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The Minor Limits of the Limits of Institutional Reform

 

May 31, 2013

My review of The Limits of Institutional Reform by Matt Andrews, The Solutions of Institutional Reform, was overwhelmingly positive. Other reviews have also been very positive. Especially about the diagnosis of what doesn’t work in Public Financial Management (PFM) reform and how to fix it.

That doesn’t mean that the book makes an infallible case. There is a data problem that leaves holes in the argument for those pre-disposed to take different views.

And, I’ve met some of these people. I don’t think that these folks will be significantly swayed from removing “best practices” or legal reform as step 1 from the PFM pedestal.

In the spirit of what I hope to be constructive…

Case Study Approach

Andrews describes specific examples of PFM gone wrong. I understand the need to use narrative to connect beyond the abstract. Of course, Andrews is a Harvard professor and Harvard is known for the “case study” approach to learning.

Yet, I find that the case study method leaves much room for alternative explanation. Or, becomes anecdotal.  I’ve noticed that case study scenarios in the Harvard Business Review can generate a broad difference in opinion among experts. (Not to mention how Evgeny Morozov or Dombisa Moyo use anecdotes to validate sometimes absurd views in my opinion.)

Don’t get me wrong, the examples used by Andrews are compelling. Only the dogmatic are likely to find fault given so many cases. Nevertheless, the book would benefit by exploring more fully why alternative explanations are likely not valid.

I also think that more cases are needed to show how the Problem-Driven Iterative Adaption (PDIA) approach (or proto-PDIA) worked effectively. My sense is that Andrews covers the “how the project would have been different if PDIA was used” well.

Of course, my “anecdotal” experience aligns very well with Limits.

Andrews uses graphs and illustrations to explain his point. This “visualization” communicates the message much better than the case study approach.

Data Sources

Andrews relies on data from Public Expenditure and Financial Accountability (PEFA) assessments. Other assessments of open budgets, government effectiveness and corruption are used. Andrews is critical of many of these measurements, including the ones he uses.

The problem is that there are no perfect PFM data sources. These leaves a lot of wiggle room for those with alternative theories, unfortunately. We also use all of the sources used by Andrews to help countries determine reform priorities.

My sense is that few would argue that there is a gap between PFM practice and PFM laws. Many may suggest that this is alright. Or, that the data is somewhat inconclusive and that the gap is narrower than we think.

This is where I begin to nitpick about the editing…

Limits has a compelling argument. Perhaps I am predisposed to agree with the argument.  

Andrews provides an outline of the argument in the introduction. There is a lot of re-foreshadowing of the argument in the text. Maybe some call-out boxes would have been helpful for some. The argument is well summarized at the end of chapters.

I found that this made for a bit too much repetition. That apparently, the editor failed to notice.

It was like the masterpiece that could have been more of a masterpiece.

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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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