Public sector accountability failure in an emerging economy

Abstract

Adoption of new public sector management (NPM) is commonplace in both developed and emerging economies. One premise of NPM is that an effective accountability mechanism is in place. It is argued here that where bad management and corruption are present, this fundamental accountability mechanism may fail for two reasons. These are considered further through the situation existing in Fiji in relation to problems experienced at the National Bank of Fiji (NBF). The demise of the NBF provides an example of a country where NPM has been introduced, where poor management and corruption are entrenched and where accountability has not worked because parties do not provide a proper account of their actions. This scandal illustrates the need for proponents of NPM to consider the context into which the system is being fitted, such as poor management, the extent of corruption and presence of political favours, when considering the net benefits likely to arise from its introduction.