The limits of institutional reform by traveling salesmen...

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03/18/2013

The limits of institutional reform by traveling salesmen...

I posted the full blog from the IMF site this morning, which discussed the application of the PDIA framework to PFM reforms in the Carribbean.... I am taking some excerpts here to show some connections and overlaps with my new book and to reinforce some of the messages in the book. The red type recounts reasons why reforms are often limited and the green type offers perspectives that you will see fleshed out in my book about how one cn overcome these limits. I point to some chapters so that anyone wanting to read this can have easy accesss...

It really is exciting to see this kind of discussion taking place and the honesty of the country-delegations in discussing the limits of their reforms is fabulous. How many other stories are there like these ones (especially about traveling 'institutional reform' salesmen who offer solutions looking for problems...)

Here is the excerpt from the IMF workshop....

"Richard [Allen] presented several models of PFM reform strategy, as well as the benefits and limitations of each. [one of these was] the problem-driven, iterative and adaptive (PDIA) approach developed by Matt Andrews in a forthcoming book. PDIA involves a large element of “muddling through” or trial and error in the reform process, replicating how reform has historically taken place on a slow, step-by-step basis in now-advanced countries. It offers perhaps the most promising route to successful reform in developing countries, but requires a substantial change in the attitude and behavior of development partners. Donors tend to have an entrenched notion of what is right for a country (focusing on solutions rather than problems), together with a bias toward projects that include large disbursements of financial resources and TA.

Participants in the workshop conducted spirited debates about reform strategies that work and those that are less effective. Some complaints were universal, including a trio of braided opinions about development partner funding: gratitude; impotence and being overwhelmed. “We could not do much reform at all without the support of donors”, said one thoughtful local official, “but they offer solutions before [or despite] our definitions of our most pressing problems.” TAKE CONTEXT SERIOUSLY!!!!!!! chapter 3.....

One country related an example that was shared by others: they had been the recipient of numerous diagnostic studies by various bilateral and multilateral development partners. They found the prescriptions dauntingly complex yet without a simple action plan they could follow. OVERSPECIFIED AND OVERSIMPLIFIED REFORMS!!!! chapter 4... The country had asked for immediate, specific help to implement a direct mandate of the premier – instead, they received another diagnostic mission. One country official intoned, ‘”I just wish we could say – no thank you, we know what we need. Why can’t you give us money for that, not what you want to do?” THE NEED FOR REAL OWNERSHIP!!!! chater 9....

In order to say ‘no’ to any specific donor proposal, the group concluded that the finance ministry must display strong leadership, and develop their own sequenced PFM reform strategy with prioritized timelines. They would then be well placed to explain to a development partner why a particular proposal does not fit with the government’s strategy, or can be postponed until a later time, and what form of assistance would be really helpful instead. “A real bonus,” said one participant, “is that this approach makes it less of a diplomatic feat to try to contain the overlapping and ‘competing’ activities of several donors.”

The group focused on how to develop a PFM strategy that can actually be implemented rather than one that simply looks good on paper. Such a strategy needs to be easily understood and accepted by the various parts of the government. “A 40-page action plan is really not much use to us,” said one exasperated local official. “We need a strategy that many people understand when they are facing daily choices – something that tells them a change is on the priority list or they should be prepared to wait.’

The group suggested that key elements of a practical reform strategy should comprise: identifying problems that need to be solved, in priority order; and involving a widely-defined stakeholder group to brainstorm on the problems that arise in different parts of government and discuss potential solutions. CHAPTERS 7, 8 and 9.... “Setting priorities is key” said one country’s reform leader. An effort to reach out and listen to stakeholders is critically important, local officials concluded, and leads to best fit solutions. Such approaches, however, are not popular with donors because they are time consuming, do not require substantial disbursements of cash (at least in the early stages), and are outside the ‘comfort zone’ of donors.The single largest problem, countries agreed, was the ‘travelling salesmen’ who successfully pitched ‘solutions’ unmatched to the countries problems, priorities, practices and resources."

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The Limits of Institutional Reform in Development

03/18/2013