The pros and cons of Project Implementation Units versus public sector capacity building | Experts’ Opinions

For a development project to achieve its goals, funding is not the only key ingredient. Other inputs are also required: a team of professional managers, experts, and consultants, and the openness of local authorities and communities are among the necessary components. But very often, development agencies and implementing partners are overwhelmed with the workload and the need to absorb money efficiently and use it strategically, leaving no room for rapid and smooth implementation. This is where Project Implementation Units (PIUs) can come to the rescue. However, although they offer multiple benefits, some see them as parallel systems. Recently, due to significant funding cuts, the international development sector has shifted from implementation that achieves quick results via dedicated PIUs to relying more on an authority’s capacities by strengthening public systems. In this context, what are the pros and cons of relying on PIUs when the final goal is for a consolidated and integrated public system that delivers results sustainably? Check out some expert opinions below.

DevelopmentAid: What are the pros and cons of relying on PIUs rather than strengthening public sector systems for project delivery?

“That is a crucial debate in development and public administration. Relying on parallel PIUs can deliver quick results, but strengthening the core public sector system offers long-term sustainability. Here is a breakdown of the pros and cons of relying on parallel PIUs versus focusing on strengthening public sector systems for project delivery. PIUs are dedicated management units, often staffed externally and operating outside the main government bureaucracy, specifically created to implement a donor-funded or priority project.

Pros of PIUs:

• Speed and Efficiency: PIUs can bypass bureaucratic constraints, allowing for faster procurement, financial flows, and decision-making, leading to quicker project delivery.
• Specialized Expertise: PIUs can hire specialized staff (often on competitive contracts) who possess the exact skills and experience required for a complex project, which the civil service might lack.
• Fiduciary Compliance: PIUs are typically established to meet the stringent reporting and financial standards of external donors, ensuring higher accountability for project funds.
• Ring-fencing: PIUs can shield a priority project from the general administrative and political risks/instability of the public sector.
• Exposure to Best Practices: PIUs can introduce modern project management techniques and best practices to local counterparts.

Cons of PIUs:

• Capacity Substitution, not Development: This is the most significant drawback. PIUs tend to substitute for, rather than build, the capacity of the host government agency, leading to an external dependency that is unsustainable.
• Parallel Structures and Fragmentation: PIUs often create a “parallel government” with different standards, salary scales, and procedures, fragmenting the public administration system.
• Loss of Government Ownership: The project can be perceived as belonging to the donor or the PIU staff, reducing genuine ownership and commitment from the core government agency.
• Brain Drain: By offering higher salaries, PIUs can pull the best local civil servants out of their regular government roles, further weakening the public sector.
• Exit Strategy Risk: When the project ends and the PIU is dissolved, the functions often revert to a still-weak public sector, leading to the risk of a project’s gains not being sustained.”

“In my view, PIUs have become both a practical solution and a long-term dilemma in development work. On one hand, PIUs can be extremely effective in getting donor-funded projects moving. They are less constrained by slow government processes, which allows them to recruit skilled staff quickly, manage procurement efficiently, and maintain strong financial control. This speed and professionalism often make the difference between a project succeeding or stalling. For donors under pressure to demonstrate results, PIUs provide a reliable and accountable delivery mechanism. However, I believe the downside is equally significant. By operating outside government structures, PIUs unintentionally weaken the very systems that development partners claim to strengthen. Skilled civil servants are drawn into higher-paying PIU roles, leaving ministries with capacity gaps. Government ownership also decreases, because key decisions and systems sit with external teams rather than national institutions. When the PIU closes, the skills, processes, and institutional memory often leave with it, creating a cycle of dependency on external management. In my opinion, while PIUs can be useful transitional tools, they can also entrench dependency if not integrated into broader capacity-building efforts. Balancing short-term efficiency with long-term institutional strengthening is therefore essential.”

“In Albania’s evolving development landscape, PIUs have played a significant role in managing donor-funded initiatives. These specialized structures, often operating parallel to government institutions, bring efficiency, technical expertise, and fiduciary discipline to project delivery. In a context where public administration still faces challenges of limited capacity, bureaucratic delays, and politicization, PIUs have enabled timely implementation and accountability — critical factors for donor confidence and the disbursement of funds. However, the reliance on PIUs also exposes structural weaknesses. By attracting skilled professionals with higher salaries and better working conditions, PIUs often drain human capital from the public sector, weakening institutional capacity in the long term. Moreover, projects managed through PIUs risk being perceived as being externally driven, limiting local ownership and sustainability once donor funding ends. In the Albanian socio-economic context — where European integration demands stronger governance systems — this parallel model can undermine efforts to institutionalize project management standards within ministries and municipalities. Therefore, while PIUs may serve as a necessary transitional mechanism, Albania’s long-term development effectiveness depends on gradually integrating their functions into public systems. Strengthening institutional capacity, merit-based recruitment, and transparent procedures would transform PIUs from being substitutes into catalysts for sustainable reform.”

“A long-term perspective is important in dealing with the institutional and structural dimensions of reform, especially in donor-funded programs. The PIUs — specialized teams operating outside regular government structures – are essential and a wonderful initiative for the successful implementation of programs leading to faster delivery, better monitoring, stronger fiduciary control, environmental and social safeguards, institutional strengthening and sustainability. The public sector systems in developing countries are not at their optimal levels of project delivery. They are confronted with a series of nagging problems and hitches that revolve around poor service delivery that impedes the reform agenda. Amongst the myriad problems are weak sector institutions that are unable to deliver on their mandates; low technical and managerial expertise; poor financing and sometimes the inefficient use of the available resources; poor service delivery orientation (institutions are not accountable and are insensitive to users and customers); poor stakeholder participation; inadequate sector policy and legal framework. These problems impede adequate delivery and sustainable reforms, necessitating mentorship of the public sector by PIUs outside regular government structures to strengthen and institutionalize the reform agenda for public sector optimality. However, there are dissenting voices that PIUs are drainpipes through which donor and related funds such as grants and loan proceeds are repatriated back to donor nations. In all, the gains of the PIUs outweigh those of public service management, bureaucracy and rule of the thumb.”

“Relying on parallel PIUs instead of strengthening public sector systems offers both short-term advantages and long-term disadvantages. Pros: PIUs can deliver projects faster and more efficiently by bypassing bureaucratic constraints. They often attract skilled consultancy staff, ensure stricter financial management, and meet donor reporting standards effectively. This makes them useful in contexts where government capacity is weak or urgent results are needed. Cons: However, PIUs operate outside regular government systems, which undermines institutional learning and sustainability. They frequently rely on externally hired consultants whose expertise leaves with them at project completion, creating knowledge gaps. This dependency fragments governance, duplicates efforts, and weakens accountability. As a result, when donor funding ends, governments may lack the skills or systems to continue implementation. In the long run, strengthening national institutions may prove more effective — although slower — and build sustainable capacity and ownership, reducing dependency on parallel structures.”

“PIUs are necessary as long as the structure of projects is increasingly bureaucratic and there is always a need for a permanent core to continuously manage projects and quickly resolve crisis situations. Whether it is called a PIU or a management team, a small group of people is needed who are familiar with the bureaucratic aspect and who can communicate quickly and directly with each other. Large strategic national projects need qualified staff, and yes, this staff comes from public institutions because, as a rule, public money is being managed. Reform should not come from PIUs; they are a cog in a mechanism and, most of the time, they do their job and the project goes ahead. We cannot make major changes while a project is underway. Reform is needed at the project system level and, as an expert, I feel firsthand that this is being attempted, albeit somewhat chaotically at the moment, but let’s hope for better times ahead.”

“PIUs are indeed necessary to accelerate the implementation of projects; however, there is a lack of mechanisms that ensure the knowledge transfer from the PIUs to the public bodies responsible for operation after the PIU closes. There is no commitment from public servants to projects, as such projects are deemed to be the responsibility of PIUs, especially when the PIU members are better paid. The project activities are seen as “more work for the same low payment”. PIU salaries are much more attractive than public servant salaries. The difference shouldn’t be that big so as to reduce migration from public institutions to PIUs. As donor-project implementation increases the responsibilities of specific public servants or units, the PIU budget will include a budget to increase the salary of these related public servants, so they will be involved and committed to the project’s activities. What are the pros and cons of relying on parallel Project Implementation Units instead of strengthening public sector systems for project delivery? Pros: The use of PIUs makes implementation easier and faster, with fewer bureaucratic processes. Cons: PIUs cause distortions in the local labor market; labor is more expensive after projects have been implemented; experienced experts migrate to private industry.”

DevelopmentAid: What are the pros of strengthening public sector systems for project delivery?

Strengthening public sector systems, or the SPS approach, focuses on using and improving the existing government’s structures, rules, staff, and procedures to deliver projects.

Pros of strengthening systems:

• Sustainability and Ownership: By delivering projects through existing institutions, the government takes full ownership, and the capacity developed is permanent, ensuring long-term sustainability for the project outcomes.
• Institutional Development: It directly improves core government functions, such as procurement, financial management, planning, and monitoring/evaluation across all sectors.
• Equity and Coherence: It promotes a unified system, ensuring that a project’s standards and benefits apply consistently across all public work, avoiding the ‘double standards’ created by PIUs.
• Scalability: Once a system becomes robust, it can be used to manage a growing portfolio of complex projects without needing new, ad-hoc structures for each one.
• Cost-Effectiveness (Long-Term): While the initial implementation may be slower, avoiding the costs of parallel salaries, offices, and project-specific overheads leads to greater long-term cost-efficiency.

Cons strengthening systems:

• Slower Initial Delivery: Reforming and strengthening a complex public sector system is a long-term, politically sensitive process that can lead to significant delays in the early phases of a project.
• Vulnerability to Bureaucracy: The project remains subject to existing government inefficiency, slow decision-making, and bureaucratic red tape.
• Higher Implementation Risk: The project is more exposed to institutional weaknesses, such as the risk of corruption, the lack of skilled staff, and political interference.
• Dilution of Project Focus: Project resources and staff can be diverted to other government priorities if the political commitment wavers.
• Fiduciary Concerns: Donors may be hesitant to channel funds directly through a public system they perceive as having weak financial management and anti-corruption controls.

See also: Reimagining NGOs’ role in a world of shifting landscapes | Experts’ Opinions

As this article shows, the international development sector is shifting from rapid project delivery through PIUs to long-term public system strengthening efforts. In this evolving environment, individual professionals need direct access to opportunities to remain competitive and relevant. DevelopmentAid’s Individual Professional Membership is a valuable resource in this regard, offering access to over 4,400 job openings in the sector, tenders and grants for individuals, salary trends, and much more. Moreover, members can find the contact information for over 500,000 organizations and donors in the field and submit their CVs directly. With access to the largest job board in the international development sector, candidates can find all types of suitable positions, from short-term consultancies to long-term jobs or fixed-term positions, both local and international.