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International donors as enablers of institutional change in turbulent times?

Veronika Vakulenko (Nord University Business School, Bodø, Norway)

Journal of Public Budgeting, Accounting & Financial Management

ISSN: 1096-3367

Article publication date: 1 January 2021

Issue publication date: 3 January 2022

110

Abstract

Purpose

The purpose is to explore the role of international financial institutions (IFIs) during public financial management reform in a transitional economy. In particular, the study focuses on interaction between external enablers and local actors.

Design/methodology/approach

The paper is based on a qualitative study of public financial management reform in Ukraine during 1991–2014. This period is divided into stages corresponding with two projects financed by the World Bank: “Treasury System” and “Public Finance Modernization.”

Findings

First, IFIs supported a Ukrainian economy weakened by financial crisis and insisted on a comprehensive reform of public financial management to facilitate recovery. By strategically addressing local challenges, eliminating local uncertainties and maintaining stable interactions, IFIs gained support from the central government. Local actors continued the reform by negotiating with other actors and getting quorum support. In the second stage, IFIs could not implement planned changes. Even though the change was well-perceived at the beginning, developed tensions between local actors were overlooked by IFIs, which resulted in loss of commitment of the State Treasury representatives. The continuous political instability in Ukraine constrained interaction between IFIs and the Ministry of Finance and reduced political will for conducting reforms.

Originality/value

The study contributes to the debate on the adequacy of externally driven public management reforms in developing countries by exploring actions and interactions of global and local actors during the change in public sector practices.

Keywords

Acknowledgements

The author would like to gratefully acknowledge helpful comments and constructive critique of anonymous reviewers. The author thank guest editors for their great work in managing this special issue. The author also very grateful to his colleagues, especially Anatoli Bourmistrov and Evgenii Aleksandrov, for insightful discussions of the previous versions of the paper.

Citation

Vakulenko, V. (2022), "International donors as enablers of institutional change in turbulent times?", Journal of Public Budgeting, Accounting & Financial Management, Vol. 34 No. 1, pp. 162-185. https://doi.org/10.1108/JPBAFM-11-2019-0167

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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