Author Topic: Sequence of the budget reform  (Read 806 times)

petagny

  • Global Moderator
  • PFM Member
  • *****
  • Posts: 348
Sequence of the budget reform
« on: April 14, 2010, 20:40:17 GMT »

The platform approach to sequencing is almost becoming part of the conventional wisdom in some circles, but I still have my doubts. In one version I've seen, IA is right there as part of Platform 1, whereas allocative and operational efficiency don't appear until Platform 4. Is IA really part of the basics?

OK, there have been some spectacular (usually donor driven) mistakes made in trying to introduce complex MTEF and performance budgeting approaches into inappropriate environments (either politically or in terms of capacities), but does this mean that we forget about strategic resource allocation and efficiency and effectiveness until all the other bits of the puzzle are in place?

PFM reform has an important political dimension and is not just a technocratic exercise. To my mind this means that reformers need to be opportunistic and push on open doors even if this sometimes means moving forward in areas that are not necessarily considered part of the 'basics'. The trick is to tailor the sophistication of the reforms to the environment. Unfortunately, keeping things simple is usually more difficult than the alternative.
« Last Edit: April 15, 2010, 13:05:42 GMT by Napodano »

atseacliff

  • PFM Member
  • *
  • Posts: 99
Re: Re: Sequence of the budget reform
« Reply #1 on: April 15, 2010, 12:53:16 GMT »
Can't really argue with any of your comments. Back in one of the Central Asian Republics in 2003 I didn't see IA as part of the basics. They (or rather the donors) pushed on with Phase 1 reforms and a competent team of consultants. I am certain the reforms are ahead of their time and were driven by donors rather than "opportunistic reformers". However, we know that reform takes time and maybe in other countries which are less resource constrained there is an argument to start developing PFM elements for phases 2 and 3 (stealing from the language of the Platform Approach).

Tuppence on Platform Theory and Practice. We need committed and technically competent government officials and a coherent approach which has a strong M&E system. With that (as I recently saw first hand in one of the poorest African countries) a lot can be achieved and rhetoric regarding sequencing and prioritisation becomes reality.

« Last Edit: April 15, 2010, 13:05:17 GMT by Napodano »

Napodano

  • Administrator
  • PFM Member
  • *****
  • Posts: 681
Re: Sequence of the budget reform
« Reply #2 on: April 15, 2010, 13:35:17 GMT »
For the ones who want to read more about the platform approach, download the attached documents.

I agree with petagny. In a volatile political system opportunistic approaches are required as long as they leave behind a base to build upon, even if that may mean working backward.
« Last Edit: April 16, 2010, 07:35:00 GMT by Napodano »

Napodano

  • Administrator
  • PFM Member
  • *****
  • Posts: 681
Re: Sequence of the budget reform
« Reply #3 on: May 04, 2010, 07:21:31 GMT »
This what Petagny wrote in another topic about sequencing:

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.

« Last Edit: May 04, 2010, 07:23:14 GMT by Napodano »

Martin Johnson

  • only for your eyes
  • PFM Member
  • *
  • Posts: 76
Re: Sequence of the budget reform
« Reply #4 on: May 20, 2010, 16:04:51 GMT »
Platforms, sequencing ..... hmmm .... a good dolop of common sense and careful reflection is probably as good as anything. Consider this, though. How many environments have you worked in where there are reform measures being carried out on each of the key PFM areas simultaneously?

In those cases, how many of then imply a substantial expansion of workload and responsibility (in operating legacy processes whilst being part of a movement towards reformed processes), major changes in the way institutions work (including definitions of roles, responsibilities and job descriptions), a requirement for better management and a straightforward understanding of the direction scope and point of the reform? Leave these things out at the cost of time, money and foregone opportunity. But it is not unusual to see this.

And why does it happen? Why can so many highly qualified and experienced government, donor and consultant practitioners engage in unspoken collusion that concludes government can proceed at (relative) speed without catering for these prerequisites? In the same way that I am unhappy with Fabio Capello (because he has unrealistically raised my expectations of success in South Africa), expectations of what many governments can achieve are often unrealistically way too high.

The result is that reform is often less successful and slower than it would have been otherwise and our government colleagues who are tasked with delivery sometimes pay the price in terms of a deterioration of their working environment and job satisfaction. Perhaps there needs to a People Approach ......
« Last Edit: May 20, 2010, 16:11:13 GMT by Napodano »

petagny

  • Global Moderator
  • PFM Member
  • *****
  • Posts: 348
Re: Sequence of the budget reform
« Reply #5 on: May 27, 2010, 20:42:43 GMT »
Here's some good advice that Peter Brooke, originator of the platform concept, gave to me:

'On the platform stuff, I must say I smile when I see what some people do with what is basically a simple idea. I guess it is the search for a magic bullet. I even see them trying to use the same platform definitions as other countries and the whole point is that they will be different for each country as they start from a different point.
 
* Really, it only reflects the lessons that I learned as a practioner trying to implement reform myself:

* Some reforms need to complement each other if they are to be successful as a whole.

* Some reforms need to happen before others have a dogs chance of biting.

* Better to focus on a small number of things step by step rather than try to tackle it all at once.

* People need to feel impact as they go....not just functional boxes ticked.

* But people also don't respond well to continous change....they need to be able to make a step up and then pause, look around and feel the benefits of what they have achieved before moving on.

And, of course, paying attention to organisation, capacity and motivation as well as technical change.
The platform definitions should never be rigid, overlap should always be allowed for and a platform will never be entirely complete and will need to be continously reinforced.'

Seems reasonably consistent with Martin's thoughts. And people who try to push the platform approach too far should perhaps pay heed to the original intentions.
« Last Edit: May 27, 2010, 20:49:13 GMT by petagny »

 

RSS | Mobile

© 2002-2024 Taperssection.com
Powered by SMF