If it’s good enough for New Zealand…

By Mark Miller

As a current employee of the Malawian Budget Division, I read with interest Matt’s blog on technological innovation and I’m sure he’ll no doubt be saddened to hear that this computer system is no further ahead than when he left it a year ago.

However, it struck me that in the field of budgeting at least this trait of ‘leapfrogging’ is sadly by no means specific to technology – whenever reforms are undertaken, invariably ‘international best practise’ (normally from New Zealand or some thoroughly un-governable nation) is the recommended yard-stick for governments to aim at.

Another innovation in budgeting championed by the donor community in recent years was ‘Output Based Budgeting’. Every Kwatcha in the Malawian budget is allocated to specific activities with specific indicators and targets. These indicators include deliverables such as ‘number of meetings attended’ and ‘% of office supplies provided adequately’. Formulating a budget in such a way is a monumental effort that no donor’s government would ever dream of attempting.

Perhaps my favourite example of thoroughly unsuitable ‘best practise’ was a consultant who visited Malawi to make recommendations on how the budget should be classified. Fresh from a trip to Australia where he had been impressed by the ability of government to revise its forecasts when the price of diesel changed by a cent, he proposed that Malawi needed to further disaggregate the budgeting for fuel down into petrol, diesel, paraffin etc. What made this observation particularly startling was that it came:

  1. During a 3 day black-out in the Ministry, with a generator unable to cover for the grossly over-stretched national grid.
  2. In a building where there are no light switches – all of them are either ‘on’ or ‘off’

I could not help thinking that when it comes managing of government’s energy resources we had bigger problems on our hands than refining our diesel forecasts.

Initially, I was under the impression that this type of ‘best practise’ reform was based on a complete lack of understanding on the part of donors and consultants as to the realities of what is happening in government. While there is on occasion an element of truth in this, I fear the actual reason such interventions keep occurring is both more worrying and difficult to address.

‘Best practise’ reforms serve very well the individuals working for the three parties involved in governance reform: consultants, donors and government workers.

Working in a competitive market-place for services, consultants will seek competitive advantage through ‘innovation’. A ‘fully integrated financial management system’ is sold as the latest panacea for Malawi’s budget. It is hard to generate contracts for ‘helping to get the sums right’ or ‘basic accounting’ even if it is in fact what is required.

As for donors, innovations and reforms to budget processes such as ‘Output Based Budgeting’ are the type of concrete reforms that ambitious employees of  donors crave as they can point to government ‘making changes’ and ‘moving forward’. A budget that adds up does not sell as well with your seniors.

Finally, for government workers, the incentive mechanisms in place whereby training and workshops to discuss reform are particularly lucrative also leave government happy to give the impression of embracing the latest ‘best practise’ reform.

There are clearly no easy answers to breaking this cosy relationship, but I think two areas at least are worth considering further.

  1. Making budget support conditional on this type of big-ticket reform can be highly counter-productive. While it may be harder to measure whether government is getting the ‘basics right,’ measuring something that can set government back is worse than no indicator at all.
  2. An international effort to take a more mature and open approach aimed at tackling civil service remuneration and incentive packages may be a naive proposal, but one I think that needs to be perservered with.

Mark Miller is currently an ODI Fellow at the Malawian Ministry of Finance.

One thought on “If it’s good enough for New Zealand…

  1. Ranil Dissanayake

    September 14, 2009 at 7:12am

    “An international effort to take a more mature and open approach aimed at tackling civil service remuneration and incentive packages may be a naive proposal, but one I think one I think that needs to be be persevered with.”

    Too true. I always said that the single reform that would make the biggest difference to the Government would be to support higher salaries, with fewer distortionary add-ons; and to back this up by true performance assessment, so there is a chance of losing one’s job due to poor performance. It makes your job worth saving, and makes saving it contingent on doing it well. To be fair, the Chief Sec (if he still is such) Bright Msaka was really pushing performance assessment as part of civil service reform, against what seemed to be enormous inertia from too many people.

    My boss in Malawi, Naomi, put in place her own performance assessment framework at one point. It sort of broke down because many staff felt it unfair that they were assessed before their colleagues in other departments.

    Going to your overall point, this is another symptom of our unwillingness to be transparent about incentives in development work. far more important and knotty than it would seem from the (lack of) discussion.

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