In 2007, Salam Fayyad accepted the dual post of finance minister and prime minister in the Palestinian Authority (PA). The financial management practices he implemented during his first period as finance minister, from 2002 to 2004, had deteriorated. During the preceding two years, from November 2005 to March 2007, the government had resumed dealing largely in cash, had kept poor records of government financial transactions, and had added more employees to an already bloated public payroll. To reinstitute good practices and implement new reforms, Fayyad and his finance ministry colleagues also had to overcome challenges related to the division of the Palestinian territories into two separate areas governed by competing political parties. Fayyad relied heavily on a small group of trusted staff, delegated important responsibilities so he could also take on the demanding job of prime minister, and set clear guidelines to maximize the long-term benefits from any external technical assistance the ministry hired.  Under his guidance, the ministry rehabilitated financial records and quickly created a new financial information system by adapting existing, locally built software; reformed the way the PA used commercial bank accounts to conduct its financial transactions; and filled gaps in capacity.  

Tristan Dreisbach and staff drafted this case study based on multiple conversations with Salam Fayyad in Princeton, New Jersey, during 2019, as well as other interviews conducted in Ramallah, Nablus, Jericho, and Washington, D.C. the same year.  The case is part of a series on state building in Palestine in 2002–05 and 2007–11. Case published June 2022.

When Salam Fayyad became finance minister of the Palestinian Authority in June 2002, the interim government was starved for cash and faced strong internal and external pressure for reform. To ensure the government could manage revenues and expenditures with fidelity, Fayyad had to improve the functioning and the professionalism of the ministry. He moved quickly to revise core procedures and change the organization’s culture. As he did so, he also began to transform the ministry from an organization based on personal allegiances into one based on institutional policies and standards. Success in that arena during the next three years depended on building coalitions to maintain support for reform as well as marshaling capacity within the ministry itself—by reshaping expectations, centralizing control, unifying geographically divided operations, and fostering talent.

Jennifer Widner and Tristan Dreisbach drafted this case study based on multiple conversations with Salam Fayyad in Princeton, New Jersey, during 2019, as well as other interviews conducted in the Palestinian cities of Ramallah, Nablus, and Jericho in June and July of the same year. The case is part of a series on state building in Palestine, 2002–05 and 2007–11. Case published March 2022.

“Could the Palestinian Authority survive?” That was the question on many Palestinians’ minds when Salam Fayyad became finance minister in June 2002 and the cash-strapped government was struggling to pay its civil servants and suppliers. To avert a collapse, Fayyad quickly took steps to increase government revenue. He developed a system that would direct into a single, centralized treasury account all taxes, fees, and other income collected by government offices. He created a fund that consolidated the Palestinian Authority’s tangled and largely opaque commercial and investment assets and contracted with an outside firm to conduct a full audit of those holdings. He also took action to reduce smuggling and assert control over the tobacco authority and petroleum commission—two autonomous PA agencies plagued with management problems. The reforms required Fayyad to navigate political resistance and an entrenched administrative culture wary of financial transparency. Fayyad’s achievements enhanced efficiency, helped restart the flow of tax revenues withheld by Israel, and enabled the PA to attract external support and investment, quashing—at least temporarily—an existential financial crisis.

Tristan Dreisbach drafted this case study based on a series of interviews conducted with Salam Fayyad in Princeton, New Jersey, in 2019. The study also incorporates other interviews conducted in the Palestinian cities of Ramallah, Nablus, and Jericho in June and July 2019. The case is part of a series on state building in Palestine, 2002–05 and 2007–11. Case published March 2022.

When Salam Fayyad became finance minister of the Palestinian Authority (PA) in June 2002, the government was struggling to manage expenditures effectively and to deliver the budget to the legislative council on time. Success in addressing those problems required winning acceptance from President Yasser Arafat and other top officials for new work processes, securing other ministries’ compliance with changes in operations, and instituting radical new levels of transparency. Fayyad focused on fixing the system instead of investigating past malfeasance. Under his watch, the finance ministry began engaging with the council’s budget and finance committee, instituting monthly financial reporting, introducing reliable internal control and audit procedures, and adopting internationally recognized transparency measures. Those reforms enhanced the credibility of the authority’s financial management internationally, restarted the flow of external aid and PA revenues withheld by Israel, and helped temporarily end a financial crisis.

Tristan Dreisbach drafted this case study based on interviews conducted in the Palestinian cities of Ramallah, Nablus, and Jericho in June and July 2019 and on a series of conversations with Salam Fayyad in Princeton, New Jersey, the same year. The case is part of a series on state building in Palestine, 2002–05 and 2007–11. Case published March 2022.

When Salam Fayyad became the Palestinian Authority’s finance minister in June 2002, one of his biggest challenges was to improve financial management in the security sector. To pay police, emergency workers, and other security personnel, commanders handed out cash to subordinates—a practice that was demeaning and that created opportunities for corruption. Procurement of equipment and supplies was neither open nor competitive and took place outside scrutiny by the finance ministry, which had little or no way of knowing where the government’s money ended up. To address the problems, Fayyad, a political outsider, had to take on a deep-rooted culture of secrecy, the reluctance of a powerful president, and resistance from some of the security officials. He began to tighten controls by working with a reform-minded legislature to incorporate procedural changes into the 2003 budget law. He then identified security service chiefs who were open to payroll reform, and he helped them become early adopters. After more than a year of private persuasion, backed by growing public discontent with corruption, Fayyad was able to implement reforms that reduced opportunities to divert funds and that increased security workers’ take-home pay. He also put security forces’ procurement activities under finance ministry oversight, thereby further limiting the risk of corruption.

Tristan Dreisbach drafted this case study based on interviews conducted in the cities of Ramallah, Nablus, and Jericho in June and July 2019 and on a series of conversations with Salam Fayyad in Princeton, New Jersey, the same year. The case is part of a series on state building in Palestine, 2002–05 and 2007–11. Case published March 2022.

In 2003, after 14 years of civil war and as many failed treaties, representatives of Liberia’s government, rebel groups, and civil society came together in Accra, Ghana, to negotiate a peace agreement. They chose Gyude Bryant, a businessman unaffiliated with any of the factions, to head a transitional government made up of ministers from the incumbent political party, the two main rebel groups, and independents, including opposition politicians and civil society leaders. Bryant’s primary goals were to maintain peace and pave the way for elections by the end of 2005—an assignment that entailed disarming and demobilizing more than 100,000 combatants, creating the means to deal with crucial issues ranging from truth and reconciliation to governance reform, and addressing a long list of other tasks—all of it under the scrutiny of Liberia’s legislature as well as regional and international organizations. Although successful democratic elections in late 2005 marked the achievement of Bryant’s primary aims, his fractious government failed to reach many other objectives, including building capacity and ensuring that resources earmarked for development served their intended purposes. The difficulties led to a novel, temporary system of governance—shared with international partners—that targeted procurement, spending, and other aspects of financial management. This case offers insights useful for planning transitions in low-income, divided societies where prolonged conflict has gutted institutional capacity.

Tyler McBrien drafted this case study based on interviews conducted in Monrovia, Liberia in November 2019. Case published in January 2020.

This series highlights the governance challenges inherent in power sharing arrangements, profiles adaptations that eased those challenges, and offers ideas about adaptations. 

The United States Institute of Peace funded the development of this case study.

Gabriel Kuris drafted this study based on interviews conducted in Jakarta, Indonesia in February and March 2012. For a look at the establishment, structure and first-term leadership of the commission, see the Innovations for Successful Societies companion case study “‘Inviting a Tiger Into Your Home’: Indonesia Creates an Anti-Corruption Commission With Teeth, 2002-2007.” Note: many Indonesians have only one name, while others prefer to be referred to by their first names rather than their surnames. This study follows the naming conventions used by local media and individuals themselves. Case posted September 2012.

Associated Interview(s):  Erry Riyana Hardjapamekas

After a decade of reforms to boost tax collection, in 2014 the Uganda Revenue Authority (URA) faced up to one of its biggest remaining challenges. Although the agency had significantly improved its internal capacity—along with its ability to collect taxes from registered taxpayers—large numbers of Ugandans paid nothing because they were unregistered or because inadequate compliance monitoring enabled them to underpay. The holes in the system undermined public trust and bedeviled the URA’s efforts to meet the government-mandated target to raise tax revenue to 16% of gross domestic product. The URA then joined other government agencies to bring millions of unregistered citizens into the tax net, and it tightened the oversight of existing taxpayers who were paying less than their fair share. Prime targets were millions of Ugandans who worked in the informal economy, which the government said accounted for nearly half of the country’s economic activity. At the same time, the URA set up operations to go after wealthy and politically connected individuals who avoided paying their full tax load, and it created a separate unit to press government departments that failed to remit to the URA the taxes they collected, such as withholdings from employees. The URA’s program achieved strong gains on all three fronts and thereby helped increase the country’s tax-to-GDP ratio to 14.2% in the 2017–18 fiscal year from 11.3% in 2013–14. Just as important, the program made significant progress toward a fairer distribution of the tax burden for Ugandans across all economic levels.

Leon Schreiber drafted this case study based on interviews conducted in Kampala, Uganda, in January and February 2019. Case published April 2019.

To view a short version of the case, please click here 

See related Uganda Revenue Case Study: Righting the Ship: Uganda Overhauls its Tax Agency, 2004-2014

In the early 2000s, the Uganda Revenue Authority (URA) faced a crisis. Even after adopting a modernized legal framework that made the agency semiautonomous—able to operate much as a business would, though still accountable to a public board—the institution remained paralyzed by corruption, outdated technologies and procedures, and a toxic organizational culture. In 2004, to begin righting the ship, the URA’s board appointed 43-year-old Allen Kagina, who had served the agency for more than a decade, as the new commissioner general. Kagina engineered a radical overhaul that required all 2,000 URA staff members to reapply for new positions under a revamped organizational structure. A new modernization office overhauled tax procedures, upgraded the URA’s technology, improved anticorruption measures, strengthened the tax investigation and prosecution function, and enhanced staff capacity. At the same time, the URA was working to smooth its customs procedures and improve cooperation with partner countries in the East African Community. 

Leon Schreiber drafted this case study based on interviews conducted in Kampala, Uganda, in January and February 2019. Case published April 2019.

To view a short version of the case, please click here

See related Uganda Revenue Authority Case Study: Bolstering Revenue, Building Fairness: Uganda Extends its Tax Reach, 2014-2018