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4/09/2014 1
The Anatomy of Development Cooperation: Principles and Prospects Derived from Exemplars at the Ministry of Finance,
Government of Lebanon
(November 2003)
Blunt & Associates P/L
Macksville
Australia
4/09/2014 2
Table of Contents
Preface and Acknowledgements 5
1. Executive Summary 6
2. Background and Purpose 8
3. A Decade of Technical Cooperation: Main Accomplishments of the MOF
Programme 9
3.1 Categories of Reform 9
3.1.1 Policy reform 10
3.1.2 Improvements to operational efficiency and effectiveness 10
3.2 Capacity Building 10
3.2.1 Training and development 10
3.2.2 Recruitment and selection 11
3.2.3 Job and organisational redesign 11
3.2.4 New technologies: work processes, automation, and computerised MIS 11
3.3 Ministry Performance and Service Improvement 11
3.3.1 Policy formulation and implementation, and public financial management
3.3.2 Services to citizens, the private sector, and civil society 12
3.3.3 Services to other government entities 12
4. MOF Programme Success: Meaning and Case Examples 12
4.1 The Meaning of ‘Success’ 13
4.2 Policy Reform 15
4.2.1 Policy advice in general 15
4.2.2 Value Added Tax 17
4.3 Improvements to Operational Effectiveness and Efficiency 19
4.3.1 Customs 19
4.3.2 Land Registration 21
4.4 Capacity Building 23
4.4.1 The Institute of Finance 23
5. Engineering Success 25
5.1 Programme Legitimacy 26
5.1.1 Minister's role 26
5.1.2 Government ownership 26
5.1.3 Institutional location 26
5.1.4 Quality and commitment of staff 26
5.1.5 Performance track record 27
5.1.6 Sources and volume of technical/financial support 27
5.1.7 Corporate image 27
5.2 Programme Leadership and Management 28
5.2.1 Leadership 28
5.2.2 Management 28
5.2.3 Organisational culture 29
5.2.4 Staff recruitment and selection 29
5.2.5 Rewards 29
5.2.6 Management of change 30
5.2.7 Engagement with government 30
5.3 Character and Quality of Technical Cooperation 31
5.3.1 Problem recognition and authenticity 31
5.3.2 Solution recognition and authenticity 32
5.3.3 Outcome legitimacy and sustainability 32
5.3.4 Programme role and functions 32
5.3.4.1 Policy advice 32
4/09/2014 3
5.3.4.2 Project development 33
5.3.4.3 Project management 33
5.3.4.4 'Multilateral bridging'and resource mobilisation 34
5.4 Government and Donor Confidence 34
5.4.1 Bases 34
5.4.1.1 Programme legitimacy 34
5.4.1.2 Programme leadership and management 34
5.4.1.3 Character and quality of technical cooperation 35
5.4.1.4 Transparency and reporting 35
5.4.1.5 Programme efficiency and effectiveness 35
5.4.2 Effects 35
5.4.2.1 Strategic partnerships based on mutual trust and respect 36
5.4.2.2 Delegated authority and responsibility 36
5.4.2.3 Operational autonomy and flexibility 36
5.4.2.4 Continuing support 36
6. Improving on Success 36
6.1 Programme Identity 37
6.2 Sustainability 37
6.3 Programme Management 38
7. Marketing Success 39
7.1 Products 39
7.2 Competitive Advantages 41
7.3 Potential Customers 41
7.4 Marketing Mechanism: Consultancy Services Unit Role and Functions 41
7.4.1 Product Development and Sale 42
7.4.1.1 Product conceptualisation 42
7.4.1.2 Product description and packaging 42
7.4.1.3 Pricing and advertising 42
7.4.1.4 Market scanning and selling 43
7.4.1.5 Distribution, delivery, and follow-up 43
7.4.2 Liaison with Clients and Consultants 43
7.4.2.1 Maintenance of consultant data base 43
7.4.2.2 Consultant and client liaison 43
7.4.3 Structure 44
7.4.4 Staffing and rewards 44
8. What Next? 44
4/09/2014 4
List of Acronyms
ASYCUDA Automated System for Customs Data
CIDA Canadian International Development Agency
CSU Consultancy Services Unit
EU European Union
EUROMED Euro-Mediterranean
ETSU Economic and Technical Support Unit
IF Institute of Finance
IMF International Monetary Fund
IT Information Technology
LR&C Land Registration and Cadastre
MIS Management information systems
MOF Ministry of Finance
OMSAR Office of the Minister of State for Administrative Reforms
UN United Nations
UNCTAD United Nations Conference on Trade and Development
UNDP United Nations Development Programme
WTO World Trade Organisation
VAT Value Added Tax
4/09/2014 5
Preface and Acknowledgements
The business of development cooperation is not renowned for its success and, it has to
be said, this ‘bad press’ is reasonably well deserved. Far too much development
assistance is misdirected and wasted because it is poorly conceived and designed,
and/or because it is inefficiently and ineffectively managed. So it is more than a little
unusual, and pleasing, to be asked to analyse a development ‘success story’1 - even
more so when it turns out that the validity of this general assessment can be
confirmed.
The success of the programme of development cooperation reviewed here, which is
located at the Ministry of Finance, bodes well for the future of governance reform and
sustainable economic and human development in Lebanon. If core governance
institutions like this can make good policy and modernise their systems and improve
their performance and services then the chances of other government agencies
following suit increase significantly. Success can be catching. This is not so say that,
as a result of this programme’s example, we should expect a sudden rash or breakout
of good governance in Lebanon. But we can say that - as elsewhere - the successful
reform of core governance institutions in the country is both a necessary and
sufficient condition for governance improvement in general. In these crucial respects,
the programme reviewed in this document is therefore fundamental to development in
Lebanon.
My work in Lebanon is always made much easier and more pleasurable by the high
intellectual calibre and commitment and pleasantness of the people who staff the
projects and programmes of technical cooperation that I deal with. In the Ministry of
Finance, there are signs that the administration is managing to recruit comparable
talent, so that the differences between programme and administration staff are much
less pronounced now than they used to be. This also augurs well for the future of
governance improvement in Lebanon. Again, the Ministry of Finance could well be a
trendsetter.
I acknowledge with gratitude the ready cooperation of programme and administration
(MOF) staff in making themselves available for interview, and for supporting my
work in other ways. The programme director, Jihad Azour, was particularly generous
with his time and helpful with his comments and penetrating observations.
As always, Randa Aboul-Hosn in the Beirut UNDP office gave me precisely what I
needed to get started and then allowed me considerable room to get on with the job, a
degree of latitude that I very much appreciate.
Peter Blunt
Beirut
26th
November 2003
1 The writer has been a consultant in the ‘industry’ for about twenty years, and can count on the fingers
of one hand projects that might qualify for this epithet. He has never before been asked to undertake
this type of assessment.
4/09/2014 6
The Anatomy of Development Cooperation: Principles and Prospects Derived from Exemplars at the Ministry of Finance,
Government of Lebanon
1. Executive Summary
Informed observers (government, donors, and ‘consumers’) regard the programme of
development cooperation that has been in operation at the Ministry of Finance
continuously for the past decade as being a ‘success’. This study confirms that
assessment.
The meaning of ‘success’: We interpret ‘success’ to mean favourable impressions
that are formed on the basis of tangible and visible programme accomplishments,
rather than a detailed knowledge of the technical outcomes of programme activities or
the activities themselves. We describe this type of success as ‘political success’. Its
confident and frequent expression by government (which implies political will) is a
necessary condition for its expression by other interested parties, particularly donors.
Political success ensures a continuing supply of resources, which strengthens the
programme, and creates a ‘virtuous circle’.
Tangible results: Tangible programme results are most evident in service
improvements to citizens, the private sector and civil society and to other government
entities. In particular, transaction costs at Customs, and at Land Registration and
Cadastre have been drastically reduced. In addition, modernisation based on work
process simplification, automation, and training have transformed the character of
service delivery by the Ministry and public perceptions of it – even in notoriously
difficult areas such as taxation (VAT).
While not yet as tangible or clear as they are in the above areas, positive results are
also discernible in the Ministry’s other major areas of responsibility, namely: policy
formulation and implementation, and public financial management.
The above suggests that in the programme the bases of political success are very firm
indeed.
Explanations of success: The success of the programme is explained, first, by its
legitimacy, which stems from the personal support of the Minister, government
ownership, institutional location (at the MOF), the quality and commitment of staff,
its performance track record, the volume and diversity of technical and financial
support that it receives, and its corporate image; second, by the high quality of
programme leadership and management; third, by the quality and character of
technical cooperation, measured in terms of the widespread recognition of the
importance and authenticity of the programme’s work and the significance of its
multifaceted role; and fourth, by government and donor confidence, which is based on
the foregoing, and which results in strategic partnerships based on mutual confidence
and trust, delegation to the programme of considerable authority and responsibility,
programme operational autonomy and flexibility, and continuing support.
The role of the programme: The programme’s role consists of four major
components. First, policy advice, which is defined in terms of the programme’s
4/09/2014 7
ability to ask the right questions, and to know what types of data are required to
answer these questions and how to analyse these data. Based on such analyses, policy
advice also entails the ability to present clear policy options or cause such options to
be presented by others, and to take informed positions concerning such policy options
and to argue their merits. Finally, either alone or with or through others, it entails the
ability to devise suitable methods of policy implementation. Second, project
development, which is defined in terms of problem identification and crystallisation;
problem solving; project conceptualisation; and the identification of development
partners. Third, project management, which entails monitoring project
implementation; interfacing between contractors and the administration; and
dovetailing with project development (completing the cycle). Finally, the fourth
component of the programme’s role is ‘multilateral bridging’ and resource
mobilisation, which consists in acting as a two-way communication channel or
‘bridge’ between the Ministry and a wide range of third parties, and resource
mobilisation from donors.
Opportunities for improvement: Minor suggestions for improving programme
performance are made in relation to: first, sharpening the perceptions of programme
staff concerning programme roles, functions and accomplishments; second, focusing
more attention on certain aspects of the transfer of skills to the administration,
particularly where policy advice is concerned; and third, certain other aspects of
programme management, such as project and programme planning and reporting.
Saleable products: Saleable products with clear, tangible outcomes and finite
implementation periods include: Customs modernisation, Land Registration
modernisation, and VAT introduction.
Saleable products with less clear and less tangible outcomes and less finite
implementation periods include: policy advice, and capacity building.
Competitive advantages: The programme’s competitive advantages include: its
recent experience and accomplishment in the region; specialised technical capability
in fiscal policy development and management; the proven sustainability of its
products; the high quality of its staff and potential joint-venture partners; adapted
(Arabic language) and enhanced computerised systems and work processes; staff
linguistic capabilities; established networks of contacts with the international financial
institutions, other donors, and other governments in the region; and Lebanon’s status
as a post-conflict developing country that has a record of success in critical areas of
governance reform.
Potential clients: In rank order, the main categories of potential client are: first,
governments and donors in the region, including the Arabic speaking countries of
North Africa; second, governments and donors in post-conflict developing countries;
third, governments and donors in developing countries in Francophone and
Anglophone Africa; and fourth, governments and donors in developing countries in
general.
What next? It is proposed that, with donor support, a small Consultancy Services
Unit be established within the programme, which will be responsible for all aspects of
product development and sale and liaison with clients and consultants.
4/09/2014 8
2. Background and Purpose
Technical cooperation between the Ministry of Finance (MOF) in the Government of
Lebanon and a range of international development assistance institutions began about
ten years ago, in 1993. Many of the parties involved over this period regard the
cooperation that has taken place as having been unusually successful. First among
these parties is the Government of Lebanon itself - most notably in the person of the
current Minister of Finance, who has expressed his appreciation of the results of the
programme of cooperation, and is a strong supporter and advocate of it.
Likewise, UNDP in Beirut, one of the programme's 'founding'2 agencies from the
development assistance side, and the institutional vehicle of programme management3
for much of the ten-year period, is unstinting in its praise. Other, bilateral and
multilateral, agencies also have good things to say, and in some cases have 'put their
money where their mouths are' by allocating more resources to the programme and by
recommending components of the programme as examples to be followed by other
regional governments. Invariably, current and former programme staff speak well of
programme leadership, management, and performance.
Such unanimity is rare in relation to any aspect of organisational performance, in any
organisation, anywhere – more so where development assistance is concerned. When
such a ‘success phenomenon’ occurs, it is therefore important to try to understand
why and how it has come about so that others can learn from the experience and
attempt to emulate or replicate it.
Realising both the rarity and importance of the phenomenon, in 2003 the Minister of
Finance asked UNDP to commission a study that would examine what has transpired
in MOF's decade of experience of development cooperation (the MOF programme)
with a view to: first, defining 'success' in the eyes of the principal stakeholders, and its
genesis; second, describing briefly a small number of cases from the MOF
programme that illustrate such success; third, identifying general principles that might
explain the success; fourth, considering the implications of this success for marketing
within the region 'development products' based upon it; and (possibly) fifth,
disseminating the main lessons to be learnt in other ways.
While this report has things to say that are evaluative of programme performance, it is
not a conventional evaluation report - in that it seeks primarily to illuminate and
explain the strengths of the MOF programme, rather than to evaluate it in detail.
Weaknesses are mentioned mainly insofar as they may be construed as opportunities
for improving already good programme performance, or building on success.
The report draws on programme documents and reviews supplied by UNDP and the
MOF programme director, field visits to project sites, and interviews conducted with
2 UNDP was one of a number of agencies that provided ad hoc technical support to the Ministry from
1993 to about 1995. It was also instrumental in the initial conceptualisation of the programme and its
design. The first UNDP project document, 'Fiscal Reform and Administration', which was signed in
January 1993, identifies many of the issues and 'lines of business' that up to the present lie at the core
of the MOF programme. 3 Mainly, this comprises influence in relation to overall programme design, all aspects of staffing, and
some financial management and procurement.
4/09/2014 9
programme and administration staff and the business community over a four-week
period, from late October to late November 2003.
3. A Decade of Technical Cooperation: Main Accomplishments of the MOF Programme
Public financial institutions everywhere are clearly central elements of national
governance structure. The strength of governance in any country depends greatly on
the effectiveness and efficiency with which such institutions, including Ministries of
Finance, carry out their responsibilities. Ministries of Finance therefore tend to be
among the first in line for development assistance, and to receive a lot of it from a
variety of sources, particularly the international financial institutions.
Their favouritism with development assistance institutions generally also arises from
the fact that globalisation has made it necessary for financial and economic
institutions in developing countries to modernise quickly in order to realise and
optimise membership of international economic and financial systems and trade
associations.4
Ministries of Finance are therefore crucial to development in at least two important
respects. First, as we have said, when they operate well, they are one of the
foundation stones of ‘good’ national governance.5 And second, because of the stature
and visibility associated with their position in government, they can play an important
role as leaders of governance reform and modernisation.
Under the circumstances, the Ministry of Finance in the Government of Lebanon
plays both of these roles remarkably well. As we have suggested above, the purpose
of this paper is not to justify this claim,6 but briefly to describe at least part of that
upon which it depends (the MOF programme), and then to attempt to explain it.
The broad extent and character of reform and accomplishment at the MOF since 1993
can be described in terms of: first, different categories of reform; second, in terms of
the institutional capacity building necessary to support those reforms; and, third, in
terms of the effects of these reforms and capacity building on performance and
service delivery.
3.1 Categories of Reform
There have been two main categories of reform at the MOF: first, policy reform, and
second, reforms leading to improved operational efficiency and effectiveness. The
main areas of reform are outlined under each of these headings immediately below.
Some of them are described in more detail in Section 4.
4 Whether this is always good for developing countries is, of course, another matter.
5 See, for example, UNDP (1995)(commissioned author: Blunt, P.). Public Sector Management,
Governance and Sustainable Human Development. New York: Department of Public Affairs, UNDP,
pp. 130 & xxvi; and UNDP (1997)(commissioned authors: Blunt, P, & Rondinelli, D.).
Reconceptualising Governance. New York: Department of Public Affairs, UNDP, pp. 93 & xi. 6 Detailed accounts of the progress of the MOF programme and of governance improvement in the
MOF are contained in a number of documents – see, for example, Reform Programme at the Ministry
of Finance, August 2003, mimeo, pp. 48; and Progress Report for 1999 and 2000, October 2000,
mimeo, pp. 68. There is little to be gained from our reporting here the detail of what is stated there.
4/09/2014 10
It goes without saying that the categories 'policy reform' and 'reform leading to
improved operational efficiency and effectiveness' are not watertight or mutually
exclusive. On the contrary, it is likely that in circumstances where one type of reform
is emphasised the other will occur as well to a greater or lesser extent – as
demonstrated in the examples given in Section 4.
3.1.1 Policy reform
The 'provision of policy advice' is a difficult activity to pin down, and can take many
forms. In its broadest sense, it may be construed as ‘any advice or activity that has
some bearing on policy’.
Among other things, policy reform driven wholly or partly by the programme, or
brokered by it, has taken place, or is underway, in relation to macroeconomic and
fiscal policy: including the introduction of VAT, focus on large taxpayers, the
deduction at source of salaries’ tax, and the introduction of a general tax on income in
lieu of the current schedule of income taxes; the devolution to local government of
revenue raising authority; the intergovernmental grant system; expenditure
rationalisation; debt management; and bilateral agreements on the promotion and
protection of investments, and double taxation.
Later in this report, we set out the main elements of the programme's role in relation
to the provision of 'policy advice'.
3.1.2 Improvements to operational efficiency and effectiveness
The main improvements here have been made in relation to land registration and
cadastre, customs, social expenditure, general administration, the government
payment and pensions systems, budgetary and accounting systems, treasury
management, and certain aspects of taxation.
In nearly all of the above, realignment of government thinking or policy has preceded,
and/or occurred in tandem with, operational improvements. The programme has
contributed to these (policy) developments to varying degrees and in a number of
ways.
3.2 Capacity Building7
Capacity building has taken place in four main areas: training and development of
staff; improvements to recruitment and selection of MOF staff; job and organisational
redesign; and the introduction of new technologies, particularly work process
redesign, automation, and computerised management information systems (MIS).
3.2.1 Training and development
In all of the case examples given in Section 4 below staff training and development
have been precursors to, and/or concomitants of, the main categories of reform and of
the introduction of new technologies. Staff training and development have been both
7 Capacity building is designed to improve the functioning, knowledge, and learning capability, of
individuals, groups, organisations and institutions, so that organisational and institutional self-renewal
and self-improvement becomes automatic and sustainable. It therefore addresses questions of human
competence development (knowledge, values, attitudes and skills), as well as issues of job design, and
organisational design and functioning. Such capacity building should be informed by the wider
cultural, institutional and organisational contexts within which it takes place.
4/09/2014 11
necessary and sufficient conditions of performance improvement and programme
success.
3.2.2 Recruitment and selection
Using normal civil service procedures, every year from 2000 to 2003, the Institute of
Finance has assisted in the recruitment of the new generation of MOF staff. Selection
criteria have been stringent and applied impartially, and selection ratios have been
high, resulting in the employment to date of about 500 high calibre staff. All entrants
must have obtained a relevant degree from a good university, be multilingual, and
possess basic computer literacy. An important aspect of their induction and initial
training has been in the emphasis given to the development of a service ethic.
3.2.3 Job and organisational redesign
Likewise, job and organisational redesign have gone hand-in-hand with improvements
to operating effectiveness and efficiency, and with the introduction of new areas of
operation. Again, the case examples given in Section 4 describe some of the ways in
which jobs, organisational structures (the division and coordination of work), and
management systems have been modified in order to accommodate and make the best
use of new technologies and/or to allow the Ministry to become involved in new lines
of business.
3.2.4 New technologies8: work processes, automation, and computerised MIS
Some of the most notable examples of the introduction of new technologies involving
work process redesign associated with automation and computerised management
information systems have taken place in Customs and in Land Registration and
Cadastre. In Section 4, we demonstrate how the introduction of new technology has
contributed to improvements of operating effectiveness and efficiency and service
delivery.
3.3 Ministry Performance and Service Improvement
The major responsibilities of the Ministry fall into three broad categories: first, fiscal
and economic policy formulation and implementation; second, public financial
management; and third service delivery to the general public and to other government
agencies.
3.3.1 Policy formulation and implementation, and public financial management
The programme has contributed significantly to the performance by the Ministry of its
major responsibilities, particularly in terms of its crucial support to the formulation
and implementation of the government's fiscal programme. It has also provided
valuable support to the monitoring of public expenditure, the management of public
debt and treasury operations, the financial management of public enterprises, and the
establishment of annual national accounts.
It is certain that without the support of the MOF programme the Ministry would not
have been able to perform these functions as well as it has.
8 It is conventional to incorporate process redesign associated with computerisation within the term
‘new technology’.
4/09/2014 12
Service improvement has occurred in two main spheres: first, services delivered to the
general public, the private sector, and civil society; and second, services that are
delivered by the MOF to other government agencies.
3.3.2 Services to citizens, the private sector, and civil society
The main service improvements for citizens, the private sector and civil society have
been realised in terms of: first, speeding-up the delivery of services provided by the
MOF (for example, customs clearance, land titles and affidavits, salary payments, tax
liabilities, and so on); second, increasing the validity, accuracy, and consistency of
assessments and records (for example, customs duties, land/property boundaries and
taxes, income taxes, land titles, and so on); third, increasing general levels of
transparency and accountability in key areas of MOF operations; and, fourth,
improving the availability and accessibility of valid, comprehensive and up-to-date
financial, fiscal, and trade data.
More detailed examples of these benefits are provided in Section 4 below.
3.3.3 Services to other government entities
From the points of view of other government entities, in general terms, service
improvements have also been realised in all of the four areas listed under Section
3.3.1 above, namely: speed of service delivery; validity and reliability of decisions;
transparency and accountability; and the range, quality, and accessibility of
information.
Automated links between MOF departments have also been established, resulting in
better integration of activities and efficiency and effectiveness improvements.
Again, some examples of this are provided in Section 4 below.
4. MOF Programme Success: Meaning and Case Examples
The cases outlined below satisfy four selection criteria. First, they are widely regarded
as being emblematic of the success of the MOF programme as a whole. Second, each
case addresses important issues of governance improvement. Third, they represent the
different categories of accomplishment described in Section 3 above. And fourth,
while having much in common, each of them illustrates a somewhat different range
and combination of critical success factors.
Each case is described in terms of: (1) the governance issues, and general policy
setting, that have led to the reform, or within which the reform has taken place –
referred to as 'precedents'; (2) the 'objectives' of the reform; (3) the 'means' by which
these objectives have been attained or addressed; (4) the extent to which capacity and
capability has been transferred, or the 'transfer status and sustainability' of the systems
within the administration; (5) the role of the project in relation to the reform – 'project
role'; (6) the external parties involved, or 'technical partners and/or sub-contractors';
and (7) the 'results' of the reform.
The main aspects of the programme's role and functions are summarised in Section
5.3.4 below.
4/09/2014 13
To begin with, however, it is necessary to attempt to clarify the meaning of 'success'
and to consider some possible implications of our interpretation of it.
4.1 The Meaning of ‘Success’
As with beauty, perceptions of success are in the eye of the beholder. Stakeholder
perspectives tend to emphasise different features of what is being perceived according
to the nature of their relationship with the object of their gaze, and their
preconceptions concerning it. In any programme of development assistance, the
principal stakeholders all have some degree of vested interest in its success.
Development assistance agencies clearly want to be seen to be making a constructive
difference in their countries of operation ('programme countries'). And, just as clearly,
in most cases, recipients want to make the best use of the assistance they receive, and
to be seen to be so doing. Both parties are therefore predisposed to the perception of
success. Yet, curiously, as we have noted above, in development assistance circles,
publicly declared 'success stories' are rare, and donors, recipients, and development
practitioners routinely bemoan their scarcity.
These observations suggest a conclusion along the following lines: 'where success is
reported rarely and the main parties involved have a common interest in its being
reported frequently either it is very difficult to achieve,9 or the interested parties are
only prepared to pronounce it (success) when they are absolutely sure of not being
shown to having been mistaken, or both'.
What, then, are the (reassuring) foundations – necessary conditions - for these rare
conclusions of success? The bedrock must be widespread recognition among those
most directly affected that something worthwhile has happened as a result of the
assistance. These worthwhile occurrences must be tangible, or clearly visible to all of
those concerned. That is to say, particularly among ‘significant’ stakeholders (more
about these later) in development cooperation, there must be agreement about tangible
benefits or visible 'runs on the board.'
These perceptions of success need not be based on systematic or detailed analyses of
objectives and outcomes – the sort of thing that might be contained in an evaluation
report. They are more likely to constitute something like general impressions or
sentiments that are informed by tangible results and are disseminated informally by
opinion leaders and others, usually by word of mouth.
Such expressions of success might be described as 'political success', which have
arisen from largely good technical foundations, but without (all of) the detail of those
foundations being known to the opinion leaders.
The most significant stakeholders are clearly, on the one hand, those who exercise
control over development cooperation resources and, on the other, those who stand to
benefit from the use of such resources (mainly governments). This is a classical
situation of reciprocal interdependency: 'donors' depend on recipients for consumption
9 Of course, the other possibility is that the party that is meant to be providing the help is not very good
at it.
4/09/2014 14
of development assistance and for statements of development success concerning it,
while recipients depend on donors for a continuing supply of development resources.
On the development assistance side, particularly in programmes where more than one
agency is involved directly or where agencies are interlinked in some way, before
'going public' individual agencies will be inclined to make sure that all involved
agencies have broadly similar views concerning programme performance.
The ordering of the pronouncement of success is also crucial to the emergence of
unanimity. It is necessary that opinion leaders on the recipient side declare their views
first and, preferably, that this be done unambiguously, vigorously, and repeatedly.
This will give confidence to the donor side to do likewise.
Once this structure of consensus is in place, it develops a momentum and life of its
own. In Kuhn’s10
terms, it becomes the 'ruling paradigm' or the conceptual ('rosy')
lens through which members of the paradigm view the programme thenceforth. As a
result, it also becomes increasingly difficult for the programme to be seen by its
adherents to do wrong or to be capable of doing wrong. In a sense, programme
success becomes self-fulfilling. Issues of loyalty to the opinion leaders who have
'stuck their necks out' and gone public about programme success, and 'face' (for those
identified with the project in these and other ways), incline adherents to search for
confirmation of success rather than falsifying evidence, or good news rather than
bad.11
If correct, the above suggests that, once achieved, this version of success will have
very good staying power, the preservation of which will depend mostly on the
presence and continuing support of the opinion leaders whose expressed views
constitute its foundations and much of its superstructure. It also suggests the
possibility that the distance between expressions of what we have called 'political
success' and the technical realities of programme performance may become wider as
time goes by, and that eventually (when opinion leaders disperse or feel compelled to
change their minds) this may lead to programme decay or downfall.
However, ‘political success’ is also likely to be an important deterrent or preventative
of programme decay - insofar as so long as the development cooperation programme
concerned continues to enjoy this reputation it will receive generous levels of political
and therefore other forms of support (resources). Providing the flow of resources is
well managed, the effect should be to enhance the technical capability and capacity of
the programme, thereby creating a ‘virtuous circle’ of reciprocal interdependence and
reinforcement between technical programme performance and expressions of
‘political success’.
The picture that we have presented here of the rise and fall of the 'political success' of
programmes of development cooperation is supported partly by the qualitative
evidence presented later in this report – 'partly' because 'political success' in the MOF
programme is still in the ascendancy phase. Time will tell whether the programme
10
See Kuhn, T. (1970). The Structure of Scientific Revolutions. University of Chicago Press. 11
Readers familiar with Kuhn ibid on the sociology of science (and Popper's critique) will recognize
that this description fits that of so-called 'normal science'.
4/09/2014 15
falls from grace in the way that we speculate that programmes like it might, and how
fast this might happen, or how long its period of ascendancy might last.12
A major reason behind the commissioning of this study was to try to find ways of
maintaining for as long as possible for the MOF programme what we have referred to
as periods of ‘ascendancy’ and ‘virtuous circles’.
4.2 Policy Reform
To some extent the role of the MOF programme can be inferred from the discussion
that follows - of VAT and of 'policy advice in general'. Further discussion of the
programme's policy advice role is contained in Section 5.3.4 below.
Where policy reform has taken place within MOF, it is also safe to assume that there
will have been implications for operations and organisational design and, in many
cases, that there will have been improvements to operational effectiveness and
efficiency.
4.2.1 Policy advice in general
The programme plays a pivotal role in relation to general matters of fiscal and
economic policy that fall within the purview of the Ministry.
Precedents: The main precedents are the economic and fiscal circumstances of the
country and government policies concerning them. These include substantial debt and
deficit issues, and the large size and low productivity of the public sector. Policy
directions include:13
Creating sustainable growth, and reducing the fiscal deficit, by reviving and
modernising the economy, establishing a liberal economic environment, and
by encouraging the private sector to act as the engine of growth.
Integrating Lebanon with the global economy, opening up the economy, and
encouraging international trade.
Maintaining monetary and financial stability, and hence investor and public
confidence.
Modernising the legal, administrative and regulatory frameworks.
Privatising non-performing public enterprises.
Confining spending increases to investment projects that stimulate economic
activity.
Introducing new taxes such as the VAT; improving tax recovery rates, tax
administration, and the debt management system; and rationalising public
expenditure.
Maintaining the level of social spending.
12
We should say, however, that somewhat paradoxically programme 'decay' can be a sign of
programme success – to the extent that all programmes should explicitly incorporate the seeds of their
own destruction by making sure that what they bring to the recipient can be taken over by the recipient
as soon as possible, thereby making the programme redundant. This is usually a gradual process. Our
reference to programme decay is to decay that takes place for other reasons. 13
As we observe elsewhere in this report, government policy in Lebanon is consistent with the basic
tenets of the (Washington-inspired and led) neoliberal consensus.
4/09/2014 16
These policy directions reflect the standard lines of thinking of major international
institutions such as the IMF and the World Bank and the requirements for
membership of international trade associations.
‘The Economic and Technical Support Unit’ (ETSU) of the MOF programme is an
important source, broker, and channel for the type of policy referred to above, and for
advice concerning its implementation, but not the only one. Such advice also comes
from, and is channelled through, the Project Director, programme staff specialists in
the Office of the Minister, other projects within the programme, and a number of
other ministerial advisers outside of the formal structure of the programme. The
sources and channels of policy advice are therefore diverse.
The evolution of policy decisions in some cases is organic, in others policy options
are constrained, or largely or partly predetermined, by the requirements of entry to
international bodies.
Objectives: The ETSU describes itself as ‘the main resource for (addressing) major
macroeconomic policy issues’ (parentheses added). It asserts that the support it
provides ‘focuses on (helping the Ministry) to ensure macroeconomic stability and
(particularly) fiscal consolidation’ (parentheses added). A particularly important area
of support is said to be ‘revenue enhancement’.
There are no clearly stated objectives for the provision by the programme of policy
advice. However, we can infer objectives from the above and from some of the
activities so far undertaken by the programme and by its modes of operation.
Means: The major activities described in progress reports include, but are not
restricted to:
Brokering access to international capital markets and providing (or brokering)
technical advice in relation to instruments, maturity and currency, the
evaluation of bids, and participation in due diligence rounds (little or no
transfer).
Acting as intermediaries between the Ministry and international ratings
agencies (little or no transfer).
Providing outside agencies with up-to-date fiscal and economic information
(significant transfer).
Facilitating IMF missions, and explaining to such missions the
‘macroeconomic and fiscal policy orientation’ of the government (little or no
transfer).
Participating in negotiations concerning entry to EUROMED and brokering
technical studies of the fiscal and economic implications of membership for
Lebanon (little or no transfer).
‘Coordinating and managing loans and grants provided by international
institutions and agencies’, including the World Bank, and so on (little or no
transfer).
Transfer status (sustainability): The amount of transfer of these functions to the
administration (indicated in parentheses above) has varied between them, but with
relatively few exceptions has been limited. Given the complex nature of some of these
activities, this is understandable.
4/09/2014 17
However, in all cases the programme has documented in detail the processes
involved, sometimes in the form of user manuals.14
Project role: In relation to matters of policy, it can be said that the programme aims
to support the Ministry by:
Analysing relevant data, considering their policy implications, and articulating
these implications to the Ministry. The programme will take positions
concerning the merits of different policy options, and argue those positions.
The programme's advice is not always followed.
Brokering, facilitating, and interpolating policy advice received from
international institutions such as the IMF and the World Bank.
Analysing this advice and making informed judgements about it, which are
conveyed to the Ministry.
Causing to be produced information that is relevant to economic and fiscal
management.
Presenting economic and fiscal information, and analyses thereof, in
appropriate formats for different audiences, and disseminating it.
Liasing with a range of international agencies, and making sure that their visits
to the country are productive.
Commenting on the implications of bilateral and multilateral agreements and
their compatibility with the laws of Lebanon. Again, the programme argues
the merits of different options.
Assisting with the formulation of development cooperation projects in relation
to the Ministry's responsibilities, and the management of such projects,
including reporting on progress.
Maintaining good working relations with donor agencies.
Technical partners and/or sub-contractors: The main technical partners have been
the IMF, the World Bank, and the EU. Technical interactions also take place with
ratings agencies, research agencies, investment banks, and underwriters. UNDP is the
institutional programme manager.
Results: The Ministry and the programme report satisfactory performance in relation
to all of the activities listed under 'means' above, that is, that these activities have been
carried out to a high standard. In terms of the ultimate objectives - reducing debt and
fiscal deficits - positive results are not feasible in the short term.
However, positive effects of policy advice can be inferred from the tangible results
achieved by projects within the programme, some of which are described below.
4.2.2 Value Added Tax
Precedents: The main precedents concern the need to decrease the debt burden, and
reduce the fiscal deficit, together with the government's wishes to widen the tax base,
and to modernise the economy and administration. The introduction of VAT also
satisfies certain international and regional trade obligations (e.g., WTO, EU, and Arab
Trade Union)
14
This is done in all areas of programme operation.
4/09/2014 18
Objectives: The project has no formally stated objectives, but these can be inferred
from the main precedents.
Means: The capacity building means for achieving these objectives have involved, in
particular, the revision of the legal framework, the design of work processes
associated with computerisation (simple, clear procedures forms), extensive staff
training and development before, during, and after the introduction of computerised
systems, as well as careful job and organisational design. The project has been careful
to ensure that the computerised systems are made to fit and augment work processes
and objectives rather than the other way around.
All staff training activities have been, and are, conducted either by staff employed by
the private sector supplier on site or, for basic computer literacy training, in close
collaboration with the Institute of Finance.
Before introduction in the Lebanon, the computerised systems had been installed by
the private sector supplier in a number of Caribbean and Latin American countries.
These systems were enhanced and adapted to local circumstances by the technical
team employed by the supplier. The team was composed entirely of Lebanese
nationals.
Most administration staff are well-qualified 'new generation' employees who received
up to 140 days of specialised training on the systems before commencing their jobs.
Issues of transfer arise mainly in relation to certain technical areas – where decrees for
the establishment of certain new units in the administration (e.g., legal, IT and
operations) have yet to be passed.
In addition, before the introduction of the new tax there were extensive public
awareness raising and education campaigns that specifically targeted different client
groups. The project also brokered the establishment of an information centre, a user-
friendly website, and a toll free telephone number for enquiries.
Transfer status (sustainability): The system is operated entirely by the
administration, but significant technical support is either provided or brokered by the
project. As indicated above, the formalisation of certain structural arrangements is yet
to be completed.
Project role: The project's role has three main components: first, it has overseen the
design of work processes, the enhancement and installation of computerised systems,
and training and development activities. This work was done by, or in collaboration
with, a private supplier but was overseen by the project. Second, following
installation, the project has continued to provide and/or to broker technical
improvements to the work and computerised systems. Third, it acts as the interface
between external third parties (suppliers, consultants, etc.) and the administration.
Technical partners and/or sub-contractors: The main technical partners have been
CIDA, the IMF, and private sector suppliers. UNDP is the institutional programme
manager.
4/09/2014 19
Results: From the point of view of the taxpayer, the administration of VAT is said to
be seen as 'revolutionary', in that instead of having to collect personally and complete
by hand long and complicated forms, the taxpayer is now sent through the post a
simple and easy to understand form for completion, which has had certain taxpayer
information incorporated in advance by the system. A stamped addressed envelope is
included for postal returns. Lodgements of returns in person, and payments, have been
speeded-up.
Moreover, the project reports that customers are dealt with courteously and
efficiently, and that enquiries are answered expeditiously.
The above has helped to achieve a 98% level of compliance in a very short period.
Insofar as services to other government departments is concerned, integration between
tax departments within MOF has improved, and an automated link with Customs has
been established that serves a variety of purposes for both parties.
4.3 Improvements to Operational Effectiveness and Efficiency
The examples given below emphasise reforms leading to improvements in operational
effectiveness and efficiency. In both cases the reform has been preceded by, and
entailed, a significant degree of policy change or development.
4.3.1 Customs
Precedents: Reform at customs occurred as a consequence of government decision to
liberalise and facilitate trade, to increase transparency in key areas of operation and
service delivery, to improve the availability and quality of trade data, and to
strengthen the management of this major source of government revenue.
Among other things, these policy directions reflected the membership requirements of
international trade organisations. The MOF programme played an important part in
the development of these policy directions on the part of the Ministry, both by taking
positions itself on the basis of project experience and by interpolating advice offered
by outside consultants, particularly from the IMF.
Objectives: The major short term objectives of reform in Customs have been, first, to
reduce customs clearance times and associated costs, and second, to make available
comprehensive, timely, accurate and up-to-date international trade statistics to
government agencies and other consumer groups. A second objective, addressed in
parallel to the first objective, has been to reduce the number and simplify the structure
of tariffs.
Third, the major longer term objective of Customs reform is concerned with
contributing to the improvement of Lebanon's trade competitiveness.
Means: The long term objective will be addressed partly through the achievement of
the short term objectives already mentioned, but also by reorienting the culture and
role of Customs towards one that emphasises trade facilitation rather than control, and
by helping to establish a discussion forum for international trade facilitation and
improvement.
4/09/2014 20
The capacity building means for achieving these objectives have involved, in
particular, changes to the legal framework, the redesign of work processes associated
with computerisation (simplification of procedures and automation), automation or
computerisation, extensive staff training and development before, during, and after
the introduction of computerised systems (hundreds of staff), as well as job and
organisational redesign (e.g., greater specialisation in audit).
All staff training activities have been, and are, conducted in close collaboration with
the Institute of Finance.
More than 50% of administration staff involved with the systems are 'new generation'
employees.
Transfer status (sustainability): The implemented parts of the new systems are
operated entirely by the administration (some staff still receive on-the-job coaching
from 'buddies'), and most technical support to the system is also provided by the
administration. Senior managers in the administration have a thorough understanding
of the operations and benefits of the system.
Systems in the process of being implemented include: an automated system for
managing customs declarations and archives; an automated system for enhancing risk
management and selectivity during desk audits; and an automated system for
managing field audits.
Project role: Throughout, the project has played an important role, primarily in terms
of project conceptualisation and development, brokering the development and
implementation of work processes and the computerised systems, and training and
development. During implementation, on behalf of the Ministry, it monitored the
performance of the implementing agency and reported informally on this to the
programme director and senior staff of the administration.
In relation to training and development, the project has been instrumental in ensuring
that training and development of staff was conducted in advance of, during and after
the installation of computerised systems. The project also undertakes much of the
liaison between Customs and the IF, and Customs and donors.
In addition, based on its long experience of attempts at reform in Customs, the project
has also taken positions concerning policy options, and influenced policy decisions –
for example, in relation to amendments to tariff structures.
As with other projects, following installation, it provided, and has continued to
provide and/or to broker, technical improvements to work processes and computerised
systems. It continues to act as the interface between external third parties (donors, the
business community, suppliers, consultants, etc.) and the administration.
Perhaps the most important part of this role has been to provide a knowledgeable and
highly experienced, and therefore credible, indigenous interface between technical
experts brought in from elsewhere - mainly the implementing agency (UNCTAD) -
and the Customs administration. Engagement with government and assistance with
the management of the introduction of change have been crucial aspects of this role.
4/09/2014 21
This has required considerable interpersonal skills on the part of project staff.
Technical partners and/or sub-contractors: UNCTAD is the implementing agency
and provider of technical assistance for the ASYCUDA system and some associated
training. The IMF assisted with tariff and procedural reforms. The World Bank
provided loan funding for hardware, while other forms of technical assistance (latest
form of ASYCUDA++) are being funded under a grant from the EU through
OMSAR. UNDP is the institutional programme manager.
Results: Tangible results from the programme include an increase in 'green line'
traffic – from 10% of total traffic in 1997 to more than 75% in 2003 – and a reduction
in average clearance time – from about 6 days in 1997 to about 3.5 days in 2003.
There have also been significant improvements in transparency (internal and
external), customer self-service, inter-departmental integration, internal management
systems, and staff productivity.
Feedback from traders is said by the project to be very good, and our very limited
'market testing' confirmed this. Some brokers report that clearance times have
decreased from several days to a few hours. For example, the responsible manager at
DHL described the new system as 'perfect' and that the ability to make online
transactions for clearance at the airport had reduced transaction times from a few days
to less than an hour.
The introduction of the new systems also coincided with a 'shakeout' of the clearance
agents market, with a number of agents going out of business. This is said to be due to
the sharp fall in (informal) clearance costs following the introduction of the new
systems.
The image of Customs in the eyes of traders and brokers is also said by the project to
have been 'transformed' as a result of the new systems that have been introduced and
the tangible benefits associated with them. Evidence of this came from comments
made by the business community about the more professional image of Customs at
the airport where, among other things, the offices are said to have been transformed
from looking like a 'Turkish prison' to a 'modern, technically competent and
professional place'.
But also, because there is a realisation among traders that the new systems have much
greater capability for detecting anomalies and patterns of declaration both in the
present and historically, it is reported by Customs officials that there is greater
'respect' shown by traders and brokers for Customs regulations.
Other governments in the region (e.g., Syria, Jordan, Egypt, Yemen, and Saudi
Arabia) have been referred to the project by international donors, and project staff
have undertaken a number of related consultancies.
4.3.2 Land Registration and Cadastre
Precedents: As with Customs, reform at Land Registration and Cadastre is a response
to government interest in: first, modernising the civil service generally and providing
better services to citizens; second, establishing effective and efficient means for
4/09/2014 22
generating valid, reliable and up-to-date economic data that is helpful to economic
management; and third, creating more transparent governance systems. The project
also responds to requirements of entry to regional trade associations.
Objectives: The main short-term objectives of reform in Land Registration and
Cadastre have been, first, to ensure the integrity and security of property records (title
deeds and registers); second, to make property registration and property transactions
more valid and reliable, and easier and quicker for citizens; third, to ensure the
integrity and security of existing maps; and fourth to improve access to information
on government land registration and cadastre and the accuracy and reliability of
information.
Means: As with Customs, the capacity building means for achieving these objectives
have involved, in particular, the redesign of work processes associated with
computerisation (procedures remain the same in principle but have been simplified
and automated), extensive staff training and development before, during, and after the
introduction of computerised systems, as well as job and organisational redesign.
Transfer status (sustainability): The implemented parts of the system are operated
entirely by the administration (some staff still receive on-the-job coaching from
'buddies'), and much technical support to the system is also provided by the
administration. A World Bank funded team continues to monitor technical operations
and, where necessary, to trouble-shoot and to broker outside technical assistance of
different kinds.
Implementation of automated systems for all land registries and cadastre offices
should be completed by the end of 2004.
Project role: The project has acted primarily as the interface between the
administration and the private sector suppliers – it continues to play this (diminishing)
role. In addition, it has assisted with public awareness raising and education. The
project also played a vital role in relation to the preparation of international bidding
procedures and contracts.
Technical partners and/or sub-contractors: The vehicles of project implementation
have been two turnkey private sector contracts awarded after international bidding to
a Canadian-Lebanese joint venture and a Dutch-Lebanese joint venture. The main
source of funding has been a World Bank loan of USD$20 million together with a
UNDP grant and support from the Government of Lebanon for a total of USD$23
million. UNDP is the institutional programme manager.
Results: Processing times for obtaining title and map abstracts and property titles
have decreased significantly. Abstracts and titles are now printed automatically rather
than being hand written, and as a result are more legible. Work procedures have been
simplified thereby reducing public reliance on brokers. Staff productivity has
increased. Title and map records are now more secure.
From the point of view of staff, the accuracy and reliability of abstracts removes
entirely their concerns about personal liability for transcription errors. It also makes
4/09/2014 23
their jobs easier, introduces a degree of multiskilling, and gives employees a more
complete understanding of department outputs.
4.4 Capacity Building
Capacity building is clearly not a stand-alone project, but a crosscutting activity that is
a feature of all of the programme’s work. It is one of the primary means of ensuring
sustainability. As an MOF capability, capacity building must be of sufficient strength
to do what is needed now (either alone or in collaboration with others) in these
respects and to learn from, and adapt to, changing circumstances. That is to say, the
Ministry's own capacity to do capacity building work should itself be sustainable. The
role of the Institute of Finance is crucial in both of these respects.
4.4.1 The Institute of Finance
Precedents: the Institute of Finance (IF) was established in July 1996 as an initiative
of the Minister, who recognised that the modernisation of the Ministry could only take
place on the basis of, and together with, all aspects of capacity building. A number of
central features of such capacity building – training and development, recruitment,
and public education and awareness raising – were therefore assigned to the Institute
of Finance.15
Objectives: The objectives of the IF can be inferred from the above, namely: first, to
provide to Ministry staff, or to facilitate the provision of by others, high quality
training and development in a range of relevant fields; second, to make the public and
other parts of government aware of, and to educate them about, MOF roles and
functions and services; and third, to collect and make available to the general public
books, unpublished papers, and journals pertaining to the business of the MOF.
Means: The IF provides some basic language training and computer literacy training
in-house, that is, by IF staff. Otherwise, the best available trainers are hired to conduct
specific training courses. Such trainers are recruited mainly from the local market,
including the MOF administration and programme staff. All trainers are required to
conform to an IF training protocol that, among other things, ensures that all training is
as applied and practical as possible, and is directly related to participants' work. On-
the-job training is sometimes conducted.
For outsiders, close to market rates are paid, and the IF reports no difficulty in
attracting the best available people on the local market.
The IF collaborates closely with project staff (Customs, Land Registration etc.) at all
stages of the project life cycle in order to ensure that relevant, high quality technical
training over which it has control (much of the specialised training is supplied by the
private sector contractors involved) is available at the right times.
The IF makes its facilities and resources available to other users in government and
civil society.
Working within normal civil service procedures, the IF assists with the recruitment of
new entrants to the MOF. The quality of this new generation of recruits is said to be
15
These are not exclusive functions of the IF.
4/09/2014 24
very high. Selection criteria include foreign language skills, accountancy
qualifications from good universities, and computer literacy.
The IF publishes a newsletter, maintains a public library and 'Internet café', and
prepares and publishes other publicity material in a variety of print and electronic
media.
The Institute also maintains active links with a number of international agencies,
institutes of public administration, private institutes, institutes such as the training
centres of the Egyptian Ministry of Finance, and the Arab Fund in Abu Dhabi.
To do many of these things, the Institute raises financial support from the private
sector and a range of international donors.
Technical partners and/or sub-contractors: Funding has been obtained from a
range of multilateral and bilateral donors including the EU, the Government of
France, and the Governments of Canada and the Netherlands. Training is also
delivered in partnership with a wide range of bilateral and multilateral donors.
Transfer status (sustainability): Transfer to the Ministry is complete. All core staff
are members of the administration. Although not part of the programme, this is a
particularly good example of successful transfer and capacity building.
Project role: As indicated above, the IF per se provides basic training and
development in computer literacy, some aspects of human resource management, and
languages. Otherwise, it hires part time staff to deliver the training courses it offers,
and manages the delivery of such training. Its facilities, which include dedicated
computer labs, a large auditorium and a library, are available for use by others.
The IF advises the Ministry on the recruitment, selection, placement and induction of
new staff, and is helping the Ministry to develop a modern HRD strategy.
It also plays a public relations role for the Ministry and maintains close contact with
all programme activities.
Results: The IF has been instrumental to ensuring the successful transfer of skills and
knowledge from projects to the administration of MOF and, thereby, the introduction
and sustainability of most of the governance reforms outlined above.
It has also played an important part in recruiting and selecting a new generation of
Ministry professional staff, in the induction of new recruits, career counselling, and in
identifying for the Ministry outstanding talent among new entrants.
It has built a deserved reputation for being good at its job (as described above), and its
assistance is now sought routinely by MOF projects and departments, and by other
government agencies.
Table 4.1 below summarises for each project and activity the profile information
supplied above and allows comparisons to be made between projects and activities.
4/09/2014 25
Table 4.1: Project/Activity Summary and Comparison
Policy
Advice
VAT Customs LR&C IF
Precedents Clear - to
some extent
predetermined
Clear - to some
extent
predetermined
Clear - to some
extent
predetermined
Clear - to some
extent
predetermined
Clear
Objectives No formal
statement
No formal
statement
Clear statement No formal
statement
Reasonably
clear, but no
formal
statement
Means Multiple,
complex
means
Mainly work
processes,
computerisation,
organisational
design, &
training
Mainly work
processes,
computerisation,
organisational
design, &
training
Mainly work
processes,
computerisation,
& training
Training,
public
relations,
public
education,
recruitment,
selection,
placement
Transfer Limited -
more could be
done in some
areas
Well advanced Almost
complete
Almost
complete
Complete
Project
role
Main
implementing
agent,
multifaceted
and complex
Project
management,
development &
interface
Project
management,
development &
interface
Interface with
the
administration
Main
implementing
agent
Partners IMF, World
Bank, EU,
UNDP
CIDA, EU,
IMF, private
sector suppliers,
UNDP
UNCTAD, IMF,
EU, OMSAR,
UNDP
World Bank,
private sector
suppliers,
UNDP
EU,
Governments
of France,
Canada &
Netherlands;
numerous
other
bilateral &
multilateral
agencies
Results Short-term
mixed;
longer-term
prospects
good
Tangible,
visible service
improvements;
operational
efficiencies;
corporate image
Tangible,
visible service
improvements;
operational
efficiencies;
corporate image
Tangible,
visible service
improvements;
operational
efficiencies;
corporate image
Visible in
project
success &
quality of
new recruits
5. Engineering Success
This section of the report addresses those factors that are deemed to have been critical
to the success of the projects described above and to the MOF programme in general.
Some of these factors have been consciously built-in to the programme by its
leadership, management, and professional staff. Others have simply evolved as a
result of programme activities.
4/09/2014 26
5.1 Programme Legitimacy
Programme legitimacy stems primarily from programme accomplishments, the strong
endorsement of the Minister, and the institutional location of the programme. The
efficacy of some of the other factors mentioned flow largely from ministerial support
and the programme's institutional affiliations. The latter are necessary and sufficient
conditions for programme success, particularly in cultures like Lebanon where there is
strong respect for (and deference to) authority, position, and status within the
governance hierarchy.
5.1.1 Minister's role
As with development assistance programmes everywhere, MOF programme
legitimacy depends greatly on the receipt of strong political support demonstrating
political will. In these respects, the legitimacy of the MOF programme is based on the
strong personal support it receives from the current Minister of Finance (who has held
this position for eight of the last ten years). The current Minister has been personally
responsible for many programme initiatives and takes a strong personal interest in
most aspects of the programme. The successful cases described in Section 4 all bear
his personal imprimatur.
Programme staff invariably report that project success would not have been
achievable without the Minister's personal support and involvement. Such support
frequently entails personal visits by the Minister to project sites, his personal
endorsement of project objectives to senior managers and staff in the administration,
and public statements that commend project activities and results.
5.1.2 Government ownership
The stamp of government ownership is manifested in a number of ways. First, it is
conveyed by the strong support of the Minister. Second, it is conveyed by the fact that
in most of the cases outlined in Section 4 above government staff operate the new
systems that have been introduced to support policy reform and improved operational
effectiveness and efficiency. Where this is not yet the case, plans are in place for the
transfer of operations to the administration. Third, in most cases senior management
in the administration have a good understanding of the aims and benefits of the new
systems that have been introduced, and identify with them.
5.1.3 Institutional location
As suggested earlier, considerable internal (within the government system) and
external (among donors, the private sector and civil society) legitimacy is imparted to
the programme simply by virtue of its institutional location at the Ministry of Finance.
The personal standing of the Minister within government and the development
community adds considerable weight to this, or synergy: the value of the whole is
greater than the sum of the constituent parts.
This serves as a magnet for funding and for high quality staff.
5.1.4 Quality and commitment of staff
Programme staff are all well qualified in relevant fields and are multilingual. This
enables them to speak the same 'languages' as donors, and to be sufficiently credible
technically to make reasonably informed judgements about problem identification and
4/09/2014 27
channelling – and sometimes giving and interpolating - advice concerning the
development and implementation of appropriate solutions.
It is significant also that all programme staff are Lebanese nationals. This clearly is
important to all aspects of communication between the programme and the
administration, to the commitment of programme staff, and to continuity and
sustainability.
5.1.5 Performance track record
Legitimacy is also imparted by the fact that the programme has been in existence for
ten years and has a consistent track record of getting things done and achieving visible
results that all concerned regard as beneficial and important. It therefore continues to
enjoy strong support from the donor community, and increasingly from the business
community and from members of the public.
Perhaps surprisingly, the new friendly, service-oriented face of government is
perceived by the programme, and is said by the programme also to be perceived by
the public, to be manifested most strikingly in the VAT department. Positive reactions
from the public are also reported in relation to improvements at Land Registration and
Cadastre, and the business community has reacted favourably to improvements at
Customs.
5.1.6 Sources and volume of technical/financial support
Institutional location, ministerial support, government ownership, credible staff, and
consistently good performance create an ideal 'investment climate' for donors, and
build donor confidence. The significant volumes of financial and technical assistance
that then flow from a variety of sources as a result, add to the legitimacy of the
programme.
5.1.7 Corporate image
The public face, or corporate image, of the MOF programme carries all of the
hallmarks mentioned above. The overall impression created is one of technical
strength and credibility, the ability to achieve good results quickly and to be at - or
able to gain access to - the leading edge of technical developments, and adaptability.
Certain projects within the programme are self-conscious about the need to build an
image and culture of service to the public, and there has been a certain amount of
success in this. Some projects within the programme have their own websites and
have deliberate strategies for public awareness raising and education and public
relations. These activities all contribute positively to corporate image, which then
both reflects and reinforces programme legitimacy.
Much of the responsibility for the construction and projection of the corporate image
of the Ministry has been delegated by the Minister to the Institute of Finance, which
has developed a range of materials, and utilises different media, for this purpose.
Programme and Ministry corporate image naturally overlap considerably, and in
many respects are indistinguishable. They are mutually reinforcing.
4/09/2014 28
5.2 Programme Leadership and Management
We envisage leadership as being concerned primarily with providing vision, direction,
and example to the programme as a whole and to projects within it. On the other hand,
we see management as being primarily concerned with the control and coordination of
operations and staff within the programme and within projects.
5.2.1 Leadership
In the terms described above, the Minister, who is widely regarded by staff as
instrumental to all reform activity, and to be visionary, charismatic, dynamic,
personable, and accessible, provides much of the programme leadership. On the basis
either of advice that he receives from the programme or elsewhere or his own
judgements, he decides which directions the programme will take and then
demonstrates in the things that he says and does that he believes in the validity and
importance of what the programme undertakes. The latter imparts 'authenticity' to his
leadership - because he ‘walks the talk’ - which is regarded by many researchers as its
most crucial ingredient.16
The Minister's vision is likely to be informed both formally and informally by
contributions from a variety of sources. From within the programme, such
contributions will nearly always be channelled through the Programme Director,
although the Minister is also accessible to some programme staff directly. External
influence arises primarily from expert missions from international organisations,
much of which is brokered by, and filtered through, senior programme staff, and other
government agencies. Much policy advice has external origins, but is interpolated by
and/or channelled through the programme.
5.2.2 Management
From a theoretical standpoint, organisations with the characteristics of the MOF
programme (what Mintzberg17
calls 'professional bureaucracies') should be managed
primarily through what is referred to as the 'standardisation of skills' and 'mutual
adjustment'.18
The standardisation of skills relies on careful selection and placement
of staff in order to ensure that professionals are employed who can do the work that
needs to be done and who bring with them into the organisation professional codes of
performance and conduct that reduce or eliminate the need for direct supervision.
Mutual adjustment simply consists in informal liaison and negotiation between
professionals in the organisation in order to get the job done. These methods of
coordination and control allow such organisations to maintain considerable flexibility
and adaptability, and speed of response, and give considerable autonomy to staff.
Management within the programme has these characteristics, which enables the
programme to react quickly and creatively to problems or changing circumstances as
they arise. Project leaders and staff generally do not feel that they have anyone
‘looking over their shoulders’, and that they are given considerable autonomy to get
16
See, for example, Blunt, P. (with M. Jones) (1997). 'Exploring the Limits of Western Leadership
Theory in East Asia and Africa'. Personnel Review, 26(1/2), pp. 6-23. 17
See Mintzberg. H. (1980). Structure in Fives. Prentice-Hall. This, together with Mintzberg’s earlier
book on the subject, is the classic reference on the subject. 18
See, for example, Blunt, P. (1986). Human Resource Management. Melbourne: Longman Cheshire.
4/09/2014 29
on with their jobs. Nevertheless, all project staff display considerable respect for
authority and all significant decision making is centralised.
5.2.3 Organisational culture
Staff see themselves as belonging to an organisation (programme and ministry)19
that
is ‘on the move’, that is ‘getting things done’, that is ‘innovative and responsive’, that
is ‘committed’, that is 'welcoming to creativity and suggestions', and that is ‘well led’.
Some staff refer to the culture as a ‘tabouli’ culture – because it has many different
constituents, but produces a very good result.
There is a clear hierarchy within the programme, but it is not intrusive or oppressive.
Most staff are at ease with it.
Staff also see the programme (and their own projects within it) as addressing issues
that are central to national development, and that some of these issues are of ‘historic’
significance. They report deriving considerable satisfaction and self-esteem and status
from their association with the programme.
This is a strong, positive organisational culture. It is based largely on the factors
discussed in this section, particularly the quality of leadership, the type of
management style, and the strong record of programme accomplishment.
There has been no conscious attempt at ‘culture building’ per se within the
programme, which means that it is not a contrived culture. This gives added
authenticity and strength to the culture that exists
5.2.4 Staff recruitment and selection
Staff selection processes are transparent, impartial, and merit-based. UNDP
procedures are followed, with short-listing of applicants being decided by the
programme director, sometimes after consultation with senior programme staff.
Large numbers of qualified applicants apply for positions (selection ratios are high),
and this is reflected in the generally high quality of staff.
Staff turnover is relatively low, which ensures good institutional memory, continuity,
and low recruitment and induction costs. Of the small numbers of staff who do leave
the project, a significant percentage of these go on to ‘better things’.20
5.2.5 Rewards
Staff are paid at about (private sector) market rates for their skills and qualifications.
Salary increments are performance based and are decided by the Programme Director.
Individual packages are negotiated individually, on appointment, with the Programme
Director.
19
It is worth noting that programme staff identify as much with the Ministry as they do with the
programme, which endorses our propositions concerning legitimacy and ownership. 20
For example, the next job of the programme’s previous director was Minister of Economy and Trade
in the Government of Lebanon. Others have moved to positions with international institutions such as
the World Bank and the IMF.
4/09/2014 30
Intangible benefits stem from the status and prestige derived from all of the aspects of
programme legitimacy described above, from the interest and significance of the
work, from the curriculum vitae adornment value of working on a UN project at the
MOF, from learning and development opportunities, from exposure to foreign travel
and experience, from network creation and access, and from the opportunities
presented for career development within the UN system, other international agencies,
and government.
5.2.6 Management of change
All of the projects discussed in Section 4 above report their use of deliberate strategies
concerning the management of change, and recognise its crucial significance. Again, a
central feature of all strategies has been the involvement and endorsement of the
Minister at all stages of project development and implementation.
There is also a shared view concerning the importance of how reform initiatives
should be packaged and described and 'sold'. The general approach has been to couch
the introduction of change in terms of modernisation and to endorse the received view
in the administration that such progress is inevitable, as well as being desirable. In this
way, automation and computerisation are seen, and have been used, as effective
Trojan horses for the introduction of operational reform, including the simplification
of procedures.
Administration staff were also reassured that there would be no job losses. Some job
transfers have occurred.
Careful preparation has also been a feature of the projects – in terms of explaining to
affected staff in advance the nature of problems and proposed solutions and the
advantages of the new systems, and in terms of training.
Considerable attention has also been given to making clients or customers (the general
public, the business community etc.) aware in advance of what was in prospect and to
educating them about the requirements and benefits of the new systems and how to
make the best use of them.
5.2.7 Engagement with government
It is clear from the above that there is strong engagement between the programme and
government at all levels (mainly in the form of the MOF). Again, government
receptivity to programme overtures has everything to do with ministerial sponsorship
and endorsement. But it also depends greatly on the interpersonal skills of project
managers and staff, and the fact that capacity building for all affected staff in the
administration has given them the capabilities to become directly involved from the
beginning, and thereby to acquire personal ownership and identification with the new
systems.
Programme staff are also encouraged to be self-conscious about giving credit for
initiatives to the administration and not to be in any way disparaging about
administration capabilities, work practices, or attitudes or values.
In this important respect, the programme (rightly) sees itself as being quite different to
some other government programmes of cooperation that it knows of.
4/09/2014 31
5.3 Character and Quality of Technical Cooperation
Clear policy direction on the part of the government and the Ministry helps to
illuminate governance issues that the main interested parties agree to be crucial to
performance improvement in a number of spheres, and therefore to be worthy of early
attention.
To some extent, with respect to policy options, government's hands are tied by the
requirements of obligations to be met under various international trade, and other,
agreements. Government policy is also broadly consistent with the neoliberal market
oriented principles devised by the international financial institutions. The new
international order follows the basic rules of the neoliberal paradigm,21
which are: to
liberalise trade and finance, to let markets set prices, to control inflation
(‘macroeconomic stability’), and to privatise.22
Essentially, this is the philosophy of
government in Lebanon.
Acting on the implications of this shared perspective is made easier by the high
quality of staff in the MOF programme and their linguistic and technical
communication capabilities. This makes the work of visiting experts, and engagement
with them by the administration, easier. It results in earlier and better problem
recognition, problem solving, solution implementation, and results.
5.3.1 Problem recognition and authenticity
As suggested above, conformity to the neoliberal paradigm clearly makes it much
easier for government and international financial institutions, and other donors, to see
eye to eye. Agreement about the nature and importance of governance problems, and
their authenticity, follows naturally from this.
Obtaining the agreement of other interested parties – such as staff within the
administration, the general public, the business community, and civil society –
concerning problem recognition and authenticity is not as straightforward.
Nevertheless, using other means – such as public awareness raising and education,
extensive staff training and development, guarantees of employment security, and
judicious automation – the programme has been very successful in gaining the support
of these constituencies.
For example, the introduction of VAT in Lebanon has been relatively straightforward.
This is a sharp contrast to the experience of many other countries, where the
introduction of VAT has been fraught with difficulties and has encountered
widespread resistance from small business, consumer associations, and the general
public.
21
Sometimes referred to as the ‘Washington consensus’. 22
Outside of the international financial institutions, other donors also largely adhere to the principles of
the neoliberal paradigm, but with varying degrees of fervour, and of comprehension concerning its
implications for the reduction of poverty and inequality. On the other hand, many developing countries
are beginning to see that from their perspective the formula may have many more shortcomings than its
proponents care to admit.
4/09/2014 32
5.3.2 Solution recognition and authenticity
Likewise, the bases described above for stakeholder support in Lebanon for problem
recognition and legitimacy have engendered similar levels of support for government
strategies for addressing economic, fiscal, and administrative problems.
5.3.3 Outcome legitimacy and sustainability
Generally speaking, the results of the different types of reform appear to have lived up
to expectations of the different stakeholder categories. This is certainly the case for
reforms that have been concerned primarily with improvements to operational
effectiveness and efficiency, where results have been more visible and tangible and
the links between them and reform measures easier for all to perceive.
When it comes to economic and fiscal policy, the same conclusion can be reached
with less assurance. Levels of debt, and fiscal deficits, remain high, and short-term
prospects are mixed. Nonetheless, for the moment, most stakeholder groups appear to
have faith that government (neoliberal) policy will eventually bear fruit.
5.3.4 Programme role and functions
The role played by the MOF programme in relation to the above has consisted of four
main components: policy advice, project development, project management, and what
we shall call 'multilateral bridging'.23
It has performed all of these roles well.
5.3.4.1 Policy advice
The MOF clearly requires some ‘in-house’24
technocratic capability in relation to its
fiscal and economic management responsibilities. Currently, this capability is
provided largely by the programme. The programme has the capability to:
Ask the right questions, and/or to understand the implications of technical
questions asked by others, and to make informed judgements about them.
Know what types of data are required to answer these questions, and how
such data can be generated, organised, presented and analysed – and/or
understand the significance of what they are told by others about these
matters, and make informed judgments concerning the merits of different
options.
Analyse relevant data, particularly in relation to fiscal issues.
On the bases of such data, analyses, and judgments present clear policy
options for consideration by Ministry and programme decision makers, and/or
cause such options to be generated and presented by others.
On certain fiscal issues25
in particular, take positions concerning preferred
policy, and argue the merits of these.
Either itself or in collaboration with or through others, devise suitable
methods of policy implementation.
23
These roles have been deduced from the case examples set out in Section 4 above, and from
interviews with staff. 24
Strictly speaking, the MOF programme is not in-house because it is not part of the administration.
But the administration cannot perform the necessary functions, so the programme is as ‘in-house’ as it
is currently possible to be. 25
The programme regards its major area of technical competence as being ‘fiscal policy development
and management’.
4/09/2014 33
5.3.4.2 Project development
The programme’s project development role entails26
:
Problem identification and crystallisation: as with much of the reform
described in this report, problems need to be legitimised by the endorsement
of the Minister either through his identifying the problems himself in the first
place or by his endorsing the importance of problems and/or initiatives
brought to his attention by others. Sometimes such problems are identified by
programme staff and sometimes by outside experts. On other occasions,
problem priority arises from treaty or trade agreement obligations. For
example, in Customs, government policy options were to some extent
predetermined by the requirements of trade organisation membership, and
these were compatible with the general orientation of government towards
governance modernisation and improvement. Similar policy suggestions for
Customs were also contained in the 1993 UNDP project document referred to
earlier. Programme staff also took positions concerning the direction and
timing of reform at Customs. On the other hand, for implementation, the main
source of ideas and reform initiatives came from a series of IMF missions.
Programme staff were involved as interlocutors or intermediaries between the
IMF and MOF.
Problem solving: Once problems have been identified and agreed, solutions
are found. Most technical solutions are partly 'off-the-shelf' (with local
adaptations and/or enhancements) and partly tailored to local circumstances.
Identifying off-the-shelf solutions is sometimes done by the programme and
sometimes done by outside experts at the direction of the programme.
Project conceptualisation: Problem identification and problem solving
usually provide enough material for the development of a project concept.
Identification of development partners: Technical solutions often 'carry'
with them a ready-made development partner (as in the case of ASYCUDA)
or implications that narrow down the field of potential development partners.
The programme arranges such development partnerships, sometimes in
collaboration with the institutional programme manager (UNDP), sometimes
through the international financial institutions, and sometimes independently.
The basis of such partnerships is usually a formal, written project document,
either written by programme staff or (more usually) by an outside consultant
in consultation with programme staff.
Project operationalisation: The above results in a partnership between
government and one or more outside agencies, which leads to the
operationalisation of the project concept based upon the project document.
The role of the programme then expands to include project management,
which moves to the foreground. Project development is maintained in the
background.
5.3.4.3 Project management
To date, project management has typically entailed the following:
26
The sequence in which these steps are presented below, and their description, imparts a false sense of
order and structure to a process that is likely to be much more organic and serendipitous than it appears
here.
4/09/2014 34
Monitoring project implementation: this consists largely in reporting on
progress and problems informally to the programme director on project
implementation by private and/or other outside contractors.
Interfacing between contractors and the administration: this consists
largely in ensuring that the administration is kept aware of developments
before they happen, so that the physical circumstances for implementation are
capable of receiving, and maintaining the operation of, new equipment. It also
entails liasing with the administration about modifications to the legal
framework, business process and organisational design, and with the IF about
training.
Dovetailing with project development: Once projects are underway,
possibilities for their extension or improvement will start to become apparent,
or opportunities for the development of related projects will emerge. This
triggers the project development activities listed above. Again, project staff
play an important role in detecting these opportunities, and bringing them to
fruition.
5.3.4.4 'Multilateral bridging' and resource mobilisation
An important part of the programme’s role is to act as a two-way communication
channel or ‘bridge’ between the Ministry and a wide range of donors, private
contractors, trade partners, and customers. This is not just a passive role. The
programme exerts influence and negotiates on behalf, and at the direction, of the
Ministry with, among others, international financial institutions, international
economic and trade associations, international rating agencies, national governments,
and the business community.
A central feature of this role is resource mobilisation. The programme's record in this
speaks for itself.
5.4 Government and Donor Confidence
As with investors of any kind, donors are keen to ensure that they get good returns,
that they can see how their investment is being used and that it is being put to the uses
they intended, and that they be kept informed of progress and prospects. Government
and donor confidence is also a function of programme legitimacy, programme
leadership and management, programme efficiency and effectiveness, and the
character and quality of technical cooperation – as described above.
5.4.1 Bases
The main bases of government and donor confidence are outlined in these terms
below.
5.4.1.1 Programme legitimacy
As demonstrated in Section 5.1 above, the bases of programme legitimacy are well
established, and are well known to government and the donor community. This is the
sine qua non of government and donor confidence.
5.4.1.2 Programme leadership and management
Again, the high standing and quality of programme leadership and management is
well known to government and donors. The fact that strong political will and support
for the programme coincides, in the person of the Minister, with programme
4/09/2014 35
leadership that has been virtually continuous for the past decade is a very firm basis
for donor confidence.
5.4.1.3 Character and quality of technical cooperation
The high quality of technical cooperation speaks for itself in the best ways possible,
that is, through visible, tangible, desirable results that are of benefit to ordinary
people, the business community, civil society, and other government agencies.
However, as suggested above, for the international financial institutions, a cornerstone
of their confidence in the programme is the underlying consistency and strength of
government’s commitment to the neoliberal paradigm, and willingness to implement
policy effectively. In this respect, and certainly for the MOF, the programme acts as
government’s mouthpiece. Partly through the programme, the government is seen to
be saying and ‘doing’ the right things and to be communicating intentions and results
clearly and persuasively.
5.4.1.4 Transparency and reporting
Internal financial management and procurement procedures within the programme are
transparent and from time to time are subjected to external audit. Responsibilities are
clearly assigned and understood.
Programme reporting is of sufficient detail, accuracy, and timeliness.
5.4.1.5 Programme efficiency and effectiveness
The programme prides itself on its productivity and ability to get things done, on its
responsiveness (primarily) to the needs of the Minister and the Ministry, and also
(somewhat paradoxically) on the long hours worked by all programme staff.27
Programme culture and corporate image certainly convey an impression of pleasant
professionalism and efficiency. Workloads are said by programme staff, and appear,
to be quite high. Levels of productivity are more difficult to ascertain (which is a
feature of most professional bureaucracies), but as everywhere are likely to be
variable.
The programme is also seen to have good absorptive capacity. Large amounts of
financial and technical support are received and put to good use on schedule.
5.4.2 Effects
The main effects of high donor and government confidence in the MOF programme
are to be seen primarily in the nature of the relationships - between donors and the
programme, and between government and the programme - and in terms of the
continuing and increasing supply of financial support.
27
Input time is widely regarded in this programme - and, in our experience, in other similar
programmes in government - as being an important indicator of commitment and of performance.
Whatever one’s output, it is important to be seen to be at one’s desk. Nearly all staff are keen to make it
known that they spend long hours at work.
4/09/2014 36
5.4.2.1 Strategic partnerships based on mutual trust and respect
Shared economic philosophies and donor confidence promote mutual trust and
respect. The main parties (government and the international financial institutions) see
themselves as partners working together towards shared objectives.
For other donors, such as UNDP, the aura of programme success combined with the
evident confidence in the programme of government and the international financial
institutions produces very similar results. That is to say, a range of other donors
augment the core partnership28
– between government and the international financial
institutions. These donors are able to position themselves in the programme with
confidence according to their interests and competitive advantages vis-à-vis other
donors.
5.4.2.2 Delegated authority and responsibility
From the point of view of the institutional programme manager (UNDP), one such
result is that considerable autonomy is given to the programme to ‘determine’29
its
own size, scope, and strategic direction. This is a rational response on the part of
UNDP, which in this context sees its main competitive advantages as lying in overall
programme management (as described in Footnote 2 above).
5.4.2.3 Operational autonomy and flexibility
The highly favourable orientation of the institutional programme manager (UNDP)
encourages a ‘hands-off’ management style (between UNDP and the programme),
which – as we have noted above – is appropriate to the rapidly changing operating
environment, professional staff composition, and structure of the programme. Under
these programme circumstances, this ‘hands-off’ style is conducive to good
performance.
5.4.2.4 Continuing support
The continuing supply of funds to the programme clearly depends primarily on the
maintenance of government and donor confidence, which is assured so long as the
programme continues to enjoy the legitimacy, and other qualities, outlined in this
report.
6. Improving on Success 30
In ways that are set out in this report, the MOF programme is clearly fundamental to
the functioning and development of the Ministry. It is successful in many of the things
that it does, and has done. But some relatively minor possibilities for continuous
improvement exist.
28
For the Ministry, in many respects this partnership is brokered through the programme 29
In effect, this is not done by the programme per se alone – the programme expresses views
concerning these matters, which arise from implications of government policy that it has perceived
itself or have been spelt out by other parties, usually experts of one sort or another from the
international financial institutions and/or other donors. 30
The TOR for this assignment require that 'failure criteria' be identified. In this section, we discuss
ways for making an already successful programme better. Our discussion of 'engineering success'
covers both 'success' and 'failure' - in that not doing the first (attending to success factors) may well
lead to the second (failure). For example, we suggest that one feature of success is what we call
'authentic' leadership. We can reasonably infer from this that 'inauthentic' leadership may lead to
failure.
4/09/2014 37
6.1 Programme Identity
In a sense, successful development cooperation should not be too clearly visible from
the outside. It should melt into the background of its host institution so that it becomes
indistinguishable from it. When this is seen to happen, close engagement between the
two parties is usually a safe inference to draw. In many ways, the MOF programme
has succeeded in this.
On the other hand, from an insider perspective, the broad identity of projects within
the programme is relatively clear and, as should be the case, is associated largely with
the reform initiatives taking place in different parts of the Ministry. This is also
desirable.
However, for insiders, particularly for programme staff, it is also important that they
be reasonably clear about the overall nature of the programme, its accomplishments,
the precise roles that it plays, and so on – that is, about many of the things discussed
in this report. As articulate advocates of the programme, it is important that they be
able to demonstrate the same clarity and quality of expression in relation to the
programme as a whole as they do in relation to their personal responsibilities within
it. This is important for the accurate attribution of credit, for 'selling' the programme,
and for external interactions generally, but it also reinforces staff identification with
the programme and organisational culture.
6.2 Sustainability
As we have seen, to date the programme has on the whole addressed issues
surrounding the transfer of skills and sustainability very well. Nevertheless, there are
one or two areas where there may be some room for improvement. First, dependency
on the programme by the Ministry for certain operational tasks – some of which are
relatively routine – might benefit from more formal management attention. This could
be done by recording instances of it and determining means and schedules for
transfer.
Second, the programme and the Ministry should agree in broad terms about the form
that transfer to the Ministry of the policy advice role will take, and an approximate
schedule for this could be worked out. As we have seen, this 'policy advice' role is the
most complex function undertaken by the programme – both technically (in terms of
the subject matter) and organisationally (in terms of the sources and forms of policy
advice). It is not certain that such a role should or could be transferred in its entirety to
the Ministry per se, that is, so that it becomes a conventional part of the
administration. 'Should' because the 'goose' that currently 'lays the golden eggs' may
be unable to do so quite so well in a more confined 'space', one that is restricted
mainly in terms of its ability to make use of the best talent available on the local
market and, in some cases, the international market. 'Could' because without the
ability to pay at least market rates, it will be difficult to attract the quality of staff
required for such work. Putting in place the structural arrangements and defining the
role and staffing of an MOF entity to do some of this 'policy advice' work will be less
than straightforward.
It may be that some variant of the present arrangement – whereby such advice is
provided and/or brokered in large part by a structural appendage to the Ministry – will
offer the most feasible and effective option. But such structural options will need to
4/09/2014 38
be carefully considered and thought through. Greater emphasis could probably be
given to this task.
6.3 Programme Management
As we have observed elsewhere in this report, generally speaking programme
management is appropriate and effective. Relatively minor possibilities for
improvement that occur to us to do so as a result of the volume and complexity of the
work undertaken by senior programme staff, particularly the programme director.
Work overload at the apex means that there are certain issues that do not receive as
much attention as management recognises they deserve and would therefore like to be
able to give them.
Opportunities include:
The extent, character, and frequency of programme planning and reporting
could be reviewed with a view to introducing more formalised planning within
projects. For example, this might entail introducing a standardised format for
the statement of project profiles in the terms described in this report, which
could be up-dated say every six months.31
This would make external
programme reporting job easier without necessarily reducing the desirable
flexibility and informality that currently exists. It would also facilitate some of
the marketing work recommended under Section 7 below.
Programme planning might be reviewed with similar ends and means in mind,
that is, requiring from projects a six monthly work plan report for which a
standardised format could be devised.
The structure and volume of the workloads of individual staff could merit at
least annual review. This could be helpful in several respects: first, it would
identify potential or actual bottlenecks; second, it would help managers to
ensure that the best use is being made of the skills and experience of staff; and
third, it would provide management and staff with another opportunity for
identifying opportunities or threats.
The structure of the programme is largely organic and flexible, which qualities
as far as possible should be maintained. However, if the programme continues
to grow, then slightly more formalised structural and reporting relationships
may need to be put in place.
As we have seen, the programme is quite sophisticated about issues of
corporate image and corporate culture. We have suggested that these aspects
of the programme are quite strong partly because they are not contrived. We
therefore hesitate to make suggestions concerning deliberate culture building,
which could undermine such 'authenticity'. Nevertheless, handled skilfully,
and perhaps largely informally, certain values could be deliberately 'drip-fed'
into the prevailing ethos by senior programme management and staff. Such
values might include: 'continuous improvement'32
(this is something of a
management cliché, but one of the few lasting and important ones); 'clarity
31
The latest programme report (August 2003) has a similar structure for each component. 32
This is largely because 'continuous success' can lead to 'creeping complacency' (not yet evident in the
programme).
4/09/2014 39
about who we are and what we can and cannot do'33
; and 'outputs and quality
matter more than inputs or time spent in the office' 34
(see below).
As suggested elsewhere in this report, among programme staff high value is
attached to perceptions of inputs (rather than outputs), mainly in terms of the
number of hours spent at the office. The assessment of the performance of
professional staff should clearly be based primarily on the quality and
timeliness of what they produce, and the efficiency and reliability of such
production, rather than how long they spend at work. Too much emphasis on
inputs can obscure more important questions of productivity and quality.
There may be some virtue in greater horizontal communication between
projects, mainly so that people have a better idea of what is going on in other
parts of the programme. This could be achieved by simply circulating the six-
monthly project profiles and progress reports suggested above.
In all organisations, perceptions concerning pay relativities, and methods of
pay determination, are potential issues.
7. Marketing35 Success
Our discussion to this point suggests that the MOF programme has achieved a great
deal and that some of its achievements are likely to be capable of being packaged and
sold within the region.
Issues surrounding this possibility are discussed briefly below.
7.1 Products
From among those reviewed in this study, the most visible and tangible projects (in
terms of implementation and outcomes), which makes them easier to convert into
saleable products, are those associated with Customs, Land Registration and Cadastre,
and VAT. Moreover, these projects address issues that are likely to be critical for
many governments in the region, and the programme has addressed the issues with
high levels of technical and organisational proficiency. This clearly enhances their
saleability.
In summary, these projects have the following features in common, which facilitate
their conversion into consultancy products that are saleable (see Table 4.1 above):
Sound and clear basis in government policy. Valid links to government policy
can be easily drawn.
Clear and widely understood and shared objectives.
Effective means of capacity building: mainly technical (work processes and
computerisation), but also organisational (structure and management), and
human (training, recruitment, selection, and placement). These means of
capacity building increase the likelihood of sustainability.
Clear results, or attainment of stated objectives, that are also clearly time-
bound or have a relatively clear finish date.
33
This is an important aspect of credibility. 34
In western cultures, this is taken as a sign of organisational maturity and security. 35
We use the term ‘marketing’ in the technical (rather than colloquial) sense, which entails all stages of
the product or service development cycle – from conceptualisation, assessment, production,
advertising, selling, distribution and delivery, customer service, follow-up, and feedback to product or
service redesign.
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Clear benefits for staff of the administration in terms of simplifying work,
reducing workloads, improving the visibility of the overall product or service
and staff's understanding of it, and enhancing skills and knowledge.
Clear and tangible service improvements for different consumer groups and
the general public, mainly in terms of reduced transaction costs.
Clear benefits for the image of the department concerned in terms of
modernisation and efficiency and effectiveness.
The issues addressed are likely to be of high importance to other governments
in the region.
The main 'products' here will be based on the business processes and associated
computerised systems.
Other – crosscutting - products that could be developed include 'capacity building' and
‘policy advice’ in general, although these will be more difficult to package and to sell
because (again, see Table 4.1):
Tangible project results are less certain, and are difficult to tie directly to the
activity in question.36
The giving of ‘policy advice’ is multifaceted and organic, and therefore
difficult to describe.
Project termination is difficult to predict.
Little or no benefit for the ultimate purposes of the activity can be gained
through tangible means such as computerisation.
In the case of policy advice, the bases for sustainability are diffuse and
therefore difficult to construct – because, to remain the ‘best available’, such
advice cannot be restricted to a single (bureaucratic) source, and the range of
such sources and their continuity of supply cannot be specified absolutely.
Here, the main products will comprise advice concerning organisational design and
staffing. Table 4.1 and the above discussion suggest that 'capacity building' (in terms
of replicating an institution like the IF) might be the more straightforward than 'policy
advice' to package and to sell. However, there should be significant demand from
governments for assistance with establishing policy advice services similar to those
provided by the MOF programme, so the time and effort required to develop this
product is likely to be justified.
In summary, from among those projects and activities reviewed in this assignment,
saleable consultancy services or products can be described as follows:
Customs modernisation: in terms of mission, work processes, computerised
operating systems, organisational design, staffing, training, project
development, and project management.
Land registration and cadastre modernisation: in terms of mission, work
processes, computerised operating systems, organisational design, staffing,
training, and project management.
36
The point is made by the well-worn adage – that ‘in training as in advertising half of the money is
wasted, the trouble is knowing which half’. Except that in the case of the IF, training activities can be
plausibly linked with project success.
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VAT introduction: in terms of mission, work processes, computerised
operating systems, organisational design, staffing, training, project
development, and project management.
Policy advice: in terms of mission, work processes, organisational design and
staffing, and project management.
Capacity building: in terms of mission, work processes, staffing and
organisational design of the IF.
7.2 Competitive Advantages
The main competitive advantages of the MOF programme are:
Experience and accomplishment: Its recent first-hand experience and first-
rate accomplishment (in the region) in the areas mentioned in this report, and
elsewhere.
Specialised technical capability: High-level technical capability in fiscal
policy development and management.
Sustainability: The proven sustainability of its products.
Staff and partner quality: The high quality and recent relevant experience
of its consultants and potential agency and private sector joint-venture
partners.
Adapted computerised systems: All computerised systems are in Arabic.
Linguistic capabilities: The language capabilities of consultants – Arabic,
English and French.
Networks: Its established network of contacts with the international financial
institutions, other donors, and other governments in the region.
Post-conflict experience: Lebanon’s status as a post-conflict developing
country that has a record of success in critical areas of governance reform.
7.3 Potential Customers
There are four main categories of potential customers:
Governments and donors in the region, including Arabic speaking countries of
North Africa.
Governments and donors in post-conflict developing countries.
Governments and donors in developing countries in Francophone and
Anglophone Africa.
Governments and donors in developing countries in general.
7.4 Marketing Mechanism: Consultancy Services Unit Role and Functions
As we have seen, much of the project development is, and will continue to be, done
within the various components or projects of the MOF programme, and by the
leadership of the programme. But such projects need to be developed into products
and to be ‘packaged’, priced, sold, and delivered.
One option would be to assign responsibility for carrying out this work to a
specialised Consultancy Services Unit (CSU), which could be established within the
programme.
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It is envisaged that such a CSU would operate as a non-profit making entity, but with
full cost recovery.
The role and functions, structure and staffing of such a unit are discussed below.
7.4.1 Product Development and Sale
Product development and sale comprises a cycle of activities beginning with product
conceptualisation and design and market assessment, through product description and
packaging, and pricing and advertising, to selling, distribution, delivery and follow-
up. As suggested immediately below, ‘product’ conceptualisation is a somewhat
different activity from project conceptualisation.
7.4.1.1 Product conceptualisation
Project conceptualisation and design takes place largely (on the basis of internal and
external expert advice) at the apex of the Ministry and within the core of the
programme, also primarily at its apex. Such conceptualisation is operationalised in the
form of projects of the types described above in Section 4.
Not all projects are easily convertible into saleable consultancy ‘products’. While
some consultancy ‘products’ that may be saleable are services that cut across projects
– such as programme management structure and design, and capacity building. The
job of identifying saleable products, most of which will be based on projects, will be
that of the programme leadership and the CSU.
Under Section 7.1 above, we have discussed in relation to existing projects some of
the issues surrounding consultancy ‘product’ design, and we have suggested on the
basis of this discussion a number of saleable products.
Depending on how the CSU performs, and the availability within government of other
successful programmes or projects, it may be that the CSU could extend its portfolio
of services by identifying saleable products in other programmes of cooperation and
negotiating suitable arrangements and terms for marketing them.
7.4.1.2 Product description and packaging
Once identified and conceptualised, products need to be clearly and succinctly
described and ‘packaged’. Packaging will consist largely of a general description of
the range of services offered by the CSU, their background and genesis, the CSU’s
competitive advantages generally and in relation to specific products, measures of
success, staffing, organisational culture, and management.
That is to say, packaging should help to build consumer confidence in CSU products
and services in much the same way as the programme has done for its stakeholders,
but in a more structured and deliberate way – as set out in this report.
7.4.1.3 Pricing and advertising
Pricing should be competitive and based on international practice and market forces
for the region.
Advertising should be through direct contact, initially with regional Ministry's of
Finance (as in Section 7.3 above), and with regional donor offices. High quality
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printed material should be produced and kept up-to-date, and a website should be
established.
7.4.1.4 Market scanning and selling
This will entail maintaining contacts with regional governments and MOFs, other
potential client groups (as in Section 7.3 above), and with international financial
institutions and other donors. Most donor agencies have established electronic
(Internet based) and other channels for advertising consultancy opportunities.
But selling can also be based on 'leading the market' by making it aware of new
products that can be offered by the CSU or standard products available in the market
that the CSU can offer with unusually high quality, or innovative features, or other
competitive advantages.
7.4.1.5 Distribution, delivery, and follow-up
This CSU will also be responsible for ensuring timely distribution and delivery of
consultancy services and follow-up with clients and consultants. Depending on the
nature of service contracts with clients, this may also entail project and/or consultant
management in the field.
7.4.2 Liaison with Clients and Consultants
A major responsibility of the CSU will be to liaise with existing and potential clients
and consultants.
7.4.2.1 Maintenance of consultant data base
Initially, the core group of consultants that the CSU will draw upon will comprise
either existing or former senior management and technical staff of the administration
and of the programme.
If, as suggested Section 7.4.1.1 above, the portfolio of CSU services were expanded to
include other programmes of cooperation the roster of consultants would be expected
to grow accordingly.
As suggested in Section 7.1 above, it may also be necessary for the CSU to form
longer-term partnerships or one-off joint ventures with private sector providers
possessing special expertise and experience in relation to project/product
implementation.
7.4.2.2 Consultant and client liaison
As we have seen in relation to the MOF programme, effective and continuous
communication with clients about current projects and their wider interests, and about
CSU activities, is clearly crucial to success.
Likewise, it is necessary to ensure that contact is maintained with consultants to
ensure that their curriculum vitaes and availability are kept up-to-date, and that they
are kept informed of possible bids or forthcoming opportunities and the general
progress of the CSU.
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7.4.3 Structure
It is envisaged that the CSU would be established within the programme as a separate
unit reporting to the MOF programme director.
7.4.4 Staffing and rewards
To begin with, it is envisaged that a small unit be established comprising one senior
professional, one junior professional, and one support person (secretary/administrative
assistant).
The senior professional should be an experienced consultant who is knowledgeable
about some aspect of the MOF programme. He or she should also possess all-round
marketing capabilities, and should be capable of carrying out the functions described
in this report.
Staff packages and employment conditions should conform to those of the market and
the MOF programme.
8. What Next?
Using this document as a basis, one option would be to develop a project proposal for
the establishment and operation of the CSU – on the basis of ‘seed funding’, say for
the first three years. Thereafter the aim should be to make the CSU self-sustaining.