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Parallel Public Administrations and Institutional Capabilities: the Case of the Project Implementation Units

Roberto Martínez Nogueira

The purpose of this paper is to analyze project implementation units (PIUs) as a new organizational form of great importance in Latin-American and Caribbean public administrations. Related to the execution of projects within the framework of credit operations with the participation of Multilateral Financial Institutions, PIUs adopt the modality of parallel public administrations, with norms, resources and capabilities that differ from those of regular policy implementation agencies. The paper describes the nature, basic attributes, mandates and operative ways of PIUs. Two analytical constructs are used to explain the regularities in the design of PIUs as well as in the substantive content of the projects that they must implement: organizational isomorphism and policy transfer.

The relationships of PIUs with the policy making level of governments and with the civil service are considered. The analysis tries to sustain the hypothesis that the very existence of PIUs, their effective role and the problems they confront are symptoms of the quality of the institutional framework and indicators of managerial capabilities. The fundaments for the creation of PIUs are two: a) their potential for an efficient project execution according to the terms of the loan contract, and b) the expected contribution for the establishment in public organizations of new ways to allocate and to manage resources, with higher effectiveness and accountability. As an institutional innovation, PIUs are thought to have impacts both on the systems of rules and managerial practices and styles.

The two purposes that PIUs must achieve generate multiple tensions and conflicts through the implementation process within the financing institutions and with the governmental organizations with which they must interact. Due to the demands of these two objectives, many inconsistencies arise, with contradictory claims on the participating agents and frequent incoherence in their behaviors.

There is an extended consensus on these tensions as well as generalized doubts on the long-term impacts of the capacity building contributions of PIUs. Issues related to the integration of their operations with line agencies, in particular when the project implementation process reaches its conclusion, and to the effective transfer of capabilities, await a more systematic treatment and their explicit incorporation to public sector reform strategies. In these strategies, more attention should be given to national and organizational capacities, to the quality of the public management institutional framework of and to public service policies and regulations.

The article discusses the character and scope of institutional analyses prepared during the phase of project design. It is also put into question the notion of institutional strengthening centered on the input side of organizations related to policy and project formulation and implementation used to define and to make operational a regular component of the credit operations. A more fruitful approach should be to focus on organizational processes, on institutional growth and innovation at intraorganizational and interorganizational levels, with attention to the social and political dimensions of reform strategies.

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