The quest for accountability has long been at the forefront of efforts to enhance public sector performance, a sentiment I myself have championed as vital for effectiveness. However, in examining Dan Honig’s latest book, Navigation by Judgment: Why and When Top-Down Management of Foreign Aid Doesn’t Work, it’s crucial to distinguish between account-based and accounting-based accountability. At its core, accountability revolves around providing a narrative or justification—referred to as an account—to stakeholders, explaining why certain actions were taken (or not) to advance shared objectives within accepted norms.

The key question arises: Can accountability be adequately captured solely through accounting? With technological advancements enabling the processing of vast amounts of data, there’s a growing assertion that accountability can be reduced to objective, numerical metrics stored in computers. Dan Honig’s book delves into whether development agencies can thrive under accounting-based accountability favored by large, top-down bureaucracies, or whether there’s a need to emphasize and rehabilitate account-based accountability. He argues that in complex projects and fluid, unpredictable local contexts, bureaucratic accounting-based accountability falls short. Instead, empowering development agency actors to navigate by judgment, relying on account-based accountability, can yield success where top-down approaches fail.

The Historical Context of Large-Scale Organizations and Development Agencies

The rise of large hierarchical organizations has been a hallmark of the 20th century, both in the private and public sectors. Alfred Chandler’s seminal works, The Visible Hand and Scale and Scope, trace the evolution from owner-operated firms to managerial capitalism, highlighting the pivotal role of accounting in this transition. Similarly, in the public sector, there was a shift from craft-based production to centralized, bureaucratically managed organizations.

The idea of “development” emerged in the post-World War II era, coinciding with rapid decolonization and the rise of newly sovereign states. The notion of development as the accelerated transformation of these states into modern entities was deeply ingrained, often involving the imposition of top-down bureaucratic structures. Development agencies, whether UN bodies, the World Bank, or bilateral aid agencies, adopted high-modernist bureaucratic models to achieve their objectives.

While the development era yielded significant improvements in human well-being, it was not without its failures. Despite extensive evaluations and lessons learned exercises, the prevailing approach remained rooted in top-down, accounting-based accountability, often overlooking the complexities and nuances of local contexts.

The PDIA in Practice series aims to shed light on alternative approaches to accountability, drawing from our experiences in navigating development challenges. By emphasizing account-based accountability and empowering local actors, we seek to forge a new path forward—one that embraces complexity and fosters adaptive, context-sensitive solutions. As we embark on this journey, we pay tribute to the countless practitioners who have tirelessly worked to drive positive change, underscoring the importance of humility, flexibility, and innovation in the realm of development.