GETTING VALUE FROM MONITORING PERFORMANCE : AN INTERNATIONAL PERSPECTIVE

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GETTING VALUE FROM MONITORING PERFORMANCE AN
INTERNATIONAL PERSPECTIVE

• Presentation to the 2003 ICGFM WBI Fall
  WorkshopNicola Smithers, PEFA Secretariat

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What is PEFA?

• A partnership, jointly-financed by the World
  Bank, European Commission, UK (DFID), and
  Switzerland (SECO).
• The Secretariat, based at the World Bank in
  Washington, DC, was established in December 2001.
• Steering Committee members currently include
  World Bank, IMF, EC, UK DFID, Swiss, French,
  Norway and the Strategic Partnership with Africa
  (SPA).
• Objectives
• Promote integrated, harmonized, coordinated
  approaches to PFM assessment reform
• Reduce transaction costs for countries
• Enhance donor cooperation and coordination
• Better meet the fiduciary and developmental
  objectives of client countries and development
  agencies
• Improve impact of reforms

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Outline
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Why Monitor PFM Performance International
Perspective
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Developing a common scale for PFM Performance
Measurement
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The Country Perspective
3
Issues and challenges
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PFM MATTERS
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INTERNATIONAL DEVELOPMENT CONTEXT
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Outline
Why Monitor PFM Performance International
Perspective
1
P
Developing a common scale for PFM Performance
Measurement
2
The Country Perspective
3
Issues and challenges
4
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PROCESS UNDERWAY TO DEVELOP A COMMON PFM
PERFORMANCE FRAMEWORK

• Joint working group of World Bank, IMF and PEFA
  developing a high level PFM performance
  measurement framework and indicators, as part of
  a wider exercise to strengthen the way
  development partners undertake PFM diagnosis and
  support government reform.
• In collaboration with OECD-Development Assistance
  Committee Working Party on Aid Effectiveness.
• Wide process of consultation commencing with
  donors, partner governments and other
  stakeholders.

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PURPOSE OF A COMMON, HIGH-LEVEL PFM PERFORMANCE
MEASUREMENT FRAMEWORK
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Outline
Why Monitor PFM Performance International
Perspective
1
Developing a common scale for PFM Performance
Measurement
2
P
The Country Perspective
3
Issues and challenges
4
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DIFFERENT STAKEHOLDERS DIFFERENT MONITORING
OBJECTIVES
Learning and capacity building
Accountability
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FOR GOVERNMENT

• PFM Performance measurement should be integrated
  within an overall framework for monitoring
  Government performance
• The learning objective is primary what changes
  successfully impact PFM performance?
• A cost efficient monitoring system
• Demonstrating improvement important to maintain
  donor flows
• Possible concerns
• - Does external scrutiny of indicators encourage
  openness and learning ?
• - Will there be penalties?

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Outline
Why Monitor PFM Performance International
Perspective
1
Developing a common scale for PFM Performance
Measurement
2
The Country Perspective
3
P
Issues and Challenges
4
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CAN THESE FIT TOGETHER ?
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KEY ISSUES
Critical questions
Factors

• Tensions between learning and accountability
• Relevance of standard set of indicators to a
  particular country circumstance
• Who undertakes the assessment
• How the information is used
• Nature of existing government/donor coordination
• Level of donor buy-in and discipline

• Can external assessment support government
  monitoring? Can it be useful to government for
  learning and capacity building ?
• Monitoring against a single set of PFM indicators
  should support better government/donor dialogue.
  Will it?

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THE CHALLENGES -1

• Learning from the HIPC experience eg. involving
  government in the assessment. Could the donor
  surveys and audits also have more domestic
  involvement?
• Identifying a common core set that focus on basic
  PFM requirements, that are of general relevance
• Adding country specific high level indicators to
  form a full set
• Country level testing of the indicators how
  they can be used for country specific
  circumstances eg. Cambodia, several Indian States
• Extensive consultation regarding the common set
  of indicators with
• Partner governments
• International community

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THE CHALLENGES - 2

• Supporting the development of country PFM
  monitoring systems, as part of overall government
  monitoring systems which link systems to outcomes
• Proposing menus of second level indicators from
  which countries may draw
• Fitting performance monitoring within a framework
  that aligns donor behind country-led strategies
  for PFM strengthening

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FOR DISCUSSION

• Can governments and domestic stakeholders gain
  value from international monitoring of PFM
  performance?
• What can be learnt from different country
  experience about linking external assessment and
  self-monitoring?
• How can donor coordination be encouraged around a
  common PFM performance measurement framework?

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ELEMENTS OF THE PFM PERFORMANCE MEASUREMENT
FRAMEWORK

• A set of six critical objectives of a PFM system
• Measuring intermediate outcomes, necessary to
  support good budgetary outcomes
• A standard set of high level PFM indicators to
  assess performance against the critical
  objectives

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0bjectives of the PFM system
The questions the PFM performance indicators seek
to answer
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STRUCTURE AND CONTENT OF THE INDICATORS
Structure of the indicators set
C. Budget Cycle
A. PFM Out-turns
Planning and Budgeting
Revenues
B. Key cross-cutting features
Expenditures
Budget Execution
External Scrutiny and Accountability
Comprehensiveness Transparency
Deficit
Accounting and Reporting
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Testing and applying