The Bricked-Up Door Why Public Finance Discourse Fails to See That Code is Law
Published on: Wed Nov 20 2024 by Ivar Strand
The Bricked-Up Door: Why Public Finance Discourse Fails to See That Code is Law
In our work analyzing digital financial management systems, a common observation is that the system’s codified logic—the de facto process—is the true embodiment of the rules. To those with a background in systems analysis, this is a self-evident proposition. Yet, in discussions with many public financial management (PFM) professionals, this idea is not just contested; it is often seen as fundamentally incorrect.
This is not a simple disagreement. It is a reflection of a deep and persistent gap between the professional culture of public administration and the functional reality of modern technology. The challenge is not that the door to this understanding is closed, but that for many institutions, it has been bricked up and painted to look like a wall. Understanding the reasons for this is critical to making meaningful progress in digital transformation.
The Primacy of the Legal Framework
The foundational belief system in public administration is that the law is the singular source of truth. PFM professionals—accountants, budget officers, and auditors—are trained and legally mandated to operate within a strict hierarchy of rules that flow from legislation. The national budget is a law passed by parliament. Financial regulations are binding legal instruments. The official procedure manual is the formal, approved interpretation of those laws.
From this perspective, the role of technology is unambiguous:
- Technology is subordinate. An IT system is a tool procured to execute the legally mandated process. It can be a good tool or a poor one, but it can never be the source of authority itself.
- Accountability is tied to the manual. An Auditor-General will assess an agency’s compliance based on its adherence to written regulations. A director is held accountable for what the manual says, not what a vendor’s software does.
- The Law is Enduring; Technology is Transient. Legal and procedural frameworks are designed for stability. Technology is viewed as ephemeral—vendors change, software becomes obsolete. Anchoring PFM in “the law” feels permanent and safe; anchoring it in “the tech” feels transient and risky.
The Socio-Technical Chasm in Government
This legalistic paradigm creates a classic “socio-technical chasm” that runs through nearly every public institution. Two distinct professional cultures interact with the same financial system but see it through entirely different lenses.
- For the PFM Professional: The source of truth is the approved manual. Their language is procedural, focused on compliance and control. They view the technology as a utility, a “black box” that is expected to work in accordance with the manual.
- For the Technologist: The source of truth is the production code, as this is what the system actually runs. Their language is architectural, focused on data structures, functionality, and efficiency. They view the manual as a set of business requirements to be translated into logical instructions.
This is not a simple difference of opinion. It is a difference in professional paradigms. One culture is oriented around de jure authority, the other around de facto function.
A Prevailing Discourse Decades Behind the Technology
Because institutional power—the authority to set policy, approve budgets, and conduct audits—has historically resided within the traditional PFM culture, the prevailing institutional discourse remains centered on manuals and procedures. The conversation in most ministries of finance is still about reforming the written rules, with the implicit assumption that the technology will simply be reconfigured to follow suit.
The entire “GovTech” and “Digital Transformation” movement, championed by institutions like the World Bank and the IMF, exists precisely to challenge this outdated paradigm. The core of this new thinking, which aligns with our own analytical approach, rests on a few fundamental principles:
- Implementation is Policy. The way a rule is implemented in software defines the policy as it is actually experienced by officials and citizens. A poorly designed digital process is a poorly designed policy.
- Code is Control. The only fiscal controls that are consistently enforced are those that are embedded in the software’s logic. All other controls are discretionary.
- Architecture is Governance. The technical choice between a monolithic, legacy system and a modular, API-driven architecture is not merely technical. It is a fundamental decision about how an institution will govern itself, share data, and adapt to future needs.
Conclusion: From Paper Blueprints to Digital Reality
What appears obvious to a systems analyst is, in fact, a profound paradigm shift for institutions steeped in a paper-based tradition. The work of modern, independent monitoring is therefore not just a technical exercise of verifying data. It is a critical act of translation. By providing objective, empirical evidence of how a system actually functions, we can help bridge this chasm. Our role is to help institutions shift their focus from the old paper blueprints to the digital reality where their processes now live.
