Author Topic: budgets, policies, laws and other strange bedfellows  (Read 988 times)

Gord Evans

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budgets, policies, laws and other strange bedfellows
« on: September 30, 2010, 15:24:20 GMT »
The analytical journey from the three levels of the World Bank's Public Expenditure Management manual to PEFA and its set of indicators have been golden years for PEM consultants.  Great efforts have been made to transition plodding, incrementalist Ministries of Finance into priority-setting, policy-driving machines able to cost outputs and infer the related outcomes at a single bound.  Splendid MTEFs have been produced with fastidiously constructed multi-year ceilings attuned to the nuances of policy sequencing.  In the developing world, the IFIs have been fully engaged in the quest, vigorously exercising their proprietary rights with their MoF "beneficiaries" to further the cause.  Budget policy departments are multiplying like zebra mussels.  With PEMtopia so near at hand, one hesitates to raise any speed bumps, but there is this one nagging irritant that continues to plague MTEF perfection...implementation.  For some reason, these incredibly annoying institutions, variously termed cabinets, councils of ministers, or governments for that matter, seem spectacularly oblivious to those MTEFs that they spent 20 minutes on at one government meeting reviewing and approving.  This of course begs the question: what do they do with their time? 

In fact, most cabinets spend most of their time debating policy and legal proposals submitted to them by line ministries.  In fact, the implementation of these policies and laws constitutes the primary source of fiscal demands on the budget in the medium term (since, for instance, it usually takes a couple of years to pass and fully implement a major piece of legislation).  Most governments delegate the task of organizing their workload to a somewhat obscure organization, variously known as the Cabinet Office, Chancellery, Government Office, General Secretariat, etc.  Here, often elaborate annual government work plans are crafted to identify which policies and laws will be submitted to the government in the year ahead.  Okay, so this is where public policy meets public expenditure; right?  Well, not exactly.

The World Bank Public Expenditure Manual does not really acknowledge that any central institution exists outside of the Ministry of Finance.  PEFA assessments focus mostly on Ministries of Finance and do not require that any in-depth assessment of the cabinet system be undertaken.  And so, governments continue to churn out laws and approve policies with alarming regularity that have little to do with the MTEF.  Some interesting efforts have been made to alert these parallel universes to each other's existence (e.g., Albania, Lithuania).  However, the predominant analytic frameworks that are used to determine the shape of PEM reforms, for the most part, remain firmly located in the MoF quadrant.  Perhaps it's time to engage in quantum consulting.       

STONE

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Re: budgets, policies, laws and other strange bedfellows
« Reply #1 on: September 30, 2010, 19:31:20 GMT »
Never understood this quantum business...

But of course you are right. 

I suspect that the root of the problem lies in the fact that  the predominant Commonwealth (ex. British Empire!) view of things hinges on a view of the world that pre-supposes MoFs are fully engaged in (temper?) this centre of government process (exuberance) and that nothing can get through cabinet without having the grudging approval of the MOF.  Let's recall that before the term prime minister was adopted (je ne sais pas quand) the top job was called First Lord of the Treasury (and given Blighty's love of tradition probably still is).  Let us also recall that most of the eminences grises of the PFM process in the WB were from Commonwealth countries (not sure about Alan Schick - but I never agreed with his focus! - sorry Alan)

The difficulty is when one comes across the "transition countries" where the MoF was just a bank,  or to really mix up terms, just a treasury that simply shuffled the money to fund the Cabinet (politburo) policy whatever it was.  For me if the MoF is not strong, policy will never be tested for affordability.  A strong MoF is one that can temper the exuberance even if it has to grudgingly accept that nuclear power stations do not emit (much) carbon and so the "eye-watering costs" are tolerable.



Napodano

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Re: budgets, policies, laws and other strange bedfellows
« Reply #2 on: October 08, 2010, 11:37:06 GMT »
So what to do?

Gordevans hinted to 'Some interesting efforts have been made to alert these parallel universes to each other's existence'.

More details please. Let me start with two leads:
  • Performance management and analysis to be  taken away from Ministry of Finance and to Cabinet Office.
  • Performance hearings to be paired with Budget Hearings for line ministries.
...and an interesting document OVERVIEW OF THE BEST PRACTICES OF FOREIGN AND LITHUANIAN INSTITUTIONS IN SETTING UP PERFORMANCE MONITORING SYSTEMS
« Last Edit: October 08, 2010, 14:54:01 GMT by Napodano »

John Short

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Re: budgets, policies, laws and other strange bedfellows
« Reply #3 on: February 12, 2024, 15:51:45 GMT »
Gord's interesting "polemic" post in 2010 is worth revisiting in the light of the PEFA 2016 Framework?  Does Pillar IV Policy-based fiscal strategy and budgeting, PI-11 Public investment management and PI-8 Performance information for service delivery address his MTEF and PEFA concerns?  Certainly there is much more attention to non MoF decision-making if the assessment is done properly.

And another from Gord to link-in!

https://pfmboard.com/index.php?topic=4396.0

and this on MTEF

https://pfmboard.com/index.php?topic=12.0
« Last Edit: February 15, 2024, 14:06:28 GMT by John Short »

harnett

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Re: budgets, policies, laws and other strange bedfellows
« Reply #4 on: February 15, 2024, 16:05:50 GMT »
Or should there be another PEFA indicator which assesses political grasp of PFM at cabinet level or similar? Surely no integrated planning system can ignore such political buy-in?

John Short

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Re: budgets, policies, laws and other strange bedfellows
« Reply #5 on: February 15, 2024, 17:43:58 GMT »


If done properly 16.2, 17.2, 18.1, 18.2?

 

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