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The ‘Best Practices’ Conspiracy in Public Financial Management

 

April 7, 2014

Doug Hadden, VP Products

Professor Matt Andrews, in The Limits of Institutional Reform found strong evidence that reform in developing countries is more easily justified by so-called ‘best practices’. This risk adverse approach has led to high failure rates. It’s an example where risk adverse mind sets lead to higher risk.

‘Best practices’ remains a mantra for many consultants. It’s pervasive as consultant-speak. Even though consultants and technical advisors often disagree on what practices are better. This is a critical problem for government decision-makers who are tormented by the changing landscape of foreign technical advisors – enduring patronizing lectures by experts.

Some advisors tout improved budget preparation and macroeconomic analysis, some on capacity, others on procurement and civil service reform. Examples of practices from Canada, India, New Zealand or Singapore are often mentioned.

For developing nations, many of these best practices are advanced practices designed to solve problems they do not have.

That’s why we talk about ‘good practices’ at FreeBalance. These are practices designed to solve the problems you have in the context of country capabilities. Sure, performance management and full accrual accounting are more advanced practices. But it makes no sense to implement something like program budgeting if there is not a regime of automated budget and commitment controls.

Let’s all agree to bury ‘best practices’ once and for all!

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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