In wake of the aftermath of the financial crisis in the 80’s, which marked some of the worst unemployment in Dutch history, public spending within the Netherlands called for measures to attain more efficiency. In this context planning and control tools were developed by the Dutch PMI Foundation. BMC and the Dutch Ministry of Home Affairs were among the partners in this Foundation. As a result of the ever-greater demands on municipalities, for example to work more efficiently and effectively, increasing attention was paid to their administrative management and the way political objectives were administratively and financially implemented. Municipalities were found to lack sufficient modern administrative instruments.

PMI was inspired by 'New Public Management', based on a result driven, more efficient, turned outward, less bureaucratic government organization. Or rather, 'more with less'. Under the PMI model a framework for systematic administrative (financial) management was developed for municipalities. Ultimately this led to the Policy and Management Instrument (PMI) project.

The PMI project, which lasted from 1990 to 1995, was very successful. During the project 50 Dutch pilot municipalities participated. There were symposiums, training-courses, study-materials and of course implementation of the principles and working methods of the PMI model. After this pilot, the model was spread among all Dutch municipalities who are still applying the PMI model and ideas of good governance although the model has been more modified during time.

The aim of the PMI model is to strengthen the position of the municipal council (the democratic component), to allow better control of the organization and to enhance citizen-orientation. For the purpose of implementation of the framework the PMI model distinguishes between phases based on the budget cycle. Important steps in the process are, for example, the translation of political wishes and desires into concrete policy plans, interim management and administration reports, development of the annual report and annual accounts as policy instruments and development of instruments for measuring effectiveness. PMI is not only a theoretical framework; it is a practical instrument that contributes to realistic political wishes, the implementation of these wishes and the evaluation of its results.