The Pragmatists Case for the Monolith Reassessing Architectural Risk in Low-Capacity States

Published on: Tue Jun 10 2025 by Ivar Strand

The Pragmatist’s Case for the Monolith: Reassessing Architectural Risk in Low-Capacity States

The prevailing consensus in public finance modernization is a clear movement away from large, monolithic systems towards more modular, federated architectures. This approach, which emphasizes flexibility and interoperability, is often presented as the optimal path for all governments.

However, for states with nascent institutional capacity and significant governance challenges, this model can introduce a different, and perhaps more severe, set of risks. A pragmatic assessment suggests that in certain contexts, the much-maligned monolithic Financial Management Information System (FMIS) remains the more responsible strategic choice. The pursuit of agility must not come at the cost of basic fiscal control.

A Critical Assessment of Foundational Assumptions

The federated, API-driven model rests on a critical and often unstated assumption: a sufficient baseline of institutional capacity within each participating government agency. This model presupposes that individual ministries and departments possess the ability to:

• Manage Complex Technology: To oversee the implementation and maintenance of their own fit-for-purpose systems, databases, and APIs.
• Conduct Rigorous Procurement: To evaluate, select, and manage relationships with multiple software vendors without being captured by suppliers of substandard solutions.
• Maintain Strong Internal Controls: To staff and operate their own robust internal audit and compliance functions to ensure their local system is secure and used correctly.

In many developing state contexts, these assumptions do not hold. Mandating that a low-capacity agency procure and manage its own core financial system is not an act of empowerment; it is an abdication of central responsibility that can easily result in dozens of poorly implemented, insecure, and unsupported systems. This risks a catastrophic loss of central visibility and a significant degradation of fiscal control.

The Limits of an API-Based Control Framework

The argument that an API-first model provides flexibility while maintaining central control through data standards is compelling, but it overlooks the limitations of the technology. An API is a conduit for data; it is not, in itself, a governance framework.

• The “Standardized Garbage” Problem. An API cannot ensure the integrity of the process that generates the data it transmits. If an agency’s local system has weak controls, poor data quality, or is supplemented by numerous offline workarounds, the API will simply provide a perfectly formatted stream of unreliable data to the central treasury. The treasury loses its ability to verify the integrity of transactions before they occur.
• Systemic Risk from the Weakest Link. In a federated network, the security of the entire government’s financial data is only as strong as its most vulnerable node. A single, poorly secured agency system can become a backdoor for malicious actors. A monolith, for all its flaws, has a single, defensible perimeter.
• Diffusion of Accountability. When a cross-agency financial report is found to be incorrect, the federated model can create a complex web of blame. The treasury may blame the agency’s data, the agency may blame the API specification, and the agency’s vendor may blame the treasury’s system. A clear line of accountability is replaced with ambiguity.

The Economic Rationale for Centralization

From a public finance perspective, the argument for a monolithic system in a resource-constrained environment is straightforward.

• Economies of Scale. A central system allows a government to leverage its full purchasing power in a single procurement and to standardize support and training contracts. A decentralized model, with dozens of smaller contracts, will almost certainly have a higher Total Cost of Ownership (TCO).
• Efficiency of Scarce Resources. A federated model results in a significant duplication of effort, with multiple agencies all trying to solve the same technical and administrative problems. This is a wasteful allocation of the limited financial and human capital available.

Conclusion: Prioritizing Control Over Agility

For a government whose primary, first-order responsibility is to establish basic fiscal discipline, enforce a national budget, and prevent leakage, the monolithic FMIS, while imperfect, is often the superior strategic choice.

It may be inflexible and cumbersome, but it is knowable and controllable. It provides a single point of accountability and enforces a minimum standard of process across all government entities, regardless of their individual capacity. The pursuit of a more agile, federated architecture is a valid long-term ambition. However, it is a luxury that can only be pursued after the foundational pillars of central control and institutional capacity are firmly in place. For a state still building these foundations, the monolith is not a legacy to be escaped, but a necessary tool for governance.