Although this body of work shows that early adoption of participatory political institutions is important, the mechanisms behind why early adoption matters and has persistent effects is not clarified or made explicit. Why are countries not able to change outcomes within short time spans by instituting elections with universal adult suffrage and spending on public education? And, conversely, why is it that reform leaders cannot bring about lasting or effective change through authoritarian rules? The answer offered in World Bank (2016 and 2017) is that norms are important in shaping the functioning of formal institutions and take time to change; and second, that norms can vary within the same formal institutions, and thereby explain different outcomes within places sharing the same political institutions. Historical institutions of inequality in present-day developing countries, such as examined by Sokollof and Engerman (2000), Acemoglu, Reed and Robinson (2014), Anderson, Francois, and Kotwal (2015), Banerjee, Iyer, and Somanathan (2005), contributed to unhealthy political norms such as those that sustain clientelist forms of political competition where political support is won on the basis of providing targeted private benefits (such as a secure government job) rather than broad public goods (such as accountability for service delivery in that government job).

In places where unhealthy political norms are the starting point of the problem of state capacity (through the three channels of weak incentives, selecting poor quality agents, and sustaining loweffort norms), transitioning to a better equilibrium (of strong incentives, selection of good quality agents, and high-effort norms) necessarily goes through politics and cannot bypass it. For example, international development partners have tried to support so-called “social accountability” institutions, such as village-level organizations of citizens, as a way of building norms of collective action, without directly engaging with political institutions.<sup>13</sup> A large body of research on social accountability, and other initiatives to foster local collective action, has found no evidence that it builds state capacity (for example, Casey et al, 2012).<sup>14</sup> Theoretical analysis of how changes in norms come about points to a triggering role for political contestation, and the leaders selected through it. Leaders can play this role as “prominent agents” who signal a shift in beliefs among society at large (Acemoglu and Jackson, 2015). Growing experience with political engagement and the learning that comes from it, such as through frustration and indignation with bad outcomes, can create fertile conditions for change in political norms (Bidner and Francois, 2013). Recent theoretical developments on the management of complex organizations generally, both in the private and public sectors, is also pointing to the role of leaders in shaping organizational culture. For example, Akerlof (2015, 2017) defines the concept of “legitimacy” of leaders in getting lower level personnel to follow

> 13 The framework of accountability relationships in the World Development Report 2004 (World Bank, 2003) contributed to popularizing the idea that politics can be bypassed when it is a problem. One of the authors of the WDR 2004 has acknowledged that research developments since the publication of that report call for amending its framework (Devarajan, 2014). The framework was indeed amended in World Bank (2016) and is the basis of this paper.

> 14 Even the most prominent proponents of community-driven-development (CDD) programs have acknowledged that these approaches are not intended to substitute for state capacity, and not designed to address problems in complex bureaucracies above the community (Wong and Guggenheim, 2018).

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