Psm Strategy

This note compares two strategies for modernizing public sector management (PSM) in countries that have large technical deficits in policymaking, allocating public resources, delivering public services, and monitoring results. One strategy, often favored by development specialists, is to attempt to rapidly  modernize public management by introducing the advanced practices of highly-developed countries. The argument for this "leapfrogging" strategy rests on the expectation that low-income countries  can avoid the trial and error process that advanced countries have experienced and accelerate straight to adopting best practices.

The counter argument is that countries which lack basic managerial capacity cannot make effective use of best practices. It behooves them, therefore, to forego, state-of-the art reforms and concentrate instead on capacity-building measures, such as developing basic accounting and budgeting systems. Rather than retard development, a "basics first" strategy prepares the ground for more sophisticated PSM systems. For example, it will likely be premature to introduce the accrual basis in a county that lacks reliable cash-based financial reports, or to extend the time horizon of budgeting to the medium-term in a country that has unstable annual budgets.

While the discussion in this note pertains to PSM innovations, it is relevant to a broad swath of governmental reforms. This writer has observed efforts to introduce avant garde education reforms in communities that lack schools or textbooks, where teachers are indifferent or ill-trained, and student attendance is irregular. When one exciting reform fails, development experts or donors promote the next great hope, often with the promise of fresh money, but again not aligned with the reality of conditions.

One of the virtues of the Millennium Development Goals (MDG) movement launched more than a decade ago, and a factor in its widespread success, is that it implies a basics first...