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Submitted by Lyn Squire on
I read with interest the proposed approach to PSM spelled out in Better Results from Public Institutions -- very impressive and thoughtful. It's clear that the effort has to grapple with all sorts of unknowns and this is fully reflected in the emphasis on risk and on learning. Both seem perfectly sensible to me. My comment is with respect to the emphasis on results. Clearly, this has merit but raises two questions in my mind. First,suppose that we have a PSM intervention designed to improve financial accountability in the Public Works Department (I have no idea whether this is a reasonable example or not. If the latter, please insert your own.) Suppose further that the intervention involves the introduction of checks and balances and that the desired results are achieved. Is this a good intervention? My answer is I don't know until I've examined the costs of the checks and balances. What is wanted is results achieved at reasonable cost. Costs may be rather nebulous in some PSM interventions but nevertheless the idea that all actions have some costs and that in some cases the costs may exceed any reasonable valuation of the results ought to be recognized. Costs are not mentioned anywhere in the document (or at least the ES). They should be at least as a reminder that 'results' only tell us something about one side of the equation. The second point raises the question of the 'counterfactual'. Staying with the same example, can the observed results automatically be attributed to the checks and balances? Possibly, but other factors may have also contributed or perhaps the better results would have occurred even without the intervention. Identifying to the extent possible what would have happened without the intervention is essential to understanding its real contribution. The with and without principle is a useful device for thinking about any intervention and I don't see why it's not relevant to PSM. Again, I did not see 'counterfactual' mentioned in the document. A key point made in the document is the importance of learning from ongoing interventions. Thinking about costs and the counterfactual are critical to understanding the merit of any intervention. Results by themselves only tell part of the story. Lyn Squire Former Director of Development Policy for the World Bank Chief Economist and retired President of the Global Development Network