4 Responses

  1. Doug Hadden
    Doug Hadden February 1, 2013 at 12:17 pm

    Have you seen any relationship between maturity of development and PEFA scores? My anecdotal observation is that there are many mid-developed small countries (i.e. in the Caribbean) that have not been subject to significant donor pressure for governance reform. On the other hand, smaller countries that have had donor intervention can leverage advantages in PFM reform from being small: adopt international standards like IPSAS & GFS, operate on a single information system to achieve timliness & completeness of reports and transparency. Financial controls and predictability of revenue and expenditures can be managed more easily in smaller countries.

    The other challenge in small countries is that the government is often providing the traditional national, regional and municipal functions.

  2. George D
    George D January 22, 2013 at 1:25 pm

    These are interesting findings, and deserve to be taken seriously.

    I wonder if it would be useful for PICs to consider internationalising some of their internal positions – sharing key personnel by either time-sharing, as Tess notes above, or the establishment of transnational institutions that could house this technical expertise. This would entail a loss of sovereignty and is unlikely to be taken lightly, but could be worth the gains.

  3. Tony Hughes
    Tony Hughes January 22, 2013 at 12:23 pm

    The main small-country reason why PICs don’t manage their public finances the way outside observers think they should, is that in PICs the political governments are so close to the management action and so prone to intervene. Passage of an annual budget through parliament is commonly a near-meaningless formality. What matters is the daily flow of formal and informal, recorded and unrecorded directions to finance officials from the PM, the Finance Minister and persons close to them. The usually unspoken context is ‘Do it this way or you’ll be sorry—good financial management means doing whatever we have to do to stay in office’. MPs are silenced by pay-offs that help them to get re-elected. Donors are afraid to criticise in case they lose their place in the inner circle of ‘high-level consultations’. Something like this happens in bigger countries too, but there the effects are not so immediate or pervasive, and improper pressures are more likely to be exposed. What PICs need is a way of electing political governments that understand, believe in and will practice good financial management. Anyone who knows how we can do this, please share the secret.

    Tony Hughes

  4. Tess Newton Cain
    Tess Newton Cain January 22, 2013 at 6:25 am

    Thank you Tobias, David & Dinuk for this extremely cogent post. The points you make are extremely pertinent and apply in a number of areas of development in our region. Interestingly, in some fields the capacity constraints you have highlighted appear to have been acknowledged and accommodated in policy decisions and donor support – e.g. specialist medical teams who spend periods in Pacific island countries, or a visiting Court of Appeal. I particularly support the point you make about providing capacity support within line agencies to enhance service delivery and for me this is the big message here. It aligns with one of the concerns raised in the recent review of AusAID work in relation to law and justice – that the implementation of ‘capacity building’ exercises led to the beneficiaries being those whose capacity was being built and not those who sought to access law and justice services. Capacity support – in whatever form it takes – needs to have as its starting point and end point (and assorted reference points along the way) how it is going to (better) deliver what people need.

Leave a Reply