, 1990:51).








73

Sida,.El1gstrom (forthcoming) argues that "..Sida's own structure contributed initially to an acceleration of the growth of Swedish aid to Tanzania and subsequently as a break on policy change."

Doctrine, which according to McDe~nott and Andrew

(forthcoming, p. IV-12) "... consists of a philosophy; what personnel hold to be true; what personnel value; their work norms; and attitudes toward their work, the clients, the program, and institution itself", could either hamper or catalyze an organization's learning process. Organizational doctrine which provides the incentive for risk taking, innovation and discourse, enough latitude or space to minimize fear of failure or error, for example, is conducive for organizational learning because it creates an organizational environment that is inf~rmation-rich (Hitt, 1975, Alexander, 1982).

Sida's development doctrine prior to the 1980s was very much influenced by the ideology of the left (Elgstrom, 1992). Ideology is crucial for this study. It is important because ideology guides actions and defines policies, programs and strategies to pursue. As it embodies values and myths, ideology not only sets the basic principles but also deals with the question of means and ends.









74

program and budgetary routines are also important

variables of institutional processes. Program involves what is done,where it is done, how it is done, and how successful it is (McDermott and Chris, forthcoming) The last two program attributes should enable us to understand to what extent the program's mode--project or country programming--as well as intervention level--macro or micro or both--facilitated or hindered Sida's learning process.

In terms of budgetary routines as an institutional

process, this study mainly focuses on the criteria used to approve Sida's budget and how the availability of funds impinged on its learning process. Institutional processes are somewhat related to what Goldmann (1988) calls "policy stabilizers.". They have often a tendency of reinforcing previous policy. This may help explain why Sida made its decision at the time it did.

Institutional processes are also important because they define responses open to an organization in respect to its performance. An organization can deny error, externalize it, or embrace it (Korten, 1980). According to Korten, individuals have inclinations toward one or the other. However, an organization has a tendency to institutionalize one among the three. In those organizations which treat errors as indications of personal incompetence, the









75

personnel will develop excellent skills for hiding errors. This will be the dominant norm in the "self-deceiving" type of organization.

."Self-defeating"-organizations are those that

externalize their errors. They tend to speak openly and in detail about their organization's errors, showing the impossibilities or difficulties involved, in accomplishing their goals. Learning organizations, on the other hand, embrace error. Members of this type of organization take error as a source of data for learning and making the necessary adjustments. They discuss their errors with the view of improving their performance by seeking solutions to those errors. Thus institutional processes will enable this study to situate Sida in terms of its capacity to learn.

Institutional processes are important variables for

successful learning because "The kind of knowledge, skills, and learning that members of an organization will acquire reflect the payoff--the incentive--embqdded in the institutional constraints" (North, 1990:74). Therefore, understanding Sida's institutional processes will reveal the role these processes played in Sida's learning process. The foregoing discussion leads us to Sida's learning model, as illustrated in the chart below.








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Figure 2.1 Sida's Learning Model




SWEDISH ECONOMIC & POLITICAL SCENES


FEEDBACK KNOWLEDGE (Performance of aid in Tanzania)



CHANGE OF NORMS, PRIORITIES AMONG OBJECTIVES AND IDEAOLOGY



SIDA'S CHANGES IN THE
INSTITUTIONAL NATURE AND
PROCESSES VOLUME OF
BILATERAL AID


SHIFTS IN SIDA'S TECHNICAL COMPETENCE AND ORGANIZATIONAL ROUTINES



CONSENSUAL KNOWLEDGE (IMF/World Bank policy outlook)









Key:
Independent variables = Feedback knowledge & consensual knowledge Intervening variable = Sida's institutional processes Dependent Variable Multilateralization









77

The model above represents a learning model for Sida.

In the context of this study feedback knowledge is seen as a relatively formal and established fact, referring to insights or conclusions about effects of past programs and projects performance in Tanzania which Sida used to inform its 1980s policy decisions. Consensual knowledge is represented by the IMF and .World Bank macro-economic reforms which became the dominant consensual knowledge for Third World development in the mid 1980s. Sida's institutional processes include organizational routines (rules, procedures, and programs), leadership, budgetary routines, bureaucratic politics, and ideology through which conceptions, interpretations, and questioning take place. We assume that the combination of the above factors and pees led to multilateralization which manifested itself in change of priorities among Sida's aid objectives and ideology, changes in the nature and volume of its aid, and shifts in Sida's technical competence and organizational routines.













CHAPTER 3

METHODOLOGY AND DATA COLLECTION Case Studies


This chapter deals with the process and techniques used to collect and analyze data for this study. It shows the strengths and weaknesses of the case study design, and justifies the use of this-design. It also explains why interviews, focus groups, and document analysis were chosen as techniques for data collection. This chapter explains not only the usefulness and shortcomings of each of the above techniques for data collection, but also how combining these three techniques helped reduce the problems associated with each one. The process of data collection, including problems encountered in the field, are also explored.

According to Lijphart (1977) and Yin (1994), it is important for researchers to understand types of case, studies and their potential contribution to theory building before they choose a case study design. While Lijphart (1977) identifies six types of case studies,--atheoretical, interpretive, hypothesis-generating, theory confirming, theory infirming, and deviant-- Yin (1994) identifies three78









79

-exploratory, descriptive, and explanatory. It is difficult to fit a research effort into a single type of case study because most research efforts tend to overlap. For example, an atheoretical case study and a hypothesis-generating case study also can fall within either Yin's exploratory or descriptive case studies. Similarly, a case study can be both exploratory and descriptive. For this reason, I agree with Lijphart's (1977) contention that these categories represent "... ideal types, and any particular study of a single case can fit more than one ..." (Lijphart, 1977:63).

An atheoretical case study, according to Lijphart (1977), is a single country or case analysis. It is descriptive and not guided by a formal theory. It is useful for basic data-gathering operations which can-indirectly contribute to generalization. In conducting this type of case study, a researcher is mainly motivated by an interest in that case situation rather than by theory construction.

Interpretive case study, like atheoretical case study, is also selected due to the researcher's interest in a particular case rather than theory-building. However, it differs from the former in the sense that the latter explicitly uses established theoretical propositions. Generalizations, if at all, are applied only to that specific case. In fact, the major objective of this kind of









80

study is to throw light on the specific case rather than to make generalizations. Interpretive caqe studies are studies in "...'applied science'. Since they do not aim to contribute empirical generalizations ... "(Lijphart, 1977:64).

The hypothesis-generating case study, theory

confirming\infirming case studies, and deviant case analysis, are all selected for the purpose of theory building. Hypothesis-generating case studies, a kind of inductive theory generation, are useful for building theories in a virgin area. In applying hypothesisgenerating case study a researcher is likely to start with a more or less vague hypothesis and work on developing hypotheses to be tested in a large number of cases. Hypothesis-generating case studies have significant theoretical value.

Theory confirming and theory infirming case studies

involve the analysis of a single case within the parameters of established theories. Theory confirming and theory infirming fall under the dqductive method. Hypotheses are drawn from existing theories and tested on that particular case. It can be limited to a single variable or a number of variables that relate to existing generalizations. If it confirms, it strengthens the proposition and if it infirms,









81

it weakens the generalization. The impact, however, is marginal.

Deviant case analyses "..are studies of single cases that are known to deviate from the established generalizations" (Lijphart 1977:64). These types of cases are chosen to reveal the reasons behind that divergence. These studies can have great theoretical value, particularly when used to reveal important variables overlooked in past studies, as well as reoperationalizing some or all the variables used in previous studies. They .can weaken the original proposition or suggest a modified proposition that may be stronger than the original one. However, for the new proposition to be valid, it must stand a test of more cases. A deviant, case study, according to Lijphart, may be likened to an experimental group with the more or less similar cases constituting the control group. This can only be successful if there is a clear definition of the deviant case in terms of its position with regard to both the variables under consideration and the more or less similar cases.

Thus, hypothesis-generating and deviant case studies have the greatest value irn theory building. While the former serves to generate new hypotheses, the latter refines and sharpens existing hypotheses (Lijphart, 1977). This study falls within the theory confirming/infirming category









82

as it builds its hypotheses from existing theories of learning.

Justification for the Case Study Method

This study uses a case study design because of its

utility in explaining a complex phenomenon. This is in line with Lijphart's (1971), Feagin, et al's (1991), and Yin's (1994) assertion that a case study design is more appropriate when a researcher seeks to explain a complex course of events as it avails the researcher with a detailed knowledge of the process. According to Orum, et al (1991), one of the major advantages of case study design is that it gives-a holistic analysis of complexes of action and meaning. They argue that investigators who use the case study approach have the advantage of a close view of their subjects. In such situations it is easier to get a sense of what drives their actions and decisions. They write: "A good case study can provide a full sense of actor's motives that eventuate in specific decisions and events" (p.10).

The complexity of Sida's policy shifts in the 1980s has been appreciated by most scholars who have dealt with that process (see Fruhling, 1986, Karre and Svensson, 1989, Elgstrom, 1992, Larsson, 1994, and Hyden and Mukandala, forthcoming). To be able to understand and explain this complexity, an in-depth analysis of processes which led to









83

these policy shifts is necessary. In this respect, case

study analysis is an appropriate design for this. study.

Moreover, case study is an important design,, not only for the development and evaluation of public policies, but also for testing theories (Lijphart, 1971 and Yin, 1994). According to Johnson and Joslyn (1991:121), the ". strongest case studies start out with clearly identified theories that are expected to explain events. Case studies are particularly useful for testing hypotheses deduced from existing theories ....." As the previous chapter attests, hypotheses which guide this study are based on consensual

knowledge of the epistemic community theorists, feedback knowledge of the organizational theorists and institutional processes of the students of institutions. In this respect, this study fits Johnson and Joslyn's (1991) contention as it attempts to explain Sida's 1980s policy shifts by testing hypotheses extrapolated from existing ]earning theories.

The importance of case study design for this

dissertation is further increased by the qualitative and historical approach utilized in this design. Its sensitivity to time and history makes case study a valuable design. This is partly because case studies allow the

researcher to 'examine patterns of continuity and' change and uncover. the historical dimension of the phenomenon or,








84

setting under study. By tracing the development of Sida and its policy process over time, this study has been able to generate insights which otherwise would have been impossible. These insights, as will be revealed in later chapters, have enriched our understanding of why and how Sida, having drawn lessons from its own experience and the experience of others, changed its aid provision policy in the 1980s. Conclusions drawn in this 9tudy have also gained more weight from those insights. Limitations of the Case Study Method


Despite its merits, case study design has been

conceived as inferior in the social sciences (Lijphart, 1977 and Yin, 1994). In fact, researchers who have used this method have been accused of conducting investigations with

in-sufficient precision (that is quantification), objectivity, and rigor" (Yin, 1994:xiii).

Case study design always comes face to face with the issue.of generalization. This problem,, however, can be reduced if we take case study to be a process of adding knowledge to existing knowledge in the field under study. As Yin (1994:10) writes:

Case studies, like experiments, are generalizable to
theoretical propositions and not to populations or
universes. In this sense, the case study like
experiment, does not represent a "sample" and the
investigators goal is to expand and generalize theories









85

(analytical generalization) and not numerate
frequencies (statistical generalization)."
On the issue of objectivity, more often than not, case study researchers have been sloppy and their findings and conclusions have been based on biased equivocal evidence (Yin, 1994). It is not the case design which inherently

allows biased- views to influence researchers I findings and conclusions but rather the way in which investigators execute the method. Biased views are not limited to case study alone. They can enter any research design. What is important, however, is the need for researchers who use case studies as well as other designs to report all evidence fairly and objectively (Yin 1994).

A third problem associated with case studies, according

to Yin (1994: 10) is that they take too long, and they result in massive, unreadable documents. I agree with Yin (1994) that people who accuse case study research of this

flaw, confuse specific data collection techniques with case study design. Data collection techniques such as ethnography or participant observation naturally take



23 According to Yin (1994:30), in statistical
generalization, an inference is made about a population (or
universe) on the basis of empirical data collected about a sample. While analytical generalization is a method in IV ... which a previously developed theory is used as a template with which to compare the empirical results of the case study. If two or more cases are shown to support the same theory, replication may be reclaimed."









86

considerably longer and call for more Aetailed accounts of observations than other techniques. Case study design does not necessarily depend upon ethnography or participant observation data collection techniques. This study, for example, took only four months and it employs interviews, focus groups and document analysis.

Reliability Versus Validity


Two questions which are pivotal in all social science

research (case study inclusive) are questions of reliability and validity. Reliability, according to Carmines and Zeller (1979), deals with:

the extent to which an experiment, test, or any
measuring procedure yields the same results on repeated
trials .... The most consistent the results given
repeated measurements, the higher the reliability of
the measuring procedure; conversely, the less
consistent the results, the lower the reliability" (as
quoted by Johnson and Joslyn, 1991:68).


According to Johnson and Joslyn (1991:70 & 76) the

reliability of the measurements used by political scientists is frequently suspect and seldom demonstrated. Most measures of political phenomena... are partially accurate." Despite this acknowledgment, the reliability of case study design is more questionable than other designs. This is partly because case study depends on a small sample. The likelihood of getting the same results by replicating the









87

study in a different setting is very small. Recognition of this fact by case study researchers is very important for avoiding becoming a victim of "ecological fallacy" (Bernard, 1994).2

Validity, according to Bernard (1994:38), is the accuracy and trustworthiness of instruments, data and findings in research." In terms of validity, case study design is superior to other methods of investigations such as experimental method and-surveys (Orun, et al, 1991). This is so particularly because this approach uses a number of data collection techniques to prove the same case. This study, for example, uses interviews, focus groups, and document analysis as its data gathering methods. It is this "triangulation of sources", if I may use Orum, et al's words, which improves the validity in the case study design.

Having chosen a case study method, a crucial issue for the success of this study remains the elimination of competing explanations. With regard to the study of Sida, two approaches--the, contextual approach and bureaucratic






"4Ecological fallacy is the result of making conclusion about the wrong unit of analysis. In most cases, it occurs by drawing generalizations about people from data about groups (Bernard, 1994). It is important for researchers to ensure that the unit of analysis of the measures and the hypothesis are matched (Johnson and Joslyn, 1991).




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LEARNING AND POLICY CHANGE: THE CASE OF SWEDISH
INTERNATIONAL DEVELOPMENT COOPERATION AGENCY (Sida)
1980-1995
By
LAUREAN JOSEPHAT PHILOMENA NDUMBARO
A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
UNIVERSITY OF FLORIDA
1998

Copyright 1998
by
Laurean Josephat Philomena Ndumbaro

To my parents—Josephat and Philomena Ndumbaro—for
their dedication and support to my education, and to my late
brother, Deonatus Ndumbaro, for his encouragement and
prayers.

I
ACKNOWLEDGMENTS
I would like to thank God for enabling me complete this
program successfully. My sincere regards go to my
supervisory chairman, Prof. Goran Hyden, whose guidance,
encouragement and patience inspired me to explore my fullest
intellectual potential. I also thank him for being a
teacher, mentor and, above all, a friend.
I would like to extent my special ¡thanks to my
committee—Dr. L. Brown, D. Hedge, C. Andrew and W. Francis
for their generosity in sharing their knowledge and time.
In addition I would like to thank my professors at the
University of Florida for helping me to develop my
intellectual abilities.
Special thanks go to the Swedish Agency for Research
and Cooperation with Developing Countries (SAREC) for
financial support, Prof. 0. Elgstrom for his insightful
comments, Prof. R. Mukandala for selecting me to join this
program, Dr. K. Mease, Dr. S. Snook and Menghua Zeng for
l
their comments in the initial preparation of this study.
I would also like to thank Sida for all the support
they gave to me during my work in Sweden and all the people
IV

whose responses make up this dissertation. Special thanks go
to Lars Johansson for making my work in Sweden smooth, to
Mama Melania for her motherly support, *and to my colleagues
in the department of political science and R. Uttaro and S.
Franco, for being such good friends.
I would like to express my sincere gratitude to my
parents—Josephat and Philomena—for their support,
encouragement and prayers throughout my entire school life.
To my wife, Dolorosa, my daughter, Bridget, and my son,
Ivan, I owe them my most profound thanks for their love,
support and patience.
v

TABLE OF CONTENTS
I
ACKNOWLEDGMENTS iv
LIST OF TABLES x
LIST OF FIGURES xi
KEY TO ABBREVIATIONS xii
ABSTRACT xiii
CHAPTER 1 INTRODUCTION 1
Background 1
Significance of the Study 3
Development Assistance: An Overview 5
Multilateralization 9
The Swedish-Tanzania Aid Relation 10
Hypotheses 17
Dissertation's Organization . . J 18
CHAPTER 2 THEORETICAL FRAMEWORK 21
Why Learning Theory? 21
Alternative Models 23
The Class Theory 24
Pluralist Theory 26
Contextual Model 29
Rational Choice Theory 31
Bureaucratic Politics 32
Learning: Conceptualization 37
Learning: Defined 38
Organizational Learning 48
Learning vis-a-vis Criteria for Information
Processing for Decision Making 54
Learning and Policy Change 60
Learning Model 66
Feedback Knowledge 66
l
vi

Consensual Knowledge .68
Institutional Processes .... 71
CHAPTER 3 METHODOLOGY AND DATA COLLECTION 78
Case Studies 78
Justification for the Case Study Method . . .82
Limitation of the Case study Method 84
Reliability versus Validity 86
Sampling and Data Collection . . ., 8 9
Sampling 8 9
Data Collection .91
Data Analysis 102
Assessments 102
CHAPTER 4 THE DOMESTIC CONTEXT OF THE 1980s SIDA POLICY
DECISIONS 105
Introduction 105
Swedish Aid Administration 105
The Parliament 105
The Cabinet 106
The Ministry for Foreign Affairs 108
Sida .' 109
The Budget Process 110
Sida's Structural Change .112
Swedish Aid Politics 114
Swedish Aid: The Guiding Principles 116
Swedish Aid Versus Changing Government
Leadership 119
Swedish Aid: What the Public Says i 124
Swedish Economic Situation 129
CHAPTER 5 LEARNING: FEEDBACK, CONSENSUAL KNOWLEDGE AND
INSTITUTIONAL PROCESSES 136
Sida and Learning 136
Sida: Is it a Learning Organization? 137
Knowledge Seeking: From Within 139
Knowledge Seeking: From Outside 142
Sida: How do they Consider their Work and What
are the Criteria for Decision Making? . 143
Why Policy Shifts in the 1980s 146
Feedback From Tanzania 154
The Rise of Consensual Knowledge in the
Development Field and its Influence on
Sida Understanding of Reality 165
vii
i

The IMF and The World Bank In Closer
Association: Elevating the New Thinking
in Third World Development .... 168
Sida, Tanzania and the New Consensual Knowledge . . . 172
Learning And Sida's Institutional Processes . . . 180
Is Sida a Slow Learner? 180
Sida's Bureaucratic Politics and Leadership . 183
Rules and Procedure for Decision Making . . . 186
Program and Strategies 187
Budgetary Routines 189
Ideology 191
CHAPTER 6 LEARNING: ITS IMPACT OF SIDA f 193
Shifts in Norms and Priority in Aid Objectives . . 193
Norms 193
Goals 197
Mainstreaming its Approach 200
Changes in Nature and Volume of Aid 203
Shifts in Strategies 208
Rural Development 208
Non-Governmental Organizations (NGOs) ... . 209
Institutional Capacity Building 210
Import Support 212
Shifts in Organizational Routines 213
Structural Change 213
Evaluation ...'.. 214
Reporting 215
Consultants 216
Budgetary Routines 217
Shift in Technical Competence 218
CHAPTER 7 CONCLUSION 221
Sida and Policy Change i 221
The Learning Model 231
Swedish Aid: The Future, and Its Implication to
Policy Makers 232
APPENDICES 237
Appendix: 1, Value of Tanzania's International
Trade (Millions Tshs) 237
Appendix: 2, Official Government Revenue-
Expenditure 1975-85/86 (Millions Tshs) . . . 238
Appendix: 3, Tanzania: Exports of Major Crops
1970-84 by Volume (tons) 239
Appendix: 4, Focus Group Scores 240
VI11

Appendix: 5, Tanzania's Share of Swedish Aid to
Program Countries Of Africa 241
Appendix: 6, Questionnaire 242
REFERENCES 245
BIOGRAPHICAL SKETCH 256
i

Table
page
LIST OF TABLES
1.1Sweden's Share of Bilateral ODA to Tanzania on
Percent of Total DAC Aid 14
1.2 Aid Disbursed to Tanzania by Major Donors (in
US Dollar) 16
4.1 The Allocation and Disbursement Aid as
Percentage of GNP Versus the Type of the
Ruling Party 122
4.3 Swedish Economic Situation 1960-1984 130
5.1 Factors in the 1980s Sida Policy Shifts 148
5.2 The Weighing of Variables in Order of
Importance 151
6.1 Average Sectoral Allocation to Tanzania in
Percentage 1975-1995 204
6.2 Tanzania's Share of Swedish Aid to Program
Countries of Africa 1975-1995 207
x

LIST OF FIGURES '
Figures page
Figure 2.1 Sida's Learning Model 76
Figure 4.1 Swedish Public Opinion Toward Foreign Aid
1981-1995 126
Figure 7.1 State Commitment to Macro-Economic Reform
and its Implication to Policy Makers 233
i
!
xi

KEY TO ABBREVIATIONS
BITS -
CK -
The Swedish Commission for Technical Cooperation..
Central Committee for Swedish Technical
DAC -
DAN I DA -
DCO -
FINIDA -
GNP -
HESAWA -
IMF -
IMPOD -
Assistance to Less Developing Areas.
Development Assistance Committee.
Danish International Development Agency.
Development Cooperation Office.
Finish International Development Agency.
Gross National Products.
Health through Sanitation and Water.
International Monetary Fund.
The Import Promotion office for Products from
Developing Countries.
LP -
MP -
NGOs -
NIB -
NU -
The Liberal Party.
The Moderate Party.
Non-Governmental Organization.
Board for International Assistance.
The Swedish Board for Education in International
ODA -
PFP -
SAL -
SAREC. -
Development.
Official Development Aid.
Policy Framework Paper.
Structural Adjustment Lending.
The Swedish Agency for Research and Cooperation
with Developing Countries.
SASDA -
Secretariat for Analysis of Swedish Development
Assistance.
SDLP -
Sida -
Social Democratic Labor Party.
Swedish International Development Cooperation
SIDA -
SIDO -
SIP -
SWEDFUND -
Agency.
Swedish International Development.
The Small Industries Development Organization.
Sister Industries Program.
- The Swedish Fund for Industrial Cooperation with
Developing Countries.
UK -
US -
United Kingdom.
United States.
Xll

Abstract of Dissertation Presented to the Graduate School
of the- University of Florida in Partial Fulfillment of the '
Requirements for the Degree of Doctor of Philosophy
LEARNING AND POLICY CHANGE: THE CASE OF SWEDISH
INTERNATIONAL DEVELOPMENT COOPERATION AGENCY (Sida)
1980-1995
By i
Laurean Josephat Philomena Ndumbaro
August 1998
Chairperson: Prof. Goran Hyden
Major Department: Political Science
This dissertation examines how learning relates to
policy change, using the Swedish International Development
Cooperation Agency (Sida) as a case study. It argues that
faced with dramatically different conditions for foreign aid
in Africa, feedback and consensual knowledge were the most
important variables for a major policy shifts in Sida in the
1980s. Whereas feedback from Tanzania 'signaled the
necessity for change in Swedish aid policies, the neo¬
liberal policy outlook of the IMF and World Bank provided
the most viable alternative. These policy shifts led to
multilateralization as manifested in changes in Sida's
operational norms, aid objectives, aid approach, nature and
volume of aid, organizational routines and technical
competence.
xm
I

CHAPTER 1
INTRODUCTION
Background to the Study
One of the most notable changes in international
development assistance since the 1980s has been the
introduction of economic and, more recently, political
conditionalities for providing foreign aid. This has
significantly changed the way both bilateral and
multilateral donors operate. This study focuses on the
Swedish International Development Cooperation Agency (Sida)
I
in an attempt to explain those changes1. Sida is
particularly relevant because the changes it has had to
undergo have been both more far reaching and painful than
those experienced by other bilateral agencies. This is
particularly true with regard to Sida's relationship with
Tanzania, a favorite recipient of Swedish aid since the
1960s.., . In fact, Sida was among the last donors to change
its aid policy toward Tanzania.
1The Abbreviation for Swedish International Development
Cooperation is in small letters "Sida."
1

2
The importance of Sida to this study is further
heightened by the fact that the bulk of Swedish aid to
Tanzania has been allocated by Sida, and because Sida has
traditionally been the biggest donor in Tanzania. Between
I
1965 and 1984/85 most (if not all) Swedish aid to Tanzania
was allocated by Sida; in the period between 1985/86 and
1994/95 more than 90 percent of Swedish aid to Tanzania was
disbursed through Sida2.
Employing a learning perspective, this study attempts
to explain why Sida changed its aid provision behavior to
Tanzania in the 1980s. It. 'also tries to show the
implication of those changes within Sida with regard to the
agency's objectives and ideology as well as its technical
competence and organizational routines. The nature and
volume of aid to Tanzania is also examined. Although this
study is based on learning perspective, alternative
explanations are discussed with the view of assessing their
influence on the 1980s Sida policy shifts and the extent to
which the policy change is a consequence of organizational
learning.
2Computed from Sweden's Development Assistance in
Figures and Graphs 1994/95.

3
Significance of the Study
This study attempts to accomplish two objectives. Most
studies which deal with the changes in the 1980s have paid
particular attention to issues of policy and institutional
changes in the Third World countries. Little has been done
to account for changes which have taken place within the
international development agencies themselves since the
1980s. This study intends to not only fill this gap, but
also contribute toward an understanding of the contemporary
aid giving process.
At the theoretical level, this study attempts to show
how international development agencies fit into
organizational learning theories. Determining why
international development aid agencies changed their
policies in the 1980s is very important for the
understanding of the operation of both multilateral and
bilateral agencies. Was it simply a result of power
politics among concerned interest groups, or classes? Was
it caused by the need to maximize self interests? Was it
the product of domestic and/or international processes that
happened in the 1980s? Or, was it due to politics internal
to these agencies?
One important point worth noting here is that
international development agencies are neither prisoners of

4
the structures surrounding them, nor are they always acting
on their own will. While they are constrained by other
institutions, international development agencies have a
number of choices available to them. In cases where
international development agencies employ knowledge from
experiences and/or epistemic communities in making their
choices, the learning perspective is likely to provide a
more convincing explanation than others3.
Most studies in international relations that have been
grounded in learning theories have focused on general
changes in foreign policy (Levy 1994). Those that have
dealt with learning theory in international organizations
have mainly dealt with multilateral organizations such as
the World Bank (Haas 1990 and Le Prestre 1995) and the
European Union (Brown 1995). International development
agencies, such as Sida, whose policy shifts have
considerable impact on the development processes of a number
of Third World countries have not been 'given sufficient
attention in the context of learning theories. By examining
Sida (a bilateral agency), this study hopes to throw new
light on the usefulness of learning theories.
3For the definition of. epistemic community see Chapter
Two page 70.

I
Development Assistance: An Overview
5
Development assistance as a conscious and purposeful
instrument of intervention in the socio-economic and
political processes of developing countries of Africa, Asia,
and Latin America is a post World War II phenomenon. The
Marshall Plan is its logical precursor (Arnold, 1979).
Although development aid has declined in recent years,
throughout the 1980s it grew in volume 'and importance. In
some developing countries, for example, development aid
accounts for more than 50 percent of the national
development budget. Under such circumstances, it is
difficult to envisage a situation wherein these countries
could undertake development without foreign assistance.
In respect to the countries of Sub-Saharan Africa,
development assistance has become their life and blood to
the extent that it is sometimes assumed that most, if not
all, cannot operate without it. Indeed, most sectors of
African economies are in one way or another financed by
I
foreign aid. Unfavorable world trade, particularly for
primary commodities, and the unavailability of commercial
loans explain in part African governments1 dependence on
foreign aid (Sandbrook 1993). In fact, Africa today not
only is more dependent on foreign aid than it was at the
time of independence but also is relatively as poor as it

I
6
was thirty years ago (World Bank 1989 and Morton 1993). The
latter may be attributed to the fact that much of the aid
disbursed in the Cold War period was not used for
development, but rather for ensuring the economic and
political survival of governments in power (Arnold 1979,
Commins 1988, and Bayart, 1993).
In most cases, that portion of foreign aid used for
development was not very effective largely because
development assistance during the post World War II era
operated on the assumption that states fin Third World
countries would have the capacity to continue to efficiently
run development projects once aid was terminated. In fact,
the capacity was not there. As a result, most of these
projects were either under utilized or simply died following
donor termination. An interesting point here is that the
ever growing aid dependence makes what donors do of great
significance to the socio-economic and political processes
of Africa.
Donor agencies have shifted their attention from one
sector of the economy to another since the 1950s in response
to changes in the social, economic, and political processes
of Africa as well as changes in global power relationships
(Sandbrook 1993). Consequently, donor perception of

Africa's problems has changed over time as well (Radetzki
1992, Hyden 1994, and Morton 1993).
In the 1950s and 1960s, for example, more emphasis was
put on industrialization (the import substitution approach)
and "modernization." In the early 1970s, attention shifted
from industrialization and modernization to agriculture
under an "integrated rural development approach" (Hyden,
1994)... This approach incorporated a more explicit "poverty
focus" (basic needs strategies) than the previous one.
The world-wide economic recession of the 1980s was felt
more severely in Sub-Saharan Africa than in any other part
I
of the world (World Bank 1989). The 1980s economic crisis
in Africa was partly seen as the failure of the previous
approaches to live up to expectations (World Bank 1989 and
Hyden 1994). This failure was attributed mainly to the
problems of macro-economic policy in these countries (World
Bank 1989, 1994). As a result, in the 1980s policy reform
came to head the agenda for Third World development.
The policy reform agenda was not introduced easily.
There were considerable economic and political constraints
to the introduction of such reforms. In fact, economic and
political conditionalities for providing foreign aid had to
be introduced to facilitate the acceptability of
macroeconomic and sectoral policy reforms such as trade

8
liberalization and privatization in most of the Third World
countries. In the case of Sida, for example, Hyden at al,
(forthcoming, p.453) write, "... Sida Has fallen in line
with the 'Washington consensus'. In its relation with
Tanzania in recent years, Sida has followed it quite
strictly so as to add pressure on the Tanzanians to take the
necessary reform measure." The introduction of
macroeconomic and sectoral reforms significantly altered the
thinking and the operation of both bilateral and
multilateral donors.
These changes were more important than the previous
ones as they paved the way for a fundamental change in the
donors' perceptions of their aid goals,( policies, and
strategies. It was not just a shift of attention from one
sector to another as with previous changes. Changes in the
1980s called for the redefinition of the entire aid program
including the reasoning therein. The underlying assumptions
of the role of the state in the development process and the
ideological logic of development assistance were brought to
the test of history in the 1980s (Jackson and Rosberg, 1986,
Migdal, 1988, Evans, et al 1985, and Evans, 1989). The
results contradicted existing theories of development and
practices.
i

9
Multilateralization
One of the most significant manifestations of the
changes of the 1980s was the "multilateralization" of what
had been bilateral relations in the aid-giving process. The
move to conditionally involving a third party--the
international financial institution—and embracing its
policy outlook in the previous bilateral aid provision
process is referred to as "multilateralization" in this
study.4
i
The Swedish-Tanzania aid relationship was
multilateralized beginning in the mid 1980s. Swedish aid to
Tanzania began to depend upon not only the agreement between
Tanzania and Sida as before, but also the signing of an
agreement between Tanzania and the International Monetary
Fund (IMF). In other words, Tanzania was required to show a
certificate of approval from the IMF before Sida would
commit most of its funds (Campbell and Stein 1991).
4 The provision of bilateral aid to Third World
countries, which prior to the eighties was "purely" a matter
of agreement between a donor and a recipient (bilateral),
experienced the inclusion of important third parties (the
IMF and the World Bank) in the matters of policy and
conditionality. Aid could not be given to most of the Third
World countries without a certificate of approval from that
third party (Campbell and Stein, 1991, Lele, 1992, and
Radetzki 1992).

10
Other donor agencies, such as the 'Danish International
Development Agency (DANIDA), Finnish International
Development Agency (FINIDA), and the United States Agency
for International Development (USAID), also introduced
similar changes in strategy. It is interesting to note,
however, that bilateral donors responded differently.
USAID, for example, was quick to embrace the IMF's
conditionalities while Sida was among the last to do so.
Why this happened the way it did will be discussed later.
To Sida, multilateralization manifested itself in a
number of ways, the most significant opes being shifts in
Sida's ideology, priorities among aid objectives, and the
volume and nature of bilateral aid.5 In this respect,
multilateralization also connotes a new vision in Sida's
thinking about the aid provision process.
The Swedish-Tanzania Aid Relation
Tanzania won its independence in 1961. Ever since,
Tanzania has been one of the major beneficiaries of
development aid. In fact, its share of total global
development assistance has been around 2.5 percent (SASDA
|
Multilateralization discussed here is different from
the process of giving aid through multilateral organizations
such as the Bretton Wood institutions and United Nations'
agencies. Sweden has always been giving aid through such
multilateral agencies, but such support did not require a
certificate of approval from either of these agencies.

11
Report, 1994). According to SASDA (1994), Tanzania received
8 percent of all Development Assistance Committee (DAC)
assistance that went to Sub Saharan Africa in the period
between 1965 and 1991. In monetary terms, Tanzania received
about US $9 billion (current) during that period. Among the
major bilateral contributors of development assistance to
Tanzania is Sweden.
Swedish aid to developing countries officially started
in 1952 with the establishment of the Central Committee for
Swedish Technical Assistance to Less Developed Areas (CK).
This Committee was formed by non-governmental organizations
(NGOs). Forty-five NGOs of different orientations became
I
members of the CK. They ranged from religious, industrial,
and labor to cooperative unions and athletic organizations.
CK had two major responsibilities. The first was to
establish a Swedish aid program to developing areas. The
second was to run programs to help raise public awareness
and support for increasing Swedish participation in Third
World development. These goals were implemented through
public education efforts and fund raising campaigns. Two
national fund raising campaigns and education were organized
by CK during a decade of its existence.
Thus, Swedish development aid was initially an
activity of non-governmental organizations. Missionary

12
groups were the Swedish pioneers of the aid endeavor. In
this respect, moral considerations and solidarity with the
poor have been at the heart of Swedish aid to developing
i
countries. It is not surprising then that foreign aid in
Sweden is seen as a moral obligation (Karre and Svensson,
1989). This perception of foreign aid could partly explain
why the first decade of Swedish aid was both less systematic
and more guided by moral and idealistic principles
(Elgstrom, 1992). Moreover, it could also explain why
Swedish commercial interests in most cases have taken a back
seat in Swedish aid to developing areas, particularly before
the late 1970s.
By 1961, the Swedish government saw the need to play a
dominant role in the aid process. The 'Board for
International Assistance (NIB) was created to replace CK.
Whereas CK was a Committee for NGOs, the NIB became a
separate administrative unit within the Ministry of Foreign
Affairs dealing with all bilateral aid. Within four years
of its existence, the NIB found itself immersed in
managerial and organizational problems which led to its
dissolution in 1965 (Jellinek, et al, 1984). The Swedish
International Development Authority (SIDA) was formed
instead. Thirty years later SIDA changed its name to the
Swedish International Development Cooperation Agency (Sida)

13
following its merger with five other Swedish aid agencies6.
Unlike the NIB, Sida was created as an 'autonomous government
agency under the auspices of the Ministry of Foreign
Affairs. Sida is responsible for planning, implementing,
and monitoring all bilateral cooperation.
While Sida is responsible for administering all
bilateral aid, multilateral aid is handled by the Ministry
for Foreign Affairs which has overall responsibility for all
government aid. Since its establishment, Sida remains the
central agency for Swedish bilateral aid. The relationship
between Sida and the Ministry for Foreign Affairs was not
particularly harmonious at the beginning partly because the
boundary of authority and responsibility between the two was
fluid. Over the years these boundaries have been redefined
and the relationship between the two has become amicable
(Elgstrom, 1992).
With respect to Tanzania, Swedish aid officially began
in 1964 under NIB. Since then, Tanzania has been one of the
main beneficiaries of Swedish aid. For example, in the
6Before 1995 Sweden had five small agencies dealing
with specific issues--The Swedish Agency for Research
Cooperation with Developing Countries (SAREC), The Swedish
Fund for Industrial Cooperation With Developing Countries
(SWEDFUND), The Swedish Commission for Technical Cooperation
(BITS), The Import Promotion Office for Products from
Developing Countries (IMPOD), and the Swedish Board for
Education in International Development (NU).

14
period between 1965 and 1995 Tanzania received a total of
20,258,843,000 Swedish Kronor (in 1995 prices). Of this
amount, about 19,407,865,000 was disbursed through Sida.
Compared with other countries receiving Swedish aid in this
period, Tanzania was given more from the Swedish aid budget
than any other country, Tanzania received about 16.6 percent
of all Swedish aid disbursed to program countries of Africa
between 1965 and 1995.7
Table 1.1 Sweden's Share of bilateral ODA to Tanzania in
percent of Total DAC aid
Year
Share
Year
Share
Year
Share
Year
Share
1962
0.05
1971
21
1978
19
1985
13
1963
0.80
1972
31
1979
20
1986
21
1964
4.09
1973
36
1980
14
1987
11
1966
6.90
1974
25
1981
16
1988
13
1967
9.90
1975
23
1982
15
1989
13
1969
30
1976
24
1983
16
1990
18
1970
18
1977
22
1984
13
1991
19
Source: SASDA Report No. 5, 1994, p.5.
Table 1.1 above further demonstrates the contribution
of Sweden's bilateral Official Development Aid (ODA) to
Tanzania as a percent of total Development Assistance
Committee's (DAC) aid. The table shows that Sweden has made
I
7Computed from Sweden's Development Assistance in
Figures and Graphs 1994/95.

15
a significant contribution to Tanzania's development
process. As can be seen in Table 1.1, Sweden's share to
Tanzania increased from an average of 8 percent in the 1960s
to over 20 percent in the 1970s. It then declined to about
15 percent in the 1980s and rose again to about 20 percent
in the early 1990s.
The rapid increase of Swedish aid to Tanzania in the
1970s could be explained by developments which took place in
both Sweden and Tanzania. The Ujamaa and self-reliance
policy adopted by Tanzania in the late 1960s emphasized
development, equality, "welfarism," support for liberation
movements, and non-alignment. These policies were not only
perceived as progressive by Sweden but were in line with
Swedish aid objectives. The fact that Swedish aid
I
objectives coincidentally agreed with Tanzania's development
aspirations fostered a spirit of friendship and mutual
understanding. This spirit explains the generous Swedish
contribution to Tanzania's development efforts. Tanzania,
as a result became a favorite recipient of Swedish aid in
the 1970s and early 1980s. Table 1.2 below shows Swedish
aid to Tanzania in comparison with various donors.
Compared with other donors, Sweden has been Tanzania's
largest bilateral supporter(Table 1.2). Between 1965 and
1992 Swedish aid averaged about 12.14 percent of all

16
bilateral aid to Tanzania, as shown in table 1.2 above.
Sweden exceeded the second placed Netherlands by 4.07
percentage points of the total bilateral aid to Tanzania,
and the United States by more than 10 percentage points.
Table 1.2 Aid Disbursed to Tanzania by Major Donors (in US
Dollar).
Country
1970s
1980s
1990-92
Total
Percent
*
Sweden
422
780
386
1588
12.4
Nether
lands
246
607
202
1055
8.07
Germany
252
533
205
990
7.57
Norway
150
566
271
987
7.55
Denmark
194
475
263
932
7.13
UK
102
441
197
940
5.66
Italy
4
486
210
700
5.35
Japan
51
453
171
675
5.16
Canada
177
300
96
573
4.38
Finland
70
291
127
488
3.73
USA
167
174
101
442
3.38
Source: SASDA Report, no. 5 1994, p.20.
Key: *= Percent of the total aid received since the 1970s
The two tables above show the importance of Sweden to
the Tanzanian development process. They also show that the
Nordic countries, together with the Netherlands, contributed
about 38.53 percent while the contribution of the major
western powers--the United States, UK, and Germany--is 16.61

17
percent. It is worth noting that Sweden, both because of
the size of its aid to Tanzania and its influence among
other donors, particularly the Nordic countries, is a case
of particular interest to the student of foreign aid.
Hypotheses
The following propositions regarding the 1980s Sida
policy shift are based on the discussion provided above8.
The propositions that guide this study are as follows.
1) Sida initiated policy changes in the mid-1980s
because:
a) its own projects and program portfolio had
failed to achieve acceptable results (the
feedback criterion);
b) the IMF's and World Bank's policy outlook was
increasingly more persuasive for Sida (the
Consensual knowledge criterion);
c) Sida's institutional processes slowed the
learning process (the institutional criterion).
feedback knowledge, consensual knowledge and
institutional processes are theoretical basis from which
these propositions are derived. For detailed account see
Chapter Two, page 66-78.

18
2) Sida's response to feedback and consensual knowledge
has been:
a) a marked shift in priorities among aid
obj ectives;
b) growing acceptance of "mainstreaming" its own
approach.
3) The impact on Sida's organizational processes has
been:
a) a relative shift in organizational routines;
b) a shift in technical competence.
Dissertation's Organization
Chapter 2 presents a literature review and discusses
the theory to guide this study. Learning theory, which
gained momentum in explaining policy change and choice in
the 1980s, provides the lens through which this study is
analyzed. Chapter 2 sets the parameters for discussion by
presenting the theoretical and empirical justification for
the applicability of learning theory in this study,
reviewing alternative theories, defining key learning
concepts, levels of analysis, types of learning, and
describing some of the debates surrounding learning. The
learning model that guides this study is also presented.

19
Chapter 3, discusses methodology and data collection.
It shows the strength and weakness of case study, and the
justification for using this method in social science
research. The whole process of data collection and problems
encountered from sampling, interviews, document analysis to
focus groups are discussed. This chapter also explains why
this study used interviews, focus groups, and document
analysis as techniques for data collection. The strengths
and weaknesses of each technique and how the combination of
these three data collection methods helped to reduce
problems associated with each one also are explained.
Chapter 4, examines the Swedish economic and political
environment in order to explain the domestic context of
Sida's 1980s policy shifts. In particular, this chapter
describes how Swedish economic performance, changes in
Swedish public opinion about foreign aid, and changes in
political leadership have affected Sida aid policy in the
1980s. The position of Sida within the Swedish government's
hierarchical structure is also presented.
Chapter 5 portrays Sida as a learning organization. It
explains how feedback knowledge from Sida's programs and
projects in Tanzania affected its understanding about
development endeavor. In addition, it focuses on why and
how the new consensual knowledge in the development field

20
carne about in the 1980s and the role it played in Sida's
understanding of reality. This chapter also discusses the
role played by Sida's institutional processes in the 1980s
policy shifts.
Chapter 6 presents the impact of learning on Sida as an
organization. It argues that lessons drawn by Sida from
both feedback and consensual knowledge impacted not only
Sida's norms, institutions, and principles but also the
nature and volume of aid. Chapter 7 provides conclusions,
prospects for Swedish aid, and future research questions.

CHAPTER 2
THEORETICAL FRAMEWORK
Why Learning Theory?
This chapter presents learning theory as the lens
through which this study is analyzed. The stage for
discussion is set in this chapter by presenting a
theoretical and empirical justification for the
applicability of learning theory to this case study,
reviewing alternative explanations, defining key learning
concepts and levels of analysis. The chapter ends by
providing a learning model which guides this study.
The incentive for the selection of learning theory is
partly provided by the nature and intensity of the debate
about the Swedish aid process and in-depth aid performance
analysis which was carried out by Sida in the period between
1979-84 (Elgstrom 1992). Prior to 1980, there was a
political consensus on aid among different actors in Swedish
politics. The missionary spirit and solidarity with the
poor were the cornerstones of this consensus which ruled out
both the possibility of any political challenges from within
Swedish politics as well as "interference" in the political
21

22
processes of developing countries. Under such
circumstances, policy shifts had to come through learning.
Moreover, the 1980s saw multilateral institutions such
as the IMF and World Bank, and bilateral institutions
working closer together in development policy than at any
other time in history. This closeness created an optimal
environment for both the development of consensual knowledge
about development aid, and the globalization of that
knowledge. This manifested itself in the way development
language has been increasingly standardized and key
prescriptions for development problems have been homogenized
across different aid agencies in the last ten years. These
developments, as will be discussed later in this study,
provide important variables for organizational learning.
A number of research studies— Claesson (1982), and
Ekengren (1984), Forss (1985) Lele (1992), Elgstrom (1992)-
-were initiated in the 1980s and 1990s to evaluate aid
performance and to suggest lessons which could be drawn from
thirty years of experience in development aid. The
underlying logic for initiating these studies was not only
that organizations are capable of learning but also that
they are devoted to improving their understanding.
The utility of learning theory has been demonstrated by
scholars from different fields and methodological

23
backgrounds. Breslauer (1987), Mendelson (1993), Moltz
(1993) and Stein (1994), for example, successfully employed
learning theories in an attempt to explain shifts in Soviet
foreign policy. Others, such as Leng (1983) and Reiter
(1994), explained changes in the Super Powers' perception of
international security and cooperation through learning
theory. Haas (1990), Brown (1995), and Le Prestre (1995)
have also successfully used learning theory in explaining
policy changes in international organizations. Argyris and
Schon (1978) attempt to provide a theory of action in
organizational learning. Thus, the above mentioned issues
provide not only the stimulus but also an empirical and
theoretical justification for learning theory.
Alternative Models
Learning is not the only theory which is relevant to
explain policy change and choice. Scholars from a variety
of disciplinary and methodological orientations have shown
increasing interest in explaining policy change and choice
in different perspectives. Two major groups can be
isolated: those who provide society-centered and those who
provide state-centered explanations. Society centric
theories include class theory and pluralism and the
contextual model, while in state centric theories,

I
24
bureaucratic and rational choice have been particularly
prominent.
The Class Theory
Class theory asserts that policy and policy change is
rooted in the relationship of power and domination among
classes9. According to this view, the dominant relations of
production in a society sets parameters for both classes and
power relationships. Societal conflicts, whether social,
political, or economical, are all explained in terms of
class, based on economic relationships among groups of
people. Policy is seen as instrumental in reconciling class
antagonism. An overall objective for any policy, in this
view, is to safeguard the interest of the dominant class
and/or ensure the persistence of the dominant system of
production.
Within this paradigm, policy change is explained in
terms of shift in the dominant class coalition or as a means
for ensuring the survival of the capitalist system
j
(Poulantzas 1973). The relative autonomy of the state (vis-
a-vis other classes) grants it the flexibility to deal with
any threat arising from subordinate classes (Poulantzas,
9Although class explanations have seemingly been
relegated to the museum of antiquity, some people in both
Sweden and Tanzania showed interest on it. For them we
include this explanation in this study.

25
1973). In situations where the survival of the capitalist
system is threatened, state agencies can initiate a policy
or policy change that seemingly contradicts the interest of
the ruling class. According to Poulantzas (1973), this is
only possible because the relative autonomy of the state
allows it to nurse the myth that policy change serves the
interest of the society as a whole while in reality the
survival of the system is for the interests of the dominant
coalitions. As Lenin (1976:45) also, writes:
I
People always have been the foolish victims of
deception and self deception in politics and they will
always be until they have learnt to seek out the
interests of some class or other behind all the moral,
religious, political and social phrases, declarations
and promises.
In the case of Sida's policy shifts during the 1980s,
Class explanations seems inadequate. The social democratic
government under which Sweden's development aid policies
were established in the 1960s and early 1970s was replaced
by a conservative government in 1975-82. No significant
policy shifts in development aid were witnessed with this
change of power and concurrently there were no discernible
shifts in patterns of class stratification, i.e. class
relationships remained constant during this period. In
fact, the 1980s Sida policy shifts came when the government
which established it was in power. In other words, the

26
class- which was in power when policy shifts occurred in the
1980s was the same class which established it. Class
explanations would be more convincing if those policy shifts
had occurred with a change of government.
i
Moreover, scholars who have dealt with Swedish aid
agree to the fact that until the 1980s Swedish aid was
mainly driven by moral and solidarity convictions (Elgstrom
1992). These moral and solidarity motives crisscross
Swedish class boundaries and formed the basis for Swedish
aid. Class explanations cannot adequately address these
issues. Moreover, the deterministic character of Class
explanations obscures not only learning but also the role of
choice in policy change.
Pluralist Theory
Pluralist theory, on the other hand, situates policy
and policy change within the context of conflict, bargaining
and coalition formations among societal interest groups.
According to this view, society is made up of a variety of
groups which are organized to safeguard the special
interests of their members. These groups compete and unite
behind common policy issues.
To pluralists, policy change and choice depends on how
different interests from the society are mobilized,
l

27
aggregated, and articulated. Baumgartner and Jones
(1993.:. 1.90) write:
The mobilization of interests changes over time, and
with those changes come difference in the likelihood of
certain issues to hit the public agenda. Interest
groups play an important role in formulating questions,
affecting public opinion and defining the terms of the
debates.
Thus, shifts in interest group coalitions and changes
in their bargaining competence are instrumental for policy
change. In short, the source and content of policy and
policy change in this perspective are societal groups. The
major function of state institutions, according to the
pluralist view, therefore, is to guide and direct interest
group competition into a particular policy resolution.
Contrary to this view, scholars including Stepan,
(1978), Evans, Rueschemeyer, Skocpol, (1985), and
Nordlinger, (1987) argue that state agencies are not arenas
lacking interest or power of their own. Skocpol (1982:4),
for example, argues that states do "... formulate and pursue
goals that are not simply reflective of demands or interests
of social groups, classes or society." By denying
governmental bodies' capacity to formulate independent
policies, pluralists implicitly obfuscate the capacity of
the state agency not only to make independent policy but
also to learn.

28
Like Class explanations, pluralists tend to obscure the
role of learning in the policy process in favor of power
politics. Our findings show that learning more than
anything played an important role in the 1980 Sida policy
shifts.10 Findings show that consensus existed among
societal interest groups in support of existing aid levels
and policies particularly, the non-interference policy. In
such circumstances it is unlikely that pluralism can offer
adequate explanation. Instead, the relative autonomy which
Sida and other Swedish agencies enjoyed was sufficient
enough to change policy based on learning without having to
seek the approval of domestic interest groups. Moreover,
the knowledge base which Sida has in international
development, and the multiple, heterogeneous contexts in
which it operates, limits the explanatory power of pluralism
in regard to the 1980s policy changes11. This conclusion is
supported by Jellinek, et al (1984) and Elgstrom (1992) who
I
argued that interest groups played a minimum role, if any,
in the 1980s Sida policy shifts.
10For more detail see Chapter 5.
11For detailed discussion see Chapter 4.

29
I
Contextual Model
A general consensus exists among organization theorists
that a sound explanation of an organization's actions and
decisions cannot be drawn from.internal factors alone (Moe, .
1985, Tipple and Wellman, 1988, and Henry, 1995) . The
consensus is more apparent when it comes to public
organizations than private organizations.
Henry (1995:67), for example, identifies two factors
which make the context of public organization an important
variable in understanding organizational decision making.
The high importance of the demands being made on the
public organization by its task environment relative to
internal management needs; the unique impact of the
task environment on the public organization's structure
and bureaucracy; its decision making; the motivation of
public managers, their satisfaction with their work;
the public organization's internal management; and even
the performance of its administrators.
This is particularly true because public organizations
are the product of the political process. As such, they are
largely shaped and controlled by the political and economic
environments in which they operate. As Gabris (1983:143)
emphasizes "Public agencies are subject to and cannot escape
their political environments." The impact of environment on
the inner workings of public agencies, therefore, is
considerably more significant than in private organizations
(Chubb and Moe, 1988 and Henry, 1995). This study would

30
fall short of a convincing explanation without paying
particular attention to Swedish politics. As a result, an
examination of Swedish politics is presented in Chapter 4.
Actions and decisions made by public agencies attain
their legitimacy not only from legislation and internal
expertise, but also from their domestic constituents (the
i
public). In fact, as public agencies grow, the need for
public political support becomes an important issue. Public
opinion concerning the actions and decisions of public
agencies is very important for their survival. This study,
therefore, examines Swedish public opinion on development
aid in an attempt to assess its influence in the 1980s
Sida's policy shifts.
As most public agencies draw their funds from
government budgets, the state of the national economy
becomes an important factor in their actions and decisions.
Reduction of government expenditure in 'certain budget areas
can affect agencies concerned. An examination of the
Swedish economic situation in the 1980s is important in
assessing its influence in the 1980s Sida's policy shifts.
The structure of the government and the position of an
agency in the governmental hierarchy are also important in
agency's decisions. The examination of Sida's position
within the government structure and Sida's decision process

I
31
enables this study to establish the influence of the
government and the parliament in the 1980s Sida's policy
shifts.
Thus, this study examines four variables—aid
administrative structure, Swedish aid politics, Swedish
public opinion about development aid, and the Swedish
economy—to establish the extent to which contextual factors
influenced the 1980s Sida's policy shifts.
Rational Choice Theory
Rational choice theory focuses on the individual or
organization acting as rational beings in explaining policy
formulation and policy change (Frohock, 1979). Rational
choice tends to confine the rationality of decision makers
to maximization of their self-interests. While, rational
choice can mainly explain policy change in a situation of
poor performance in terms of inefficiency of the means, it
cannot sufficiently deal with the learning conveyed by
feedback and the role played by epistemic actions in policy
l
change. In the 1980s Sida policy shifts where lessons from
experience and the consensual knowledge in international
development field played an important role rational choice
cannot adequately address these issues.
Moreover, rational choice provides limited insight into
how factors such as contextual factors, historical

32
experience, ideologies, and alliances, enter decision making
circles and shape or even determine decisional outcomes
(Grindle and Thomas, 1991). These issues are important in
explaining the 1980s Sida policy shifts as chapter 4 and 5
show.
Rational choice theory also has a tendency to disregard
the dimension of power. As a result it tends to trivialize
institutional processes which not only define power
relationship within the organization but also constrain
l
choices. As chapter 5 reveals, Sida's institutional
processes, particularly the leadership played an important
role in setting and opening parameters for debate which led
to the 1980s policy shifts. By belittling or ignoring the
dimension of power, rational choice theory cannot adequately
account for the role played by institutional processes in
the 1980s Sida policy shifts.
Moreover, in the context of Swedish aid, where
altruistic and moral factors played an important role in aid
decisions, rational choice theory falls short of a
convincing explanation. 1
Bureaucratic Politics
Bureaucratic politics explain policy change in terms of
competition among bureaucratic entities and actors who are
constrained by their organizational roles and capacities

33
(Allison, 1971, and Grindle and Thomas, 1991). The resource
base for their participation in policy making is the
position they hold in the organizational hierarchy, their
access to and control of information, and their bargaining
competence12.
Strategies and tactics employed by proponents and
opponents of the policy under discussion are instrumental
for policy decision. Allison (1971:145), for example, in
support of this view argues that a policy decision is the
result of "... not simply the reasons that support a course
l
of action, or routines of organizations that enact the
alternative, but the power and skills of proponents and
opponents of the action in question."
All these factors are important for explaining policy
change, however, the importance of each one depends upon the
issue in question. Three scenarios could be drawn in which
one of the factors plays a more important role than others.
The first scenario is the situation where evidence does not
overwhelmingly support or preclude a certain course of
action. In such a situation, proponents' and opponents'
skills and power are likely to play an (important role. The
12Bureaucratic politics in the context of this study is
limited to power relationship and competition of ideas among
bureaucratic entities and actors, and the way different
bureaucratic entities and actors influence policy decisions.

34
second scenario is a non-controversial policy situation.
Here, organizational routines are likely to play an
important role. The third scenario is a situation where
feedback knowledge or new knowledge regarding a particular
issue or both are overwhelmingly in favor of a new course of
action.' Under such circumstances knowledge that supports a
new course of action is likely to play a more important
role.
The last scenario is more evident in the 1980s Sida's
l
policy shift. As this study will show both feedback
knowledge from the field and new knowledge in the
development field in the 1980s fostered a redefinition of
goals, strategies, and policy to address issues raised by
that knowledge. In Sida, for example, feedback knowledge
from Tanzania, coupled with the new dominant consensual
knowledge in the development field in the 1980s, made even
those who would have otherwise been opponents of the 1980s
Sida's policy shift to Tanzania (for political reasons or
emotional attachment to a project in Tanzania or otherwise)
accept policy change (Elgstrom, 1992, aind personal
interviews) .13
While bureaucratic politics is important for
understanding what is happening within an organization, it
â– ^Questionnaire number 20.

35
I
is inadequate for this study because it gives only a
superficial explanation about ways knowledge is obtained
from experience, and how historical contexts shape and
influence policy change. Moreover, bureaucratic politics
provide "... little analytic capacity to deal with issues
such as professional biases and alliances or consensus on
technical analyses that cut cross bureaucratic boundaries"
(Grindle and Thomas 1991:30), issues which played an
important role in the 1980s Sida policy shifts. Learning
theory addresses some of these deficiencies. Findings
presented in Chapter 5 reveal that in the 1980s Sida policy
shifts bureaucratic politics was more of a catalyst than a
cause for change. In this respect, bureaucratic politics
alone cannot successfully explain the situation.
Further, the study argues that all bureaucratic policy
decisions are in one way or another grounded in bureaucratic
politics. In this respect, bureaucratic politics is seen as
an institutional process which is not only found in all
bureaucratic organizations but whose influence on a
particular policy also depends on a policy situation. This
study, therefore, conceptualizes bureaucratic politics as an
institutional process rather than a model for policy making.
In this way, learning as a source of policy change is not
obfuscated.

36
Summary
Generally speaking, the above explanations can be
grouped into two major camps. State-centric models base
their explanations on people working within government
institutions. These perspectives view contextual factors as
well as historical experiences as playing a limited, if any,
role in the initiation of policy or policy change. Society
based explanations, on the other hand, mainly focus on
societal groups or classes' in explaining policy change. In
fact, "... most or nearly all public policies are understood
as responses to the politically weightiest societal
expectations, demands and pressures; the state is almost
l
invariably unwilling or unable to act upon its preferences
when these diverge from society's" (Nordlinger 1981:43).
The roles and interests of the people working within the
government, therefore, are belittled by these explanations.
The lens used in this study takes the middle road between
the two major camps.
Learning theory asserts that members of an organization
do initiate policies and policy change. In the process,
they are influenced by both internal and external factors.
Internal processes, including organizational routines,
leadership, historical experience and ideology, and external
factors, inter-alia, feedback and consensual knowledge from

37
the organizational environment, all have bearing on an
organization's policy process. The importance of each
factor, however, is issue and context specific. Learning
l
theory, as discussed in the context of this study, attempts
to address these issues.
Learning: Conceptualization
Learning as a concept has been a subject of controversy
among scholars. Scholars from different disciplines and
methodological orientations have defined learning in
different ways. Learning is defined as: a change of
behavior in a manner that enhances effectiveness (Porter,
1980, Argyris and Schon, 1978), a change of behavior as a
result of acquisition of information or new knowledge
(Jarosz and Nye 1993), the understanding of a particular
policy question (Reiter, 1994), a change in belief (Levy,
1994), a change in cognitive structure (Bennett, 1990),
increase in cognitive complexity (Etheredge, 1985), a
process of specification of causal relationship in new ways
(Haas, 1990).
•Tetlock (1991), draws^‘five definitions from the
learning literature with each definition rooted in a
specific approach. He identifies the definition of the
neorealists, the psychologists and cognitive theorists, the
I
cognitive structuralists, the organizational and political

cultural theorists, and the efficiency definition of
l
learning.
As a theoretical framework, learning is also a subject
of contention. The controversy is complicated by the lack
of a unified theoretical trend, a variety of types of
learning (e.g. individual, organizational, governmental,
political, social)14, different levels of analysis used by
different scholars, different levels of learning (single
loop vs double loop, simple vs complex, peripheral vs
fundamental). Other contentious issues include learning vs
unlearning, intentional/conscious vs
unintentional/unconscious learning, caiisal linkage between
learning and policy or behavioral change and the distinction
between learning and adaptation. Given these contending
views, this section discusses each aspect of the controversy
in an attempt to locate the current study in a proper
perspective.
Learning; Defined
Porter's (1980) conceptualization of learning as an
intentional or conscious process is criticized by Huber
(1991) who argues that learning need neither be intentional
I
14For individual learning see Moltz (1993) and Bennett
(1990). For political learning see Heclo (1974) and Hall
(1987) for social learning. For governmental learning see
Etheredge (1985) and Bennett (1990).

39
or conscious nor does it necessarily increase the learner's
effectiveness. Argyris and Schon (1978) link learning with
increasing effectiveness, however, in their 1996
publication, Argyris and Schon agree that learning need not
always increase effectiveness. They recognize the
distinction between learning that increases effectiveness
and learning that does not. They call the former
"productive learning" and it is the center of discussion in
their work.
Despite recognizing the distinction between coming to
see things in new ways and behavior change, Jarosz and Nye,
(1991), and Argyris and Schon (1996) argue that for learning
to be of any theoretical and practical utility it need be
/
conceived in relation to behavior change. To Friedlander
(1983), learning can result in change of one's understanding
or cognitive structure without requiring a change of
behavior. In fact, in certain circumstances learning
results in reinforcing an existing behavior.
Levy (1994) sees the conceptualization of learning in a
generic sense as having more theoretical and practical,
utility than one that is limited to behavioral or policy
change. According to him, this allows students of learning
to explain "... when individual learning gets translated
into policy and when learning gets blocked by institutional

40
or political constraints" (Levy 1994:290). I agree with
Friedlander (1993) and Levy (1994) that there is no need for
linking learning with behavior or policy change a priori.
The linkage need remain as an empirical question. In other
l
words, the conditions under which learning leads to behavior
or policy change needs to be a subject of empirical
investigation.
Reiter (1994:492) defines learning as "... the
application of information derived from past experiences to
acquire understanding of a particular policy question."
This definition is too narrow for this study. As argued
above, learning is more than acquisition of an understanding
of specific policy questions. Learning can involve coming
to see things in new ways without focusing on a particular
policy issue. Besides, learning need hot always require the
use of information obtained from past experiences. It may
also include the application of information derived from the
experiences of others (Hedberg, 1981 and Rose, 1991), new
knowledge (Haas, 1990 and Jarosz and Nye, 1991) and study
(Bennett, 1990).
Levy (1994:283) defines learning "... as a change in
belief (or degree of confidence or the development of new
skills or procedures) as a result of observation of and
interpretation of experience." Not all change in beliefs as

41
a consequence of observation or experience involve learning.
Individuals or organizations can be forced to change their
beliefs for fear or many other reasons besides learning.
While this definition may explain changes in foreign
policy in general, it falls short of explaining changes in
international aid organizations. International aid agencies
have specific tasks to fulfil. The overall goal of Sida,
for example, is helping to improve the living standard of
poor people. The way these agencies carry out their
programs depends very much on their understanding of the
recipients' socio-economic and political processes. In
fact, unfamiliarity with and uncertainty of the recipients'
environment make development aid agencies operate their
programs mainly on an "experimental" basis (Hedberg,
1981).15 International development agencies repeatedly
engage in testing, construction, and reconstruction of their
l
knowledge. In this respect, the definition of learning that
focuses on change in beliefs does not capture the reality
underlying international development aid agencies.
15This study uses uncertainty in the same meaning that
is used by George (1980). The conditions of uncertainty
which he identifies include inadequate information
surrounding the issue in question or limited available
knowledge for assessing the expected outcomes of different
course of action. It seems to this writer the situation
under which international development agencies make policy
decisions fits George's definition of uncertainty.

42
One important aspect which this study borrows from
Levy's definition is "change in a degree of confidence."
The uncertainty and unfamiliarity with Third World
l
environments are adequate justifications for this study to
include "change in a degree of confidence" in a definition
of learning involving international development aid agencies
or individuals working in them.
To Bennett (1990:100), learning consists of "... change
in cognitive structure ... as a result of experience or
study.". When it comes to .international development aid
agencies or individuals working in them (as discussed
above), change in cognitive structure is just one side of
the learning coin. The other side is consolidation of those
structures. For example, when a program run by an aid
agency is successful, the existing cognitive structures are
reinforced; when the program fails, cognitive structures
change.
Furthermore, Bennett's (1990) emphasis on study as an
important source of information for learning is very
relevant to international aid organizations and individuals
working in them. Most of these agencies (individually, or
in cooperation with others) sponsor a number of studies with
the view toward gathering information or knowledge on a
particular issue. The use of consultants by these agencies

43
to gather this knowledge falls under information derived
from studies.
Etheredge (1981) sees learning as a process by which
learners increase their intelligence ar}d sophistication in
a way that enhances their effectiveness. To him, learning
involves an increase in sophistication in cognitive
complexity, valuative complexity, or cognitive integration.
By cognitive complexity, he means a variety of different
arguments underlying a set of beliefs. Valuative complexity
consists of both a level of inconsistency among them and the
manner into which the inconsistencies and value trade-offs
of different arguments are dealt with in a larger framework.
In this view, simple policy changes are not a part of
learning.
I
According to Levy (1994), the problem with this
conceptualization is the implicit assumption that increased
sophistication in cognitive structures leads to an improved
understanding of reality or better skills and effectiveness.
In reality, increased cognitive complexity does not
necessarily result in learning or in increasing
effectiveness. This conceptualization produces also some
methodological problems--simple mind versus complex mind.
How do we identify and measure simple cognitive structures
or complex cognitive structures? Is the complexity or the
l

44
simplistic cognitive structures across-context or trans¬
issues or is it constrained by the context or issue under
question? In other words, is the complexity or simplicity
of cognitive structures universal or issue and context
specific?
l
Another concept of learning is provided by Haas (1990).
In his view, learning is a "... process by which consensual
knowledge is used to specify causal relationship in new ways
so that the results affect the content of public policy"
(p.23). Specification of causal relationship is an
important ingredient in linking learning to policy change.
For the purpose of this.study, however, this definition is
inadequate. The major limitation of Haas' conceptualization
is that it sees epistemic communities as the sole producer
of causal explanations. In this view, members of
organizations are passive recipients of new knowledge from
epistemic communities.
While this may be true in some contexts, in others such
as the development context, organizations work hard to
produce new knowledge and establish causal relationships
among the variables with which they work. More often than
not, an international aid development agency, (or its
department), individually, or in collaboration with other
agencies (or departments) initiates studies with the view of
f

45
establishing causal relationships among different issues.
Thus it is not necessarily the epistemic community which can
provide a causal, linkage.
Drawing from the above discussion, learning for the
purpose of this study is defined as a process whereby
information or knowledge derived from experiences, eoistemic
community or study significantly affect! the understanding of
reality. By "significantly" I mean at least part of
understanding of reality is reevaluated or confirmed. By
experiences I mean own experience and the experience of
others. By study I mean own study and studies done by
others. This conceptualization recognizes the distinction
between acquiring new understanding and translating these
new insights into actions. In doing so, it addresses one of
the major controversies in the learning literature
concerning the relationship between learning and adaptation.
Anderson (1991:101) defines adaptation as "... a switch
from one behavioral routine in the repertoire of an
individual or organization to another routine." Haas
(1990:33) goes further to qualify this change of behavior;
he views adaptation as "... the ability to change one's
behavior so as to meet challenges in the form of new demands
without having to evaluate one's entire program and the
reasoning on which that program depends." According to

46
this view, then, if one evaluates just part of the program
and the reasoning in which that part is based, it does
constitute learning.16
While scholars such as Hedberg (1981), Haas (1990) and
Anderson (1991) maintain the distinction between learning
and adaptation, Tetlock (1991) and Levine (1991) contend
that the distinction is unimportant. Levine (1991: ), for
example, defines learning as "... adaptation to changing
circumstances." More cautiously, Tetlock (1991) argues that
adaptation can be considered as an outcome of learning.
While this study does not equate learning with adaptation as
Levine does, it views adaptation as one of the methods
organizations use to put their lessons into actions.
In fact, adaptation involves the acquisition of
competency in certain organizational activities. Changes in
the environment can force an organization to make simple
adjustments to increase competency in its strategies or
programs without questioning the underlying assumptions of
l
16For the purpose of this study, whether the
acquisition of an understanding is a product of the
evaluations of ones' whole program and the underlying
assumptions, as Haas (1990) maintains, or part of it and
that of the reasoning involved, all involve learning.
However, as we show in our discussion between learning and
policy change (later in this chapter), the first level of
learning, or simple learning, in most cases leads to
adaptation while the second level of learning, fundamental
learning, often leads to basic policy change.

those strategies. Sometimes, when an organization faces a
unique situation it adjusts to this specific situation to
create a fit between itself and its environment without
necessarily evaluating part or the entire program; this is
an adaptation.
It. is also important at this juncture to explain about
unlearning. According to Hedberg (1981:18), unlearning is
"... a process through which learners discard knowledge.
Unlearning makes way for new responses and mental process."
Unlearning is a big problem with most international
development aid agencies. This is partly because it takes
years before these agencies accumulate experiences.
Likewise, it requires a highly cumulative convincing
counter-evidence to make an organization discard its learned
knowledge.
It seems to me, when an organizational world view, or
myth (Hedberg, 1981), or theory of action (Argyris and
Schon, 1978, 1996) reaches a "dead end", an unlearning
process is spontaneous as the organizational efforts are
directed toward creating new vision, nqw policies, and new
organizational routines. Otherwise the process is slow. I
agree with Hedberg (1981:19) that "... fund shortages,
falling revenues, actual losses, diminishing popular
support, or public criticism" and the failure of an

48
I
organization to achieve acceptable results can trigger
organizational unlearning. This study, however, goes beyond
Hedberg's (1981) contention. It argues that it is the
emergence of a problematic situation and/or a new consensual
knowledge in an organization that can switch on the
unlearning process.
Organizational Learning
Organizational learning is more controversial than the
concept of learning itself. Argyris and Schon (1996)
identify three challenges to organizational learning. The
first challenge is presented by scholars who maintain that
"... the very idea of organizational learning is
contradictory, paradoxical, or devoid of meaning" (p.xx).
The second challenge comes from scholars who accept
organizational learning as a meaningful term but who doubt
that real world organizations actually engage in it or can
be capable of doing so", (p.xx). The third challenge is
presented by researchers who "... accept organizational
learning as a meaningful notion and agree that organizations
do some times learn; what it denies is that organizational
learning is always or ever beneficent" ¡(p.xxi). This study
relates primarily to the third challenge. It works under
the assumption that organizations do learn but whether what

49
is learned is positive or not is left as an empirical
question.
Another controversy in organizational learning is the
unit of analysis. Organizational learning theorists are
divided on the unit of analysis for organizational learning.
Scholars such as Levy (1994) maintain that organizational
learning takes place at the individual level. In other
words, organizations learn primarily by institutionalizing
individual learning into organizational learning practice.
As Argyris and Schon (1978) argue, individuals
... reflect on and inquire into previous context for
learning ... They discover what they did that
facilitated or inhibited learning, they invent new
strategies for learning, they produce these strategies,
and they evaluate and generalize what they have
produced. The results become encoded in the individual
images and maps and are reflected in organizational
practice (as quoted by Levy 1994:286).
However, individual learning by itself cannot cause
change in organizational behavior or policy, unless such
learning is institutionalized in a way that not only reaches
policy makers but also is accepted among the dominant
coalition of policy makers. This process requires
collaborative inquiry and effort rather than individual
searches. It is difficult to envisage a situation where an
individual in an organization single-handedly can make an
organization learn. This is basically because the logic of
an organization's operations works against it. Thus this

50
study designate the organization as its unit of analysis.
This is particularly important in Sida's case because not
only do organizations learn as collective entities but like
Sida, they work in a disaggregate fashion through
committees.
Organizational learning differs from individual
learning. They learn by encoding collectively learned
inferences from experience and new knowledge into
organizational routines. As Argyris and Schon (1996:16)
contend:
In order to become organizational, the learning that
results from organizational inquiry must become
embedded in the images of the organization held in its
members' minds and/or in epistemological artifacts (the
maps, memories, and programs) embedded in the
organizational environment.
To Ravel (1978:28) an organization learns by "...
imposing upon the structure and process of policy choice a
set of decision rules ... that will dispose the system to
respond in certain ways—presumably better than before—to
future contingencies." According to Hedberg (1981:3)
organizational learning takes place when "... organizations
interact with their environments: organizations increase
I
their understanding of reality by observing the results of
their acts. ... by imitating other organizations' behavior,
or by accepting others' experiences and maps of the
environment."
Lovell (1984:135) maintains that

I
51
organizational learning takes place when "... policy
experiences become assimilated into organizational doctrine,
structure, decision-making procedures, personnel systems,
and organizational commitments." To us, unless individual
inquiry and effort are translated into collaborative inquiry
and efforts no organizational learning will take place.
Thus, the work of learning agents (whether an
individual or group) is unfinished business until the result
of the inquiry, that is, the discoveries, inventions and
i
evaluations, become encoded in the organizational processes.
If they are not encoded, individual members will have
learned, but not their organization. In other words, what
members have learned remains an unrealized potential for
organizational learning (Argyris, 1978).
While Haas (1990) sees learning as a result of
failures, Argyris and Schon (1996:16) treat learning as a
result of a problematic situation. In their words:
They experience a surprisingly mismatch between
expected and actual results of action and respond to
that mismatch through a process of thought and further
action that leads them to modify their images of
organization or their understandings of organizational
phenomena and to restructure their activities so as to
bring the outcomes and expectation into line...
In this study, the failure of an organization to
achieve acceptable results, the emergence of a problematic

52
I
situation, or achievement of success could all result in
organizational learning.
Bennett (1990:100) defines organizational learning as
"... changes on organizational equivalents of beliefs." To
Haas (1990:36), organizational learning is a process whereby
"...an organization is induced to question the basic beliefs
underlying the selections of ends." For the purpose of this
study organizational learning is a process whereby
collaborative inguirv by members of an organization (as a
result of feedback knowledge or consensual knowledge)
generates information or knowledge that significantly
affects the organization's understanding of reality.
The common denominator for these definitions is the
fact that learning involves information processing and
change. Here change is defined in a more generic sense to
include change in a degree of confidence in an
organization's understanding of reality. In this sense,
even learning that may reinforce or consolidate an existing
organization's understanding of reality is addressed. This
is because even under such circumstances, changes, at least
in the confidence level of organizational understanding,
/
will occur. This is more so for development agencies which
operate on the condition of uncertainty than for those
organizations which operate in a more stable environment.

53
At this juncture, it is appropriate to note that
neither does all information processing involve learning nor
is all change is a product of learning. I agree with
Bennett (1990) who maintains that a particular way of
information processing that assumes decision makers as
"naive scientists" who use their "knowledge structures" and
"judgmental heuristics" to infer about the socio-economic
and political environment fall under the learning paradigm.
According to Bannett (1990), the word "scientist" is used to
express the fact that when confronted with a problem, policy
makers in most cases will employ the same methods used by
trained scientists. Policy makers, like trained scientists,
l
sample data, make generalizations, observe covariation,
formulate causal linkages, and use them to predict and test
strategies against goals. The word "naive" connotes the
fact that judgmental heuristics used by policy makers carry
with them certain biases which sometimes work against
statistical assumptions (Bennett, 1990).
In processing information for decision making,
organizations employ different criteria which are couched in
different assumptions. An understanding of these criteria
or procedures and their underlying assumptions in
organization's decision making process ’is important because
it enables this study not only to explain how the process of

54
data collection of these models fit in the learning paradigm
but also establish which criteria for information processing
fit the 1980s Sida's policy decisions as well as the
i
learning model. Scholars of decision making (e.g. Simon,
1957, Lindblom, 1968, Etzioni, 1964, March and Olsen, 1979,
among others), have developed a variety of decision making
methods over the years. These methods include the
comprehensive rational model, incrementalism, bounded
rationality, mixed scanning, garbage can and groupthink.
Models developed by these decision making scholars focus on
two issues--information processing for decision making and
the decisional outcome, i.e. incremental or fundamental
change. The Former, in addition to the underlying
assumption of decision making model is 'of interest to this
study and will be a subject of discussion in the following
section.
Learning vis-a-vis Criteria for Information Processing for
Decision Making.
The classical model of rationality assumes decision
making occurs under stable conditions where decision makers
have perfect information, goals, means are hierarchically
arranged and the cost of decisions are under estimated
(Frohock, 1979). The criteria for a rational comprehensive
model are considered to be ideal, howeyer, and its

55
unrealistic idealized assumptions, inter alia, unlimited
human or organizational capacity, and costs involved in
terms of time and attention in gathering all information,
have made it less practical (Simon, 1957 and Lindblom 1968).
The uncertainty, risks, and information problems associated
with the development environment make its utility in the
development field highly questionable. In fact, the way
Sida policy decisions are made (as shown in Chapter 5) casts
doubt on the applicability of this model in policy decisions
for Sida.
The incremental model advocated by Lindblom (1968)
assumes decision making as a bargaining process among
different interested parties. Each interested participant
aims at improving his/her resources. Under this model,
changes in programs or policies are done incrementally--step
by step. Fundamental changes that depart from the status
quo are difficult to envisage under incrementalism. This
model does not suit this study because the 1980s Sida policy
shift was a fundamental departure from its previous aid
policies. Besides, the 19'80s policy shifts included not
only tangible programs and projects but also abstract goals
and policy statements with which incremental solutions have
limited capacity to deal (Gortner, et al. 1995).
l

56
Groupthink "... refers to a mode of thinking that
people engage in when they are deeply involved in a cohesive
in-group, when the members' strive for unanimity override
their motivation to realistically appraise alternative
courses of action" (Janis, 1972:9). In this view, high
group cohesiveness, structural faults of the organization,
provocative situational context and pressure toward
concurrence seeking are the basis for the emergence of group
think. This leads to the deterioration of a group's mental
efficiency, reality testing, and moral judgement. The
consequences are a disaster:
... a distorted view of reality, excessive optimism
producing hasty and reckless policies, and a neglect of
ethical issues. The combination of these deficiencies
makes these groups particularly vulnerable to initiate
and sustain projects that turn out to be fiascoes ('T
Hart, 1990:6).
Janis (1972 and 1982) delineates eight symptoms that
manifest the occurrence of groupthink in an organization.
They include the illusion of both unanimity and
invulnerability, collective rationalizations, direct
pressure on dissenters, self appointed mindguards, self
censorship, belief of inherent morality of the group, and
stereotypes of out groups.-
According to Elgstrom (1992), the debate which took
place within Sida before the policy shifts in the 1980s was
characterized by openness. Different viewpoints were
l

57
allowed to compete in that debate. There was no censorship
of deviant arguments and the leadership was more or less
impartial. These, together with the mode of decision making
employed by Sida, warrant us to conclude that the criteria
for a groupthink model was not likely present in the 1980s
l
Sida policy shifts.
The garbage can model contends that the decision making
process is ambiguous, unreliable, and anarchic. According
to this view, decision making does not fit the assumptions
of the more classical decision making models because
decisions take place in situation where "... preferences are
problematic, technology unclear or participation is fluid
(Cohen, March and Olsen, 1988:321). To these scholars, the
policy making process serves more as an arena for individual
and group expression of conflict, values, myths,
friendships, and power, rather than prdblem solving.
Knowledge has little, if any, role in the decision making
process. As Cohen, March and Olsen, (1988:296) write:
The mix of garbage in a single can depends on the mix
of cans available, on the labels attached to the
alternative cans, on what garbage is currently being
produced, and on the speed with which garbage is
collected and removed from the scene.
The underlying assumption of this model is that
decision making is a matter of accident or coincidence. As
Cohen, et al (1988:297) go on to say, "... a decision is an
/

58
outcome or interpretation of several relatively independent
streams within an organization." As will be revealed in
Chapter 5, the 1980s Sida policy shift involved the
interpretation of not only relatively independent streams
within the organization but also other independent streams
outside the organization.
The mode of policy decision used i^y Sida, together with
the intensity of the debate about Swedish aid within and
outside Sida, and critical aid performance analysis which
was conducted by Sida in the early 1980s, make it unlikely
that this model could explain Sida's aid policy shift in
that period. Moreover, the major role played by knowledge
in the 1980s Sida policy change make the garbage can model
less useful. Another limitation of the garbage can model in
the context of this study is that it does not provide a
useful explanation about the way organizational structures
define inter alia who should participate in the decision
l
making process and what issues should come to the agenda
(Masuch and LaPotin, 1989). In the 1980s policy shifts the
Sida leadership played a dominant role in setting parameters
for debate and by sending a number of missions to Third
World countries to get first hand information and evidence
for their policy decisions.17
17For more detail see Chapter 5.

59
The satisficing model, like incrementalism, was
developed as a reaction to the limitations of the classical
rational model. The model assumes that goals are not
hierarchically arranged, information available to decision
makers is incomplete, and collection of information is
costly. In this view, decision makers always seek a course
of action that is minimally satisfactory. To reach this
end, decision makers do not search every possible choice.
Bounded by their own intellectual capacity, time and the
resources available to them, decision makers select only a
sample of possible choices--bounded rationality. An
alternative that meets minimum criteria or standards of
acceptability is chosen (Simon 1959). In other words, the
alternative selected is based on "satisficing."
I
According to this view, organizations develop routines
which simplify information search and issue assessments.
Decisions are made after inquiring into issues that seem to
be the most relevant for a particular choice. For that
matter, decision makers do not seek to exhaustively analyze
every choice. March and Simon (1959) argue that.the level
of knowledge of policy makers and information available to
them are among the key factors that bound a decision maker.
In this respect, this model is likely to fit into learning
theory.

60
The satisficing model underlies the way most research
is conducted and fits the .learning paradigm (Bennett, 1990) ..
When faced with a problem, organizations (particularly
development agencies) would in most cases employ a trained
scientist or use the same criteria as used by trained
scientists. Organizations will define ’the problem, collect
and analyze data that are relevant to the issue under
question, formulate causal linkages and use them to choose
an appropriate solution. Organizations, like individual
researchers, are bounded by time, resources, and
intellectual capacity which make the rationality of their
outcome, if at all, bounded. As will be indicated in
Chapter 5, the criteria for the satisficing model fits the
empirical reality underlying Sida's 1980's policy decisions.
Learning and Policy Change
I
Learning is by no means the only possible explanation
for policy change. Changes in the external environment or
political leadership, for example, can lead to policy
shifts. More often, organizations change their course of
action in an adaptive fashion (Haas, 1990) or through
coalition shifts (Anderson, 1991) rather than learning. In
this regard, the question of what type of change can be
attributed to learning becomes problematic, because a loose
conceptualization of learning can encompass any new policy

I
61
initiative in an organization while a more restricted
conceptualization can exclude policy initiatives which in
reality involve learning.
Within this problematique, three major theoretical
trends that try to explain the relationship between learning
and policy change in the learning paradigm can be
identified. The first is based on analogical reasoning. It
l
combines the ideas of knowledge structure and judgmental
heuristic (Reiter, 1994).18 The second trend, which is
couched in consensual knowledge, emphasizes both the
conceptual framework through which the interpretation of
experience is done and the political process through which
the epistemic communities try to shape the actions and
decisions of dominant actors (Levy, 1994).19 The third
trend puts more emphasis on the relationship between means
and goals. Feedback knowledge and organizational routines
are central variables.20
It is a common phenomenon in the ¿earning literature on
organizational theories and international organizations to
18For the discussion and application of this
theoretical trend see Bennett (1990).
19For discussion and applicability of this theoretical
trend see Haas (1990).
20For discussion and application of this theoretical
trend see Argyris and Schon (1978).

I
62
assume that "... organizations have a target level of
performance or aspiration level to which they compare their
actual performance; in each period, they determine whether
they have performed above or below this aspiration level"
(Lant and Mezias, 1992:48). Organizational performance is
measured by the difference between actual performance and
the accepted goals or aspiration level. International
development aid organizations, like any other organizations,
have their own goals or aspiration levels and means or
strategies to realize those goals. These postulations are
very important in the organizational learning literature
because it provides the cornerstone for the organizational
learning theoretical framework. In fact, most literature
on organizational learning and international relations
distinguishes between two levels of learning. On one hand
is learning associated with means; on the other is learning
associated with goals. In most cases, learning at ‘each
level is translated into different policy actions
The first level of learning focuses on the means rather
l
than ends. At this level, for example, members of an
organization individually or collaboratively inquire into
the underlying assumptions of their tactics and strategies
after repeated failures (Argyris and Schon, 1978) or an
emergence of a problematic situation. In other words,

63
participants in an organization come to understand that the
existing organizational processes (in terms of
organizational framework of action and routines) do not make
it possible for the expected goal(s) to be achieved.
Learning which occurs at the level of means is
sometimes called simple learning (Nye, 1987), peripheral
learning (Breslauer, 1987), or single-loop learning (Argyris
and Schon, 1978 and 1996). At this level, members of the
organization collaboratively become the principal agents of
learning as they invent new techniques and strategies based
on feedback knowledge. The latter is necessary for this
level of learning to take place. This level of learning is
particularly important in organizations like Sida whose
major goal is to support development in an unfamiliar and
uncertain environment. Learning at this level of means is
likely to lead to simple incremental change or adaptation.
Learning which occur at the second level--goals or
ends — is likely to lead to fundamental (policy change. This
is particularly true because organizational inquiry is often
geared not only toward resolving incompatible organizational
norms, goals, and policies by developing new priorities, as
well as establishing new weights but also by rethinking the
whole process and the reasons therein (Nye, 1987, Breslauer,
1987, and Argyris and Schon, 1978 and 1996). Learning at

Page
Missing
or
Unavailable

I
65
for organizational learning is the subject of empirical
test.
While Argyris and Schon (1978 and 1996) give examples
where organizations learn and change their policies as a
result of feedback knowledge, Haas (1990) presents cases
where organizations learn and change their policies as a
result of new consensual knowledge. A more interesting
issue is that in all these cases the organization's
institutional processes have either facilitated or hampered
organizational learning.
This study provides a case where dn organization learns
and changes its aid policy as a result of a combination of
feedback knowledge and new consensual knowledge in the
development field. The above discussion reveals that a
successful organizational learning model needs to include
organizational institutional process. Thus, this study
takes organizational institutional processes as an
intervening variable.
Unlike Schechter (1990), who views learning as a "top-
down" process, the conception employed in this study views
learning as both a "bottom-up" and a "t^op-down" process.
Learning which occurs at the first level is essentially a
"bottom-up" process while that associated with the second
level is primarily a "top-down" process.

66
Learning Model
l
This study draws "feedback knowledge" from
organizational theorists, "consensual knowledge" from
students of epistemic community, and "institutional
processes" from students of institutions to construct a
model of learning for Sida in particular and international
development agencies in general. These three variables are
at the center of the organizational learning process because
they enable us to underscore not only how learning occurs,
but also the source of those lessons, and their outcomes.
In order to locate the learning model used in this study in
its proper perspective each of the three variables is
examined in detail below.
Feedback Knowledge
In the context of this dissertation, feedback knowledge
is viewed as a relatively formal and established fact,
referring to insights or conclusions about effects of past
decisions which an organization can use to inform its
subsequent decisions. Organizational learning could simply
be viewed as a cyclical process whereby feedback knowledge
and/or consensual knowledge leads to collaborative inquiry
which in turn leads to collective efforts to change the
I
organization's policies, procedures and strategies leading
to further feedback.

I
67
Although feedback knowledge is a necessary factor for
organizational learning, it is not sufficient by itself.
For feedback knowledge to play an effective role in the
organizational learning process it requires an open window
in the organization's institutional processes, otherwise its
impact will be felt slowly. This is so because
institutional processes in an organization can either block
or facilitate the flow of feedback knowledge.
In addition, institutional processes structure and
institutionalize mechanisms for obtaining and interpreting
feedback knowledge (Argyris 1993). In fact, "... Good
feedback is unlikely when critical members of the system are
motivated to distort or downplay bad news which might be
taken as indicative of poor judgement in prior policy
selection" (Bobrow and Dryzek, 1987:204).
Feedback knowledge is also important because in most
cases organizations insulate themselves from the new
consensual knowledge unless feedback knowledge has begun to
i
undermine the existing organization's understanding of
reality. In other words, consensual knowledge will be more
convincing and easily accepted by an organization if
feedback knowledge has begun undermining the existing
organizational understanding of reality. In this respect,

68
organizational institutional processes intervene with both
feedback and consensual knowledge.
The importance of feedback in the organizational
learning process is also recognized by Hedberg (1981) who
argues that "Feedback can also challenge ruling myths in
cases, where organizations expect outcomes which do not occur
and in cases where organizations misinterpret outcomes which
actually should have confirmed the strategies and myths"
(Hedberg, 1981:12).
This dissertation studies the way 'sida received
feedback information from Tanzania and the way this
knowledge was used in the 1980's Sida policy shift. The
main concern will be the evaluation process employed by Sida
to assess, the performance of its own specific projects in
Tanzania and the Tanzanian economy in general, and how the
knowledge obtained from this process helped Sida to
multilateralize its bilateral relations with Tanzania.
Consensual Knowledge.
Haas (1991:65) defines consensual knowledge as:
Generally accepted understandings (about cause-effect
linkages about any set of phenomena considered
important by society, provided only that the finality
of the accepted chain of causation is subject to
continuous testing and examination through adversary
procedures. Cause-effect chains are derived from
information, scientific or nonscientific, available
about a given subject and considered authoritative by
interested parties-although the authoritativeness is
always temporary.

69
I
According to Haas (1991:66), organizations are exposed
to consensual knowledge through the medium of epistemic
communities. An epistemic community is "... network(s) of
professionals with recognized expertise and competence in a
particular domain and an authoritative claim to policy¬
relevant knowledge within that domain or issue-area" (Haas
1992:3).. It is "... composed of professionals (usually
recruited from several disciplines who share a commitment to
a common causal model and a common set of political values"
(Haas 1990:41). It can be a group of scientists or
academicians or analysts from varieties of disciplines or
organizations. The common denominator for members of an
epistemic community is
shared causal beliefs, which ... serve as the basis for
elucidating the multiple linkages between possible
policy actions and desired outcomes;... shared notions
of validity—that is, inter subjective, internationally
defined criteria of weighing and validating knowledge
in the domain of their expertise; and ... a common
policy enterprise—that is, a set of common practices
associated with a set of problems (Haas 1992, as quoted
by Brown 1995:54)
The success of an epistemic community in shaping
organizational learning depends on two characteristics ".
i
(1) the claim to truth being advanced must be more
persuasive to the dominant political decision makers than
other claims, and (2) a successful alliance must be made

70
with the dominant political coalition" (Haas 1990:42).
According to this view, when new consensual knowledge
commands an upper hand in the bureaucratic politics in
particular and the political process at large it leads to
the institutionalization of changes in both goals and cause-
effects relationships (Haas, 1990 and 1991). This
institutionalization of change necessarily leads to policy
shifts. Therefore, an epistemic community plays an
important role in the occurrence of the second level of
learning.
In respect to this study, the 1980s witnessed an
increasing acceptance of the IMF and World Bank policy
i
knowledge in the development process. This was in part due
to the failure of Keynesian economics and state socialism to
stand the test of time. These paradigms claimed that
extensive planning under active state management of the
economy could lead to rapid economic development in Third
World countries. The 1980s worldwide economic crisis, which
was more pronounced in countries under state-centric
economies, proved otherwise. As a result of this economic
crisis, "State worship in its various forms—national
integration theory, nationalization, development economics,
central planning—suffered a series of fhammer
blows..."(Young, 1994:42). The World Bank and the IMF came

71
up with the Berg Report and structural adjustment programs
J .
respectively, as a response to this crisis. Reaganism,
Thatcherism, the 1982 socialist retreat of Mitterand,
economic reforms in both the Soviet Union and People's
Republic of China worked for, and in favor, of the IMF and
World Bank new development policy outlook (Young, 1994).
In fact, these organizations represent a dominant
consensual knowledge in the development field since the
1980s. That is why in the model below the consensual
knowledge in foreign aid is represented by the IMF and the
World Bank's aid policy outlook. Thus, the IMF and World
Bank policy community represent the dominant international
epistemic community in Sida's learning process. This study
identifies the lessons Sida drew from the international
consensual knowledge and the impact of those lessons on
Sida's aid policy shifts in the 1980s.
Institutional Processes
Students of institutions have placed emphasis on
different issues in defining institutions. North (1990),
for example, puts more emphasis on constraints. He defines
institutions as "... humanly devised constraints that shape
human interactions" (North, 1990:6). To Haas (1990),
l
institutions can be arenas for innovation as well as
constraints. I agree with Commons (1934) who sees

72
institutions not only as a constraining force but also as a
liberating and expansive force (McDermott and Adrew,
forthcoming). In fact institutions can "... forbid, permit
l
or require some actions or outcomes" (Ostrom, 1990:5).
Ostrom's (1990) definition of institutions captures the
three dimensions of institutions—forbid, permit or require-
-which are important to this study. Thus, Ostrom's
definition of institutions is employed in this study.22
Institutional processes, for the purpose of this study,
include, organizational routines (rules, procedures, and
programs), leadership, budgetary routines, bureaucratic
politics, and organizational doctrine through which
conceptions, interpretations, and questioning take place.
In terms of structure, for example, decentralized authority,
broad discretion, and open interface with other parts of the
organization tends to stimulate the learning process.
According to Sabatier (1988), a decentralized organization
facilitates learning by acting as a catalyst for policy
experimentation and realistic points of comparison for
evaluating different policy instruments. In the case of
22 She defines institutions as "...a set of working
rules that are used to determine who is eligible to make
decisions in some arena, what actions are allowed or
constrained, what aggregation rules will be used, what
procedures must be followed, what information must or must
not be provided and what pay-off will ¿e assigned to
individuals depends on their actions" (Ostrom, 1990:51).

73
Sida, Elgstrom (forthcoming) argues that "... Sida's own
structure contributed initially to an acceleration of the
growth of Swedish aid to Tanzania and subsequently as a
break on policy change."
Doctrine, which according to McDermott and Andrew
(forthcoming, p. IV-12) "... consists of a philosophy; what
personnel hold to be true; what personnel value; their work
norms; and attitudes toward their work, the clients, the
program, and institution itself", could either hamper or
catalyze an organization's learning process. Organizational
doctrine which provides the incentive for risk taking,
innovation and discourse, enough latitude or space to
minimize fear of failure or error, for example, is conducive
for organizational learning because it creates an
organizational environment that is information-rich (Hitt,
1975, Alexander, 1982).
Sida's development doctrine prior to the 1980s was very
much influenced by the ideology of the left (Elgstrom,
1992). Ideology is crucial for this study. It is important
because ideology guides actions and defines policies,
programs and strategies to pursue. As it embodies values
and myths, ideology not only sets the basic principles but
also deals with the question of means and ends.

74
Program and budgetary routines are also important
variables of institutional processes. Program involves what
is done, where it is done, how it is done, and how
successful it is (McDermott and Chris, forthcoming). The
last two program attributes should enable us to understand
to what extent the program's mode--project or country
l
programming—as well as intervention level—macro or micro
or both-facilitated or hindered Sida's learning process.
In terms of budgetary routines as an institutional
process, this study mainly focuses on the criteria used to
approve Sida's budget and how the availability of funds
impinged on its learning process. Institutional processes
are somewhat related to what Goldmann (1988) calls "policy
stabilizers.". They have often a tendency of reinforcing
previous policy. This may help explain why Sida made its
decision at the time it did.
Institutional processes are also important because they
define responses open to an organization in respect to its
performance. An organization can deny error, externalize
it, or embrace it (Korten, 1980). According to Korten,
individuals have inclinations toward one or the other.
However, an organization has a tendency to institutionalize
one among the three. In those organizations which treat
errors as indications of personal incompetence, the

75
personnel will develop excellent skills for hiding errors.
This will be the dominant norm in the "self-deceiving" type
of organization.
"Self-defeating" organizations are those that
externalize their errors. They tend to speak openly and in
detail about their organization's errors, showing the
impossibilities or difficulties involved, in accomplishing
their goals. Learning organizations, on the other hand,
embrace error. Members of this type of organization take
error as a source of data for learning and making the
necessary adjustments. They discuss their errors with the
view of improving their performance by seeking solutions to
those errors. Thus institutional processes will enable this
study to situate Sida in terms of its capacity to learn.
Institutional processes are important variables for
successful learning because "The kind of knowledge, skills,
and learning that members of an organization will acquire
reflect the payoff—the incentive—embedded in the
institutional constraints" (North, 1990:74). Therefore,
understanding Sida's institutional processes will reveal the
role these processes played in Sida's learning process. The
foregoing discussion leads us to Sida's learning model, as
illustrated in the chart below.

Figure 2.1 Sida's Learning Model
Independent variables = Feedback knowledge & consensual
knowledge
Intervening variable = Sida's institutional processes
Dependent Variable = Multilateralization

77
I
The model above represents a learning model for Sida.
In the context of this study feedback knowledge is seen as a
relatively formal and established fact, referring to
insights or conclusions about effects of past programs and
projects performance in Tanzania which Sida used to inform
its 1980s policy decisions. Consensual knowledge is
represented by the IMF and World Bank macro-economic reforms
which became the dominant consensual knowledge for Third
World development in the mid 1980s. Sida's institutional
processes include organizational routines (rules,
procedures, and programs), leadership, (budgetary routines,
bureaucratic politics, and ideology through which
conceptions, interpretations, and questioning take place.
We assume that the combination of the above factors and
pseee led to multilateralization which manifested itself in
change of priorities among Sida's aid objectives and
ideology, changes in the nature and volume of its aid, and
shifts in Sida's technical competence and organizational
routines.

CHAPTER 3 '
METHODOLOGY AND DATA COLLECTION
Case Studies
This chapter deals with the process and techniques used
to collect and analyze data for this study. It shows the
strengths and weaknesses of the case study design, and
justifies the use of this design. It also explains why
interviews, focus groups, and document analysis were chosen
as techniques for data collection. This chapter explains
not only the usefulness and shortcomings of each of the
above techniques for data collection, kJut also how combining
these three techniques helped reduce the problems associated
with each one. The process of data collection, including
problems encountered in the field, are also explored.
According to Lijphart (1977) and Yin (1994), it is
important for researchers to understand types of case
studies and their potential contribution to theory building
before they choose a case study design. While Lijphart
(1977) identifies six types of case studies,—atheoretical,
interpretive, hypothesis-generating, theory confirming,
theory infirming, and deviant— Yin (1^94) identifies three-
78

79
-exploratory, descriptive, and explanatory. It is difficult
to fit a research effort into a single type of case study
because most research efforts tend to overlap. For example,
an atheoretical case study and a hypothesis-generating case
study also can fall within either Yin's exploratory or
descriptive case studies. Similarly, a case study can be
both exploratory and descriptive. For this reason, I agree
with Lijphart's (1977) contention that these categories
represent "... ideal types, and any particular study of a
single case can fit more than one ..." (Lijphart, 1977:63).
An atheoretical case study, according to Lijphart
(1977), is a single country or case analysis. It is
descriptive and not guided by a formal theory. It is useful
for basic data-gathering operations which can indirectly
contribute to generalization. In conducting this type of
case study, a researcher is mainly motivated by an interest
in that case situation rather than by theory construction.
â– Interpretive case study, like atheoretical case study,
is also selected due to the researcher's interest in a
particular case rather than theory-building. However, it
differs from the former in the sense that the latter
I
explicitly uses established theoretical propositions.
Generalizations, if at all, are applied only to that
specific case. In fact, the major objective of this kind of

80
study is to throw light on the specific case rather than to
make generalizations. Interpretive ca^e studies are studies
in "...'applied science'. Since they do not aim to
contribute empirical generalizations ..."(Lijphart, 1977:64).
The hypothesis-generating case study, theory
confirming\infirming case studies, and deviant case
analysis, are all selected for the purpose of theory
building. Hypothesis-generating case studies, a kind of
inductive theory generation, are useful for building
theories in a virgin area. In applying hypothesis¬
generating case study a researcher is likely to start with
a more or less vague hypothesis and work on developing
I
hypotheses to be tested in a large number of cases.
Hypothesis-generating case studies have significant
theoretical value.
Theory confirming and theory infirming case studies
involve the analysis of a single case within the parameters
of established theories. Theory confirming and theory
infirming fall under the deductive method. Hypotheses are
drawn from existing theories and tested on that particular
case. It can be limited to a single variable or a number of
variables that relate to existing generalizations. If it
confirms, it strengthens the propositidn and if it infirms,
\

it weakens the generalization. The impact, however, is
marginal.
Deviant case analyses "... are studies of single cases
l
that are known to deviate from the established
generalizations" (Lijphart 1977:64). These types of cases
are chosen to reveal the reasons behind that divergence.
These studies can have great theoretical value, particularly
when used to reveal important variables overlooked in past
studies, as well as reoperationalizing some or all the
variables used in previous studies. They can weaken the
original proposition or suggest a modified proposition that
may be stronger than the original one. However, for the new
proposition to be valid, it must stand a test of more cases.
A deviant, case study, according to Lijphart, may be likened
to an experimental group with the more or less similar cases
constituting the control group. This can only be successful
if there is a clear definition of the deviant case in terms
of its position with regard to both the variables under
consideration and the more or less similar cases.
Thus, hypothesis-generating and deviant case studies
have the greatest value in theory building. While the
former serves to generate new hypotheses, the latter refines
and sharpens existing hypotheses (Lijphart, 1977). This
study falls within the theory confirming/infirming category
I

82
as it builds its hypotheses from existing theories of
learning.
Justification for the Case Study Method
This study uses a case study design because of its
utility in explaining a complex phenomenon. This is in line
with Lijphart's (1971), Feagin, et al's (1991), and Yin's
(1994) assertion that a case study design is more
appropriate when a researcher seeks to explain a complex
course of events as it avails the researcher with a detailed
knowledge of the process. According to Orum, et al (1991),
one of the major advantages of case study design is that it
gives .a holistic analysis of complexes of action and
meaning. They argue that investigators who use the case
study approach have the advantage of a close view of their
subjects. In such situations it is easier to get a sense of
I
what drives their actions and decisions. They write: "A
good case study can provide a full sense of actor's motives
that eventuate in specific decisions and events" (p.10).
The complexity of Sida's policy shifts in the 1980s has
been appreciated by most scholars who have dealt with that
process (see Fruhling, 1986, Karre and Svensson, 1989,
Elgstrom, 1992, Larsson, 1994, and Hyden and Mukandala,
forthcoming). To be able to understand and explain this
complexity, an in-depth analysis of processes which led to
I

83
these policy shifts is necessary. In this respect, case
study analysis is an appropriate design for this study.
Moreover, case study is an important design, not only
for the development and evaluation of public policies, but
also for testing theories (Lijphart, 1971 and Yin, 1994).
According to Johnson and Joslyn (1991:121), the "...
strongest case studies start out with cflearly identified
theories that are expected to explain events. Case studies
are particularly useful for testing hypotheses deduced from
existing theories...." As the previous chapter attests,
hypotheses which guide this study are based on consensual
knowledge of the epistemic community theorists, feedback
knowledge of the organizational theorists and institutional
processes of the students of institutions. In this respect,
this study fits Johnson and Joslyn's (1991) contention as it
attempts to explain Sida's 1980s policy shifts by testing
hypotheses extrapolated from existing ^earning theories.
The importance of case study design for this
dissertation is further increased by the qualitative and
historical approach utilized in this design. Its
sensitivity to time and history makes case study a valuable
design. This is partly because case studies allow the
researcher to examine patterns of continuity and change and
uncover the historical dimension of the phenomenon or

I
84
setting under study. By tracing the development of Sida and
its policy process over time, this study has been able to
generate insights which otherwise would have been
impossible. These insights, as will be revealed in later
chapters, have enriched our understanding of why and how
Sida, having drawn lessons from its own experience and the
experience of others, changed its aid provision policy in
the 1980s. Conclusions drawn in this ^tudy have also gained
more weight from those insights.
Limitations of the Case Study Method
Despite its merits, case study design has been
conceived as inferior in the social sciences (Lijphart, 1977
and Yin, 1994). In fact, researchers who have used this
method have been accused of conducting investigations with
"... in-sufficient precision (that is quantification),
objectivity, and rigor" (Yin, 1994:xiii).
Case study design always comes face to face with the
issue of generalization. This problem,( however, can be
reduced if we take case study to be a process of adding
knowledge to existing knowledge in the field under study.
As Yin (1994:10) writes:
Case studies, like experiments, are generalizable to
theoretical propositions and not to populations or
universes. In this sense, the case study like
experiment, does not represent a "sample" and the
investigators goal is to expand and generalize theories

I
85
(analytical generalization) and not numerate
frequencies (statistical generalization),23
On the issue of objectivity, more often than not, case
study researchers have been sloppy and their findings and
conclusions have been based on biased equivocal evidence
(Yin, 1994). It is not the case design which inherently
allows biased views to influence researchers' findings and
conclusions but rather the way in which investigators
execute the method. Biased views are not limited to case
study alone. They can enter any research design. What is
important, however, is the need for researchers who use case
studies as well as other designs to report all evidence
fairly and objectively (Yin 1994).
A third problem associated with case studies, according
to Yin (1994:10), is that "... they take too long, and they
result in massive, unreadable documents." I agree with Yin
(1994) that people who accuse case study research of this
flaw, confuse specific data collection techniques with case
study design. Data collection techniques such as
ethnography or participant observation naturally take
23According to Yin (1994:30), in "... statistical
generalization, an inference is made about a population (or
universe) on the basis of empirical data collected about a
sample." While analytical generalization is a method in
"... which a previously developed theory is used as a
template with which to compare the empirical results of the
case study. If two or more cases are shown to support the
same theory, replication may be reclaimed."

86
considerably longer and call for more detailed accounts of
observations than other techniques. Case study design does
not necessarily depend upon ethnography or participant
observation data collection techniques. This study, for
example, took only four months and it employs interviews,
focus groups and document analysis.
Reliability Versus Validity
Two questions which are pivotal in all social science
research (case study inclusive) are questions of reliability
and validity. Reliability, according to Carmines and Zeller
(1979), deals with: 1
the extent to which an experiment, test, or any
measuring procedure yields the same results on repeated
trials.... The most consistent the results given
repeated measurements, the higher the reliability of
the measuring procedure; conversely, the less
consistent the results, the lower the reliability" (as
quoted by Johnson and Joslyn, 1991:68).
According to Johnson and Joslyn (1991:70 & 76) "... the
reliability of the measurements used by political scientists
is frequently suspect and seldom demonstrated. Most
measures of political phenomena... are partially accurate."
Despite this acknowledgment, the reliability of case study
/
design is more questionable than other designs. This is
partly because case study depends on a small sample. The
likelihood of getting the same results by replicating the

87
study in a different setting is very small. Recognition of
this fact by case study researchers is very important for
I
avoiding becoming a victim of "ecological fallacy" (Bernard,
1994) ,24
Validity, according to Bernard (1994:38), is the "...
accuracy and trustworthiness of instruments, data and
findings in research." In terms of validity, case study
design is superior to other methods of investigations such
as experimental method and .surveys (Orum, et al, 1991).
This is so particularly because this approach uses a number
of data collection techniques to prove the same case. This
study, for example, uses interviews, focus groups, and
document analysis as its data gathering methods. It is this
"triangulation of sources", if I may use Orum, et al's
words, which improves the validity in the case study design.
Having chosen a case study method, a crucial issue for
the success of this study remains the elimination of
competing explanations. With regard to the study of Sida,
two approaches—the contextual approach and bureaucratic
24Ecological fallacy is the result of making conclusion
about the wrong unit of analysis. In most cases, it occurs
by drawing generalizations about peoplé from data about
groups (Bernard, 1994). It is important for researchers to
ensure that the unit of analysis of the measures and the
hypothesis are matched (Johnson and Joslyn, 1991).

88
politics—are perhaps the strongest potential rivals to
learning theory.
The contextual approach contends that knowledge about
domestic and international environments of decision making
is crucial for an understanding of policy choice. Domestic
and international factors become the central focus of the
study. This study accepts the fact that the context into
which Sida's policy decision took place is very crucial for
the understanding of what lessons were learned, and from
what sources. To accomplish this, the dissertation examines
the extent to which Swedish economic performance, changes in
political leadership, and changes in Swedish public opinion
about foreign aid affected Sida's policy shifts in the
1980s25. The reasoning employed in this study views the new
I
consensual knowledge in the development field (as
represented by the IMF and World Bank policy outlook since
the early 1980s) as an international contextual factor.
As discussed above, bureaucratic politics for the
purpose of this study, however, is limited. It is important
in understanding what is going on within the organization.
The examination of Sida's .institutional processes (which set
parameters for bureaucratic politics) and the results of
interviews conducted in Sweden have enabled this
25For further detail see Chapter Fóur

89
dissertation to establish the extent to which bureaucratic
politics influenced policy shifts by Sida, as will be
revealed in Chapter 5. In general terms, data used in this
study reveal that both bureaucratic politics and domestic
contextual factors were clearly less significant than
learning for the 1980s Sida policy shifts toward Tanzania.26
Sampling and Data Collection
Sampling
The data for this study were collected for about four
months. One month was used to explore literature about
Swedish aid at the University of Florida libraries
(September, 1996) and about three months (October -
December, 1996) were used to collect data in Sweden. Forty
interviews were conducted in Sweden.
The first ten days in Sweden were (used to read some of
the documents dealing with the question of interest to this
study. These documents were easily accessible at Sida
library. During this time we also studied the structure of
Sida and sampled respondents.
Sida is made up of fourteen departments. Five are
sectoral departments, five are regional departments, three
are staff function departments, ( Policy, Evaluation and
26For more detail see Chapter Four and Five
l

90
Information) and there is an administrative department.
Three people from each of Sida's sectoral departments and
two regional departments for Africa were selected. Also
selected were three people from the Policy as well as the
Evaluation department and one from the Information
department. The researcher also selected one head of unit
from the Asian region and a head of department from the
Latin American region. These two respondents were picked to
cross check the scope of the 1980s Sida policy shifts.
People from the administration department, and Central and
Eastern Europe department were not interviewed because they
were not particularly relevant to our study.
This study used Sida's telephone directory to select
people for interview. The internal telephone directory was
convenient because all employees are listed under the
units/divisions they belong to within each department. Each
department is listed with the head of t^he department at the
top followed by heads of units/divisions, and followed by
desk officers. This made the random selection of the sample
an easy task.27 Random selection applied to head of units
and desk officers as each department has only one head.
27Heads of departments could not be randomized because
there is only one head in each department.

I
91
Data Collection
This study uses a combination of interviews, focus
groups, and document analysis as data collection methods.
This section discusses each of the three data collection
methods' showing their strengths and weaknesses. It also
explains how each method was used.
Interviews
Both structured and semi-structured interviews were
l
conducted28. With respect to structured interviews, each
informant was exposed to the same ten sets of questions.
This was done to enable a reliable comparison of responses
between individuals and among categories to which they
belonged. The semi-structured part allowed the researcher
to ask questions which were more specific to an
interviewee's work. All interviews were administered in
person by the researcher.
The questions used in this study were both closed-ended
and open-ended (see appendix, 6). Closed-ended questions
were used in situations where the researcher wanted to
provide respondents with a uniform frame of reference in
answering particular questions. This uniformity made
answers provided by respondents easy to compare. It is
28Questions used in this study are provided in
appendix, 6.

I
92
always easier to code data from closed-ended responses than
information from open-ended responses.
In writing closed-ended questions, it is important for
a researcher to ensure that "... (1) they are not biased,
(2) all possible opinions are counted for, and (3) none of
the answer categories overlap" (Weisberg and Bowen,
1977:49). This study used a pretest interview in an attempt
to cross check and where possible minimize them.
Pretest interviews were conducted with a few
respondents before the full blown interviews began. This
enabled a partial check for the problems of intrusiveness
and reactivity associated with face-to-face interviews, as
well as those linked with closed-ended questions as
identified by Weisberg and Bowen (1977). In fact, after the
preliminary interviews, both the structure and content of
some of the questions were reworked.
In addition, advanced preparation was helpful in
removing questions whose answers could be obtained from
other sources. By the time full blown interviews started
the questions had been reduced by one third. This helped a
great deal particularly with respondents who assigned less
than an hour for the interview. Pretest also helped the
researcher to become acquainted with the terminologies used
in development circles.

93
The questionnaire used involved yds/no, rank ordering,
and rating types of questions. In terms of rating,
informants were asked to rate on a scale of one to three the
importance of given factors (including learning) in
influencing the 1980s Sida's policy shift to Tanzania. This
enabled us to get from insiders the causal explanation for
the 1980s Sida policy shifts. In rank ordering, for
example, informants were asked to rank in order of priority
what they believed to be the three major causes of the 1980s
Sida policy shift to Tanzania. This enabled the study to
establish what was the major cause for the 1980s Sida policy
shifts. Face-to-face interviews were beneficial in probing
about the process which lead to Sida's policy shift to
Tanzania.
While closed-ended questions provided short answers,
the open-ended, and the semi-structured section played an
important role in soliciting detailed accounts of the
answers provided' by informants: In fact, it allowed this
researcher to ask detailed questions which would have been
difficult to do with other data collection techniques.
Therefore, a combination of structured and semi-structured
l
interviews together with open- and closed-ended questions
were very useful in providing valuable data for this study.

94
The majority of the interviews were one hour long.
However, three of the interviews were thirty minutes each
l
and two others were three hours each. It would have been
almost impossible to get informants to complete a two to
three hours questionnaire as most of interviewees were
extremely busy finalizing their annual reports because
Sida's fiscal year ends December 31st. The three hour
interviews were possible because the respondents were
retirees as well, as kind enough to avail me with a lot their
experience, let alone their time.
Face-to-face interviews can be time and resource
consuming. Locating, scheduling, as well as interviewing
respondents requires a lot of time. FcJr this study,
however, it was not a problem because most of the
respondents were working in the same organization and were
linked together by both e-mail and telephone systems.
Therefore, it was easy to locate and to communicate with
them within a short time. This study provided the
respondents a window of sixty days in which to scheduled one
hour interview.
The head of the department, one head of unit or
division, and a desk officer were interviewed in each
department. The researcher also interviewed two people at
the ministry of foreign affairs, two former Sida directors,

95
and two prominent people who have been critical of Swedish
aid for more than fifteen years. Interviews with retired
directors provided insights on how thinking within Sida's
top policy makers changed over time, tfye lessons learned in
different periods, and how these lessons were translated
into policy. Six people working directly with Tanzania were
interviewed.
Most interviewees were open, kind, and friendly. They
gave the researcher almost all the information wanted.
Some of them referred, and in fact arranged for, the
researcher to meet other people who were more informed on
certain issues. Some gave the researcher books and
pamphlets with information. Some even made photocopies for
the researcher which attest to their kindness and support to
/
this research.
All notes were taken on special forms containing
questions asked. Two to three interviews were conducted per
day. After each interview (where possible) the researcher
sat down and rewrote all the notes. On two or three
occasions it was impossible to rewrite the notes at the end
of each interview because of the tight schedule.
Document Analysis
Various archival records were used to complete this
study. Sida's current records, including policy documents,
/

96
evaluation records, aid figures, working papers,. reports,
books., newspapers, and Other relevant accessible documents
were examined. Most of these documents were available
through Sida's library and the evaluation unit library. The
researcher also visited the main library at the University
of Uppsala and the library of the Nordic Institute for
African Studies, also in Uppsala. The material in these
libraries is carefully stored and easily accessible.
It was easy for the researcher to retrieve information
from the archives. The archival information covers the
entire period of Swedish aid to Tanzania—1965 to date.
These factors served this study with time and resources.
Document analysis made it possible to obtain information
which other methods could not provide, including figures and
some insights about events in the 1960s and 1970s. This
study uses both quotations and data frc^m those records to
support its findings. Archives also helped to counter check
the validity of responses from interviews. For example, if
people say lessons from experience was a major cause, we
asked them what lessons did Sida learn. On the basis of
this we traced the documents to see if those lessons appear
in policy recommendations.
â– The major problems associated with document analysis
are selective survival, incompleteness, availability, and
l

97
lack of a standard format (Johnson and Josyln, 1991). These
were not a major concern for this study as most of the data
were complete and easily accessible. The one major problem,
however, was that some documents were written in Swedish.
An interpreter helped the researcher with the translation of
the important documents. Other techniques—interviews and
focus groups—helped this study to verify translations and
to supplement and counter-check data obtained from document
analysis.
Focus groups
A focus group is "... the explicit use of group
interaction to produce data and insights that would be less
accessible without the interaction found in a group"
(Morgan, 1988:12). Given this reasoning, focus groups
techniques are not limited to exploratory or feasibility
studies alone. They can be used at any time in the research
process. Focus groups also can be used solely or in
I
combination with other methods.
According to Stewart and Shamdasani (1990:15), focus
groups are useful for:
1. obtaining general background information about a
topic of interest; 2. generating research hypotheses
that can be submitted to further research and testing
using more quantitative approaches; 3. stimulating new
ideas and creative concepts; 4. diagnosing the
potential for problems with a new program, service, or
product;. 5.- generating impressions of products, .
programs, service, institutions or other objects of

I
98
interest; 6. learning how respondents talk about the
phenomenon of interest. This in turn may facilitate the
design of questionnaires, survey.instruments, or other
research tools that might be employed in more
quantitative research; and 7. interpreting previously
obtained quantitative results.
This study used focus' groups mainly as a tool to
facilitate the interpretation of data collected from other
sources. Focus groups were also used to learn how
respondents talk about issues pertaining to their
l
organization's past performance. This was crucial because
in learning organizations employees embrace mistakes and
take them as a motivation for learning (Korten, 1980 and
Caiden, 1991).
Justification for Using the Focus Group Method
Most scholars discuss the advantages of focus groups
relative to other methods (.Morgan, 1988). Focus groups as a
method of data collection stand in the intermediary position
between the two most common methods of data collection--
individual interviews and participant observation. For that
matter, focus groups are more flexible (and can easily
function across traditional boundaries (Morgan, 1988,
Stewart and Shamdasani, 1990, and Bernard, 1994).
This study organized its focus group around six issues.
These issues emerged from the analysis of data obtained by

99
other techniques as well as from issues raised in the
hypotheses.
1. Identification of lesson learned and its associated
shifts in policy and strategy and time of occurrence.
2. The future of Swedish aid.
3. Ranking in order of importance factors that
influenced 1980s Sida policy shifts.
4. The impact of Swedish economic and political
environment on Sida's policy shifts.
5. Changes in sectoral distribution of Swedish aid to
Tanzania
6. Interpretation of changes in volume of aid to
Tanzania.
Focus groups enabled access to data concerning these
questions much more quickly and at a less cost than would be
the case if each individual were interviewed separately. It
also enabled the researcher to obtain insights on how people
feel when discussing sensitive issues particularly failures.
In fact it enabled us to get "... deeper levels of meaning,
make important connections, and identify subtle nuances in
expression and meaning" (Stewart and Shamdasani, 1990:16).
These were important to cross check findings from interviews
to see the extent to which Sida officials deny, externalize
or embrace errors.

100
Focus group also provided an opportunity for informants
to react to and build upon others' responses as well as to
qualify their responses and give contingent answers to
questions. These facilitated the generation of data or
ideas that otherwise could not be obtained. Focus group
also provided a researcher with an opportunity "... for
clarification of responses, for follow up questions, and for
the probing of responses" (Stewart and Shamdasani, 1990:16).
Disadvantages of Focus Groups
Despite their merits, focus groups have their own
limitations. Most of the limitations are the negative
effects of their strengths. Some of the major limitations
of the focus group technique include less control by the
moderator over the information generated (Morgan, 1988) as
i
well as the group can veer off the topic of interest without
the moderator's intervention. With regard to this study
there were no major problems as issues for discussion were
written and distributed to participants one by one. This
also helped to reduce the moderator's bias particularly that
of giving a clue about the kind of responses that are
required.
Another limitation is that focus groups are often
constituted in an artificial setting. As such, the group
effects on individual and vice versa should not be
I

101
overlooked. In certain circumstances, for example, an
individual member of the group can dominate the discussion
while more reserved participants may not talk freely in
front of the group. This study used a combination of
discussion and writing to reduce this problem.
i
The number of participants in a focus group is very
important with regard to reducing this problem. As Stewart
and Shamdasani (1990:10) argue, "Experience has shown that
smaller groups may be dominated by one or two members, while
larger groups are difficult to manage and inhibit
participation by all members of the group."
According to Morgan (1988), the lowest limit in size of
a focus group is four and the upper limit is twelve. In
most cases, small groups are less productive and more costly
as they are more sensitive to the dynamics among individual
participants (Morgan, 1988). This study used a six member
focus group. The group was made up of Sida officials who
are working (or had worked) with Tanzania in Stockholm.
This study used only one focus group because it was needed
only for clarification and discussion of certain issues.
The focus group discussion took about two hours.
The focus group was used as a follow up to interviews
and documentary data. In doing so, the focus group
facilitated the exploration and interpretation of issues
i

102
that arose from the analysis of interviews and documents.
It also added some insights and clarifications to responses
obtained with the other two methods. In this respect, then,
the focus group technique served as a supplement to the
other methods.
Data Analysis
Some of the data collected is organized into simple
statistics. In other words, graphs, tables, charts,
percentages, etc, are used to organize data for this
dissertation. The analysis and interpretation of data
gathered are based on descriptive statistics and historical
accounts
Assessments
A combination of data collection techniques--
interviews, focus groups and document analysis-- enabled us
to get rich and insightful information about the subject of
this study. It also helped to reduce the problems
associated with each of the techniques. The process of data
collection showed the researcher that the use of a focus
group to countercheck some of the issues arising from other
methods is a great idea. This enabled the research not only
to clarify some of the key issues but also to get

103
interpretation from insiders as well as the feelings and
emotions of participants as they engage in discussion.
This study has also taught us the importance of pretest
and reading documents before full blown interviews
particularly when conducting elite interviews. This is
important because it can help save research time and
resources.
Language was a major limitation to data collection for
this study. However, an interpreter helped with
translation. Moreover, documents written in English, and
interviews with employees helped to reduce this problem to a
significant extent. This was so because all of the
interviews were conducted in English.
Another limitation is that data used in this study were
collected in 1996 to infer the process which took place in
the 1980s. However, this problem is reduced by the fact
that most people interviewed were working with Sida or other
Swedish aid agencies in the 1980s. Besides, we were able to
interview more than ten Sida's top leaders including the
Sida's Director General of the time of these changes.
Generalization of these findings to other cases is
another limitation. However, we can generalize them to
theoretical propositions employed in this study. The
findings are supportive of the importance of feedback,

104
consensual knowledge and institutional processes in the
learning process of international development agencies.

CHAPTER 4
THE DOMESTIC CONTEXT OF THE 1980s SIDA POLICY SHIFTS
Introduction
This chapter discusses the domestic environment of
Sida's policy shifts in the 1980s. It focuses on four major
variables: the position of Sida within the Swedish
government hierarchical structure and its implication for
Sida's decision process; changes in the national political
leadership; changes in Swedish public opinion about foreign
aid; and the decline in Sweden's economic performance since
the late 1970s and its implications for the volume of aid.
All these variables are discussed within the context of Sida
policy shifts in the 1980s.
Swedish Aid Administration
The Parliament
The Swedish political system allows a considerable
degree of delegation of authority. The parliament
(Riksdagen) , for example, has delegated to the government
the power of policy making. The cabinet, which is the
highest government body in the country, is the center for
policy making. This is particularly true when the
105

106
government of the day has a clear majority in the
parliament.
In situations where the government of the day has a
limited majority, the locus of power remains the
parliament.29 However, even under such circumstances the
cabinet remains the highest planning and administrative body
in the country (Lindstrom, 1983) . Despite delegating its
authority for policy making to the government, the Swedish
parliament maintains its power to approve or disapprove
policies. In most cases, these policies are initiated
outside the parliament (Heclo and Madsen, 1987). With
respect to foreign aid, the parliament "... decides the
annual foreign aid budget and the financial frame for each
program country, it defines and decides the general foreign
aid policy objectives, and which areas are to be prioritized
in aid cooperation" (Elgstrom, 1992:54).
The Cabinet
The cabinet, which is the highest government body works
with different central agencies in ensuring government
activities are carried out in accordance with legislation.
Although each of these agencies operates under a specific
ministry, they hold a substantial amount of power. These
29In the period between 1976 and 1982 the government in
power sometimes had only one more seat then the opposition.

107
agencies are expected to act as autonomous bodies in the
area of their jurisdiction. As Elgstrom (1992:56) asserts:
The central agencies are independent of the ministries.
Their function is to faithfully implement the decisions
of Parliament and Government, but on their own
responsibility. According to Swedish practice,
ministers are not supposed to "give orders" to an
agency, at least not as regards to specific cases.
The relatively high autonomy invested in central
agencies is supposed to increase efficiency and
accountability. It is also expected to make these agencies
more flexible in conducting their business. Moreover, it
allows central agencies to make use of their expertise in
the area of their specialization with minimum political
interference. This is in line with the acknowledgment of
the importance of decentralized structure in organizational
learning as put forward by most organizational learning
theorists (Alexander, 1982, Sabatier, 1988, and Argyris and
Schon 1996). In fact, the decentralized structure of
Swedish government creates an enabling environment for its
central agencies to learn.
In dealing with bilateral aid, for example, the
cabinet, through the Ministry for Foreign Affairs, mainly
depends on Sida. Sida is expected to prepare, plan,
implement, and evaluate all programs for the bilateral
cooperation. In conducting its duty, Sida prepares and

108
submits development program proposals to the parliament via
the Ministry for Foreign Affairs for approval and financing.
The Ministry for Foreign Affairs
In the Ministry for Foreign Affairs there is a specific
minister dealing with development cooperation. This
minister is assisted by an Under-Secretary. Within the
Ministry for Foreign Affairs there is an office for
international development. This office deals with Swedish
multilateral aid. It also deals with the preparation of
broad government policies about Swedish aid.
When the office for international development was
created in the early 1970s, an antagonistic relationship
emerged between Sida and the Ministry for Foreign Affairs
over the line of responsibility. By the end of that decade,
however, most of these issues were already resolved.
Moreover, some of the people who were employed early on by
Sida moved to the Ministry. This smoothed the relationship
between Sida and the Ministry. While the amicable
relationship between Sida and the Ministry for Foreign
Affairs facilitates Sida's decision process, it is by no
means clear that Sida's decisions sail through without
critical examination by the Ministry. In fact, although
most of Sida's decisions have been accepted with less
controversy, a few have been blocked or returned to Sida for

109
adjustments (Elgstrom, 1992) . Nevertheless, the cordial
relationship between Sida and the Ministry for Foreign
Affairs works in favor of Sida's policy decisions.
Sida
Sida is headed by a Board of Direqtors. Members of the
Board are chosen from representatives of political parties,
trade unions, industry, and non-governmental organizations.
Representatives from Sida are also on the Board. The
government is responsible for appointing members of Sida's
Board of Directors.
Members of the parliament who are on Sida's Board of
Directors, in most cases, are also members of the
Parliamentary Committee on Foreign Affairs. This is the
committee which examines government proposals from the
Ministry for Foreign Affairs and makes recommendations to
1
the parliament for final decisions.
The fact that most members of the parliament who are in
Sida's Board of Directors are also members of the Committee
for Foreign Affairs of the parliament which scrutinizes
foreign aid issues is advantageous to Sida's policy
decisions. In fact, these members of Parliament are likely
to help clarify or defend Sida policy decisions during
parliamentary deliberations as they feel they are part and
parcel of those decisions.

110
In most cases, the Director General of Sida is the
chairman of the Board and has great influence in political
decisions. Karre and Svensson (1989:269) write, "... a
director-general—normally the president of the Board--has a
potentially powerful political base at his disposal, which
J
can be used to exert considerable influence on political
decisions".
The Director General is assisted by Assistant Director
Generals who are also heads of departments. Below them are
heads of units or divisions who work with desk officers.
The Director General and his Assistant Director Generals
form a management committee which meets once a week for
consultation and discussion of issues ranging from policy to
daily business. The decision process and the relationships
between Sida and both the Ministry for Foreign Affairs and
the parliament is best illustrated by the budget process.
The Budget Process
Sweden's fiscal year used to run from the 1st of July
to the 30th of June. In January 1997, however, the fiscal
year was changed to fit the calendar year. All government
agencies are supposed to submit their budget proposals to
their respective ministries no later than March 31st of the
current year.

Ill
Thus, Sida prepares its budget proposal and submits it
to the Ministry for Foreign Affairs by March 31st of the
current year. While most, if not all, public agencies use
the previous year's expenditures as the basis for their
current budget proposal, Sida uses the year prior to the
current year to build up its budget proposal. This is
because by the time Sida submits its proposal to the
ministry, implementation of the current year in developing
countries has just begun.
The Ministry for Foreign Affairs examines Sida's budget
and includes it in the ministry's budget proposal. The
budget bill for development assistance is discussed by the
Parliamentary Committee for Foreign Affairs. During the
deliberations of this committee, Sida and the Ministry for
Foreign Affairs are all represented. The committee then
submits its report to the Parliament for final decision.
Development assistance issues are discussed in October or
November. After Parliament's approval, the government
officially informs Sida about its budget. The
responsibility for ensuring Swedish aid is used in
accordance with Swedish objectives is left to Sida. In
other words, Sida is the real manager of the bilateral aid.

I
112
Sida's Structural Change
Sida has gone through three major structural changes
since the early 1970s; the 1995 change, is the most
extensive. In the early 1970s, Sida underwent the first
major structural change. A Board of Directors for Sida was
established for the first time and Sida was divided into ten
departments. These structural changes were aimed at
increasing Sida's technical competence in handling huge sums
I
of money and facing the challenges of development in Third
World countries.
In 1986 Sida was restructured to consist of five
departments, ten divisions, three secretariats, and sixteen
development cooperation offices(DCOs). These DCOs are
located within Swedish embassies in the countries receiving
bilateral aid from Sweden. . DCOs are mainly responsible for
coordinating, implementing, monitoring and reporting to
Sida's headquarters about Sida's programs in developing
countries. DCOs were expected to enhance Sida's feedback
process and in so doing enhancing Sida 'learning capacity as
well as the policy process.
In 1995 Sida underwent a third major structural change.
Sida incorporated within its wings all other Swedish aid
agencies—The Swedish Agency for Research Cooperation with
Developing Countries (SAREC), The Swedish Fund for

113
Industrial Cooperation With Developing Countries (SWEDFUND) ,
The Swedish Commission for Technical Cooperation (BITS), The
Import Promotion Office for Products from Developing
Countries (IMPOD), and the Swedish Board for Education in
International Development (NU). These agencies have become
either separate departments or units of Sida. This merger
was designed to remove duplication of projects, increase
coordination and thus the efficiency of Swedish aid.
The structural changes which Sida has undergone so far
by themselves show how flexible and responsible Sida is in
enhancing its capacity to deal with development programs.
In fact, these structural changes have given Sida all the
expertise and flexibility it needed to effectively deal with
development programs. There is no other organization in
Sweden that can match Sida in its expertise on bilateral
aid. In most cases, the expert advantage has given Sida a
cutting edge in bilateral policy debates and decisions in
Sweden.
One can argue that the composition of Sida's Board of
Directors (with some of the members of the Parliamentary
Committee on Foreign Affairs and representatives from the
Ministry of Foreign Affairs as its members), the expertise
of Sida's bureaucracy on bilateral aid (Sida has the most
experienced bureaucracy on development aid of any

114
institution in Sweden), and the cordial relationship that
exist between Sida and the Ministry for Foreign Affairs are
likely to make the decisions of Sida's Board of Directors
highly influential on governmental and parliamentary
decisions. Moreover, the autonomy Sida enjoys (the Swedish
tradition does not allow the minister to "give orders", at
least not with regard to specific cases) make it unlikely
that the 1980s Sida's policy shifts were imposed from above.
In fact, some of the interviewees said that the government
was not pleased with Sida's policy shifts to Tanzania.
Despite this, the government never asked Sida to reverse its
decision.30 This is the potent result of Swedish tradition
which does not allow government to intervene in the business
of its agencies, although this was a significant shift in
policies. This clearly shows that hierarchical structure
had little influence on the 1980s policy shifts.
Swedish Aid Politics
Most scholars who have attempted to deal with Swedish
politics have stressed the centrality of consensus. Taggart
(1996:3), for example, argues that Swedish politics "... has
always stood as a by-word for consensué." Heclo and Madsen
(1987) assert that the Swedish culture, with its emphasis on
^Questionnaire number 35

115
consensus, compromise and pragmatism, is the foundation of
the structure of the political system. 1
In order to understand Swedish aid, one has to have a
knowledge of Swedish politics. The Swedish political system
is dominated by seven political parties: the Leftist Party
(formerly the Communist Party); the Social Democratic Labor
Party (SDLP); the Green Party; the Liberal Party (LP); the
Center Party; the Christian Democrats; and the Moderate
Party (MP). The SDLP, has ruled Sweden for about sixty of
the last seventy-five years. During this period, Swedish
Cabinets were mainly dominated by the Social Democrats
(Elgstrom, 1992). (
This is an important point because Sida, as an agency
for development cooperation, was established by the Social
Democratic government. In fact, the government fell to a
non-socialist coalition more than a decade after Sida was
established. Even at that time, the Ministry for Foreign
Affairs was still dominated by people who were committed to
foreign aid.
Development aid has been important in Swedish politics
as most political parties (including the non-socialist)
support it, albeit for different reasons (Andersson, 1986).
i
To the Liberal Party, for example, aid is very important
because it is supported by the interests of its

116
constituents. Being supported by religious and other
moralistic organizations, the Liberal Party sees assistance
to poor people as a moral duty. The Leftist Party supports
l
foreign aid for ideological reasons. In fact, it would like
to see more aid given to countries pursuing left-wing
policies.
To conservatives, being primarily the wealthier
segment, foreign aid is seen as supporting private
enterprise. When conservatives were in power, in 1979 they
established SWEDFUND to pursue that interest. The Center
Party favors increasing Swedish food aid as it mainly
represents the agrarian population. For the Social
Democratic Party, comprised mainly of the working people,
international solidarity is a driving ¿orce. Thus, although
all Swedish political parties support development aid, they
do so for very different reasons.
Swedish Aid: The Guiding Principles
The 1960s could be characterized as years of setting
and defining the parameters of Swedish aid in Swedish
politics. The bill 100 set the stage for systematization of
Swedish aid. Issues concerning the amount of aid, the
nature of the programs, and the question of whose priorities
should determine Swedish aid commitments were at the center
of foreign aid debates in Sweden. By tjhe mid 1970s,

117
however, the debates had settled and a consensus had emerged
establishing three basic principles of Swedish aid. Sweden
designated one percent of its GNP to foreign aid as a
principle. In fact, Sweden went further to set a schedule
for reaching the one percent target. I
Country programming instead of project and sector
programming was established as a rule to guide Swedish
development projects in the early 1970s. Country
programming required commitments to be made for several
years. It also increased flexibility in choosing programs
on the part of both recipients and donors. Donors and
recipients had room to manouvre programs within the
framework of existing financial commitments. Sida's
commitment time frame was three years.
The switch from sector to country programming had a
considerable impact on the Sida decision process. According
to Edgren (1986:50):
programme management within Sida became more
decentralized to the country field offices, ... With the
introduction of country programming they became
responsible for identifying new projects as well as for
providing headquarters with virtually all the material
on which strategic considerations in the country
programs were based.
A third principle guiding Swedish aid was what
Jellinek, et al, (1984) called a "recipient-oriented" aid
policy. According to them, this principle meant "the
l

118
recipient countries decide how to use their aid."(p.382).
In other words, the recipient countries were more or less
treated as equal partners in determining the forms and
substance of aid. The country programming approach, which
was adopted by Sida in the early 1970s reinforced this
principle. I
All of these principles were adopted under the Social
Democratic government. When the non-socialist governments
were in power in the second half of the 1970s and early
1980s, they did not nullify them, although country
programming underwent some modifications. While the Social
Democratic government conducted their aid business through
country programming, the non-socialist government
established other agencies which conducted their business
outside country programs. Projects with Swedish commercial
interests, for example, were pursued by SWEDFUND and BITS.
i
Another feature of Swedish aid politics in the 1970s
was its stand against the Bretton Wood institutions of whom
Sweden became increasingly critical. Sweden was concerned
about the role of developing countries in decisions, the
extent to which Swedish goals were represented by those
institutions, and the administrative efficiency of those
agencies (Jellinek, et al, -1984). This made Swedish aid
relatively different from the major western donors.
i

119
Swedish Aid Versus Changing Government Leadership
After more than 40 years in power, the Social
Democratic party was defeated in the 1976 election by a
coalition of three non-socialist parties (Center, Moderate
and Liberal).31 The Center Party provided the prime
minister. The coalition was not very stable and broke up in
1978 after disagreements on nuclear energy policy. A
liberal minority government was established. In the 1979
election, the Social Democratic Party was defeated once
again. The 1976 non-socialist coalition was re-established
but not for long. In 1981 the coalition collapsed over
taxation policy. The Center and Liberal Parties remained
in government while the Moderate Party resigned.
After the establishment of one percent of GNP as a goal
for Swedish aid in 1969, Sweden worked toward achieving that
goal by the end of the 1970s. Development aid allocation as
a percent of GNP increased from .45 percent in 1970/71 to
.89 percent in fiscal year 1975/76, while the actual
disbursement increased from .40 percent of GNP in 1970/71 to
.82 percent in 1975/76. An interesting aspect of Swedish
aid is the fact that the amount of money not disbursed is
31This happened eleven years after the Swedish-Tanzania
development cooperation was established. It was also eleven
years .after the establishment of Sida.

/
120
kept in a special reserve account. It is not re-allocated
for other businesses in Sweden.
In the period between 1971/72 to 1976/77, Swedish
Official Development Aid (ODA) allocation averaged .71
percent of GNP, with disbursements averaging .62 percent of
GNP. The Social Democratic Party was in power during this
period. 32
When the non-socialist coalition was in power between
1976 and 1981, the amount which Sweden(allocated for
development aid averaged .91 percent of GNP (see table 4.1
below). The amount disbursed averaged .83 percent of the
GNP. The non-socialist coalition in short"... neither
challenged Social Democratic hegemony nor altered any
established government program... " (Rothstein (1987: ).
The Social Democratic Party regained power in 1982
following its election victory. With the support of the
Communist Party, the Social Democratic Party was able to
form a relatively stable government. The 1985 election was
also won by the Social Democratic Party. In the first six
i
years of the Social Democratic government (1982-88) the
32It would be unfair to compare the 1971/72-1976/77
Social Democratic government's official development aid
allocation and disbursement as a percentage of GNP with the
non-Socialist Coalition government's 1977/78-1982/83
allocation and disbursement because in the early 1970s
Sweden was working toward reaching the one percent of GNP
goal.

121
I
amount allocated to development aid on average was about .89
percent of the GNP while the disbursed amount averaged .81
percent of GNP.
The Social Democrats also won the 1988 election. An
interesting issue in the 1988 election was that the Greens
were able to get more than 4 percent of the total votes and,
for the first time, gained .representation in the
Parliament.33 The 1988 election also saw the Social
Democrats forming a minority government with the support of
the Communist Party. During their three year term in office
(1988-91) , the Social Democratic goverriment allocation to
foreign aid averaged .93 percent of GNP. The amount
disbursed in this period averaged about .92 percent of GNP.
After nine years in power, the Social Democrats were
defeated in the 1991 election. The Greens did not win
parliamentary representation in this election. A four party
coalition of non-socialist parties took over. The
Christian Democrats, a newcomer to the parliament, joined
the coalition. When the non-socialist coalition was in
power in 1992-94, the amount allocated for development aid
averaged .92 percent of GNP; disbursement averaged .91
percent of GNP.
33In Sweden, a political party is required to have at
least 4 percent of the total votes to have representation in
the parliament (Riksdagen)

122
The Social Democratic Party returned to power in 1994.
What happened to the Greens in 1991 also happened to the
Christian Democrats in 1994. An interesting issue here is
that while the two new parties—the Greens and the Christian
Democrats—were able to challenge the hegemony of the five
parties in the Swedish politics in 1988 and 1991,
respectively, neither of these two parties won parliamentary
representation in the subsequent election. This is partly
attributed to the fact that by joining a coalition
government these parties compromised some of the issues they
campaigned for. As a result they lost a number of voters in
subsequent elections.
Table 4.1 The Allocation and Disbursement Aid as a
Percentage of GNP versus the Type of Ruling Party.
As % of
GNP
1971/72-
1976/77
SD-Gvt**
1977/78-
1982/83
NSC-Gvt*
1983/84-
1988/89
SD-Gvt
1989/90-
1991/92
SD-Gvt
1992/93-
1994/95
NSC-Gvt
Average
alloca¬
tion
.71
. 91
.89
. 93
. 92
Average
disbur¬
sement
. 62
.83
81
. 92
. 91
*NSC-Gvt = Non-Socialist Coalition Government
**SD-Gvt = Social Democratic Government
Source: Computed from Sweden's Development Assistance in
Figures and Graphs, 1994/95.

123
An interesting issue arising from Table 4.1 is that
comparing the period between 1976 and 1981 when the non¬
socialist coalition was in power and 1982-88 when the Social
Democrats were in power, the non-socialist coalition's
allocation and disbursement to development aid on average
was .2 percent of GNP higher than that of the Social
Democratic government. However, in the periods between
1988-91 when the Social Democrats were in government and
1991-94 when the non-socialist coalition was in power, the
Social Democratic allocation and disbursement were on
average .1 percent higher than that of the non-socialist
coalition. This shows, therefore, that the difference
between change in Swedish political leadership and the
amount allocated or disbursed to development aid is
negligible.
A more interesting issue is the fact that the 1980s
Sida's policy shifts did not happen under the non-socialist
coalition. In fact, the non-socialist coalition has taken a
stronger pro aid position while in government than when out
of government (Karre and Svensson, 1989). No wonder the
1980s shifts occurred under the Social Democratic
government, the government which established Swedish-
Tanzania development cooperation in particular and Swedish
development cooperation at large.

124
The above analysis, together with observations by most
scholars who have studied Swedish aid politics (Heclo and
Madsen, 1987, Rothstein, 1987, Elgstrom, 1992, and Taggart,
1996) shows that the non-socialist coalition did not change
aid policies and principles which were established during
the reign of the Social Democrats. This attests to the fact
that change in political leadership had limited, if any,
effect in the 1980s Sida's policy shifts.
Swedish Aid: What the Public Savs
The role of public opinion on Swedish policy process
has been acknowledged by most students of Swedish politics
(Heclo, 1973, Kazenstein, 1985, Heclo and Madsen, 1987, and
Taggart, 1996). With regard to development assistance,
public opinion has been an important resource. This is
particularly true as political parties, including the non¬
socialist parties, base their aid policies on the
electorates. As Andersson (1986:35) writes.
It is interesting to note how the non-socialist
parties, even in the early days of Swedish development
assistance, based their aid policy on the interests of
their respective electorates.
Tampering or compromising the interests or opinions of
the public have cost a number of parties electoral votes.

125
The failure of the Greens and the Christian Democrats to win
representation in subsequent elections attest to this fact.
In other words, when the Greens and Christian Democrats
joined the ruling coalition, they compromised some of the
issues they campaigned for. As a result, a lot of voters
l
deserted them in the subsequent election.
An excellent example occurred in the early 1980s. In
1984, the Social Democratic government tabled a proposal to
reduce the one percent Swedish Official Development Aid
(ODA) share. According to Karre and Svensson (1989), the
proposal met strong opposition from the National Federation
of Social Democratic Women, the Swedish Association of
Christian Social Democrats, and the Social Democratic Youth
League. Outside the Social Democratic Party, the Communist
Party, the Center Party, and Liberal Party mounted a strong
opposition against the proposal. By 1985 the proposal was
abandoned. Thus, although it is difficult to establish a
direct causal relationship between public opinion and policy
change, generally it may be argued that public opinion is an
important factor in Swedish aid decisions.
Although public opinion has been influential on some of
Swedish aid decisions, its influence was marginal, if any,
in th'é 1980s Sida's policy shifts. Public opinion polls
about Swedish aid conducted in the 1980s and 1990s show that
i

126
Swedish people support giving aid at the existing levels.
While in the 1980s the poll results show Swedes increasingly
support giving aid at the current level, in the 1990s the
results shows a slight decline (figure, 4.1 below)
Graph 4.1 Swedish Public Opinion Towards Foreign Aid
1981-1995
V-
OJ
CO
'V
m
CO
h-
CO
co
JO
T—
C\l
CO
"ÑT
m
00
00
oo
00
00
CO
00
co
o
O
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
x—
x—
X—
x—
X—
x—
x—
x—
CD
CD
\—
X—
x—
x—
x—
Source: Information department of Sida.
The poll results also show an increasing number of
people favoring the reduction of the level of aid. In
fact, while the percentage of people in favor of decreasing
aid did not go above twenty-five percent in the 1980s, it
reached thirty-eight percent in the 1990s. The percentage
of people who called for increasing aid declined to a record
low level in the' 1990s. The percentage of people who want
-x- Increase
Same
Decrease
-+- No Aid

I
127
foreign aid to be terminated has remained fairly stable,
around ten percent, for all of these years.
Thus, while Swedish public opinion in support of
foreign aid was high in the 1980s, in the 1990s public
opinion' about foreign aid has gone down remarkably, reaching
its lowest level in 1992. The polls, however, show a
decreasing tendency toward exceeding contemporary levels of
aid.
I
The media increasingly criticized Sida's aid programs
in the 1980s. It accused Sida of not ensuring its programs
benefitted the poor. The media claimed that the money
allocated for development programs was wasted in
bureaucratic corruption and theft or on programs that are
not "success stories." These accusations spurred public
debate about the effectiveness of Swedish aid. While the
media and opponents of foreign aid focused on failed Sida
projects, they did not acknowledge those projects that had
succeeded.
Despite media critiques, public opinion in support of
Sida's development programs remained strong in the 1980s.
This could partly be attributed to Sida's considerable
openness and willingness to provide "correct" information
to the public. In fact, even top Sida officials participated
in several discussions about aid programs to clear what they

I
128
saw as media bias. In most cases, Sida has openly explained
to the Swedish public the reasons behind the instances of
dismal aid performance (interviews).
Karre and Svensson (1989:259) reacting to Swedish
public opinion polls' results about foreign aid (1975-86)
write:
One surprising result of the opinion survey is that
there seems to be no clear, general correlation between
the internal economic situation and willingness to
provide aid. Over the years and in spite of the
worsening economic outlook, which has not left the
Swede untouched, two-thirds of those questioned want to
maintain appropriations at the present level or to
increase that level.
Thus, these poll results, together with the fact that
the non-Socialist government in Sweden (1976-83) did not
significantly change aid policies established by the Social
Democratic government, indicate that not only the Swedish
people but also the internal politics of Sweden is pro
foreign aid. Karre and Svensson 1989:260) argue that "The
polls shows that the responsiveness to Third World needs,
rather than being shallow and dependent upon high levels of
employment, is in fact remarkably entrenched within the
l
social values of most Swedes."
Elgstrom (forthcoming, p.320) also saw a limited role
of interest groups in the 1980s Sida's policy change. He
writes the "... influence of Swedish public opinion on

129
foreign aid has been rather minimal. Even the media have
been of relatively little significance." Thus, we may
conclude that Swedish public opinion had little influence on
the 1980s Sida's policy change.
The Swedish Economic Situation
By the end of the 1960s, the per capita income of
Sweden and Switzerland were the highest in the world (Heclo
and Madsen, 1987). In the period between 1960 and 1972, the
Swedish economy was doing very well as, table 4.2 below
shows. The GDP average annual growth was 4.1 percent and
the unemployment rate was within the full employment limit
by Swedish standards. The inflation rate was at a tolerable
level and saving averaged 24.8 percent of GDP. Thus, during
this period all major economic indicators pointed to the
healthy nature of the Swedish economy.
Swedish economic prosperity did not last long,
however. By the mid 1970s, the Swedish economy was on a
decline. Table 4.2 below shows that in the period between
1973 and 1982, average GDP annual growth fell from 4.1 to
1.4 percent. The unemployment rate rose from 1.8 to 2.1 and
inflation from 4.9 to 10.4 percent. Gross saving as a
percent of GDP fell from 24.8 to 18.8. Thus, in the 1970s

130
and early 1980s the Swedish economy was not as healthy as it
had been the decade before. According to Heclo and Madsen
l
(1987), Swedish export lagged, production and investment
were declining, and borrowing to pay for deficits had
reached record levels.
Table 4.2 Swedish Economic Situation 1960-1986
1960-1972
1973-1982
1982-1986
Average
annual growth
GDP
4.1
1.4
2.6
Average
unemployment
rate
1.8
2.1
3.0
Average
inflation
rate
4.9
10.4
7.3
Gross saving
as Percent of
GDP
24.8
18.8
17.2*
Source: Bosworth and Rivlin (1987:4)
^Figures of 1983-84 only
At first, this economic decline was mainly seen as
externally caused and temporal, the result of the 1973 and
1979 oil crisis and increased labor costs. Labor costs in
Sweden increased by some forty percent in the mid-1970s and
oil prices went up four times by the late 1970s (Nicholson,
i
1990). By the end of the 1970s, the Swedish economy seemed
to be heading in an alarming direction.

131
In an attempt to avert the deteriorating economic
situation, a non-socialist government which came into power
in 1976 embarked on a number of economic measures (including
devaluation and budget cuts). In September 1980, for
example, the government passed a program to reduce
government spending. "[C]utbacks in spending growth were to
occur in housing and food subsidies, the activities of Labor
Market Boards, foreign aid and defense constructions (Heclo
and Madsen, 1987:64). During the period 1976 to 1981 four
devaluations were implemented in Sweden by the non-socialist
government.
The measures which were taken by the non-socialist
government were not bold enough to bear immediate results.
The non-socialist government was limited by the fact that
l
the coalition was very weak and had a very narrow election
margin. This meant that a lot of compromises were needed in
policy reforms. Moreover, the non-socialist coalition
feared adopting policies which signaled a change in the
social welfare system and a full employment policy as it
would have been exploited by the opposition. In fact, the
opposition was already portraying the non-socialist
government as anti-welfare and uncommitted to full
employment (Heclo and Madsen, 1987, and Taggart, 1996). The
non-socialist government did not want to engage in policies

132
which would reinforce those accusations partly because they
would, have benefitted the opposition as the Swedes were not
ready for a change at that time.
After winning the 1982 election, the Social Democratic
government adopted a set of bold economic measures. In
fact, those measures were so far-reaching that Heclo and
Madsen, (1987), and Elgstrom (forthcoming) believed no
bourgeois government would have dared to embark upon them.
Several budget constraints were introduced to reduce
public spending. The government made clear that no funds
would be given to new social reforms and subsidies to
lagging industries such as textiles and shipyards were
considerably reduced. Moreover, the Social Democratic
government devalued the Swedish Kronor by 16 percent. This
was the largest devaluation since 1949 (Heclo and Madsen,
1987). Foreign exchange controls were /abolished in 1989 and
foreign banks were permitted to operate in Sweden in 1989.
These measures left many Social Democrats in a state of
confusion as they could not determine the direction their
government was heading. Some Social Democrats, particularly
labor officials, accused their government of adopting
"bourgeois policies."
Economic measures which were introduced by the Social
Democratic government produced encouraging results.
i

133
According to Nicholson (1990:357), "... inflation duly fell
from 8.3 percent in 1982 to 4.3 percent in 1984, while
industrial production continued to grow at rates between 3
and 4 percent."
However, in the 1990s the economy was on decline again.
Between 1990-93, for example, industrial production fell by
17-18 percent and unemployment reached (about 9 percent in
1993 (Lindbeck, et al 1994). In fact, Sweden, which was
ranked as the third richest country in 1971, fell to 14 in
1991.
One issue of great interest to this study is the fact
that the decline in Swedish economic performance in the
1970s and 1980s did not have a significant impact on the
volume of aid. The disbursement of aid as a percent of GNP
rose from .42 percent in 1972/73 to .82 in 1976/77. It
further increased to .83 percent in 1981/82. This was so
despite Swedish economic difficulties. ( Thus, economic
problems did not make Sweden waiver in its commitment to
foreign aid in the 1980s and early 1990s.
Stokke (1989:310) comes to a similar conclusion. He
contends that the economic recession which occurred in the
1970s and 80s, "... contrary to our expectations, had only
marginal impact on the ODA volume performance.... Again
contrary to expectations, its impact on the financial terms '

134
of aid was even less" (Stokke, 1989:310). Karre and
Svensson (1989:260) also conclude that Swedish foreign aid,
rather than depending on the economic climate, "... is in
fact remarkably entrenched within the social values of most
Swedes." The fact that Swedish aid allocation and
disbursement as a percent of GNP increased despite the
deteriorating economic conditions also supports the above
conclusions.
Thus, it seems to this study that the Swedish economic
situation had little influence on the 1980s Sida's policy
shifts. In fact, some of the interviewees contended that
economic reforms which were taking place in Sweden did even
less to influence the 1980s Sida's policy shifts than the
rapid deteriorating economic performance of the recipient
countries. With respect to Tanzania, most interviewees
claimed that the economic reform measures which were
embarked upon by the Social Democratic government at home,
if anything, boosted their confidence in the diagnosis and
prescriptions which they had already made about aid
performance in Tanzania. According to them, the economic
reform measures in Sweden could not be that influential in
their policy decisions to Tanzania because Sida takes
contextual factors seriously. In fact, Sida, they
maintained will not engage in a program without making a

135
country analysis to uncover contextual factors
(interviews) .34
Thus, evidence presented in this chapter warrants this
study to conclude that contextual factors including the
structure of the government, change in political leadership,
public opinion, and the economic situation played a minor
role in the 1980s Sida policy shifts. This conclusion
supports central issues of the present study. It implies
that factors other than contextual variables had a
significant impact on the 1980s Sida policy shifts. This
observation not only provides a booster to learning theory
but also leaves bureaucratic politics as the only competing
explanation. Observations presented in this chapter also
show that Sweden's domestic consensus about foreign aid was
very high in the 1980s. As a result, highly convincing
evidence was required to open a crack on this consensus.
While learning fulfilled this job, bureaucratic politics
acted as a catalyst35.
^Questionnaire number 29 and 14
35For a detailed account see Chapter 5.
i

CHAPTER 5
LEARNING: FEEDBACK, CONSENSUAL KNOWLEDGE, AND INSTITUTIONAL
PROCESSES
Sida and Learning
Chapter 4 argues that Swedish public opinion, and
domestic political and economic factors had little influence
in the 1980s Sida policy shifts. This chapter starts by
presenting evidence which shows that Sida is a learning
organization. It then discusses the reasoning behind Sida
policy shifts in the 1980s, arguing that feedback from
Tanzania concerning the performance of the Tanzanian economy
in general and development projects in particular not only
made Sida question its aid policy and strategies but
provided evidence which made policy shifts an inevitable
phenomenon.
This knowledge about dismal economic performance and
unsatisfactory project performance by itself, however,
provided neither an alternative nor the direction of change.
Despite their efforts, Tanzania, like many other Third World
countries, could not come up with an alternative that would
be accepted by donors. Meanwhile, no real attempt was made
136

137
by Sida and other Nordic countries to search for an
alternative.
Instead, the IMF and World Bank recommendation for
macro economic policy reform emerged as the most viable
alternative. As the Tanzanian economic crisis deepened, the
policy proposal of the Bretton Woods institutions became
increasingly persuasive to Sida as well as other development
agencies. The Bretton Woods institutions' policy arguments
increased Sida's understanding (as well as other donors)
about the viability of macro-economic environments in the
success of development programs. This increased
understanding made Sida, as well as other donors, rally
behind the Bretton Woods institutions' policy reforms.
This chapter also discusses the role played by Sida's
institutional processes in the 1980's policy shifts. It
concludes that Sida's institutional processes, particularly
those which made the organization receptive to feedback
knowledge, with the exception of ideology, strategies and
budgetary routines, acted as a catalyst for learning.
Sida: Is it a Learning Organization?
Chapter 2 argues that a learning organization, needs to
embrace error and make use of knowledge from feedback in its
decision making. It also argues that organizations, in most
cases., tend to insulate themselves from the new consensual

138
knowledge. In this respect, a learning organization,
particularly one whose primary mission is economic
development, would likely encourage a knowledge search
culture, i.e., a culture devoted to increasing
organizational understanding of reality. This helps the
organization reduce uncertainties and complexities
associated with development environments and by so doing,
improve its performance. Furthermore, it argues that a
decentralized structure acts as a catalyst for learning and
a satisficing model of decision making suits the learning
model.
Research findings are in line with Korten (1980) and
Caiden (1991) who assert that a learning organization has to
embrace its errors. 88.2 percent of respondents were
comfortable talking about Sida's past experience including
both failure and success. They saw Sida's past mistakes
both as a basis for learning and as a motivation to work
better; 8.8 percent were not comfortable talking about
Sida's past mistakes. They either did not like to talk
about it or dismissed it as politics. This is a
characteristic of a self-defeating organization.
Very few (2.9) percent were of the opinion that Sida
did not make any mistakes. According to this group,
I
mistakes which occurred were those of implementation and so

139
the recipient countries or institutions were the ones
responsible. This group also claimed that Sida has nothing
to learn. To them, the implementors, particularly Third
World governments and institutions, are those who are
l
supposed to learn and improve their work. According to
Korten this will be people who will be found in a self-
deceiving organization.
Also according to Korten (1980), while individual
members of the organization have an inclination toward
denying error, externalizing error, or embracing error,
organizations tend to institutionalize one of them. With
88.8 percent of respondents embracing error, it is adequate
evidence to conclude that Sida falls within Korten's
categorization of a learning organization.
Knowledge Seeking: From Within 1
This study found that Sida employees read approximately
11 to 14 semi-annual and annual reports and reviews from
the field per year. They are required to go through these
reports and respond to issues raised in them. The reports
carry information about what is happening in the field,
focusing on the level of project completion, implementation
problems and how they were solved, or what assistance (if
any) is needed from Sida headquarters.

140
In most cases, the officer in charge, particularly a
head of unit or a desk officer, will study these reports in
great detail and write a briefing to his immediate superior,
highlighting issues requiring attention. These issues and
others are discussed at the unit or division, departmental,
and management levels. These discussions are important
because they update employees with what happens in the
field. They are also important as they allow information
about different experiences to travel across units or
divisions and departments.
Findings also show that members of Sida's units or
divisions as well as departments meet on average more than
seven times annually. Sida's management committee meets
once every two weeks. At these meetings, issues ranging
from new policy to reports, evaluations, and daily
operations are discussed. Sometimes officials who have been
l
on field mission give their reports.
In addition, Sida employees have an hour coffee break
every day where they discuss various issues and get informed
about issues taking place at different levels of the
organizational hierarchy. The coffee rooms are organized in
such a way that members of the same department meet in the
same coffee room every day..- I find this to be a healthy
learning environment as employees freely interact with their

141
superior, and vice versa. Discussion around the coffee
table is more informal than formal. Sometimes this coffee
break is attended even by the top Sida leadership, including
the Director General. Sida also has three newsletters which
cover various issues from evaluation reports to debates on
daily working procedures and performance.
Findings from this study further show that on average
Sida employees conduct and supervise between six and ten
evaluations annually. It is both the number of evaluations
conducted each year and Sida employee participation in the
evaluations that are of interest to this study since it is
logical to assume that the greater number of evaluations the
higher the learning potential. In fact, by participating in
the evaluation process the likelihood that employees
internalize and make use of lessons drawn from those
evaluations is very high, in addition to improving their
individual evaluation skills.
This study also found that Sida employees annually read
approximately 6-10 evaluations conducted by other
departments. This means that Sida employees are not limited
to evaluations done by their own departments, but also gain
experience and knowledge from other departments to improve
their understanding of reality. Thus, within Sida there
exist multiple mechanisms for knowledge seeking and

I
142
dissemination across the board. This creates an optimum
environment for learning.
Knowledge Seeking: From Outside
Sida employees on average read between five and six
evaluations done by other donors in areas of interest to
them annually. By reading evaluations from other
departments as well as other donors, Sida, employees are
enriched with multiple experiences of both success and
l
failure. From these experiences, they draw lessons which
help them better their understanding of reality in the Third
World. In fact, this process by itself shows a high
propensity of Sida employees to learn from their own
experience and that of others.
The findings also show that on average Sida employees
read between seven and eight new professional publications
annually that deal with areas of their specialization. In
essence, this means that Sida employees are not satisfied
with learning only from experience. They go to academic and
professional publications to search foii new knowledge that
is relevant to their work. In fact, Jellinek, et al,
(1984), Anell, (1986) and Elgstrom, (1992) have demonstrated
how major theoretical trends in development field have
influenced Sida's thinking. This further attests to the
fact that Sida keeps its doors open to new knowledge. It is

I
143
this openness to outside information that permitted the neo¬
liberal thinking to influence Sida's policy shifts in the
1980s.
Sida; How Do they Consider their Work and What are the
Criteria for Decision Making?
When asked if they consider their work as a learning
process, 93 percent said yes and 3.5 percent said they see
it as partial learning; 3.5 percent said no. The 93 percent
consider their work as a learning process mainly because of
uncertainty and rapid change in the environment in which
l
they work. According to them, new challenges develop from
day to day in the development environment which call for
flexibility, creativity, and learning on their part.
They also see the understanding of contextual factors
in the Third World countries as a challenge which makes
their work a learning process. Although, Third World
countries may appear to have the same problems, they may not
be solved in the same way. Solutions need to be adapted to
not only suit but sometimes alter the environment of these
countries. This is why learning is an important part of
development agencies. <
The mode of operation of Sida highly encourages the use
of existing information. Sida works under the committee
system, i.e. committees are formed to deal with different
issues. It uses a problem-oriented approach. A back-up

144
study group of a few people will be appointed to work on a
problem. In most cases, these back-up groups involve
employees from different levels of the organizational
hierarchy as well as with different levels of experience.
In certain cases, particularly where external expertise is
needed, consultants can be hired to assess the problem and
give recommendations.
Whether it is a back-up group or a consultant firm, all
are supposed to define the problem, collect and analyze
relevant data, formulate causal linkages, and come up with
alternatives based on empirical evidence. The findings set
i
the stage for policy discussion and decision. These
routines help Sida simplify information search and issue
assessment for the betterment of its decision making.
Obviously, these groups, consultants, as well as Sida policy
makers, are bounded by time, resources, and their
intellectual capacity to make their decisions more
satisficing than optimizing.
When it comes to Sida as an organization, the
institutional process further constrains choices. The
criteria for decision making is no different from Simon's
satisficing model. In fact, Sida does inot work outside of
what Heclo and Madsen (1987:8) asserted about Swedes:
Swedes typically adopt a problem focused approach that
is grounded in empirical detail and that seek specific

145
solutions to concrete problems. A prediction for a
workable reform is part of the larger Swedish political
tradition.
l
Moreover, Sida is a learning organization because it
uses feedback information in its decision process (Forss,
1985, Edgren, 1986, Elgstrom, 1991 and SASDA, 1994).
Edgren, (1986:54) on the use of feedback information,
writes:
When it became clear that certain important
requirements were not being met, remedial action was
very often taken by altering project design, changing
technology or expertise, etc. Projects were very seldom
terminated, but they changed course and objectives so
as better to take into account the lessons learned.
Also, Holm, et al, (1994) analyzed 56 evaluations of
l
Sida projects in Tanzania which were done between 1968 and
1993. In addition, they chose six out of 56 for a more
specific analysis of how recommendations have been
incorporated in Sida's proposal to the government. The
results of this study are not very encouraging in terms of
quality, however, for the use of evaluation results the
study concluded that in general Sida made great use of
evaluation results in its decision making.
In six evaluation reports which Holm, et al, (1994)
analyzed in great detail, the recommendations made from
these evaluations were later found in áida's proposal to the
government. SASDA (1994:68) also concludes: "It seems that

146
Sida uses the recommendations as the basis for its proposal
to the government ("regeringsskrivelse"). The Swedish
Auditor General's office also conducted a study in 1988
l
entitled "Does Sida Learn?". The study concluded that Sida
is a learning organization, however, it needs to improve
some of its routines to make it realize its full learning
potentials.
Thus, the above discussion shows that Sida embraces
errors. It uses knowledge from feedback in its decision
making, it has different fora for discussion, it uses a
problem oriented approach to decision making and it
possesses knowledge seeking culture, all of which provide
enough evidence to conclude that Sida is a learning
organization. Although the conclusion 'that Sida is a
learning organization does not necessarily tell us whether
Sida policy shifts in the 1980s were a result of learning,
it does show that learning was part and parcel of the whole
process.
Why Policy Shifts in the 1980s
In Chapter 1 this study hypothesized that Sida
initiated policy shifts in the 1980s because feedback from
its own project and program portfolio showed unsatisfactory
results. In other words, lessons which Sida learned from
its projects' and programs' performance necessitated policy

147
shifts. We also hypothesized that the IMF and World Bank
neo-classical policies were increasingly becoming more
persuasive to Sida and other donors. The Bretton Woods
institutions called for domestic policy reforms. They argued
that even a well-designed and managed gid program or project
could not make any meaningful contribution if macro-economic
policies were creating an unfavorable environment.
In testing these hypotheses, we considered a number of
other variables which were seemingly competing explanations.
We identified lessons from Sida's experience with its
projects and program portfolio, Swedish domestic political
and economic factors, the IMF and World Bank neo-liberal
policies, pressure from other donors and Sida's bureaucratic
politics as reasons for the 1980s Sida policy shifts.
We asked respondents to identify which of the above
I
factors were very important, important, and not important in
determining the 1980s Sida policy shifts. All respondents
saw lessons from experience as either very important or an
important factor in the 1980s Sida policy shifts (Table
5.1). While 67.5 percent saw lessons from experience as a
very important factor, 32.5 percent saw it as an. important
factor. No one saw it as an unimportant factor.
Concerning the influence of the IMF and World Bank
policy outlook, 62.5 percent saw it as a very important
l

148
factor, 35 percent saw it as an important factor, and 2.5
viewed it as not important at all.
â– Fifty-five percent indicated that the Swedish domestic
political and economic environment was a very important
factor in the 1980s Sida policy shifts. Some 37.5 percent
saw it as an important factor, while 7.5 percent said that
i
Swedish economic and political factors were not important in
the 1980s Sida's policy change.
Table 5.1 Factors in the 1980s Sida Policy Shifts
Variable
Very
Important
Important
Not
Important
Total
Lessons
27 (67.5)
13. (32.5)
0 (0)
40 (100)
IMF/WB
Policies
25 (62.5)
14 (35)
1 (2.5)
40 (100)
B/politics
12 (31.6)
14 (36.8)
12 (31.6)
38 (100)
Swedish
E&P
22 (55)
15 (37.5)
3 (7.5)
l
40 (100)
Pressure
1 (2.6)
6 (15.4)
32 (82.1)
39 (100)
Total
87
62
48
Key: ()percentage
Lessons = lessons from experience.
IMF/WB policies = The IMF and World Bank neo-liberal
policies.
B/politics = Sida's bureaucratic politics.
Pressure = Pressure from other donors.
Swedish E&P = Swedish economic and political factors.

I
149
Sida's bureaucratic politics were seen as a very
important factor by 31.6 percent; 36.4 percent said it was
an important factor, while 31.6 percent marked it as not an
important factor. As far as pressure from other donor
agencies is concerned, 2.6 percent said it was very
important, 15.4 percent saw it as an important factor, and
82.1 percent said it was not important at all36.
Changes in Eastern Europe were mentioned by some
interviewees as an important factor in the 1980s Sida policy
shifts. However, as the researcher probed further,
particularly about the timing of the East European reforms,
it was clear that their influence in the 1980s Sida policy
shifts was minimal. Findings from the focus group also
confirmed this conclusion.
Most people in the focus group agreed that changes in
East Europe had little (if any) effects on the 1980s Sida
policy shifts. In fact, 50.0 percent of the focus group
said the collapse of the planned economies of the Eastern
I
bloc had no influence in the policy shifts; 33.3 percent
said it had little influence, and 16.6 said it had a strong
36It is important to note that 18 percent of
respondents see pressure from other donors as being either
very important or an important factor in the 1980s Sida
policy shifts. Although it appears to be insignificant,
given its "negative connotation" one is obliged to conclude
that pressure for compliance (at least peer pressure) from
other donors was applied on Sida.

150
influence. However, they did consider the collapse as
playing an important role in Sida's thinking and decisions
in the 1990s, particularly on the issues of democratization,
human rights and privatization.
.The researcher asked .respondents to rank in order of
importance the three most important factors for the 1980s
Sida's policy shifts (Table 5.2). In other words,
interviewees were asked to say which was number one, which
was number two and which was number three of the five
variables. Lessons from experience were ranked as the most
important reason for the 1980s Sida policy change by a score
of 69 points. Other variables ranked number one include
Swedish economic and political factors (27 points), the IMF
and World Bank Policies (18 points), Sida's bureaucratic
politics (6 points), and pressure from other donors (0
percent).
When it came to ranking the second most important
factor, the IMF and World Bank macro-economic reform policy
received the highest score with 42 poigts. Ranking for the
second most important variable results for the remaining
variables were as follows; Swedish economic and political
factors received 32 points; lessons from experience received
6 percent, while bureaucratic politics and pressure from
other donors received none.

151
Table 5.2 The Weighing of Variables in Order of Importance.
Variables
# 1
(3)
# 2 (2)
#3
(1)
Total
Lessons
23
(69)
3 (6)
12
(12)
38
(87)
IMF/WB
policies
6
(18)
21 (42)
10
(10)
37
(70)
Swedish
E&P
9
(27)
16 (32)
9
(9)
34
(68)
B/Poiitics
2
(6)
0 (0)
9
(9)
11
(15)
Pressure
0
(0)
0 (0)
0
(0)
0
(0)
Total
40
(120)
40 (80)
40
(40)
120
(100)
Key: () Weight
The third most important factor could not be easily
identified by looking at scores for number three as the
difference between lessons, the IMF and World Bank policies,
Sida's bureaucratic politics, and Swedish economic and
political factors is very small. Lessons, and the IMF and
World Bank policies, which dominate the first and second
spot respectively, appear to also be competing for the third
place.
However, we can delineate the ranking clearly, by
looking at the total score. From the total score it is
clear that lessons from experience is tlhe most influential
factor with a score of 87 points. The IMF and World Bank
policies was the second major factor with a score of 70
points and Swedish economic and political factors ranked

152
third, scoring 68 points. Bureaucratic politics scored 15
points while pressure from other donors received none.
Thus, three variables standing out as very important—
Lessons from experience, the IMF and World Bank policy
outlook, and Swedish economic and political environment.
These findings show clearly that the Swedish economic and
political factor is the competing variable. However, as
discussed in Chapter 4 and as appendix 4 shows, the Swedish
economic and political environments had little influence in
the 1980s Sida policy shifts.
An explanation for this inconsistency is that the
i
increasing level of unemployment in the 1990s brought the
question of volume of aid to task. The debate about volume
of aid centered around the growing government deficit,
growing unemployment rates etc. The debate culminated with
a reduction in aid from one percent of GNP to 0.7 percent
from January 1997. One could argue that as this debate was
still fresh in the mind of the respondents it could have
biased their ranking. An interesting fact remains, although
the debate was still fresh, the influence of Swedish
economic and political factors in determining the 1980s Sida
policy shift was less than that of the ilessons from
experience, and the IMF and World Bank policy outlook.

153
Moreover, when we asked people in the focus group to
rank in order of importance the influence of the above
factors, plus the collapse of planned Economies of Eastern
Europe and the experience of other bilateral donors, the
result was that changes in Swedish economic and political
environments, and the experience of other bilateral donors
had minor influence in the 1980s Sida policy shifts(see
appendix 4).37 These data suffice to conclude that lessons
from experience as well as the IMF/World Bank neo-liberal
policies were the major reasons behind the 1980s Sida policy
shifts. These findings are supportive of the learning model
introduced in Chapter 2.
Given these findings, the questiorj of what Sida learned
from both experience and the IMF/World Bank policy outlook
becomes central. What did Sida learn from its experience
with projects and programs in Tanzania that necessitated
policy shifts in the 1980s? To answer this question it is
important to study Sida's feedback from Tanzania. For the
purpose of this study, feedback from Tanzania is divided
into two levels.' The first is'that feedback which came from
Sida's own projects and program portfolio. The second level
37The study added the collapse of planned economies of
Eastern Europe and the experience of otlher bilateral donors
as its other variables for the focus group because this
issues were raised in the course of our interviews.

154
is concerned with the feedback from general performance of
Tanzania's economy in the 1980s. It is important 'to
distinguish between these two types of feedback because it
seems to this study, that they had different implications
for Sida's understanding of reality.
What did Sida learn from the experience of other
donors? Here, particularly the issue of the IMF and World
Bank policy outlook in the 1980s becomes more important than
general lessons which Sida learned from other donors. This
is so partly because results from studies done on other
donors' projects and programs in Tanzania are not different
from those of Sida (SASDA, 1994). In other words, lessons
which other donors drew from their experience with Tanzania
are not different from what Sida learned from its projects
and program portfolio. The question of what Sida learned
from the IMF and the World Bank policy orientation becomes
outstanding. For these reasons, this, study discusses
feedback from Tanzania and the IMF and World Bank policy
outlook below.
Feedback From Tanzania
Sida's Aid Programs
Sida uses various methods to get feedback from
recipient countries. They include evaluations, semi and
annual reports, site visits, commissioned studies, sector

155
and program reviews. Sida also uses studies conducted or
commissioned by other aid agencies.
Sida conducted a number of evaluations in the late
1970s and early 1980s. Some of these include Alange,
(1979), TISCO, (1980), Claesson (1982), and Ekengren,
l
(1984). Various Swedish aid programs—health, water,
education agriculture, and industries—were evaluated.
Economic infrastructure, including the energy and
telecommunications sectors, were not evaluated in time to
have contributed to the 1980s Sida policy shifts. In fact,
most evaluations in the infrastructure area were done in the
1990s. This may be partly .attributed to the fact that most
projects in this area were co-sponsored by Sida, the World
Bank, and other donors. It seems to this author that
coordination problems may have demotivated individual
sponsors from initiating evaluations. t
Sida's support to the health sector was mainly for the
construction of physical infrastructure including rural
health centers and schools for rural health practitioners.
This sector was first evaluated in 1976 by a joint Sida-
Tanzania evaluation team. It was again evaluated in 1978/79
by the Tanzanian Ministry for Health. In 1982 a joint
evaluation team comprised of Sida and Tanzanian government
officials reviewed the program. The team concluded that

156
there were a number of administrative as well as technical
problems hindering the smooth running of the program.
Problems ranging from bureaucratic red tape to lack of
competent personnel were revealed. The team also
recommended that Sida concentrate on maintenance and
rehabilitation of existing projects instead of supporting
the construction of new centers (Ander^son-Brolin, et al
1987). According to this report, the achievements of the
health sector program as a whole were encouraging.
Similarly, a study initiated by WHO in which Sida and
other donor agencies, along with the Ministry for Health,
participated dealt with the same issues. It concluded that
the achievements made in the health sector were encouraging.
According to this study, 90 percent of the population were
living within 10 kilometers of a rural health center and 70
percent were within 5 kilometers from a health facility.
The quality of services in these health facilities, however,
i
left much to be desired. For example, by the early 1980s,
most of the health units were reported to malfunction and
lacked essential facilities such as clean water,
electricity, or refrigerators. This malfunction showed Sida
that the Tanzanian state in particular and the economy at
large was unable to sustain the achievements made in this
sector.

I
157
Although Sida saw the need to shift its support from
the health sector to the productive sector as early as 1982,
it could not do so until later in the 1980s (Andersson-
Brolin, et al, 1987), partly because it could not afford to
allow, .its investments in the health sector to fall apart.
Sida also wanted to make sure that all health centers under
construction were completed.
In the water sector, Sida started in the early 1970s by
l
supporting a twenty year nationwide water program aimed at
providing free water to the entire rural population by 1991.
The performance of this program was far from satisfactory.
For example, thirteen years after the adoption of the water
program, only 38 percent of the rural population had water
facilities, and only 19 percent of these facilities were
working properly; the rest were facing continuous problems
(Radetzki, 1990). In the early 1980s Sida shifted its
strategy from supporting the nationwide water program to a
regional rural water development program with particular
emphasis on rehabilitation of the existing water
installations and local participation.
Lack of local community participation, the use of
inappropriate technology, and the unrealistic nature of the
program are often cited as reasons for the dismal
performance of the water sector program. The cost of

I
158
running and maintaining water facilities was beyond
government capacity. If local contributions were allowed
they would to a certain extent have reduced the government
burden as these contributions could have been used to
finance the operation and maintenance of these facilities.
It is encouraging, however, to see that Sida took care
of most of these problems when it engaged in the Health
through Sanitation and Water (HESAWA) program in the mid
1980s. HESAWA is an integrated program of health,
education, sanitation, and water supply. Contrary to the
early water programs, which did not involve the local
community and were run and managed solely by the government,
the HESAWA program is community based. It is operated and
managed by local people through their management committees.
Villagers are supposed to contribute to the running and
maintenance of their program. The program uses simple
technology. An interesting aspect of the above discussion
is that Sida was able to change or make modifications in its
water development strategies as a result of feedback.
A number of evaluations were also done in the
industrial sector. The Small Industries Development
Organization (SIDO) and Sister Industries Program (SIP) were
evaluated by various people—Alange, (1979), TISCO, (1980),
Claesson (1982), and Ekengren, (1984), Forss, (1985). Like

I
159
evaluations in other sectors, most of these evaluations
explained problems in this sector from managerial or
technical perspectives.
An interesting development emerging in the early 1980s
is the shift of focus in the evaluation process from
administrative and organizational issues to performance.
For example, evaluations conducted by TISCO (1982) and
Niklasson (1983) studied the contribution of the SIP to
foreign exchange38. In other words, the contribution of the
industrial sector to the national econdmy, particularly in
the area of foreign exchange, came into the picture. These
evaluations, however, saw the performance of the industrial
sector in terms of profit generation as being unsatisfactory
(Carlsson, et al, 1988).
The above discussion shows that prior to 1980 most of
Sida's feedback was micro-economic in nature. In this
period Sida relied heavily on reports from the field and
annual joint evaluation missions by Sida and recipient
governments. Most of these evaluation reports focused on
achievements, implementation problems and their solutions.
The contribution of Swedish aid programs to the national
economy in terms of poverty alleviation, resource growth,
38This is a shift from input to output/impact
evaluation.

160
and equity was not studied. They were ftaken for granted.
This, however, was not peculiar to Sida as most donor
agencies, including the World Bank, were focusing on similar
issues (SASDA, 1994). Similarly, the impact of Tanzania's
macro-economic policies on Swedish aid programs were not
studied at all.
It was this oversight that made Sida as well as other
donors attribute most problems associated with the
performance of development aid in Tanzania to managerial and
technical issues. Tanzania's policies were not questioned
as that would have meant intervention in its sovereignty.
I
Moreover, the dominant development consensus of the time did
not provide enough room for donors to intervene in the
macro-economic policies of Third World countries. Also,
cold war politics may have acted as a stumbling block. This
is true particularly if one takes into account Tanzania's
bold stand against West Germany, the United States and
British aid in the 1960s.39- Thus, -the most important thing
which Sida learned from its feedback from Tanzania was that
39Tanzania refused to close its Ea?t Germany Consulate
in Zanzibar after West Germany said it would withdraw its
aid if Tanzania did not close it. Tanzania expelled two US
diplomats by accusing them of being spies. Tanzania cut its
diplomatic relations with the United Kingdom after the
former failed to take steps against settlers' unilateral
declaration of independence in Zimbabwe (the then Rhodesia).

161
its projects and program portfolio were not working as
expected.
Economic Performance
Tanzania, like many other third world countries,
experienced a serious economic crisis in the 1980s. All
major economic indicators were showing that Tanzania's
economy was heading toward a permanent decline. The balance
of trade deficit rose from 6.8 percent in 1968 to 58.2 in
1978 and to 77.5 percent in 1988.39
Since 1978 government recurrent expenditure was in
deficit.40 This meant foreign aid had to pay even for the
expenditure of running the government. Agricultural
production for the official markets declined considerably.
The production of major export crops also declined.41 For
example, in the early 1980s, cashew nuts, cotton, sisal and
pyrethrum exports were well below their mid-1960s levels
(See appendix, 3).
Average growth rate of GDP declined from 2.7 percent in
1980 to a negative 1.0 percent in 1981 and negative 0.4
39Balance of trade deficit did not go beyond 27 percent
before 1977, except for 1974 and 1975 with the oil crisis
and drought which affected most parts of Tanzania during
these years (see appendix 1).
40See Appendix, 2.
41See Appendix, 3.
!

162
percent in 1982. The contribution of agriculture (which is
the backbone of the economy) to GDP fell from 2.0 percent in
1979 to 0.5 percent in 1980 and 0.7 percent in 1982. The
l
industrial contribution to GDP declined from 1.0 percent in
1989 to negative 1.3 and 0.1 in 1981 and 1982 respectively
(World Bank, 1994). In the early 1980s the average rate of
capacity utilization in the industrial sector was below
fifty percent. In fact, capacity utilization in the
manufacturing sector in 1982 was below 30 percent
(Skarstein, 1986) .
This economic situation exercebated some problems which
previously were seen as managerial or technical by Sida as
well as other aid agencies. The economic crisis revealed
that most of what were believed to be Managerial and
technical problems were symptoms of deeper problems rooted
not only in some domestic policy adopted by the Tanzanian
state but also in donors' misperception of the state's
capacity to realize its expected goals.
As the economic crisis deepened, one also sees Sida's
evaluation process widening its focus to include the
performance and impact of development programs. According
to Carlsson, et al (1988), Sida's evaluation program moved
to assess the impact of its projects on the national economy
in 1983. They write:

163
•The Grettve' & Larsson 'study was an important
contribution to the analysis of the sister industries,
as it was among the first that tried to incorporate
into analysis the foreign exchange saving effects of
the projects, as well as their integration into the
national economy through linkage.
This shift could be explained by the fact that as all
major economic indicators were showing the Tanzanian economy
was in serious trouble, Sida, like other donors, moved to
assess the contribution of its aid program to the Tanzanian
economy. This was partly an attempt to answer the question
if aid in general and Swedish aid in particular is a
success, why is it not reflected in the major economic
indicators? Even as Sida widened its focus on the
evaluation process, the emphasis was still on the
contribution of Swedish aid to the macro-economic
performance of the Tanzanian economy. (The impact of macro-
economic policies on Swedish projects was hardly addressed,
if at all.43
The results from these expanded evaluations
particularly in the industrial sector, were far from
satisfactory. It revealed that most of the industries
survived on subsidies from the government. In essence this
meant'"that some of Sida's development policies and
43It is in this area where the IMF and World Bank
macro-economic policy reforms play an important role in
Sida's understanding of reality.
I

164
strategies were detrimental to the sustainability of
development programs. This called for a complete
reevaluation of Sida's development strategies and policies
to Tanzania.
The economic crisis also made donor agencies realize
that most Third World states were not in a position to take
bold reform measures to combat the crisis. Among donor
agencies this realization occurred at different times and
very few agencies came up with the same causal explanation,
as we will show below.
Thus, feedback from Sida's project performance
indicated that the problems Tanzania was facing were more of
a matter of managerial and technical practices than
policies. As the economic crisis deepened Sida realized
that the problems which Tanzania was facing were far deeper
than managerial or technical. These were problems rooted in
Tanzania's macro-economic policies as well as unfavorable
external factors. Despite this realization, little, if any,
attempt was made by Sida (or other Nordic countries) to come
up with alternative solutions partly because Sida
development strategy was based on the principle of
"development on the recipient's terms."

165
The Rise of Consensual Knowledge in the Development Field
and its Influence on Slda's Understanding of Reality.
In the 1960s the dominant consensual knowledge in the
development field put the state at the center of
development. According to Sandbrook (1993:2), the dominant
development model at that time was based on the assumption
that "... markets often worked inefficiently in developing
countries and therefore a pro-active state must widely
intervene to encounter those market failures." The west
under the influence of Keynesian thinking, saw the
intervention of the state in the economy as an important
aspect of the development process.
In contrast, the East was dominated by Marxist thinking
which views the state as an instrument for the
transformation of societies from exploitative class-based
societies to free classless societies. This view denounces
capitalism with its free market policies. It calls for the
creation of public property, an egalitarian society, and
collective enterprise under state leadership. According to
Marxism, central planning and statism are crucial for
development. Thus, these two lines of thinking both put the
state at the center of development and 'took for granted the
capacity of the state to fulfil that mission.

166
When African countries became independent, they
inherited an authoritarian state that controlled all
administrative and development activities. This, together
with the influence of the two lines of thinking above, made
the adoption of statist policies by African governments a
natural choice. This manifested itself in the burgeoning of
the public sector in Africa in the 1960s and 1970s. The
expansion of the public sector occurred regardless of
ideological inclination. Influenced by the above thinking,
donor agencies embraced and supported the expansion of the
public sector under the banner of development planning.
Tanzania, like many other developing countries, adopted
a number of policies which put the state at the center of
the development process. Policies ranging from
nationalization of industries and commercial enterprises to
the abolition of local government and cooperative unions
were adopted. This meant that the state was not only in
charge of almost everything but also owned all major
economic investments. In fact, until the early 1980s,
virtually all aid to Tanzania passed through the state.
The economic recession which became more serious in
most Third World countries in the early 1980s led to the
questioning of state capability not only to own and lead but
also to sustain development projects. 'The question of state

167
capability was not limited to Third World development alone.
In Western countries, particularly the United Kingdom and
the United States, statist policies were re-examined. The
result was a shift away from such approaches.
In Africa, donors came to realize .that the state was
not as inclined toward development as they had expected. In
fact, the state was an obstacle to sustainable development.
Its size, its competence to formulate sound economic
policies, its capability to maintain and sustain development
projects, and its capacity to maintain law and order became
subject to criticism. The result was disillusionment with
statist approaches.
As scholars, as well as donor agencies, realized the
inefficiency of statist approaches, a shift in the dominant
consensual knowledge in Third World development occurred.
The IMF's financial stabilization policies and the World
Bank's Berg report were among early contributions to the
shift in consensual knowledge. In fact, close cooperation
between the IMF and the World Bank in the 1980s set the
stage for the domination of neo-liberal thinking in Third
World development. As a result, development policies
shifted from statist approaches to neo-liberal approaches,
focusing on diminishing state intervention, developing the
(

168
price system, the market, and the private sector, including
non-governmental organizations.
The IMF and the World Bank spearheaded this shift in
Third World development. Other international aid agencies
reworked their aid policies in accordance with the emerging
thinking in development processes. As Caiden (1991:243)
writes: ,
Major country donors and international agencies moved
to encourage private enterprise and voluntary
organizations in poor countries ... to assist
government to privatize public enterprises and to
strengthen business management education and training.
The IMF and The World Bank in Closer Association: Elevating
the New Thinking in Third World Development
At the time of its establishment, the IMF had no
specific role to play in developing countries. It was
originally given responsibility, for ensuring that the
Bretton Woods rules for convertibility based on a dollar-
gold standard, would be maintained. As the Bretton Woods
gold standard system disintegrated in the early 1970s, the
IMF became an important player in the area of balance of
payment support and, later, Third World debt negotiations.
Moreover, as industrialized countries stopped taking loans
from the IMF in the late 1970s, its role in Third World
development increased considerably.
The economic crisis, which affected most Third World
countries in the 1980s, brought with it the emergence of the

(
169
IMF as the policy maker, policy enforcer, monitor, and
"credit worthiness guarantor" for the international donor
community as well as international private banks. This
crisis went hand in hand with the debt crisis which called
for fundamental policy reform which would guarantee
international financial institutions the repayment of their
loans. The IMF conditionalities were seen by most of these
institutions as providing the assurance needed for Third
World government credit worthiness. This partly explains
f
why international financial institutions supported the IMF's
requirement of conditionality.
When starting their programs, the IMF/World Bank put
great emphasis on stabilization with issues of exchange
rate, interest rates, domestic credit systems, and monetary
imbalance. The emphasis then shifts to enabling environment
by concentrating on structural adjustment with particular
emphasis on macro-economic and institutional reforms. The
enabling environment supposedly will remove inefficiencies
and improve the growth rate. The major reforms include
privatization, trade liberalization, price deregulation in
industries and agriculture, financial liberalization, and
the taxation system. These institutional and macroeconomic
reforms also constitute the criteria for determining

170
government performance and eligibility 'for further aid
(Polak, 1991).
The centrality of the IMF in Third World development
was boosted by the way donor agencies, as well as
international private banks, supported the IMF
conditionalities in the early 1980s. The World Bank, which
followed its own route prior to the 1980s, started to work
more closely with the IMF in the early 1980s than at any
other time in history. Campbell and Stein (1991:13) write:
While historically the World Bank has charted a
somewhat different course, since the early 1980s the
Bank has also been reinforcing and prolonging the
conditionalities imposed by the IMF.
In fact, after adopting Structural Adjustment Lending
(SAL) in the late 1970s, the World Bank came closer to the
IMF than ever. With the introduction of a Policy Framework
Paper (PFP) as a requirement for lending since the mid
1980s, the closeness of the IMF and the World Bank was
reinforced.
The IMF, the World Bank and the government concerned
are required to provide inputs in the preparation of the
PFP. This provides a mechanism through which differences
between the World Bank and the IMF are ^raised and reconciled
with the view of reaching a sound structural adjustment
reform. Thus, the deep involvement of the IMF in structural

171
adjustment policies in close association with the World Bank
and other donors (and the lack of any persuading
i
alternatives) made the neo-liberal policies advocated by the
IMF and the World Bank the dominant consensus in Third World
development.
The rise of the UK's Margaret Thatcher to power in 1979
and Ronald Reagan in the United States in 1981 reinforced
neo-liberal thinking in Third World development. In fact,
the bold reforms they introduced in their respective
countries and their support of the Bretton Wood institutions
contributed to putting this policy outlook at the center of
aid processes as Sandbrook (1993:2) argues:
Disillusioned with statist approaches and the
ascendancy of neo-conservative government in Britain,
United States and West Germany provoked a shift towards
a neo-classical market oriented paradigm. Development
policy focused on markets, price system and private
sector.
Thatcher, the British Prime Minister, and Reagan, the
President of the United States, had similar world views.
Both followed neo-liberal policies aimed at a diminished
public sector and state interventionism. These world views
gave the IMF and the World Bank the support they needed to
get their policies implemented in Third World countries.
Reforms in the Soviet Union, France, and China also worked
i
in favor of the IMF and World Bank policy outlook. What

172
Sida learned from this new thinking and the importance of
support the World Bank and these neo-conservative
governments gave to’ the neo-liberal policies could clearly
be depicted in the Tanzanian case. (
Sida, Tanzania, and the New Consensual Knowledge
As the Tanzanian economic crisis reached a
disproportionate level, it became more and more apparent
that the problems which Tanzania was facing were more than
managerial or technical. Despite donor agencies' attempts
to solve those problems, the situation became worse and
worse. Production in agricultural and the industrial sector
fell considerably.43 Tanzania turned to the IMF for help.
The IMF's response was structural conditionality. A
series of discussions with the IMF beg^n in 1979 with the
IMF demanding a thirty percent devaluation, removal of
government subsidies, trade liberalization, and an increase
in producer prices. Mtei, the then Minister for Finance,
agreed with the IMF conditionalities, however, Nyerere, the
then president disagreed with them. He saw the IMF
conditionalities as infringements upon Tanzania's
sovereignty. Nyerere believed his socialist policies were
good for Tanzania. As a result, the Minister for Finance
43See Appendix 1, 2 and 3

173
was forced to resign. Despite this disagreement,
discussions with the IMF continued. In fact, negotiations
continued for six years before an accord could be reached.
The difference between Tanzania, Sida, and the IMF was
based on different causal explanations of the crisis which
varied among donor agencies as well as 'scholars. Tanzania
saw the crisis as primarily a manifestation of its position
in the world economy. The decline in export prices,
increase in import prices, including oil prices (1973 and
1979), as well as the war with Uganda were seen as primary
causes. Internal factors, such as unfavorable climatic
conditions as well as implementation problems, were seen as
secondary factors. In fact, up to the late 1980s, Nyerere
still claimed that his policies were good but the problem
was implementation. In explaining the crisis, Malima
(1984:1), the then Tanzanian Minister for Economic Planning,
asserted:
The severity of the economic difficulties which
Tanzania presently face is primarily a consequence of
inherent weakness and vulnerability of her economic
structure to external shocks and disturbances.... the
domestic factors may have made an extremely grave
situation a little bit worse, but they could not have
been decisive.

174
»
The IMF and the World Bank saw Tanzania's socialist
policies as the root of the economic crisis. As Lipumba
(1984:19 ) writes:
The World Bank and the IMF blame socialism for the
economic demise of Tanzania. They single out
inefficiency of public owned enterprises, rapid
expansion of government and parastatal bureaucracy, the
villagisation programme that disrupted agricultural
production and increased economic uncertainty facing
"progressive" farmers and the very low and decreasing
real produce prices as the main cause of what they term
as the "Tanzanian tragedy".
Although Sida took a seemingly middle line, it was
initially clearly more inclined to accept the Tanzanian
explanation of the crisis than the IMF one. While Sida
acknowledged the effects of external factors on the economy,
including low prices for primary commodities and the war
with Uganda, it did not blame socialism as a whole but
rather certain policies including the foreign exchange
policy and low prices for farmers.
Sida also saw the need for contextualizing reforms to
l
fit the Tanzanian situation.. According to Sida officials,
the difference between Sida and the IMF/World Bank was not
what to do, but how to do it. Sida saw the need for
Tanzania to own and lead the reform process'factors it felt
were essential to commitment and success. This is validated
by the way Sida continued to support Tanzania's reform
initiatives, including NESP and SAP, in the early 1980s.

175
According to Sida officials, experience from other parts of
the world, including Sudan, showed that the cost of
accepting the IMF's reform process wholesale was sometimes
detrimental to even the few achievements that had been made
earlier.
In fact, Sida as well as the Swedish government,
realized as early as 1982 that there was a need to make
policy adjustment, and that domestic politics in the Third
World countries sometimes hindered the (execution of sound
policies. As the government bill 1982/83 states: "On the
national plane, problems often emanate from the choice of
development strategy and from domestic politics-based
difficulties in executing necessary changes" (P1982/83:30).
While Sida recognized the need for change, it was
skeptical with regard to some of the IMF prescriptions. It
seemed to Sida that the IMF was less concerned with the
political and social implications of its adjustment policies
while Sida in contrast, was very much concerned with the
implications of the IMF conditionalities for the social
i
sector. This was particularly true because Sida's
investment in the social sector was in line with its poverty
alleviation goal.
As Tanzania and the IMF failed to reach an agreement,
Tanzania and the World Bank formed an independent group to

176
advise the Tanzanian government about policy reforms. The
group was chaired by the former Director General of Sida,
Ambassador Ernst Michenek, and two internationally renowned
professors—G. Helleiner and C. Pratt--as its members. The
group worked independently of Sida, Tanzania, and the World
Bank for two years trying to come up with recommendations
which were expected to enrich the debate and help Tanzania's
government take the necessary steps toward reforms.
The group saw some of the reforms such as devaluation
and increase in produce prices, as necessary. It also saw
the difficulties of making reform oversight. The major
contribution of this group was that it set the stage for
discussion. It also raised issues of pace and the sequence
of reform. The group suggested that going too fast does not
necessarily lead to better results nor does going too
slowly. With hindsight, the information regarding what
happened to Sudan and other countries which had hastily
embarked on IMF conditionality would allow one to argue that
their advice was well-founded.
While the recommendations from the advisory group
helped Tanzania to take important step^ toward bridging its
gap with the IMF, it also enriched the debate which was
going on within Sida. As Tanzania failed to reach an
agreement with the IMF, USAID, Britain, and West Germany put

177
pressure on Tanzania to accept the IMF conditionalities by
withholding their aid to Tanzania in 1983. The World Bank,
in turn, withheld any new commitment of aid to Tanzania in
1984 .
Other donor agencies, including Sida, DANIDA, NORAD and
those of the Netherlands, continued with their aid. Sida
began persuading Tanzania to accept the IMF policy reforms
in 1982/83. A high level symposium was called to discuss
the macro-economic policies of Tanzania in 1984. This
symposium provided a forum where Nordic officials and top
Tanzanian government officials met to discuss the macro-
economic policies of Tanzania. At this symposium, Nordic
f
countries told the Tanzanian government that the acceptance
of the IMF conditionalities was inevitable if Tanzania
required more funds to finance its economic recovery. This
in essence meant that Sida, as well as the other Nordic
countries, had joined the new consensual knowledge for Third
World development. In fact, 92 percent of the respondents
argued that Sida- learned from the IMF/World Bank policy
outlook the importance of macro-economic policies for the
success of development programs. They give over-valued
currency and low prices for agricultural produce as examples
from the Tanzanian experience which had adverse effects on

178
projects as well as the economy in general the very reasons
the IMF and World Bank were giving.
Thus, Sida accepted the mainstream interpretation of
l
Third World Development because it was convinced that sound
macro-economic policies were crucial for the success of
development projects. As Sida joined other donor agencies
in insisting on macro-economic reforms, it accepted not only
the dominant consensual knowledge but also the leading role
of the dominant epistemic community (the IMF and World Bank
policy makers) in development policies. As a result, its
aid relationship with Tanzania became multilateralized. The
impacts of these shifts on Sida's part as an organization
will be discussed in the next chapter.
While the mid 1980s Sida policy decision showed a u-
turn in its attitude toward the Breton Woods institutions,
it did not make Sida part of the international epistemic
community for the Third World policy reform. It was not
until 1988 when the international epistemic community
accepted the inclusion of social cost of adjustment in the
macro-economic reform package, the agenda which Sida and the
like minded donors were advocating that Sida felt part of
the international epistemic community for the Third World
macro-economic reform.
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179
A number of issues combined, therefore, to increase
Sida's understanding of reality. Feedback from its own
program performance in Tanzania was very important because
if Sida had been receiving positive feedback from Tanzania,
the likelihood of Sida making policy shifts in the 1980s
would have been very minimal, if at all largely because
Sida's domestic environment was against such a shift in
policy.
Debates within Sida and with other Nordic countries, as
well as the recommendations of the Michanek advisory group,
all helped speedup the learning process. Sida officials
also had access to top Tanzanian government officials,
including the president, which availed them with first hand
information about what was going on. This gave Sida a
clearer picture of the magnitude of the crisis which in a
way enriched the debate and the decisions that followed that
debate. The IMF and World Bank policy outlook, which became
the dominant consensual knowledge in Third World development
after the mid 1980s, increased Sida's understanding about
the importance of macro-economic policies in development
processes.

180
Learning and Sida's Institutional Processes
Is Sida a Slow Learner?
This study hypothesized that Sida's institutional
processes slowed the learning process. Scholars who have
studied Sida's policy shift toward Tanzania have came up
with different views about the timing of these shifts. Lele
(1992) and Collier (1990) argue that Sida was slow to make
its policy shift in Tanzania. As a result, this helped
Tanzania postpone its reform process. According to this
view, Sida's slowness helped deepen the crisis in a way.
Cassen (1986) and Svendsen (1986), blame the IMF for
the delay. According to Cassen (1986) the reform could have
been delayed by the harsh stance of the IMF in the early
1980s. To him, the IMF demand for a large devaluation may
have actually contributed to the delay of the reforms and
hence, the deepening of the crisis. This could be true as
the exchange rate was viewed by the Tanzanian government as
an instrument against imperialistic exploitation. In other
words, the IMF demanded a change in national principles
which in most cases came slowly and, at best, incrementally.
Svendsen (1986:74) also writes:
At the same time, it must be said that the IMF has been
very stubborn and has made a large devaluation the
symbol of acceptance of conditions for additional
assistance. In this context it is interesting to note
that the IMF's Managing Director conceded during summer

181
of 1985 that the instrument of devaluation might not
work in the usual way under African circumstance.
This is not to say that devaluation is a poor policy,
f
but rather that if the IMF would have taken the social and
political implications of its devaluation into account, it
could have demanded a lower percentage of devaluation to
start with. Some scholars, however, such as Collier (1990),
argue that compared with what Tanzania signed later, the
*
1979 IMF conditionality was moderate. It means that there
was no excuse for Tanzania not to accept that.
It could still be argued that the period before
Tanzania reached an agreement with the IMF was important as
both the Tanzanian SAP and the debates which took place gave
Tanzanians time to prepare for the reform which was a total
reversal of what Tanzanians had experienced previously. In
fact, the ujamaa with its welfare policy were seen by most
Tanzanians as the fruits of independence. The reversal
meant the fruits of independence were taken away. this
could have resulted in riots as President Nyerere claims:
"What do they want me to do, sign and have riots in the
streets?" (Collier, 1990:170).
For Sida, this period was also important as it ushered
in debate about the efficacy of Swedish aid. As Elgstrom
(forthcoming, p.289) asserts: "A rather intense internal
Í

182
debate within Sida and the Ministry for Foreign Affairs took
place ... the outcome was a change in policy 1983-84)."
Evidence from this study shows that Sida was a faster
learner than is appreciated. The United States, Britain,
and West Germany stopped their aid to Tanzania in 1983.
However, the decisions to discontinue aid by agencies from
these countries can be attributed mainly to changes at home
rather than learning. The rise of neo-conservative
governments in these countries in the early 1980s played an
important part in the decision to withdraw aid from
Tanzania. Snook (1996), for example, cites the coming of
the Reagan administration to power as a determining factor
for the withholding of US aid to Tanzania in the early
1980s.
To Sida, the situation at home was different. A social
democratic government, the government that established
Swedish-Tanzania development cooperation in the first place,
was elected to power in 1982. Sida's domestic politics did
not encourage policy shifts at that time. In fact, when
Sida officials returned from Dar-es-Salaam where they told
the government of Tanzania it needed to accept the IMF
conditionality, the Swedish government, particularly the
Ministry for Foreign Affairs, was not particularly pleased
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183
with Sida's decision. In other words, Sida's domestic
institutional processes were against policy shifts.
Furthermore, the period between the USAID, British, and
West Germany withdrawal of aid from Tanzania (1983), and
when Sida communicated its decision to Tanzania (1994) is
about a year. One year is insufficient for organizational
f
learning. Thus, taking the difference in time and the
institutional process at home, it is evident, that contrary
to the general belief, Sida learned very quickly.
Chapter 2 identifies five institutional processes which
were likely to have an impact on Sida's learning process—
rules and procedures, program and strategy, budgetary
routines, leadership, and ideology. While Sida's
bureaucratic politics, leadership, rules and procedures
hastened learning, ideology, budgetary routines, and program
and strategy were constraining factors.
Sida's Bureaucratic Politics and Leadership
In assessing the importance of bureaucratic politics in
the 1980s Sida's policy shifts 31.6 percent of respondents
said it was a very important factor, 36.8 percent said it
was an important factor, =and 31.6 percent saw it as not
important.44 For those who saw bureaucratic politics as a
44For more detail see Table 5.1, page 15.

i
184
very important/important factor, they saw it both at the
level of power and ideas.
At the level of power they saw the leadership not only
opening up parameters for discussion but willingly
participating in the debate about policy reforms. In fact,
the leadership went further to persuade other Nordic
countries to come up with a common stand. The openness of
leadership to different ideas encouraged even those who
otherwise could not have voiced their arguments to do so.
The leadership also sent a series of missions to Tanzania to
appraise projects in the early 1980s (Edgren, 1986). The
results from these missions enriched both the debate and
decision-making within Sida. Moreover, the openness of
leadership and the intensity of the debate which took place
within Sida reduced the power of hierarchy to screen ideas.
All these acted as catalysts for learning.
At the level of ideas, Sida's personnel are influenced
by two major orientations—the "missionary" or "project"
/
orientation and "the Bankers" or "transferees" orientation
(Elgstrom, 1992). The former is made up of generalists,
while the latter consists of economists. The generalists
put more emphasis on the importance of individual projects
and close involvement/supervision as "project secretary".
The specialists, particularly the economists, are inclined

I
185
toward import support, big projects based on Swedish
expertise with economic efficiency as their criterion.
These differences in outlook provided a healthy
condition for debate within Sida whose characteristic of
openness to discussion acted as a catalyst to learning. For
example, Sida's internal newsletter and Rapport (an
independent Sida journal) provided sounding boards for these
debates (Elgstrom, 1992).
The deteriorating economic performance in Tanzania
sharpened the differences that existed within Sida
(Elgstrom, forthcoming). The economists demanded
efficiency. Evidence from Tanzania helped economists to
build strong arguments which later were used to persuade
generalists to reform aid policy. While, in general, Sida
saw some of their projects successful, it was caught in the
issue of sustainability and project contributions to macro-
economic performance. The argument went: if aid programs in
general and Sida's aid programs in particular, were a
success, why are they not reflected in the macro-economic
indicators? As discussed above, evaluation results from
Sida projects in Tanzania concerning performance and profit
generation in the industrial sector were far from
satisfactory. Even their contribution to the Tanzania
foreign exchange reserve was questionable. These, together

186
with the fact that agricultural production, the mainstay of
the Tanzanian economy, had gone down were enough ammunition
in the hands of economists to call for Sida's policy shifts.
Rules and Procedures for Decision Making
Ninety three percent of our respondents agreed that
rules and procedures governing Sida's policy decisions
encourage policy innovation, critical reflection, and
stimulate change; 6.9 percent disagreed. In its decision¬
making process, in most cases, Sida appoints a group of
people to prepare a background paper for policy discussion.
I
The composition of this group cuts across the hierarchy as
well as departments. In most cases, this group consists of
desk officers, heads of unit or division, and heads of
departments. This group is supposed to make a detailed
study and come up with different alternatives based on
empirical facts. The material provided by the group becomes
the basis for policy debate and decisions. The composition
of such groups allows free flow of information not only from
top-down and bottom-up, but also across departments and
units.
Moreover, working procedures at Si!da provide a great
deal of autonomy to departments, units and desk officers.
Autonomy at different levels encourages creativity and
innovation. The decentralized Sida, and the informal and

187
formal communication among employees creates an optimum
atmosphere for debates and learning.
While at a general level Sida's rules and procedures
for decision-making encourage learning, in some cases it may
inhibit learning. Too much autonomy, particularly at the
implementation level, could allow for officials to attach
themselves to certain projects in the recipient country. In
so doing, they limit their capacity to make critical
analysis. This could inhibit learning as an individual
officer may overlook the negative side of projects under his
or her control. In the Tanzanian case, however, the joint
evaluation missions and independent evaluations mitigated
against this.
Program and Strategies
In the 1970s, aid programs were project oriented. This
forced evaluation to adopt a narrow perspective. No attempt
was made to measure the impact of projects on the macro-
economic environment and vice versa. As a result many
projects that were seen as' a success in relation to a given
criteria could have a negative impact on the economic and
social environment. This project specific focus limited
Sida's understanding of the macro-economic implication of
l
its projects. Moreover, objectives were expressed in

188
physical terms which made it difficult to link them to
results and effectiveness in the longer term perspective.
With hindsight, we can conclude that this narrow focus
limited Sida's capacity to see what was happening at the
macro-economic level. This is particularly true as a
general consensus now exists that the macro-economic
environment played a more significant role in the 1980s
economic crisis than was appreciated by Third World
countries in the early 1980s.
On top of that, "development on the recipient's terms"
gave the recipient government the responsibility of
evaluating its own projects. The latter lacked the
qualified manpower to carry out this work. However, the
!
joint evaluation mission helped to reduce this problem.
The study also found .that, in its early days, Sida had
a system of quarterly reports. This system was not very
efficient as it did not give enough time for people at
Sida's headquarters to thoroughly go through the reports and
conduct meaningful discussions about them. Before the
recommendation of the first quarter was sent back to the
field, the second quarter report was already on the table.
This meant that issues which were raised in the first
quarter would also appear in the second quarter.
Furthermore, it meant Sida officials were supposed to read

189
the reports hastily and, as a result, some important signals
were missed or were not given their due attention.
Budgetary Routines
The vast majority (96.6 percent) of our respondents
i
agreed that Sida's budgetary routines in the 1970s did not
in the main encourage learning. Accountability on the part
of Sida was very low. Project results and impact were not
given due attention in the budgetary process. This could
partly be attributed to Sweden's hasty move toward reaching
its one percent of GNP goal of aid volume by the mid 1970s.
This move provided Sida with more money than it could
efficiently spend. As a result, it derailed Sida to a
certain extent, from giving evaluation its due attention or
taking seriously feedback signals. In fact, most
interviewees harbored no doubts that Sida would have done a
better job than it did if-'reaching one percent of GNP had
not been a major concern.
The availability of funds sometimes made Sida sponsor
inappropriate projects or continue to sponsor projects which
gave no indication of success. For example, Sida continued
to support a program of artificial insemination in Tanzania
five years after it was convinced that the project would
fail (Edgren 1986).
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190
Moreover, it encouraged Sida to sponsor huge projects
without considering the capability of the macro-economic
environment of Third World countries to sustain them. As
Elgstrom (1992:43) writes:
In order to spend more money, capital intensive
technology choices have been made, and costly projects
and "hardware" (buildings, equipment) have been
prioritized at the expense of "software" (transfer of
knowledge). Efforts to spread a more cost conscious
way of thinking have been stalled.
Sida's support to the construction of the Southern
Paper Mill in Tanzania is a case in point. This paper mill
was built without considering much of what happened in its
support to a similar project in Vietnam. This is not to
argue-,- however, that Sida was just throwing money to
projects but rather to indicate that the amount given was
too large for Sida's own executive capacity.
For example, the volume of reserve money (money which
l
Sida is unable to spend in a year is kept in a reserve fund)
grew from 67.7 million Swedish kronor in 1964/65 to 329.0 in
1969/70, to 2189.8 in 1979/80, to 4992.3 in 1984/85, to
7632.2 in 1989/90, to 7957.3 million Swedish kronor in
1994/95. This attests to the fact that Sida both was given
more money than it could spend as well as the fact that it
did not just spend for the .sake of it.
l

f
191
Ideology
The majority of respondents (96.5 percent) agreed that
Sida policy decisions were very much influenced by the
ideology of the left in the 1960s and 1970s. According to
the respondents, ideological inclination sometimes reduced
Sida's capacity to conduct a professional analysis of its
activities. As a result, some mistakes were made. In fact,
Sida trusted more the so-called "progressive" governments
than others. This trust was based more on ideological
inclinations than the efficient performance of aid
programs.45
Moreover, Sida presented Tanzania as its success story
not because of performance but rather because of ideological
inclinations. The fact that Tanzania's policy orientation
was in line with Swedish aid objectives made Sida take for
granted not only the impact but also the performance of its
development projects. This elevated view of Tanzania by
Sida sometimes obscured critical assessment of project
performance and, in a way, delayed seeing the negative
effect of some of the Tanzanian government's domestic
policies.
45Sida's support of the artificial insemination project
to Tanzania is an example. The continuation of this project
was based on the trust that the Tanzanian government would
eventually take steps to rectify the situation, which it
never, did. - '

192
Thus, observation made in this chapter enable us to
conclude that the 1980s Sida policy shifts were a result of
learning. We argued that the 1980s Sida's policy shifts
were a result of lessons drawn from the performance of its
development programs and projects as well as from the IMF
and World Bank neo-liberal policy outlook. We further argue
that insights obtained from both sources were translated
into fundamental changes in Sida's aid policy.
In addition, we arglie that Sida's program and strategy
as well as budgetary routines and ideology in a way
constrained the learning process. However, Sida
bureaucratic politics, leadership, and rules and procedures
for decision-making, as well as its decentralized structure,
accelerated the learning process. From these arguments we
conclude that generally speaking, Sida learned relatively
faster than is commonly appreciated.
ft

CHAPTER 6
IMPACT OF LEARNING ON Sida
Shift in Norms and Priority in Aid Objectives
i
In Chapter 1 we hypothesized that in response to
feedback and consensual knowledge, Sida shifted its norms
and priorities among aid objectives and increasingly
accepted "mainstream" approaches to Third World development.
Its organizational routines and technical competence changed
in relative terms. This chapter discusses the impact of
learning on Sida as an organization. The discussion that
follows is couched on the above hypotheses.
Norms
It is important to differentiate here between societal
I
norms and organizational norms. At a societal level, moral
duty and international solidarity are the normative aspect
of Swedish aid. These are in fact, the foundation of
Swedish aid and are the basis of what has been the
overreaching objective of Swedish aid—to improve the living
standard of poor people. These norms justify the need for
giving aid and over the decades they have not changed.
At the organizational level, we talk about operational
norms, i.e., norms that shape the form into which aid is
given, and this is the concern of this section. Two basic
l
193

I
194
norms are eminent at this level—development in recipient
terms and the separation of aid from commercial interests.
Sida has been very strong in both norms. For example,
Jellinek, et al, (1984:392) concluded that "... there is a
strong inclination among the management and staff of Sida
[toward]... a belief that aid should be clearly divided from
commercial cooperation." In other words, Sida wanted
development with little, if any, conditionality.
Development in recipient terms became more important
with the introduction of country programing in the early
1970s. Program aid and unconditional ¿id were also in line
with the above norms. Leftist ideology, which dominated
Swedish aid circles in the 1970s, not only nourished these
norms but also made them highly institutionalized in Sida.
These norms partly explain Sida's sympathetic attitude
toward recipients' performance in the 1970s. They also
explain why Swedish aid has been critical of the Bretton
Wood institutions prior to the mid 1980s. More
specifically, these norms and the radical orientation
associated with leftist ideology made Sida view the Bretton
Wood institutions as imperialistic (Jellinek, et al, 1984
and Elgstrom, 1991).
It is interesting to note that following the 1980s
policy shifts, these norms have changed considerably. The

195
idealism has given way to more realistic views. Prior to
the 1980s, policy shifts norms were not translated into
systematic ways of ensuring that aid given was effectively
and efficiently utilized by the recipient governments. In
fact, Sida organized its aid around trust; a country was
given aid because it was poor and its policies matched
Swedish aid policies. When this was not true, Sida hoped
that its programs and projects would influence recipient
policies toward that end. Recipients' development policies
were neither criticized nor touched. Conditionality was
minimal, i.e., only a small amount of aid was tied to
purchase of goods from Swedish manufacturers and recipient
I
set the tone for development.
Sida's improved understanding since the mid-1980s of
the complexity of development processes necessitated changes
in its norms. Commitment to "good" governance is now the
norm under which aid is given. "Development on recipient
terms" has been replaced by "development with donor
intervention" and increased recipient accountability and
responsibility. Macro-economic conditionality has been
added to conditionality for procurement in Sweden. In
addition, the separation of aid from commercial interest is
a bygone. There are, however, still a dumber of people who
would like to see the old ideals maintained.

196
Statist ideology which placed the state at the center
of development, has given way to neo-liberal ideology. This
has allowed the broadening of the aid spectrum to include
support to the private sector both directly, by Sida, and
through non-governmental organizations. Prior to the 1980s
policy shifts, this was highly opposed by Sida. Changes in
norms is best summarized by one respondent who argues that
"things which in the 1970s were considered wrong, now are
the right things ....1,47
It can be argued that the-move to merge five Swedish
aid agencies into one was a logical consequence of learning.
By accepting the dominant consensual knowledge for Third
World development, the ideological differences which
underlaid the separation of those agencies were blurred.
The merger of commercial and aid interests in Swedish aid
community necessitated the merger of those agencies.
It can also be argued that the experience of having
five separate aid agencies was not very encouraging. There
were duplication of work, increased administrative cost, and
conflict of interest among those agencies. Therefore, the
merger was necessary for reducing administrative cost,
removing duplication of projects, improving coordination,
and efficiency utilization of Swedish aid.
^Questionnaire number 10.
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197
It. is important to note that while restructuring'
presumably reduces cost and increase efficiency, it is not
necessarily always the case. Merging organization can
become more hierarchical, less innovative and inefficient.
However, the merger of the five Swedish aid did not lead to
more hierarchy. In fact, it lead to one less hierarchy.
The extent to which this merger is not going to be at the
expense of innovation and efficiency remains to be seen.
It is interesting to note that while 96.5 percent of
respondents saw changes in ideological inclination helping
Sida broaden its perspectives in development, some
questioned the extent of these shifts. As one respondent
cautioned, "People have gone too far in the market ideology.
We need to take a more balanced view."48
Goals i
Bill 100 of 1962 laid the guidelines under which
Swedish aid was to be provided. According to Anderson
(1986), this Bill was a first step toward systematizing
Swedish aid. Bill 100 stipulated that the goal of Swedish
development aid was to improve the living standard of poor
people in Third Word countries. This goal was very broad.
It was not until 1978 when parliament officially made it
specific in an act which specified: "... (i) economic
^Questionnaire number 13.
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198
growth, (ii) economic and social equality, (iii) economic
and political independence,, and (iv) the development of
democracy in society" as the major goals of Swedish aid
(Karre and Svensson (1989:231).
Before the 1980s policy shifts, Sida placed great
emphasis on social justice and economic equality. The basic
need strategy which dominated international development
processes in the 1970s worked in favor of Sida's goal of
equality. Support for the liberation movement in Southern
Africa and the Portuguese colonies in Africa was a strategy
used by Sida to realize its goal of political independence.
Sida's goal of economic growth, which occupied a front
seat in the 1960s, fell almost to a back seat in the 1970s.
Feedback from its own projects and program portfolios in
addition to the rise of the new consensual knowledge in the
1980s necessitated the re-evaluation of Sida's aid
i
objectives. New weight was given to Sida's goals. Economic
growth, which occupied almost a back seat in the 1970s in
Sida's priority, became a leading priority for Sida after
the 1980s policy shifts. Economic and social equality,
which was the dominant goal in the 1970s, is now almost last
on the list. Other goals were redefined. Economic and
political independence goal came to mean economic
interdependence and political independence. In fact,
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199
economic independence was overshadowed by the political
independence, and in some of the recent Sida's documents,
economic independence is not mentioned at all. Political
independence as a goal is now in the backyard following the '
collapse of the apartheid regime in South Africa. It is
important to note here that the 1980s policy shifts have
nothing to do with the goal of independence.
l
It is also interesting to note that democracy as a
goal had never been a priority for Sida before 1990. It is
appropriate, nevertheless, to argue that the 1980s policy
shifts set a precedence for attaching aid to policy reforms.
This made the tying of aid to democracy and human rights in
1990s a little bit easier than otherwise would have been the
case.
Another interesting thing worth noting is that it is no
longer the matching of Swedish goals and recipient goals
that matters (as it used to be prior to mid 1980s). On the
contrary, more concrete measurable criteria define the
amount of aid to be given. It is development towards market
economy, respect for rule of law and human rights, movement
toward democracy, efficiency utilization of aid, efficient
mobilization of internal resource (improved tax collection
system), reduction in unnecessary government expenditure
particularly the military budget that matter now. A country

200
I
which matches Swedish aid goals but is unable to meet these
criteria will receive little, if any aid.
The above discussion shows that the impact of learning
on Sida's norms and goals is significant. The
incompatibility between moral duty and commercial interests
seems to have been resolved, if not accepted, as the way to
go. The discussion shows changes in norms and goals, as
well as re-evaluation and redefinition of goals to suit
these new developments. Leftist ideology, which dominated
thinking in Sida prior to the 1980s, has been replaced by
neo-liberal ideology. This means that Sida has undergone a
fundamental change due to learning.
Mainstreaming its Approach
Sida was increasingly critical of the "mainstream"
thinking about Third World development before the 1980s.
This manifested itself in Sida's criticism of the Bretton
Woods institutions. Sida's concerns centered on the limited
role of Third World countries in the decision-making process
of these institutions, the extent to which Swedish goals
were represented by these institutions, and the
administrative efficiency of these agencies (Jellinek, et
al, 1984). In fact, prior to the 1980s policy shifts, Sida
was proud of being an agency with a relatively independent
approach.

I
201
The 1980s Sida policy shifts meant it has accepted the
IMF and the Word Bank policy outlook as the most viable
alternative for Third World development. In fact, the World
Bank and the IMF not only provided a technical lead, but
their "... neo-liberal ideology also became the dominant
view.of what needed to be done" (Elgstrom, forthcoming,
p.338). Consequently, Sida is no longer an agency that
stands for an autonomous approach.
While Sida has increasingly accepted the consensual
knowledge about Third World development!, this neither means
that Sida is uncritically embracing it nor does it mean that
Sida is simply waiting for the dominant epistemic community
to come up with new causal explanations. On the issue of
environment, for example, long before it became an important
aspect of development activities, Sida, as well as Swedish
politics has been debating it (Jellenik, et al, 1984). In
1988 the Swedish Parliament approved environment as a goal
of development.
In the Tanzanian context, Sida began to take into
account environmental issues in the eairly 1980s with a shift
from soil conservation to land management, rehabilitation
and productivity.49
^questionnaire number 20.

202
The movement toward mainstreaming (its approach can
clearly be depicted in the tying of import support with the
fulfillment of IMF conditionalities. Moreover, the five
criteria for giving aid which the Swedish government adopted
in the late 1980s and early 1990s also attest to these
shifts. The criteria for governing the amount of aid to be
given to a country include development toward market
economies, democracy, respect for human rights, the
efficiency of aid, and low military spending (SASDA, 1994).
Although respect for human rights has been on the Sida
agenda for some time (support for liberation movements and
i
the struggle against apartheid), it has not been tied to
Swedish aid. It seems to us that these criteria have been
brought about by learning, particularly from the neo-liberal
thinking pioneered by the Bretton Woods institutions.
While the movement by Sida toward the IMF and World
Bank has been more remarkable, the IMF and the World Bank
have not remained static. -In fact, they have also moved
towards Sida and agencies with similar thinking (Karre and
Svesson 1989). In the Tanzanian case, for example, Sida and
other Nordic countries played an important role in making
the IMF and the World Bank take the social cost of
adjustment seriously. As Ehrenpreis (1996:18) concludes
Sida "... eventually played an active and supportive role in

203
international consensus-building on structural adjustment
with a strong focus on poverty and social dimension."
l
The IMF has increasingly shown concern for the poor.
In its 1990 Annual Report, for example, the IMF writes "...
the need to identify more closely the poor, assess the
impact on them of policy reforms, and improve the policy mix
in programs remains urgent." While this IMF move cannot be
solely attributed to Sida, it is definitely the role played
by Sida and the like-minded agencies that helped shape the
IMF thinking toward poverty reduction. In addition, the IMF
also has increasingly shown concern for the environment,
political consideration, and concern for human rights
(Polak, 1991) 50. According to Polak (1991) these issues are
not originally IMF areas, but the result of interaction
between the IMF and other donors in the Third World
development process.
Changes in the Nature and Volume of Aid
In terms of changes in the nature of aid, this study
focuses on the direction of aid in different sectors. We
chose six major sectors in the Tanzanian economy--rural
development, industry, education, public administration,
I
50 The IMF has explicitly shown concern for human
rights in its dealing with the former apartheid regime of
South Africa.

204
import support, and infrastructure. Table 6.1 below shows
five-year average allocations to these sectors for a period
of twenty years (1975/76-1994/95).
Table 6.1 Average Sectoral Allocation to Tanzania in
Percentages 1975-1995.
Year
July
to
June
19. .
Rural
Deve
lop
ment
Indus
try
Educa
tion
Pub
lie
Admin
istra
tion
Im
port
Supp
ort
Infra
stru
cture
Other
75-80
35.0
7.4
12.4
14.6
20.4
5.5
1.2
80-85
16.8
23.4
13.6
5.0
30.2
3.2
7.8
85-90
14.2
8.8
8.8
6.8
37.2
6.6
11.2
90-95
17.4
11.2
11.2
4.4
17.4
17.4
29.8
Source:' Computed from Sweden’s Development Assistance in
Figures and Graphs 1994/95.
Table 6.1 above shows that rural development, which
averaged 35 percent in the period between 1975/76 and
1979/80, reached its lowest level folldwing the 1980s policy
shifts. Industrial and educational sectors also experienced
similar declines. Allocation to public administration,
import support and infrastructure shows a relative increase
after the mid 1980s policy shifts. It is difficult to
determine with certainty changes in the direction of aid
since import support was "... directed towards agriculture,
transport and industries and certain public
services..."(Ljunggren, 1986:81). One can argue, however,

205
that following the 1980s policy shifts more aid was
allocated to import support than before. In fact in 1985,
53 percent of all Swedish aid went to import support, the
majority of which was used in rehabilitation and maintenance
of existing facilities and inf rastructiires. Supply of spare
parts and agricultural tools was a primary concern. Sida
paid particular attention to "... agriculture, industrial
and infrastructural rehabilitation, the possibility of
safeguarding social gains, and ... balance of payments."
(Ljunggren, 1986:80). Import support was also tied to
fulfilment of the IMF/World Bank macro-economic reforms.
Thus, the 1980s policy shifts led to necessary changes in
the nature of aid, changes away from unconditional import
support to the tied one as well as shifts from new ventures
to the maintenance and rehabilitation of existing
structures.
In addition, the amount given to non-governmental
organizations rose considerably after the mid-1980s, growing
from below 6 million Swedish Kronor in the early 1970s to
about 10 million in the early 1980s. It then increased
dramatically to reach 475 million Swedish Kronor in 1987/88
and to about 1000 million Swedish Kronor in 1994/95
(Ehrenpreis, 1996). This shows that following the 1980s
l

I
206
policy shifts, Swedish NSOs played more important roles in
Third Word development than before.
In the Tanzanian context, the 1980s policy shifts
opened the way for other Swedish agencies. Prior to these
shifts', Sida was the only Swedish aid agency with a
significant contribution to the Tanzanian development
processes. Other Swedish agencies, including SAREC did not
contribute significantly to the Tanzanian development
l
processes until after the mid 1980s. The contribution of
other Swedish agencies represents 2.2 percent of total
Swedish aid to Tanzania in the period between 1985/86 and
1989/90 and 1.3 percent in the period between 1990/91 to
1994/95.
With regard to volume of aid, Tanzania received on
average, about 44 percent o.f Sida's Program Countries (PC)
budget for Africa in the 1970s and about 28.6 in the 1980s
and around 20.2 percent in the first half of the 1990s as
Table 6.2 shows. These figures show in part the declining
importance of Tanzania to Sweden since*the 1980s.
An argument can be made, however, that the decline in
Tanzania's share of Sweden's budget for program countries in
Africa is due to the fact that new countries from Africa
were added to the list of Sweden's program countries,
notably Mozambique, Angola, Zimbabwe, Namibia, and Uganda.

I
207
The addition of these countries necessitated redistribution
of Swedish aid to Africa*which led to the decrease in the
Tanzanian share.
Table 6.2 Tanzania's Share of Swedish Aid to Program
Countries of Africa 1975-1995.
Year 19...
(a)
(b)
(c)
75/76-79/80
3889
1438
37
80/81-85/85
10353
2967
32
85/86-89/90
11669
2955
25
90/91-94/95
14101
2904 1
20
Source: Computed from Sweden's Development Assistance in
Figures and Graphs 1994/95.
Key: a = Disbursement to Sweden's program countries of
Africa via Sidá in million Swedish Kronor (in 1995
prices).
b = Disbursement to Tanzania via Sida in million
Swedish Kronor (in 1995 prices),
c = Tanzania's share of Sweden's program countries for
Africa (in percentage).
Another argument which could be made from the figures
above is that the decline in Tanzania's share of Swedish aid
to Africa is probably a product of a more strict mechanism
of disbursing aid to Tanzania which Sida has employed since
the mid-1980s. For example, in 1994/9!} Sweden withheld most
of its funds because of lack of an effective tax collection
mechanism in Tanzania. In fact, in that year the Tanzanian
share was the lowest ever (12 percent).

208
These points taken, the declining (importance of
Tanzania to Sweden in the 1980s and 1990s cannot be ignored.
In fact, the general consensus in our focus group was that
the importance of Tanzania to Sida has declined
considerably. Tanzania is no longer treated as a favorite
country. Although few saw the decline as temporary, the
majority saw it as permanent unless Tanzania takes serious
steps'"toward making its governance practice considerably
more effective and efficient. (For more detail on
Tanzania's share of Swedish aid to program countries of
Africa, see Appendix 5).
(
Shift in Strategies
a
Rural Development
Prior to the mid 1980s, the major focus of aid was
development via the state. With regard to ecological
issues, for example, the state was seen as a solely
responsible in areas of forestry and soil conservation.
Moreover, soil conservation was isolated from soil
productivity. Local participation and local organizations
were largely ignored in favor of state sponsored
organizations. Policies guiding these areas have not been
able to produce satisfactory results.
Since the mid 1980s; a more integrated system of land
management and production involving farmers' organizations,

209
I
pastoral associations, fishing organizations, credit groups,
and water organizations have been established.51 Broader
participation on the part of local communities has been
emphasized. The main focus is on small producers with a
particular emphasis on women. Increasing productivity
within the framework of land management and rehabilitation
is the major concern. It means that productivity with
environmental consciousness has replaced the old way which
took soil conservation and productivity as a separate
phenomenon. This new strategy put people at the forefront
of land management, rehabilitation, and productivity. Soil
conservation, and other programs for sustainable
development, were expanded. In Tanzania, for example,
district oriented programs for the management of forestry
and land productivity (LAMP) have been implemented in
Arusha, Singida, and Morogoro regions.
Non-Governmental Organizations (NGOs)
One of the strategies used by Sida to realize its goals
has been cooperation with non-governmental organizations
(NGOs) dealing with environment, gender, human rights,
democracy, and other humanitarian issues. This strategy has
undergone three major changes since the 1980s. First, the
dialogue between these NGOs and Sida has moved beyond the
51Refer to HESAWA and LAMP projects in Tanzania.

210
project level to include policy issues. Sida discusses and
assesses NGO objectives, policy, and strategies to see if
they are in line with Swedish aid goals. Before the 1980s
policy shifts, dialogue with the NGOs was limited to the
project level.
Second, the increasing number of.NGOs in the 1980s has
necessitated the creation of umbrella organizations. Sweden
has more than three hundred NGOs dealing with development
processes. Thirteen umbrella organizations have been
created which make direct contact with Sida.
Third, Sida has also taken a conscious step toward
strengthening the capacity of these NGOs to deal with the
I â– 
challenges of development. A number of capacity-building
studies have been initiated to look at the administrative
and management capacity of these organizations with a view
toward enhancing their capacity. These changes are mainly
the result of Sida's own experience.
Transport and telecommunication reforms shifted from
supporting major, roads to rural roads while sector reforms
included the restructuring of the TAZARA railway and
Telecommunication system.
Institutional Capacity Building.
Sida's support to education pays particular attention
to primary education and rural development education in folk

211
colleges52. Health service has moved from focusing on
primary health care to health system reform with support for
sexual and reproductive health, including maternal health
and family planning. Reforms also include focusing on the
health system to improve government capacity for planning,
administration, and economic management of the health
system.
Public administration focuses on "good" governance,
including civil service reform, government financial
reforms, and the democratization process. It also works to
improve the judicial system and to influence the respect for
the rule of law. Generally, the focus has shifted from
projects to institutions and policy reforms. Prior to the
mid-1980s, the focus was on technical jssues and short term
organizational matters. Institutional matters were handled
purely on an ad hoc basis with a very narrow focus.
Institutional cooperation has since been enhanced.
In terms of research cooperation, Sida has moved from
supporting individual research efforts to supporting
institutional capacity with an emphasis on issues of
sustainable development, gender, democracy and human rights.'
Strengthening libraries, financing international travel for
52 These are colleges that teach local communities on
how to improve their skills and knowledge in various
sectors.

212
researchers, sponsoring joint university programs are only a
few of the activities which Sida is supporting. Focus has
also shifted to strengthening institutional links between
Swedish institutions, particularly universities, with Third
World institutions of higher learning and research. Sida is
also supporting students from Third World countries for
masters and PhD studies. African countries receive more
than 50 percent of the resources committed to research.
Another important shift in this area is that prior to the
mid 1980s, multilateral organizations, particularly the UN
system, were receiving about 80 percent of research money
and bilateral cooperation's research got only 20 percent.
This has changed. Bilateral cooperation now receives more
than 50 percent of all research funds. Thus, following the
1980s policy shifts, the emphasis has changed from focusing
on exclusively physical infrastructure/ to institutional
infrastructure both at the governmental and local levels.
Import Support
Since the mid 1980s, we see the traditional project
support being replaced by import support. In the Tanzanian
case, for example, allocation to import support was more
than 50 percent of the total Sida allocation in 1985.
Import support is mainly used for essential commodities,
including inputs and spare parts. Import support is given
I

213
to those countries which undertake economic reform programs
as approved by the IMF and/or the World Bank. It aims at
creating macro-economic balance and economic growth.
Local importers are required to pay full counter value
in local currency. Monitoring and follow-up of counter
payment value has always been a problem with import support.
Moreover, because the use of counter válue funds is neither
tied to specific expenditures nor checked, the funds are
easily embezzled or used to finance a loss-making public
sector.
Shift in Organizational Routines
Structural Changes
In 1986 Sida underwent a structural reorganization. It
reduced its departments from ten to five and created ten
sectoral division and sixteen Development Cooperation
offices (one in each program country). This reorganization
aimed at improving the coordination and monitoring within
each program country and the reporting system between the
Development Cooperation office and Sida-Stockholm.
Regional heads became overseers of all sectoral activities
within their region and were allowed to implement changes in
sectoral allocations. â–  â– 

I
214
Evaluation
Evaluation has been revised from being a narrowly
focused to a more holistic approach. Before the 1980s,
evaluation was more historical in character; now it is more
scientific. The quality of evaluations has also increased
with the use of consultants and independent evaluators. The
most significant change in the evaluation process is the
awareness of the importance of independent evaluators and
recipient participation in the evaluation process and the
importance of setting realistic and measurable goals.
The status as well as the importance of evaluations has
increased. The Evaluation unit which was reporting to the
Director General now reports directly to the Board of
Directors. This unit has contributed to making the whole
evaluation process more professional than before. Prior to
the 1980s policy shifts, most evaluations were the result of
individual efforts rather than organizational ones.
Evaluation now has become an organizational effort.
i
With the introduction of country analysis and results
analysis, which require the use of evaluations in their
preparation, evaluation has become an organizational
phenomenon. Evaluations have been important in drawing
lessons, justifying spending, or laying the basis for more
spending. Evaluation and other feedback has been used in

I
215
country analysis to lay the basis for aid support for a
particular country as well as for withholding it.
Lessons learned has been given new status; prior to
1980s there were no sections in evaluations or other reports
devoted to lessons. A conscious effort to learn has made
Sida require that an independent "lessons learned" section
be included in all of its evaluation reports.
Reporting
In its early days Sida had a system of quarterly
reports. With time, Sida realized that! the quarterly report
system was not very efficient as it did not allow enough
time for people at Sida headquarters to thoroughly examine
the reports and conduct meaningful discussions about them,
particularly because before the recommendation of the first
quarter was returned to the field, the second quarter report
was already on the table. This meant that issues raised in
the first quarter would appear in the second quarter. It
further meant Sida officials were required to read the
reports in haste and, as a result, some issues were missed
or were not given due attention. (
Sida now uses a semi-annual and annual reporting
system. This change allows Sida officials to conduct in-
depth studies of these reports. It also gives them the
opportunity to have meaningful discussions and prepare

216
recommendations. In fact, this move by itself shows how
lessons from experience can help an organization improve its
feedback system.
In the early days, people used to write long and
complex reports. This has changed over the years. The
management has agreed that the report or policy paper should
not exceed ten pages and be presented more clearly. If
reports go beyond ten pages for necessary reasons, then an
executive summary must be attached. Also meetings should be
short and to the point.
Consultants
l
Prior to the mid 1980s, Sida used to contract people to
work in the field mainly as advisors to government
organizations. In most cases, these experts held executive
posts and, as a result, their utility in terms of training
and capacity building was very limited. Since the mid
1980s, Sida has increasingly been using consultants in its
projects and programs preparation, monitoring, and
assessment. Consultants are employed in areas where Sida
lacks competency or where independent evaluators are
required.
Sida continues to mix consultants (from universities and
private companies. Prior to the 1980s, consultants
generally were Swedes and were mainly dealing with

217
feasibility studies. Following the 1980s policy shifts,
Sida has expanded its horizons to include consultants of
l
international reputation, including consultants from Third
World countries. Most consultants in the 1980s have been
those oriented toward institutional capacity-building. The
increasing use of consultants has led to a significant
reduction in the number of people working in the field.
Both short- and long-term consultants have replaced field
personnel.
One respondent saw the use of consultancy by Sida as
likely to lead to an experience gap. According to him, most
development experts in Sweden are a product of Sida's
efforts to contract people to work in the field. By not
contracting long term field workers Sweden will have
limited, if any, experts with field experience. He called
for striking a balance between contracting people to work in
the field and the use of consultants.53
Budgetary Routines
Changes in budgetary routines in the 1980s to involve
results analysis have enhanced Sida's capacity to deal with
development programs. Before results analysis was
introduced to the budget process, spending and politics
I
“Questionnaire number 31.

218
drove the budget. Politics, in the sense of reaching one
percent of GNP and spending, in the sense of Sida's capacity
to disburse funds. With the introduction of result
analysis, achievements in terms of project impact on the
local population is at the core. Results analysis has made
Sida aware of the need to take seriously the extent to which
program objectives have been achieved and, if not why? In
so doing the quality of Sida's decision-making has improved.
Shift in Technical Competence
Macro aid policy formulation by the World Bank and the
IMF has definite policy and institutional implications for
doner agencies. According to Lele (1992:xi), for example,
the increasing reliance on 'the World Bank and the IMF for
determining aid direction has led to a decline in internal
technical know-how and capacity in most aid granting
agencies. Findings from this study, however, show that Sida
has been affected positively by the new consensual
knowledge. Preparation of a country strategy requires a
detailed account of the country's social, economic and
political processes, including various possible scenarios of
constraints and the impact of Swedish aid on those
processes. This, together with Sida's established emphasis
on contextual factors, has increased Sida's technical know¬
how regarding its program countries.

*
219
Moreover, more than 90 percent of our respondents
argued that the IMF and World Bank macro-economic reforms
have played an important role in increasing Sida's awareness
of the importance of the macro-economic environment in the
performance of development aid. Tying import support to the
implementation of the IMF and World Bank policy reforms
attests to this improved understanding.
The quality of discussion at different levels has
¿ j
increased partly because there are a lot of experienced
people at different levels within Sida. Consequently, a
great deal of experience is brought to bear on the policy,
programs or projects debates as well as decisions.
Moreover, the feedback system, including evaluation and the
use of consultants has improved considerably. Information
obtained from these sources is now more scientific than
previously. The contribution of these factors to the
quality of debate within Sida and between Sida and recipient
countries as well as other donors cannot be underestimated.
* I
Moreover, Sida staffs are recognizing that it is the
results that count, not just completion of projects. For
that matter, a lot of effort has been directed toward that
end. As one respondent argues, policies employed since the
mid 1980s "...require sharper arguments, good performance

220
and convincing evidence".54 This means that a lot of effort
is devoted to seeking and improving knowledge about Third
World development.
Multilateralization has also allowed greater sharing of
data and information among donor agencies. Sida uses
information from other donors as well as lessons from their
failures and successes in its policy debate and decisions as
information is more accessible now than ever before.55 This
has enriched Sida's debate, and decisions. As one respondent
argued "... Sida is more effective and focused in dialogue
with other donors than before."56
Thus, the above discussion support our second and third
hypotheses. We argued that Sida multilateralized its
bilateral relations as a result of learning which was
translated into changes in Sida's operational norms and
goals. We further argued that lessons drawn from feedback
and international consensual knowledge made Sida change its
approach to Third World development and its organizational
routines. Besides, we argued that multilatelization has
played an important role in increasing Sida's technical
competence for program countries. We also argued that
^Questionnaire number 7.
55Refer to Chapter 5.
^Questionnaire number 2.

221
learning which took place in Sida in the 1980s was a
fundamental one because the resultant changes were bold with
far reaching effects.

CHAPTER 7
Conclusion
Sida and Policy Change
The central issue in this dissertation has been to
explain reasons for the 1980s policy shifts by Sida as well
as the impact of these shifts on Sida as an organization.
Our first hypothesis was that Sida initiated policy change
in the mid-1980s because its project and program portfolio
had failed to achieve acceptable results. Findings from
this study show that feedback from Sida's own projects and
programs in Tanzania signaled unsatisfactory performance
which was initially attributed to managerial and technical
factors. We argue that the narrow focus of Sida's feedback
system, particularly the evaluation system before the 1980s,
i
played an important role in limiting the explanations for
unsatisfactory performance to managerial and technical
reasons.
We argue that as the Tanzanian economic crisis
deepened, Sida realized that the supposedly managerial and
technical problems had much deeper roots than initially
thought. In fact, these problems were rooted in Tanzania's
222

í
223
macro-economic policies, particularly foreign exchange and
counterproductive agricultural policies. This persuaded
Sida to enter into macro-economic dialogue with Tanzania and
other countries in the then Southern African Development
Coordination Conference (SADCC) in the areas of producer
prices, foreign exchange policy, and the role of the private
market (Ljunggren, 1986).
Concerning the IMF and World Bank (Policy outlook the
study found that the macro-economic reform policy (NESP and
SAP) initiated by Tanzania in the early 1980s, like many
other proposals initiated by other Third World countries,
did not work as expected, largely because these reform
proposals did not have far reaching effects, nor were they
supported by many donors. Despite realizing the complexity
of Tanzania's problems, Sida like many other donors put
little, if any, effort toward developing alternatives. This
could partly be attributed to the fact that during this time
"development on recipient terms" was Sida's operational
i
norm.
Amidst this complexity, the IMF and World Bank macro-
economic reforms emerged as the most viable alternative for
Third World development. We argue that policy arguments
associated with the IMF and World Bank neo-liberal thinking
were sufficiently persuasive to make Sida, as well as other

224
donors, accept macro-economic reform as the most viable
alternative. As Sida and other donors accepted this, they
accepted not only the leading role of the Bretton Woods
institutions in the macro-economic policy of Third World
countries, but also the neo-liberal ideology underlying
those, policy reforms. . Thus, the Bretton Woods institutions'
macro-economic reforms became the dominant consensual
knowledge for Third World development since the mid 1980s.
The study also hypothesized that Sida's institutional
processes slowed the learning process. ' Data presented in
this dissertation shows a mixed result. We argue that
Sida's institutional processes, including budgetary
routines, and ideology, together with Sida's operational
norms, were limiting the organization's learning capacity.
Sida's leadership, bureaucratic politics, its decentralized
structure, as well as rules and procedures for decision
making acted as accelerators for Sida learning. We argue
that Sida evaluation process played double role. While in
the main evaluation process speeded learning its narrow
focus acted decelerated learning to a limited extent. These
observations enabled the study to conclude that in the main
Sida's institutional processes made Sida learn faster than
is commonly appreciated.

225
<7
This study identified Sida's domestic contextual
factors and bureaucratic politics as competing explanations.
Domestic contextual factors in this study include the
structure of the Swedish government, change in the national
political leadership, public opinion and economic
conditions. Bureaucratic politics centered around
leadership and competition of ideas among Sida staff.
Findings presented in th>is' dissertation show that domestic
contextual factors played little, if any, role in the 1980s
policy shift by Sida. Bureaucratic politics played more of
a catalytic role than a causal role for the shifts. These
l
findings support conclusions reached by Karre and Svensson
(1989) and Elgstrom (1991).
Findings in this study also support our second and
third hypotheses. They enable us conclude that the major
consequence of lessons drawn from feedback and consensual
knowledge was multilateralization of Sida's bilateral
relation. This manifested itself in a number of changes,
including changes in Sida's approach to Third World
development, in priority among aid objectives, in
organizational routines, and technical competence.
We argue that Sida, which was proiid of having a
relatively independent policy approach to Third world
development, had to swallow its pride as lessons from its

226
own program and project portfolios necessitated a different
approach, one which dominated mainstream thinking. We also
argue that as Sida was accepting the IMF and World Bank
l
macro-economic reforms it also was in a way "mainstreaming"
its own approach to Third World development.
Data presented in this study enable us to conclude that
Feedback from Sida's projects and program portfolio in
addition to the rise of the new consensual knowledge in the
1980s made the re-evaluation and redefinition of Sida aid
objectives an inevitable phenomena. Economic and social
equality which was the leading priority among Sida's goal in
the 1970s took a back seat after the 1980s policy shifts.
The goal of economic growth became the leading priority.
Other goals, including economic and political independence
was redefined.
We also argue that multilateralization has helped Sida
to improve its technical competence. Sida's feedback system
has improved and is more focused than previously. This is
partly because macro-economic dialogue among donors and
between donors and recipients, which is the result of
multilateralization, requires persuasive arguments grounded
evidence but also on evidence supported by reliable data.
The evaluation department has responded to this
challenge by formulating an evaluation policy and guidelines
l

227
under the Logical Framework Approach (LFA). This approach
is more systematic and focused; if institutionalized, it
could lead to considerable improvement not only of Sida's
learning process but also in the quality of debate and
decisions. The use of country strategy and result analysis
has increased Sida understanding of program countries'
macro- and micro-economic issues.
Sida's confidence and technical competence in the area
of macro-economics has increased. Prior to the 1980s,
macroeconomic issues were not addressed by Sida. Now it is
one of its major concern. Moreover, Sida's country strategy
involves the detailed analysis of social, economic, and
political variables that are likely to impact on the program
under question. This increases Sida's technical competence
in not only macro-economic issues but also governance, as
l
well as social issues. Contrary to Lele's (1992) assertion
that the technical competence of international organizations
concerning specific countries has gone down as a result of
depending on the IMF and World Bank leadership, results
presented in this study show that Sida's technical
competence has gone up.
We also argue that Sida's strategies and organizational
routines have changed significantly. Findings show that
Sida has added ecological issues, local institutions and
l

228
community involvement to rural development strategy. Focus
has also shifted from physical infrastructure to
institutional infrastructure. We also argue that the nature
of aid has changed as Sida focused its aid on import
support.
As regards organizational routines we argue that the
reporting system, the use of consultants, budgetary and
evaluation routines have also changed to fit the 1980s
developments. For example, the evaluation department now
reports directly to the Board of Directors instead of the
Director General as previously. This means that evaluation
is an organizational issue rather than a departmental issue.
Thus, what took place in Sida in the 1980s was
fundamental learning which was translated into fundamental
policy change. We argue that this learning involved not
only reevaluation and rédefinition of Sida's norms and
goals, but the whole Swedish aid process was brought to
test. The result was an improved understanding of the
complexity of development aid, an understanding which
necessitated fundamental policy shifts by Sida in the 1980s.
While most respondents agreed that changes have had a
positive effect on Sida's aid programs, still one has to be
cautious regarding a number of issues, including what the
market, can accomplish in the social, economic and political
c

I
229
environment of Africa. Higher expectations can lead to
disillusionment very soon. Similarly, rather than
dismissing statist policies and programs wholesale, it is
important to make a thorough analysis of what a state can
and cannot do within the African context. In other words,
it is important to understand the extent to which we can
"roll back the state" and still make it capable of providing
incentives and defining the direction of development. We
think the days when the state role was deduced to
maintenance of law and order are long gone.
Our findings also showed that Sida has a balanced view
of the relationship between the public and private sector.
This is particularly true as the Swedish economy is rooted
in this balance. Moreover, the shift in ideological
inclination experienced by Sida since the early 1980s has
widened Sida's perspectives in a more balanced way then
before. This suggests that a balanced view may continue to
be nursed and strengthened to create a more dynamic
environment for policy debates. /
Most Sida employees see Sida's capacity to learn as
having improved considerably in the last ten years. They
also see information overload as a major obstacle to
learning. As Simon (1957) argues, people's minds are
limited; they can only handle so much at a given time. It

230
is important for Sida to study this problem and look for
ways of dealing with it.
One way of dealing with this problem is to try and
condense report, and shorten meetings. This can be
achieved by attaching a summary of. report findings, showing
major issues of concern and referring to the major text for
a more detailed account. This needs to be written in a
simple and straight forward language.
Another way is to create a data bank that contains
abstracts of evaluations, reports, and other documents under
defined subjects, for quick reference. If staff want to
look for something, they can easily retrieve summaries or
abstracts from the computer instead of going through entire
reports. This will save a lot of time and energy. We know
that creating such a data bank involves a lot of work and
resources; however, we believe that not doing it now is
tantamount to postponement of the problem. It will be
easier for Sida to do it now than wait until time forces it
to do so. Technology will necessitate it sooner or later.
i
Sida can assign a few people to do this work now, at the
1
same time that it requires that all reports and important
presentations include an abstract or summary. This can save
Sida time and resources when the agenda to institute a data
bank arises.

231
The Learning Model
The learning model developed in this study draws upon
insights derived from the organizational, institutional, and
learning literature. While feedback is derived from the
literature on organizational theories, consensual knowledge
is taken from the learning literature and institutional
processes from literature on institutions. Findings show
that a combination of these factors are important in
explaining learning in international development agencies.
This study explain a case where an organization changes
its aid policy as a result of the knowledge gained from a
mixture of feedback knowledge, new consensual knowledge, and
its own institutional processes. Although we cannot
generalize from these findings, we still may argue that for
a sound explanation of policy change in international
development agencies, one needs to include learning as a
competing model in the study design. This is particularly
true given the nature of both their work and the environment
in which agencies operate. Their work involves a great deal
of trial and error; the environment in which they operate is
not only full of uncertainty, but it is also constantly
changing.

232
Swedish Aid: The Future and Its Implication to Policy Makers
The Swedish aid constituency has considerable influence
with almost all political parties. With the inclusion of a
commercial interest in development aid, even the
conservatives have begun to support it. Moreover, Sweden
has more than three hundred NGOs which are funded by Swedish
aid. These together with the fact hat development is
founded in the moral values of the Swedish public (Kare and
Svensson, 1989), make us conclude that Swedish aid will not
stop in a foreseeable future. The continuation of Swedish
aid in a specific country will depend on the commitment of
that country to macro-economic reform. Figure 7.1 shows
that the response of donor agencies to Third World countries
will vary according to the zone in which they are located.
In the figure below, Zone 1 represents states which
are not committed to macro-economic reforms and yet still
are doing well. Zone 1 is more hypothetical than real. In
actuality, it is very difficult to find a state that is not
committed to reform and still performing well, although
China, which is undergoing partial economic reform, may be
an exception. China, however, does not fit this study
because it does not depend on development aid. This study
seems to indicate that the challenge for policy makers in
countries situated in Zone 1 is to study the macro-economic

233
Figure 7.1 State Commitment to Macro-Economic Reform and its
Implication to Policy Makers
Good Performance
Un¬
committed
state
i
1
L
4
2
3
’
Committed
state
Poor Performance
reform package and select policies appropriate for their
countries just as China is doing. Ignoring macro-economic
reform packages altogether, as is the case with North Korea,
can be disastrous for a country's economic development.
There several options for donors agencies dealing with
countries located in Zone 1. They can stop giving aid,
engage in dialogue with policy makers with the view of
persuading them to improve some of their policies (in areas
of human rights and democracy), establish cooperation at the
level of trade and other ventures.

234
Zone 2 represents those countries which are not
committed to macro-economic reform and are performing
poorly. Cuba and North Korea are candidates likely to fall
into this category. Tanzania, and a lot of other countries
which were resisting the IMF conditionality was in this
category in the early 1980s. It was the effort of the donor
community, particularly Sida and the World Bank, which
prompted Tanzania to accept the IMF/World Bank macro-
economic reform package. The Tanzanian case shows that it
is important for the donor community to exert pressure and
open discussion in policy matters with a given government.
Discussion may highlight important contextual factors which
donors may have overlooked. Similarly, it can help clear
issues which a government concerned may have overlooked or
over-emphasized. Tying aid to macro-economic reform is one
method of exerting pressure toward compliance. If this does
not work, the withdrawal of aid is another option, although
is not always easy. Withdrawal, sometimes can be limited by
the level of investment a donor agency has made in a
particular country over the years and/or the degree of
friendship between the donor agency and a recipient
government. The case of Tanzania shows that while Sida
chose' discussion and persuasion, in contrast, USAID Britain
and West Germany chose withdrawal. This study indicates

235
that the above two factors (among others) played an
important role in Sida's decision.
Tanzania, and the majority of African, Asian, and Latin
American countries which receive Swedish aid, moved to Zone
3. In this zone, countries have to show commitment to
macro-economic and political reform in order to recieve aid.
Third World countries need to accept and then commit
themselves to these reforms rather than accepting for the
sake of guaranteeing aid. The problem is how do we measure
the level of commitment? Further research is need to answer
this question.
It is important for policy makers in this zone to
engage in continuous discussion about these reforms to
determine their pace and sequence. This type of policy
dialogue can also help resolve some of the difference
between donors and recipient governments. For countries
under this category, effort needs to be directed toward
improving the enabling environment for economic and
political development.
South Africa and Botswana are the best candidates in
Africa for Zone 4. For countries located in this zone,
donor agencies need to focus on improving trade
relationships and economic cooperation with little or no
aid. Policy makers in these countries need to direct their

I
236
efforts toward establishing their countries' priorities and
creating incentive packages in areas where domestic capital
can not venture or advanced technology is needed. Thus,
figure 7.1 shows that the future of development aid is
based on the commitment of Third world states to engage in
reforms for economic development and good governance.
a
I
I

APPENDICES
Appendix: 1, Value of Tanzania's International Trade
(Millions Tshs)
Year
Exports
Imports
Balance
Percentage
1976
4109
5421
-1312
24.2
1977
4536
6199
-1663
26.8
1978
3671
8798
-5127
58.2
1979
4216
8885
-4669
52.5
1980
4776
10210
-5434
53.2
1981
4806
9739
-4933
50.7
1982
4230
10519
-6289
59.7
1983
4271
8877
-4604
54.8
1984
6235
13373
-7238
54.1
1985
6173
16966
-10795
63.6
1986
11067
29880
-18813
62.0
Source: Compiled fromTanzania's Economic Survey (several
years).
237

Appendix: 2, Official Government Revenue-Expenditure
1975/76-85/86(Millions Tshs)
Year
Revenue
Expenditure
Surplus/defici
t
1975/76
3918.5
3715.6
202.9
1976/77
6129.0
4702.5
1426.5
1977/78
6082.1
5563.3
518.8
1978/79
6812.0
8295.0
-1483.0
1979/80
7757.3
9229.0
-1471.0
1980/81
8872.0
10136.0
-1264.0
1981/82
10960.0
13214.1
-2254.1
1982/83
13145.0
14871.5
-1726.5
1983/84
15465.0
18182.0
-2716.4
1984/85
19143.0
21336.5
-2193.4
1985/86
22321.0
27407.1
-5081.3
Source: Compiled from Tanzania's Economic Survey (several
years).
1

t
Appendix : 3, Tanzania: Exports of Major Crops 1970-84 by
Volume (tonnes)
Year
19. .
Coffee
Cotton
Sisal
Cashew
Tea
Toba
cco
Flue-
cured
Pyre-
thrum
70/71
46.7
223.8
181.1
112.5
9.2
8.8
2.7
71/72
52.4
193.5
156.8
126.0
11.6
10.6
4.3
72/73
47.5
225.7
155.4
125.5
13.3
10.8
4.0
73/74
42.4
188.4
143.4
145.1
12,3
15.3
3.3
74/75
52.1
206.5
120.5
188.9
13.9
11.9
4.7
75/76
55.4
122.9
113.7
83.7
13.1
14.5
4.2
76/77
48.8
194.0
104.8
97.6
15.2
18.4
3.6
77/78
51.9
150.5
91.9
68.4
18.5
17.1
3.7
78/79
57.8
166.6
81.3
57.1
17.6
17.3
1.6
79/80
47.9
180.5
86.0
41.4
17.3
17.2
1.4
80/81
66.6
174.8
73.8
56.6
16.3
16.8
1.7
81/82
54.8
134.3
60.6 â– 
44.3
15.5
16.1
1.2
82/83
53.8
129.1
46.2
32.5
17.6
13.6
1.7
83/84
49.7
140.4
38.4
48.4
11.9
11.0
1.4
84/85
53.0
152.9
56.0
50.0
15.0
14.0
2.0
Source: Compiled from Tanzania's Economic survey 1970/71-
1984/85.
239

Appendix, 4 1
We asked people in the focus group to rank in order of importance the influence of the
following variables on Sida's policy shift to Tanzania in the 1980s with 4 very strong
influence, 3 strong influence, 2 little influence , 1 no influence and 0 don't know.
Variables
a. Pressure from other donors
b. Sida's bureaucratic politics
c. The collapsed of planned economies of the Eastern bloc.
d. Lesson's from Sida's own experience
e. The experience of other bilateral donors
/
f. Changes in Swedish economic and political environment
g. The emergence of the neo-liberal way of doing development as championed by the
IMF/World Bank in the 1980s.
Varia-
Scores
Scores
Scores
Scores
Scores
Scores
Total
Mean
bles
a
2
1
2
3
2
1
11
1.8
b
1
2
0
0
1
3
7
1.8
c
1
1
2
2
3
1
10
1.7
d
4
4
4
2
2
4
20
3.3
e
3
3
2
3
2
2
15
2.5
f
2
3
3
2
i
3
2
15
2.5
g
2
3
2
4
3
3
17
2.8
Source: Focus group.
240

Appendix: 5, Tanzania's share of Swedish aid to program
countries of Africa 1975-1995.
Year
19. .
(1)
(2)
(3)
Year
19. .
(1)
(2)
(3)
65/66
29
7
24
80/81
1036
313
30
66/67
48
21
44
81/82
1378
491
36
67/68
38
12
32
82/83
1382
426
31
68/69
74
30
43
83/84
4815
508
33
69/70
99
43
43
84/85
1742
506
29
70/71
98
50
51
85/86
1836
456
25
71/72
130
67
52
86/87
1852
557
30
72/73
178
96
54
87/88
2358
519
22
73/74
272
133
49
88/89
2608
551
21
74/75
393
202
51
89/90
3015
872
29
75/76
574
230
40
?
90/91
3253
724
22
76/77
651
279
43
91/92
3171
794
25
77/78
819
256
31
92/93
2827
565
20
78/79
907
326
36
93/94
2606
561
22
79/80
938
347
37
94/95
2244
258
12
Source: Computed from Sweden's Development Assistance in
Figures and Graphs 1994/95.
Key: a = Disbursement to Sweden's program countries of
Africa via Sida in million Swedish Kronor (at
1995 prices).
b = Disbursement to Tanzania via Sida in million
Swedish Kronor (at 1995 prices).
c = Tanzania's share of Sweden's program countries for
Africa (in percentage).
I
241

Appendix: 6, Questionnaire
CHANGES IN GOALS, PRIORITIES AND STRATEGIES
1-The major goals of Swedish aid are -, growth, equality,
democracy, and independence/self-reliance, environment
(1987) and Gender (1996). Can you tell me which goal (s)
is/are the major focus of your department?
2-What strategies does Sida use to realize these goals?
3-Can you tell me major changes in those strategies, if
any, that have taken place since 1980(in respect to
Tanzania)? Why?
EPISTEMIC COMMUNITY
5-Sida has been using consultants and other experts to
formulate, implement, and evaluate its programs, Have there
been any changes over the years in Sida's use of
consultants/experts? Can you give me examples?
6-Can you assess the influence of consultants/experts in
shaping Sida's policy decisions in terms of 1. very
important 2. important 3. Not important.
7-Sida contributed the human face in the IMF/World Bank
thinking about structural adjustment Yes/no. What in your
opinion is the contribution of the IMF/World Bank to Sida's
1980s policy shifts.
FEEDBACK KNOWLEDGE
8-On average how many evaluations are conducted by your
department annually?
None 5&> 6-10 11-15 16-20 <20
9-Approximately how many (i)evaluations do you read
annually?
a) from other departments
None 5&> 6-10 11-15 16-20 <20
b) from other donors
None 1-2 3-4 5-6 • 7-8 9&<
c) from academic/professional publications
None 1-2 3-4 5-6 7-8 9&<
(ii) How many field reports/annual reviews
None 5&> 6-10 11-15 16-20 <20
10-Have there been changes in Sida's evaluation process
over the last fifteen years? Can you give me example? Is it
better, worse or same? why? 1
242

11-How is the knowledge and experience which are provided
by evaluations, field reports and reviews (feedback
knowledge) transferred to decision makers and other
departments or units?
12-Is there any mechanism or structure that ensures
acquired knowledge/lessons from feedback (evaluations,
field reports, and reviews) are put into full use. Please
explain 1
13-a) On average how many times annually do you meet as
heads of departments/units to share/discuss the
recommendations /experience/lessons from different
sectors/regions?
None 1-2 3-4 5-6 7&<
b) Approximately how many times annually do your
department/unit meet as a whole to share/discuss
/experience/lessons from different sectors/regions
None 1-2 3-4 5-6 7&<
15-Which of the two methods country programming/analysis
and project/sector programming best enhanced Sida's
capacity to cope with development processes ?
Why?
16-Do you consider what you are doing as a process of
learning? Why
17-It has widely been agreed that in the 1970s Sida's
budget was more "generously" approved by the parliament
compared with the 1980s and 90s. Y/N. In your opinion
has this change enhanced or hindered or no impact on Sida's
learning capacity. Why?
18-In your opinion do the structure of responsibility
within Sida and between Sida -Stockholm and Development
cooperation office in embassies encourage/discourage policy
innovations, critical reflections and change. Can you
explain please.
19-a)-It has been argued that in the 1970s Sida's policy
decisions were very much influenced by the ideology of the
left Y/N. Has there been any change? Can you give me
example.
243

b)In your opinion that change has - 1. facilitated
2. hindered 3. no impact - on Sida's learning capacity. Why
20-What are the main obstacle to learning in your
department (if any)
22-Can you assess the influence of the following factors
(in terms of - l.very important 2.important 3.not
important - on shift of SIDA aid policy(to Tanzania) since
the mid 1980s.
a) Lessons from SIDA's own experience and the experience of
other donors.
b) Pressure from other donor countries
c) Changes in Swedish domestic political and economic
climate.
d) The emergence of a new way of doing development in the
1980s as championed by the IMF/World Bank.
e) Sida's officials' politics.
23-Can you arrange in order of importance the three most
influential factors?
PERSONAL QUESTIONS
24-How long have you been working with development aid?
0-3years 4-6years 7-10years ClOyears
25-How long have you worked with SIDA?
0-3years 4-6years 7-10years ClOyears
26-Have you worked in a developing country?
No l-2years 3-4years 5years & <
27-Have you ever:
i) taught in a college of higher learning? Y/N
ii) published papers/books? Y/N
iii) presented a paper in a domestic or
international conference/seminar Y/N
244

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!
BIOGRAPHICAL SKETCH
Laurean Ndumbaro was born in Ruvuma region in Tanzania
in 1960. He Obtained his bachelors Degree in International
Relations/Public Administration from the University of Dar
es Salaam in 1987. He went on to earn his Master's Degree
at the University of Dar es Salaam in 1994. Between the
time of achieving his BA and MA he worked as an
administrator with the local government and also as a
senior personnel officer in a public corporation.
He is married to Dolorosa Mtega and is the proud
father of two children.
256

I certify that I have read this study and that in my
opinion it conforms to acceptable standards of scholarly
presentation and is fully adequate, in jrcope and quality, as
a dissertation for the degree of Docto]
Goran Hyden,
Professor of
Science
olitical
I certify that I have read this study and that in my
opinion it conforms to acceptable standards of scholarly
presentation and is fully adequate, in scope and quality, as
a dissertation for the degree of Doctor^of Philosophy.
(
Chris Andrew
Professor of Food and
Resource Economics
I certify that I have read this study and that in
my opinion it conforms to acceptable standards of scholarly
presentation and is fully adequate, in scope and quality, as
a dissertation for the degree of Doctor of Philosophy.
Myra/LÍann Brown
Associate Professor of
Political Science
I certify that I have read this study and that in my
opinion it conforms to acceptable standards of scholarly
presentation and is fully adequate, in scope and quality, as
a dissertation for the degree of Doctor of Philosophy.
David Hedge
Associate Professor of
Political Science
I certify that I have read this study and that in my
opinion it conforms to acceptable standards of scholarly
presentation and is fully adequate, in scope and quality,
a dissertation for the degree of Doctor of Philosophy.
Wayne] Francis,
Professor of Political
Science
as

This dissertation was submitted to the Graduate Faculty
of the Department of Political Science in the College of
Liberal Arts and Sciences, and to the Graduate School and
was accepted as partial fulfillment of the requirements for
the degree of Doctor of Philosophy.
August, 1998
Karen A. Holbrook
Dean, Graduate School




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