July 23, 2013Doug Hadden
Doug Hadden, VP Products
I attended this book launch at the IMF about three months ago. We’re seeing quite the increase in analysis of what works in Public Financial Management (PFM). This is a critical question, according to Alan Schick, because governments can represent up to half of all financial activities in developing countries.
The concept of risk in PFM has also been getting more attention in developed and developing countries. Governments in developed countries tend to be risk adverse losing innovation opportunities. Meanwhile, governments in developing countries often unwittingly accept risks.
Many providers of “technical assistance” try to curb the enthusiasm among developing country governments to accept risks during reform. One of the techniques is to recommend the use of “best practices” which turns out to be very risky. One of the biggest risk management problems is that many stakeholders have conceptual views rather than real-life experience. For example, some stakeholders believe that it is less risky to acquire software designed for the private sector from large companies rather than specialist Government Resource Planning (GRP) software. Yet, facts show the opposite to be the case.