The Problem With PFM Reform ‘Best Practices’

First blog in a series on PFM reform practices:

  1. The Problem With PFM Reform ‘Best Practices’
  2. PFM Reform Good Practices

A group of earnest Public Financial Management (PFM) professionals from an Asian country visited Ottawa on a study tour a few years ago. A briefing by the Treasury Board Secretariat explained the approach used by the Canadian federal government for consolidating information across departments and agencies. The Asians claimed that this approach wouldn’t work. It is, they said, an acknowledged ‘best practice’ that all government organizations, at every level of government, share a single common public accounts classification.

What are PFM Reform Best Practices?

Best practices” has become a buzzword in both public policy and information technology. Even though it was never meant to be a universal prescription, it has become ‘consultant-speak’ with excellent branding. And it has become ‘ERP-speak’ (As in: this is what the software does, so it must be a best practice).

The myth of ‘best practice’ is also alive and well in the world of Public Financial Management (PFM).

Professor Matt Andrews takes on the tyranny of “best practices” in developing country PFM advice in The Limits of Institutional Reform. Andrews pulls no punches by describing the “tyranny of the experts” who “overspecify reforms” and “oversimplify the content” through “functional mimicry” of practices from other countries.

In the book he states: “International organizations, local policy makers, and private consultants combine to enforce the presumption that the most advanced countries have already discovered the one best institutional blueprint for development and that its applicability transcends national cultures and circumstances…The assumption is that superior externally sourced solutions will eventually prevail if local leaders allow them to.”

This thinking results in public servants from developing countries come to conferences to learn about the latest “best practices” and foreign advisors waxing lyrical about the reform successes in their home country.

Why Best Practices Don’t Work

Meanwhile, those with real-life experience in many countries tend to look at reform in a more pragmatic way. For example, Stephen Symansky, formerly with the IMF, described the focus on “policy” in post-conflict countries as ill conceived. Post-conflict countries have no basis for policy according to Dr. Symansky. “You got to get the nuts and bolts right,” he said at one of the FreeBalance International Steering Committee (FISC) meetings.

In addition, the variability of ‘best practice’ advice given by PFM experts is often contradictory. We’ve seen situations where one group of experts recommends faster but incremental reforms while others suggest stopping any reforms altogether until a laundry list of diagnostics is completed with years of capacity building.

More Science Than Art

With decades of experience, FreeBalance is the first choice for governments looking to plan and implement a PFM reform and nation building program. Our solutions align country priorities, national development plans and donor objectives and empower governments to improve citizen wellbeing.

The FreeBalance Accountability Suite™, which provides Government Resource Planning (GRP) solutions, is the only Public Financial Management (PFM) solution designed exclusively by government, for government. A flexible, modular financial management system with six base configurations, it can be scaled to meet the evolving needs of a country’s PFM reform program.

For more information, please get in touch.

Further Reading:

A survey conducted amongst members of the ICGFM highlighted some interesting results:

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