ESTABLISHING AND UTILIZING ASSESSMENTS OF PUBLIC SECTOR PERFORMANCE

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ESTABLISHING AND UTILIZING ASSESSMENTS OF PUBLIC
SECTOR PERFORMANCE AN IFI PERSPECTIVE World
Bank / International Consortium on Government
Financial Management Fall Workshop Washington
DC, 25 November, 2003 David ShandFinancial
Management Advisor,The World Bank dshand_at_worldba
nk.org
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WHAT DO WE MEAN BY PUBLIC SECTOR PERFORMANCE ?

• DELIVERING THE RIGHT SERVICES AT THE RIGHT TIME,
  QUANTITY, QUALITY AND PRICE
• SUBJECT (OF COURSE) TO OVERALL FISCAL
  CONSTRAINTS/TARGETS

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PFM PERFORMANCE OBJECTIVES (THE FOUR LEVELS)

• AGGREGATE FISCAL DISCIPLINE ANNUAL AND
  MULTI-YEAR TARGETS
• STRATEGIC RESOURCE ALLOCATION PRO-POOR OUTCOMES
  (ECONOMIC GROWTH AND SERVICE DELIVERY)
• OPERATIONAL EFFICIENCY MINIMIZE WASTAGE OR
  LEAKAGE OF RESOURCES IN PRODUCING OUTPUTS
• FISCAL TRANSPARENCY INTERNAL AND EXTERNAL

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SERVICE DELIVERY

• COMPONENTS OF SERVICE QUALITY
• RELEVANCE/SUITABILITY
• ACCESSABILITY
• TIMELINESS
• CONTINUITY ETC
• SERVICE DELIVERY AS AN UNDER-EMPHASIZED
• COMPONENT OF PUBLIC SECTOR PERFORMANCE
• AND OF PFM PERFORMANCE

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SERVICE DELIVERY (Contd)

• EFFECTIVE SERVICE DELIVERY IS IMPLICIT UNDER PFM
  OBJECTIVES TWO AND THREE
• SO MUCH EFFORT INTO REQUIRING (DONORS) OR
  PREPARING (GOVERNMENTS) PRO-POOR BUDGETS WHICH
  CANNOT BE OR ARE NOT IMPLEMENTED !
• LESS EMPHASIS ON BUDGET IMPLEMENTATION BUT THIS
  IS NOW CHANGING
• INCREASED EMPHASIS IS NEEDED ON IMPROVING BUDGET
  EXECUTION OR IMPLEMENTATION

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PFM AND SERVICE DELIVERY

• SERVICE DELIVERY AGENCIES SHOULD KNOW BUDGET
  ALLOCATION AND EXPECTED OUTPUTS/OUTCOMES
• AND HAVE REASONABLE PREDICTABILITY OF FUNDING
  FLOWS (NOT STOP/GO)
• AND SOME FLEXIBILITY IN THE ALLOCATION OF
  RESOURCES/INPUTS
• AND RELIABLE, TIMELY INFORMATION ON EXPENDITURES
  AND COMMITMENTS
• AND BE ABLE TO BE HELD REASONABLY ACCOUNTABLE FOR
  EXPENDITURES AND RESULTS

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PFM AND SERVICE DELIVERY (Contd)

• THE CENTER (MOF) ALSO NEEDS ADEQUATE INFORMATION
  FOR MONITORING
• DO MOST PFM SYSTEMS PROVIDE FOR ALL THIS ?
• INCREASED EMPHASIS ON IMPROVING BUDGET EXECUTION
  DOES NOT LESSEN THE IMPORTANCE OF SOUND BUDGET
  CONSTRUCTION A COMPREHENSIVE BUDGET, MEDIUM
  TERM FRAMEWORK, PERFORMANCE BASED ALLOCATIONS ETC
• AND PROBLEMS IN BUDGET EXECUTION MAY REFLECT
  PROBLEMS IN UPSTREAM BUDGET CONSTRUCTION e.g.
  UNREALISTIC BUDGETS
• NOTE THAT SOUND PROCUREMENT PRACTICES ARE AN
  IMPORTANT ASPECT OF BUDGET EXECUTION

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PUBLIC EXPENDITURE TRACKING SURVEYS (PETS)

• DEVELOPED BY SECTOR ECONOMISTS, NOT PFM
  SPECIALISTS
• ARE THE FUNDS REACHING THE INTENDED POINT OF
  SERVICE DELIVERY ? SCHOOLS AND HEALTH CLINICS
• THEY CONFIRM THAT BUDGET EXECUTION IS A MAJOR
  PROBLEM
• BUT PETS ALSO SHED LIGHT ON COST EFFICIENCY,
  QUALITY OF ACCOUNTABILITY, ADEQUACY OF SERVICE
  DELIVERY ARRANGEMENTS ETC

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PUBLIC EXPENDITURE TRACKING SURVEYS (Contd)

• 1996 UGANDA SURVEYS SHOWED SUBSTANTIAL LEAKAGE
  OF FUNDS 87 OF NON-WAGE RESOURCES DID NOT
  REACH SCHOOLS
• PUBLICATION OF BUDGETS LED TO LOCAL DEMANDS THAT
  THE FUNDS ARRIVE
• LEAKAGE MAY BE DUE TO UNREALISTIC BUDGETS, NOT
  JUST REALLOCATIONS OR OTHER DIVERSIONS
• BUT LAST POINT IN THE FEEDING CHAIN GENERALLY
  BEARS THE SHORTAGE NOT THE CENTER
• PETS NOW A REGULAR BANK DIAGNOSTIC TOOL ON
  SERVICE DELIVERY AND BUDGET EXECUTIOON

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 THE ROLE OF MOF

• ARE MOFS SUFFICIENTLY INTERESTED IN SERVICE
  DELIVERY - OR LEVELS TWO AND THREE GENERALLY
• THEY MUST GUARD AGGREGATE FISCAL DISCIPLINE
• BUT AT THE SAME TIME WORK TO IMPROVE THE RATE OF
  BUDGET IMPLEMENTATION
• NOT ACT BY STEALTH OR EDICT, BUT TRANSPARENTLY
• THIS MAY REQUIRE A CHANGE IN MINDSET/CULTURE
  AND INCENTIVES
• A (REALISTIC) PERFORMANCE BUDGETING APPROACH MAY
  BE A VEHICLE FOR THIS

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A SUITE OF PERFORMANCE INFORMATION

• BUDGET EXECUTION RATES/ PREDICTABILITY OF FUNDING
  
• MEASURES OF SERVICE QUALITY
• USER SATISFACTION SURVEYS
• PROGRAM EVALUATION
• PETS

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UTLILIZING THE PERFORMANCE INFORMATION

• RELATING TO THE WORLD BANKS RESULTS FOCUS
• HOW MUCH WE LEND TO A COUNTRY
• AND CONDITIONALITIES FOR LENDING (NEED FOR
  DONOR HARMONIZATION)
• WHY DO WE MEASURE COUNTRY PROGRESS ?

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Utilizing the Performance Information (contd)

• REWARDING GOOD PERFORMERS WITH ADDITIONAL
  FINANCIAL SUPPORT ? ( c.f. US MILLENIUM
  CHALLENGE ACCOUNT)
• COUNTRY IMPROVEMENT OVER TIME RATHER THAN
  (SUBJECTIVE AND DIFFICULT) INTER-COUNTRY
  COMPARISONS
• WHY SO LITTLE EXPLICIT COVERAGE OF SERVICE
  DELIVERY IN RESULTS FOCUS AND CONDITIONALITIES ?