Supporting public financial management in conflict‐affected situations: Adapting to change in the Occupied Palestinian Territories

Abstract

AbstractThis article traces the introduction of public financial management (PFM) processes and systems in the Occupied Palestinian Territories (OPTs) since they came under the control of the Palestinian Authority (PA). A number of factors combined make for an extremely challenging context for external actors to catalyse change: non‐existent formal central government functions at the time the PA was established, major restrictions in the movement of goods and people, ill‐designed donor budget support and a very asymmetric distribution of power that favours the status quo. An unelected government, donor‐dependency and a suffocating and chronic (yet low‐level) conflict are increasingly de‐incentivizing long‐term institutional reform. Such a complex problem requires multi‐faceted solutions. This article describes a dual delivery model adopted by the Palestinian Governance Facility (PGF) encompassing adaptive interventions that support longer‐term PFM improvements combined with the introduction of a selective workstream targeting service delivery. This focuses on the management of external medical referrals, which emerged as a political problem. A flexible development assistance delivery model can allow reform areas not anticipated at project design to be tackled as they emerge on the political agenda and open the space for political capital. A constant examination of contextual issues and re‐programming of project activities are offering lessons from which to learn and adapt. The ideal coalition involves flexible, aligned donors and relevant “institutional entrepreneurs” from within local organizations, with direct access to politicians. If high‐level government buy‐in falters, a coalition of technocrats may help construct and broker problems from which to gain political access.