Public Sector Governance and Accountability Series: Budgeting and ...

388 Salvatore Schiavo-Campo
largely underpinned Wagner’s Law. 2 These policy efforts were successful, by
and large, and were followed in short order by radical changes in the implementation
mechanisms—the instruments themselves—both in expenditure
management and in public administration in general. Some of these changes
proved successful, some did not, and almost none were suitable candidates
for export to Africa. However, their partial success in a few highly industrial
countries led many in the World Bank and other organizations to view these
management changes as a single set of universally desirable innovations—
the “best practice”of the New Public Management (NPM). Enamored of the
semantics, oblivious to the pitfalls of transplanting institutional models, and
encouraged by the international consulting industry, a growing number of
national and international officials attempted to push several developing
countries to leapfrog all the way to the end point of institutional change in
public expenditure and financial management. Inevitably, reality eventually
won out. The innovations did not take root in the entirely different institutional
and administrative climate, and the NPM bubble has been judged as comparable
to the “new economy” bubble of the late 1990s. The differences
between the two are, of course, vast, but the grandiose rhetoric, the weight
of fashion, and the abdication from simple common sense are symptoms of
the same technocratic delusion and unwillingness to do the hard work
needed to tailor innovations to reality.
The reaction against the NPM was long overdue. However, at this stage,
salvaging from among the PEM innovations those that are most likely to be
suitable (with adaptation) to African developing countries is important.
Thus, although the return to a focus on the basic plumbing of public financial
management is welcome, it must be complemented by a road map of
subsequent improvements and a reasonably clear view of the end point of
reform. The purpose of this chapter is accordingly to try to sketch out for
each of the different aspects of the PEM cycle both the basic initial reform
priorities and the medium- and long-term introduction of advanced
systems and practices. The underlying paradigm is a combination of the
“two Ps” of traditional public administration—probity and propriety—with
the “two P’s” of the NPM—policy and performance. 3 The pitfalls of fashion
can best be avoided by establishing and following a set of clear principles for
budget reform, as in South Africa (box 12.1).
Protect the Money
If the government budget is to become the financial mirror of society’s
economic and social choices, as emphasized in chapter 2, the first obvious
requirement is to protect the resources mobilized from society or provided