Author Topic: Using country systems in Cambodia  (Read 467 times)

russcraig7

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Using country systems in Cambodia
« on: April 11, 2010, 12:08:05 GMT »
It seems to me there can be serious mismatches between high level commitments by agencies to statements like the Paris declaration and the Accra Accord and the actual behaviour of country level technical staff. The European countries in Cambodia at least seem to be attempting to take these declarations seriously enough to try and map a way forward. They have started by trying to assemble the multitude of reports, both stand alone and as part of project appraisals and completion reports into a synthesised report on the country systems [going beyond finance to include HR, planning, M&E etc]. I am leading a team to do this at present. They foresee a further set of activities that will use this as a basis of recommending how to move forward another few steps.

Much of the resistance comes from the agency staff in country, who sometimes are not even aware of their country's commitment to alignment and the use of country systems. They also find 'project' mode as easier to manage and control and easier to sell as examples of their country's commitment to the development of Cambodia and so please their political masters back home. However not all resistance comes from the agency technical staff on the ground - sometimes senior staff in Ministries are not happy with the idea of embedding responsibilities within their ministries and thus depriving them of the opportunity of extending their patronage to well paid PIU jobs. And in Cambodia this patronage usually has a monetary kickback associated.

Napodano

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Re: Using country systems in Cambodia
« Reply #1 on: April 13, 2010, 08:42:47 GMT »
Cambodia is among the countries testing the PFM Platform approach (click over the picture below to enlarge it)
A PowerPoint presentation is also attached for download

The platform approach aims to implement a series of reform measures to take the PFM competences in a country to increasing levels (‘platforms’) of sophistication over a medium term framework. Each platform establishes a clear basis for launching the next one.

Each platform is assessed in terms of improved outcomes rather than procedural compliance. That fosters a shared understanding among the different stakeholders of the strategic directions of the reform
« Last Edit: April 13, 2010, 08:58:06 GMT by Napodano »

harnett

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Re: Using country systems in Cambodia
« Reply #2 on: April 28, 2010, 22:43:16 GMT »
Your description of what is happening in Cambodia is, I feel, the tip of the iceberg when it comes to donor doublespeak - it sounds like you have "old" style country offices and "new" style HQs.  Paris and Accra may well have been developed for noble reasons but have tied the hands of many donors when confronted with "doing business" in countries with weak PFM and/or endemic corruption (and they are in the majority I feel), not to mention the advent of Chinese aid (or Indian, Russian or Venezuelan influence etc.). 

Hence your Cambodia situation - but also the opposite situation of DFID Zambia which pushed ("new" style) for GBS despite HQ and consultant (OPM) resistance because of "risk" - and is now seriously backtracking into "traditional" projects contra Accra following corruption scandals.  Or plenty of other offices which profess getting value for money for taxpayers money whilst knowing that large percentages of funding goes to inefficiencies and corruption.

I suspect that the honeymoon period of Paris/Accra is coming to an end.  Inefficiency, corruption and increasing serious alternatives in and for developing country governments are too widespread to continue adhering to such agreements unconditionally and the time has come to "get real" - support on the basis of effectiveness, not poverty.

I personally had such a "get real" moment in Zambia recently when I seriously considered the support of USAID in the health sector to be more appropriate than that of the Europeans.  The Europeans had better ideals a la Paris/Accra but their impact through Sector and General Budget Support was extremely questionable due to GOZ corruption/inefficiency.  USAID's impact may well be unsustainable and carry a high transaction cost, but anti-retrovirals and malaria tablets were actually getting to the poor, which didn't seem to be the case under sector or general budget support.

Are we now in a scenario where we should compare transaction costs to corruption/inefficiency costs?

Or start to question aid through Governments (especially those with endemic corruption) at all? 

atseacliff

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Re: Using country systems in Cambodia
« Reply #3 on: May 03, 2010, 08:04:31 GMT »
An important IMF Working Paper article adopting a more sceptical position on the platform approach as that adopted in Cambodia. Some of us ( :) who like our inputs to fit into tidy conceptual models will find this paper uncomfortable reading.

petagny

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Re: Using country systems in Cambodia
« Reply #4 on: May 04, 2010, 07:05:22 GMT »
While acknowledging the need to build some basic foundations, Richard Allen's paper seems to be a thoughtful expansion on ideas in my earlier post on sequencing reforms (I have to be honest and admit having already read the paper!). I would point to the following useful passages from the final section on 'Suggested Approaches':

'An important implication of this simpler, scaled-down approach is that the topic of sequencing, over which there is much debate in recent literature, becomes a largely redundant issue in relation to the overall design of the reform program since, as noted, strategies that include hundreds of measures, and are distributed over several “platforms,” are unlikely to be successful. The concept of sequencing continues to be relevant, however, in relation to specific components of a reform strategy―such as reorganizing the central finance institution (ministry of finance), or establishing an integrated revenue authority, or a new debt management office―and how these changes should be planned and implemented.'

‘Of course, focusing on the basics as a core organizing principle of the budget reform process should not be interpreted too literally. In the practical circumstances of a developing country, given its political and institutional drivers, there may be situations in which action x is initiated before action y, despite x’s “inferior” position in the reform hierarchy. Reformers need to leverage existing institutions and human capacity. Thus, a country may decide to establish an external audit authority even though its basic systems of accounting and financial reporting are very weak. Such an initiative may be required politically to satisfy the requirements of a burgeoning parliamentary system, or a special interest group, or to pay off a political supporter, for example; and may indeed be helpful in building external pressure (through the legislature, NGOs, the media, or the general public) for improvement in more basic areas of budgeting. Similarly, it may be useful for a developing country to introduce some elements of a simple program classification, or a performance management framework―at a basic level―to meet external demands for greater social accountability, even though it is not yet ready to introduce a fully developed performance budgeting system.’

'Finally, in applying the approach outlined above, the overly complex, rigid, and technocratic budget improvement programs that have bedeviled would-be reformers in many developing countries need to be avoided. Budget reform is an art, not a science. Moreover, modernization of the budget needs to be linked to reforms in public administration more generally, and to the establishment of a professional, merit-based civil service. There is much value in the guidance given by Hirschman (1958), namely to focus on changes that either impel or facilitate further changes.'

Richard Allen also warns against blindly using PEFA scores to drive reform sequencing, i.e., focusing first on the D-rated areas: 'In practice, a more sophisticated, nuanced approach is required in which all relevant variables—including the regulatory framework, business processes, human resource issues such as developing appropriate skills and training facilities, and IT systems―are taken into account. Is sufficient external finance and technical assistance available to support the program? Are the proposed measures dependent on government decisions to institute other improvements in the public sector—for example, a new civil service law, or recruitment and training arrangements; or a reorganization of ministries that may affect the role and responsibilities of the finance ministry and its staff? How will these various elements be coordinated and prioritized? Another key issue is to make a thorough assessment of the institutional and political drivers in the country that will shape and influence the reform process, and may be obstacles to improvement unless adequately dealt with.'

The historical perspective (at the beginning of the paper) on the length of time taken to institute reforms in certain OECD countries is also both enlightening and daunting.

Daniel Tommasi also gives pragmatic guidance on sequencing. He doesn't dismiss the platform approach, but says that the chronology might not be so important - which kind of undermines the idea doesn't it? You can download the paper here and listen/watch Daniel talking about it:

http://capacity4dev.ec.europa.eu/strengthening-public-expenditure-management-developing-countries

Any volunteers for the first video clip on the PFM Board?!

 

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