Africa's Overgrown State Reconsidered

Arthur A. Goldsmith, in Africa’s Overgrown State Reconsidered: Bureaucracy and Economic Growth, comments that the time of creation is an extremely important period for an organization because this period of time sets the culture of the organization (lazy versus hard-working, performance-based versus nepotistic). He says that a bad start doomed many bureaucracies in Africa, but that there is some hope of change. “The ministry of finance in charge of revenue was corrupt and marred by absenteeism, which fueled the growing public budget deficit. The National Revenue Secretariat was created in 1984 as an elite unit to oversee taxes and customs. Steps were taken at the beginning to sustain a performance-based culture in the new organization. Base salaries were set on a par with those in the banking sector, and working standards were high—paid for in part by allowing the secretariat to meet operational expenses by taking a cut of all revenue collected. These efforts paid off. By 1988, tax and customs revenues almost doubled as a share of GDP.” I wonder – in this case did the secretariat just oversee the ministry of finance, or did it eventually take over the tasks? I wonder if it would be a good idea to get rid of an old organization with a bad culture by creating a new, more effective one that initially oversees and regulates, but eventually overtakes and replaces the old organization. This might be better than trying to create a whole new organization; this way it would have time to grow and develop. But perhaps it is better just to leave it in a supervisory role.

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