Capability Does Not Travel: Why Proficiency at Collecting One Revenue Stream Does Not Transfer

Abstract

An organization that collects one revenue stream well is commonly assumed to be capable of collecting another. This article argues that the assumption is unfounded and specifies the conditions under which it fails. It develops a conceptual account in which revenue collection capability decomposes into four components — identification of the liable party, valuation of the liability, timing of the collection event, and enforcement against non-payment — and shows that these components are instrument-specific rather than general. An organization proficient on an instrument where the liable party is registered, the valuation is administratively determined, the collection event recurs annually, and enforcement operates through a renewal requirement will possess none of the corresponding capabilities for an instrument where the party must be identified, the valuation self-assessed, the event irregular, and enforcement dependent on audit. The article illustrates the argument with an organization holding both types and shows that its performance on the two differs in the direction predicted. It draws three implications: that recommendations to diversify revenue understate the capability investment required, that the interval between announcement of a revenue loss and its effect is less useful than its length suggests, and that assessments of administrative capacity should be instrument-specific rather than organizational. The account is conceptual; the empirical material illustrates rather than tests it.