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Author Topic: Professional Diaries #1: Integrated Planning: the Good, the Bad and the Ugly  (Read 5005 times)

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Gord Evans

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Initial Involvement

I’ve be asked to post a few reflections on my experiences with integrated policy and financial planning.  Over the next few months, I will recount the good, bad and ugly of several such efforts. 

For those of you who don’t know me, I’ve worked more on the policy and planning than budgeting side of the ledger.  However, my lengthy work experience in Cabinet Office in Ontario, Canada taught that policy planning and fiscal planning, although often competitive and pushing in opposite directions (“we can’t afford that” vs. “we would like to be re-elected”), cannot be performed in isolation.  When I ventured into international work in the late 1990s, to my surprise, what to me was an obvious point of departure (i.e., integrating policy and fiscal planning) was largely being ignored in the world of international development. 

At the time, a multitude of projects were working with Ministries of Finance to implement MTEFs and program budgeting, often overseen by the IMF and/or World Bank.  These projects only remotely connected to the Prime Minister and Cabinet – there would usually be one tick box on the matrix indicating “Government must approve MTEF.”  In this world, policy decisions were the exclusive domain of the Ministry of Finance taken under the watchful eye and veto-empowered IFIs. 

Against the tide, a few intrepid souls were acknowledging that governments were not entirely run by the IFI-MoF duopoly.  SIGMA was completing a series of Centre of Government profiles and advocating policy management reform in EU accession countries.  And a several people at the World Bank, most notably Nick Manning, were exploring how the centre of government influenced policy making and implementation.  At the same time, my international career had begun with an assignment in Lithuania.  This will provide the first reminiscence.   

Following the instructions of those who understand how this works, I will duly add section 2 of 3 in a separate reply post.
« Last Edit: August 11, 2014, 08:42:23 GMT by Napodano »

Gord Evans

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INTEGRATED PLANNING IN LITHUANIA

Allen Schick once prepared a presentation entitled “Why Efforts to Integrated Planning and Budgeting Usually Fail, and Why It Is Important That They Succeed.”  Lithuania is one of the few cases where it did succeed, but certainly not at first.

The project scoping work, undertaken by a former Cabinet Secretary from Ontario, clearly recommended that reform at the centre of government was what was needed.  However, this was not fully understood by the Lithuanians and the project was duly assigned to the Ministry of Public Administration Reform and Local Administration (MPARLA).  Following in the footsteps of many other EU accession countries, they informed us that they were expecting us to conduct a functional review in three pilot ministries as a precursor to a whole-of-government functional review.  Since the Canadian team all came from government, rather than the foreign aid community, we had no idea what a functional review was – we of course eventually understood, but wondered why on earth anyone would want to perform this type of labour-intensive activity which had so often failed in developed countries.  We were also wondering why a Ministry of Public Administration was leading a project which was supposed to involve government decision making.  How could one deal with government decision-making working in a ministry which couldn’t get the Ministry of Finance to return their calls?

In any event, one of the realities of working in former Soviet Union countries at the time was frequent changes of government (annual was the norm).  Along the way, Andruis Kubilius, who I’d met when he was Deputy Speaker in Parliament, became Prime Minister.  Previously, though our discussions and a first-hand view of integrated planning during a visit to Canada, the future prime minister had become convinced that Lithuania needed the Canadian model if they were going to fix their decision-making system and catch up to Estonia on the path to European integration.  Accordingly, the Prime Minister immediately shifted the project to the Chancellery (their Cabinet Office) with the Chancellor (Head of the Prime Minister’s Office) identified as the lead. 

For those interested in a more detailed look at the reform, you can read the attached article written for the Institute of Public Administration of Canada’s journal “Canadian Public Administration.”  Here are the highlights:

•   a technical working group headed by the Chancellor was established, including senior officials from the Chancellery (Cabinet Office), Ministries of Finance, Economy and MPARLA, and three line ministries.  The group was tasked with developing an integrated planning methodology;

•   a Strategic Planning Unit was established in the Chancellery, which at that time was headed by a former Minister of Finance;

•   the Prime Minister chaired a Strategic Planning Committee with several senior ministers to review the strategic plans and ensure that the government’s strategic priorities were being appropriately supported by the budget; and

•   Strategic Planning Units were established in each ministry to ensure that ministry planning efforts were integrated.

Lithuania’s strategic planning and budgeting system was implemented government-wide in 2001.  A 2006 study by the World Bank (attached) confirmed the positive impact of these reforms on its performance both pre and post-accession.

Reflecting back, next to the personal commitment and engagement of the Prime Minister, the most important success factor for the reform was the involvement of the Ministry of Finance.  Under MPARLA’s leadership, MoF paid no attention whatsoever to the project.  However, once the Prime Minister was in charge, they had to take notice and had to attend meetings.  At first, they did so reluctantly.  To this point, MoF had been merrily implementing program budgeting under the guidance of a US consultant who fervently believed that a properly constructed program budget removed the need for government decision-making altogether, with everything flowing up and down in perfect harmony to and from the budget ceiling determined by MoF.  Why get involved with messy policy decisions, abstract political priorities, or stressful negotiations with ministries when it could all be decided algorithmically through the budget process?   

Meanwhile, back on planet Earth, MoF was begrudgingly attending meetings, providing input into the government’s priorities, linking budget ceilings to those priorities, and modifying ceilings (within an overall cap) though negotiations with ministries who were referencing their strategic plans.  Then a strange thing happened – they began to realize that having the Minister of Finance and Prime Minister on the same page was strengthening their hand with controlling expenditures and discouraging end-runs by powerful ministers.  And why not find out what the Prime Minister really wanted to accomplish at the outset of the process?  Little by little, they became champions of the system and continued to work closely with the Chancellery and Prime Minister’s Office thereafter.  Needless, to say, the system was far from perfect, but continued to evolve and remains in place today.
« Last Edit: August 11, 2014, 08:42:45 GMT by Napodano »

Gord Evans

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PARALLEL UNIVERSES

Thinking back, one issue which strikes me is the nature of the conceptual gap between the universe of the Ministry of Finance and the universe of decision makers. 
With apologies to PFM professionals (I am definitely straying outside my expertise here), I will begin with the MoF universe. 

Above all, it is holistic, involving all activities and functions of government.  To impose some sense of order, a structure is developed into which the full expenditures and revenues of government can be fit.  Aside from the usual universal structures (GFS/COFOG), each government will have some way of structuring its expenditures and revenues using both organizational and policy cascades.  The former works its way down from ministries/agencies (or sometimes sectors) through divisions, departments and units or whatever.  In many systems, a program structure will be superimposed as a way to provide a sense of policy coherence to the myriad organizational structures.  The policy cascade typically looks at what these organizations are doing and producing (activities and outputs), or intending on doing with their money and what this could mean in the medium term (i.e., the resulting outcomes and impacts).  This approach often requires that the expenditures of ministry divisions and/or programs have a policy logic to them (i.e.,  each program is underpinned by agreed policy goals and policy objectives that can be linked to specific program expenditures and outputs).  Whatever the approach, the Ministry of Finance cares about everything everyone spends and, in varying degrees, why they are spending it and what results from these expenditures.

Not so the head of government – usually the Prime Minister.  A Prime Minister is elected or appointed to deliver a promised set of reforms (i.e., policy changes) that will result in the party he leads being re-elected.  Over a period of up to five years, the PM will expect to see policy proposals from ministries at Cabinet that present policy options to deliver political commitments and explain how those promises will be implemented and what they will cost.  During this period, the PM will periodically indicate new policy priorities and will work with the Minister of Finance to ensure that the budget priorities align with those of the government.

The ministry proposals that come to Cabinet are typically written as policy papers and may be accompanied or followed by draft laws/regulations or some other policy instrument.  Although the policy proposals are (or at least should be) reviewed carefully by the Ministry of Finance, they are not structured in a way that fits within the formal financial structure – costing here becomes a bit of an art.  Typically, these proposals indicate the policy changes that need to be made in order to deliver a political (confusingly, the same word as policy in many languages) commitment.  However, the related policy changes rarely if ever directly correspond with the policies that inform the financial structure.  More often, they will lead to regulatory changes that may affect part of a program policy or many parts of many program policies.  Although the same word (policy) is used, they are referring to two related but different structures.  The Prime Minister could not care less how many program goals, objectives or policies are affected (he won’t even know what they are); he just wants his promise delivered.

in Canada, Cabinet and its sub-committees used to be able to process roughly 100 such proposals per year.  In any given year, therefore, only a portion of the financial structure is affected by these proposals.  For example, the passport office, while an important service provider and contributor to an external affairs documentation program, will never come before Cabinet unless something highly unusual and controversial happens involving the passport process.  Very costly, longstanding agricultural programs will not come before Cabinet unless significant and contentious changes are being proposed.  And so on.  Generally, since processes exist to discourage ministries from bringing forward contentious proposals that have not been identified as government priorities, Cabinet exists as a promise-keeping factory tasked with producing the necessary conditions for re-election.  The Prime Minister’s universe is therefore one that focuses on significant policy changes and only interacts with the MoF universe in a piecemeal manner.  He entrusts that MoF and his Ministers will take care of the whole of government.

This partly explains why the Prime Minister and Cabinet will never be overly concerned with or read an entire MTEF document or ministry strategic plan.  What they care about are the excerpts from those documents that deliver the policy changes deemed essential to the continuing popularity and credibility of the government.  In general, it is therefore prudent to ensure that all-encompassing documents, such as MTEFs and strategic plans, are structured in a way that a Prime Minister can quickly access those priority issues.  The same applies to sector strategies, national plans, program reviews and all other such documents that seek Cabinet approval.  This is just a matter of respecting the universe in which the PM operates.

I could go on further about a third universe – one inhabited by the Ministry of Justice and designed on the basis of Constitutional/legal structures – but that would be migraine-inducing.  From a PFM perspective, the lesson learned above is that the two parallel universes must be mutually understood and that both parties must work closely together to ensure that the intersection of their worlds is mutually reinforcing.  This was the case in Lithuania and has been the case in a few other countries since.  A topic for another day is what happens when the MoF universe must intrude on the PM’s universe; i.e., when revenue collapses and cuts must be imposed.  In this case, negative priorities (what the government will no longer do or do less of) are set as the PM, Minister of Finance and Ministers will need to decide how to achieve the necessary fiscal target while doing the least political damage.     

So that’s it for now – next time (mid to late September), I’ll describe a few cases where integrated planning did not work.  As Schick inferred, they usually don’t.  In the meantime, I would be interested in hearing about your experiences concerning attempts to bridge the policy and financial divides.  I won’t be responding immediately or answering queries (sorry but the day job is intruding), but will certainly pick up on themes raised in future posts.
« Last Edit: August 11, 2014, 08:08:20 GMT by Napodano »

Gord Evans

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SOMETIMES IT DOESN'T WORK

Time for instalment II.  Having discussed the winning conditions for centre of government reform and integrated planning in Lithuania during the early 2000s, it is time to face facts that those conditions rarely align and can easily be undermined.

Trying to emulate the Baltic experience, some interesting experiments were occurring at the centre of government in Serbia in the late 2000s.  Two DfID-funded projects, led by local consultants, were trying to introduce policy-driven, evidence-based processes through the poverty reduction strategy and ministry-level operational plans.  I was invited by them to help take the next step; i.e., adapting these methodologies for government-wide implementation as part of a broader strategic planning system.  The teams were very high-calibre and would certainly have been capable of leading such a transformation.  The related reforms occurring in the Ministry of Finance could potentially be linked to these efforts.  All very positive, but formidable obstacles existed.

The government of the time was a coalition of two main parties.  The Prime Minister focused mostly on foreign affairs, Kosovo, national security and key economic issues, while the Deputy Prime Minister, from another party, oversaw social policy and EU integration.  In the meantime, a twinning project (France and Lithuania) was working with the Government (Cabinet) Office to introduce a policy-driven decision-making process in place of the highly legalistic system of that time.   
Although some modest success was achieved by introducing an annual government work plan coordinated by the Government Office, more ambitious initiatives to strengthen policy management and develop an integrated policy and financial planning system faltered.  DfID asked me to assess what could be done to create a conducive reform environment.  I prepared a list of critical success (listed below) for presentation and discussion.

1. strong political support
2. single focal point for decision-making
3. coherent central institution structure
4. sufficient central institution capacity
5. Ministry of Finance amenable to reform
6. policy-fiscal linkages technically feasible
7. effective linkages with EU integration
8. buy-in by line ministries
9. favourable incentives

In discussing these, it became obvious that the political factors alone (the Prime Minister was not engaged; two isolated centres of government existed under different coalition partners) made it impossible to implement a policy-driven, integrated planning system.  Although minor reforms can be accomplished at the administrative level, anything ambitious, such as integrating policy and financial planning, must have strong political support for obvious reasons; at some point, critical policy decisions will need to be made in the context of the budget by the Prime Minister, Minister of Finance and their Cabinet colleagues.  In Serbia, at this time, there simply was not a political audience.  This frustrating status quo remained in place for two more years.

Then prospects changed.  A new government was elected and all of the key political positions (PM, Deputy PM, Minister of Finance) and planning responsibilities (policy, budget, EU integration) were filled by members of the major coalition partner.  Moreover, the high-calibre teams supported by DfID remained in place and were willing to accept positions within government to drive the reform.  Prospects for working with the Ministry of Finance were promising.   Finally, the elusive winning conditions were in place. Accordingly, I advised DfID that, after four years, the reforms should proceed. 

Two key government appointments, however, dramatically altered the reform landscape.  First, the new head of the Cabinet Office was uninterested in policy and believed that her exclusive job was to ensure the legal quality of ministry laws and regulations.  More damaging was the Deputy Secretary.  He was young, had worked in Parliament and was interested in IT systems.  Sadly, it turned out that there was little else he was interested in.  His vision consisted of a vast IT system feeding him information on everything everyone was doing.  He wasn't exactly sure what he would do with this information, but it certainly would be a cool thing to have.  Although he begrudgingly accepted the reforms being pushed on him, and, even more begrudgingly, accepted that a female head from one of the DfID teams might lead the reforms, he continually obstructed progress.  For example, he forbid staff to consult with the Ministry of Finance or the Prime Minister's advisors and constantly disparaged and undermined the eminently qualified local consultant.  Ultimately she left and the reforms once again faltered.  It should of course have been possible to replace him, but he was well-connected in the party and the donors did not want to force this issue early in the life of the new government.

Sour grapes on my part?  Yes, definitely, but this underscores how much having the right people in the right place matters when the stars align.  Reform environments are particularly precarious during the early years and typically depend on a very small circle of well-placed champions.  The Lithuanian example, where the Prime Minister was the lead advocate, is hardly the norm.  In Albania, where reforms did work (a discussion for another day), the initial momentum was established by one adviser in the Prime Minister's Office, the Budget Director, a director in the European Integration agency and a few supporting consultants.  The politicians did not engage for several months and it was a couple of years before critical mass was secured. 
« Last Edit: October 14, 2014, 18:10:18 GMT by Napodano »

Gord Evans

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SETTING PRIORITIES IN REVERSE - WHAT TO CUT?

Well-functioning governments expend considerable effort to establish and secure funding for new, high-priority policies and programs.  Options are identified, ex-ante impact assessments completed, and multi-year, budgetary requirements established.  The budget process provides the funnel through which competing policies are prioritized and resourced.  Much care, thoughtful deliberation and decision-making time, in inter-ministerial committees, private briefings and eventually at Cabinet, are invested by decision makers in getting these choices right.

The same is rarely true for the reverse process: deciding what to cut, particularly during periods of severe fiscal crisis where the cuts are so severe that the required savings target cannot be reached without extensive restructuring or elimination of programs and services.  To arrive at the right mix of cuts, the government usually tasks the Ministry of Finance, sometimes in collaboration with Cabinet Office, with leading the process.  Although ministries will be involved, it is generally assumed that they will not be forthright in offering up potential cuts.  This leaves the Ministry of Finance to take the lead and wield the blunt axe as required. 

Unlike policy development, policy withdrawal is not something that is informed by an inclusive consultation process (too politically contentious) or a methodical decision-making process (too many cuts are being considered concurrently).  Rather than carefully constructed policy options papers, the government is presented with lists of projects or initiatives to be cut (in one exercise I was involved with in Canada, over 400 programs/initiatives were included on a list presented at Cabinet).  Usually, some form of briefing note with one or two sentences on potential impacts is prepared by Finance or Cabinet Office.  Given political pressures to get the bad news out all at once and fast (it is difficult for the media to decide where to focus any criticism when it all comes at once), there will only be time to look in-depth at the most contentious, far-reaching cuts.  For most items, mention on a list and perhaps in a briefing note will be the extent of information that Cabinet sees. 

With so many decisions taken so quickly, things rarely unfold according to plan.  Given the relative speed and lack of depth to the process, unanticipated consequences are inevitable, particularly where there are cross-cutting impacts.  So the bad news keeps on coming, sometimes in torrents, sometimes in trickles.  Some backtracking will occur, some changes will be made.  Although the communications plan will insist that the government return to a more positive decision-making environment as soon as possible, this is easier said than done.

So, is there anything that can be done to make this less painful?  In truth, not a huge amount.  Nonetheless, if ministries do invest in understanding their programs, take performance measurement seriously, periodically conduct meaningful program assessments/evaluations and simulate cost-cutting scenarios when there is time to think things through, then the chances of surviving the cuts less scathed increase.

At the government level, Cabinet Office and the Ministry of Finance should work together, before a fiscal crisis occurs, to identify the best way to triage and present large volumes of decisions in a way that enables politicians to understand the major decisions they are being asked to make.  Any incentives to promote meaningful ministry participation and reduce gaming will also be helpful.  The goal of the exercise is to reach the savings target while incurring the least amount of political damage.  A well-crafted expenditure reduction process, fed by previously considered ministry proposals, will contribute significantly to that outcome.
« Last Edit: October 14, 2014, 18:10:40 GMT by Napodano »

Gord Evans

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SORTING OUT THE DOG'S BREAKFAST

Time to meander down the lessons-learned path once again.  In previous PFM posts, I discussed a policy management/PFM reform that worked (Lithuania)  and then a couple that didn’t (Romania, Serbia).  Wanting to start off the New Year, let alone the Year of the Goat, on a positive note, I will, goat-like, kick off with one project that worked quite well for quite awhile, although it has apparently experienced some backsliding of late: Albania.

For me, it all began when a colleague at the World Bank asked me to drop by Albania to provide my impressions of what he described as an unsavoury dog’s breakfast of reforms at the centre of government.  So, I did the usual tour of senior government officials to get their take on this breakfast of no champions.  My World Bank colleague had, in fact, understated the depth of malaise inflicted on poor Albania by a combination of overzealous donors, under-qualified consultants and empire-building project leads.  The country was suffering from a toxic mix of priorityitis (a plethora of approved “strategies” promoting over 1000 “priorities”), strategy envy (my strategy is bigger than yours) and donor-inspired perversities (e.g., an exotic database in the Cabinet Office that tracked an eclectic group of sundry ministry actions in the belief that a definitive ministry performance indicator would miraculously emerge).  At least seven core government-wide policy and financial management processes (national planning; policy formulation; sector strategies; budget formulation; EU integration; public investment planning; performance monitoring), supplemented by such hoary reform chestnuts as functional reviews and civil service reform, were all charging off along their own paths oblivious to each other in an apparent attempt to test the limits of chaos theory. 

At some point, I started to do the rounds of whatever TA was in town and agreed to meet a PFM team working with the Ministry of Finance on “Strengthening Public Expenditure Management” (yes, we tried, unsuccessfully, to convince them to add “revenue” as part of their project title just to flesh out the acronym).  I met with the PFM consultants over a drink (well, maybe it was more than one) at the top of a revolving tower high over Tirana.  Turns out they’d been working for some time in MoF to convert hardened devotees of incremental, line-object budgeting to an approach that would emphasize the policy assumptions underpinning expenditures.  Now to a centre of government guy, to hear anyone on the PFM side use the word “policy,” without it being circumscribed by adjectives such as macro, fiscal, structural, expenditure or wage, is siren-like.  However, my PFM colleagues had a problem: lots of high-quality content, but nowhere to sell their wares. 

At another port of call, I met an Albanian consultant working on EU integration who was appalled at the current reform smorgasbord which clearly was not contributing and likely impairing Albania’s efforts to join Europe.  He proved a good sounding board, ever-willing to tell me, in response to sentences that I began with “what if...”, that “no, that won’t work in Albania.”  However, in general, he felt his EU integration clients would be reasonably open to and well-served by policy and budget planning processes that were not only mutually reinforcing, but joined-at-the-hip to EU integration. 

Persuaded to make a few more visits, the search began in earnest for that most elusive and valuable of reform needs, someone with political access who would understand that the Prime Minister’s interests would be well-served by sorting out this mess.  That person appeared in the form of the Prime Minister’s economic adviser who cringed at the avalanche of disconnected, incoherent, unaffordable proposals being walked into Cabinet every week by over-enthusiastic, under-informed Ministers.  She quickly agreed that this had to stop and, with the Prime Minister’s blessing, personally offered to lead a technical working group with representatives from Cabinet Office, MoF (Strategy & Budget Depts.), Economy (then in charge of public investment planning) and EU Integration plus their TA advisors.  The group was quickly formed by Prime Minister’s Order. 

Over the next few months, ten technical papers were presented covering everything from decision-making structures and strategic planning to budgeting methodology and harmonizing the EU integration process.  Ultimately, a concept paper was developed and presented to Cabinet.  Although quite technical for a Cabinet paper, it was framed by a strong political argument that decision makers would benefit from and had every right to demand a manageable, coherent, affordable, integrated planning system.  Moreover, the paper proposed that the Prime Minister and Ministers take the lead in setting the priorities that would drive this process.  To fulfill this role effectively, they required credible policy options and high-quality analysis and an appropriate decision-making forum for such deliberations.  At Cabinet, while strongly supporting the proposal, Ministers expressed some frustration that they had not done this sooner.  Thus the Integrated Planning System, with the snappy acronym IPS, was approved.  However, it was never implemented by that Government because of an event which is presumably good for things like freedom, human rights, social well-being et al, but can really screw up project momentum: a general election.

A new government arrived in due course, usually the death knell to all things approved by the previous one.  But then a curious thing happened.  The donor community, most notably the World Bank, DfID, European Commission and UNDP, which had been pleasantly surprised and increasingly supportive of this relatively quick coming together of ideas, technical advice and political support through the technical working group process, met with and made a strong case to the incoming Government that they take a close look at the IPS proposal.  This task fell to one of the new PM’s senior advisors.  After due diligence, she reported to the PM that not only was this worthwhile, but, if he was willing to drive the process, she would be willing to make it happen on the ground.  Consequently, the Strategic Planning Committee, chaired by the Prime Minister, was established and the advisor duly appointed as Head of the newly-formed Department for Strategy & Donor Coordination in the Prime Minister’s Office. 

Over the next few years, the reforms unfolded, not perfectly, but in a remarkably sensible, coherent fashion.  Political access continued; central institutions collaborated; the Albanian leads became ascendant in the public administration; ministries succumbed and occasionally subscribed; consultants worked collaboratively; donors generally remained on the same page.  For the most part, a reform success story.
Since I am a consultant, I feel obliged to conclude with a few critical success factors.

•   POLITICAL APPEAL: We framed the problem as political (Prime Minister, you receive disjointed, poor quality recommendations that will prevent you from keeping your promises; you deserve better) rather than technical (the policy and financial planning systems are disconnected and will produce inconsistent, unaffordable outcomes – yawn).  This was crucial to convincing two Prime Ministers that this esoteric set of process improvements merited their attention.

•   ACCESS:  Securing the hands-on involvement and support (twice) of a senior advisor to the Prime Minister was crucial.  When roadblocks arose, she could go to the PM or call Ministers or State Secretaries directly to deal with the problem.
 
•   COMMITMENT: The Albanians leading the IPS really did believe that this would make that proverbial difference.  In a work culture which thrives on personal connections, their commitment rubbed off on others to the point where a critical mass eventually formed.
 
•   TRIANGULATION:  By having the Prime Minister’s Office, Ministry of Finance and European Integration Agency (later Ministry) all involved, a tactical approach to the reform process evolved where pressure could be applied concurrently or selectively from multiple entry points.  At the political level, it provided the PM, Minister of Finance and EU Minister a chance to forge a unified position on the fiscal framework and priorities before opening the budget up to all the usual lobbying and side conversations from individual Ministers.  At the implementation level, if momentum was flagging or an important proposal was encountering internal resistance, it could be advanced by another.
 
•   STEALTH CONSULTING: The technical advisers worked closely and intensively behind-the-scenes to ensure a coherent technical package, keep donors on board and, periodically, pre-empt or at least diffuse prospective organizational clashes.

•   MARRYING CONTENT TO ACCESS.  At the outset of the IPS process, the PFM material was well developed, but was encountering difficulty gaining any political traction.  On the policy management side, we had just created a political forum for the Prime Minister, but had very little of substance to present since the new strategy unit was just being formed.  Having got the Prime Minister’s attention, you can’t just say “see you in six months while we think of something to present.”  But fortunately, we had a prodigious volume of PFM material ready, willing and eager to go.  Wonderful marriage of convenience - Demand do you take Supply to be your lawfully wedded output? 
 
•   BRANDING: Now I usually recoil any time anyone uses this term, especially in the governance field (a Nike swoosh on the cover of the budget policy statement?).  And as a long-time policy guy, it’s been disheartening to watch communications displace policy as the primary driver of political decision-making.  Nonetheless, we did not discourage the quasi-branding of IPS in Albania (T-shirts were pondered but there are limits)  and did little to stop the IPS bandwagon from forming.  The risk of over-selling was real, but, overall, the internal pride, goodwill and momentum generated by this made-in-Albania breakthrough was well worth the occasional touch of hyperbole. 

So, there we have it.  Some fodder to ruminate/ruminant on in the Year of the Goat.

Postscript.  I’m told that IPS has fallen on harder times these days and the rigour of planning and budgeting is not what it was.  Haven’t been back to Albania, but from my own experience this happens everywhere.  Invariably, some combination of process fatigue, change for change’s sake, and planning entropy gradually chips away at the prevailing system which is ultimately deemed to have exceeded its “best before” date.  Eventually, however, some future government, sick and tired of clueless ministry proposals with no chance of ever being funded, will demand that policy and budget choices should perhaps be made together.  It won’t be called IPS, because it will have to be touted as a bold new initiative of the forward-thinking new government, but it will address those same problems confronted when I was first exposed to Albania’s unsavoury dog’s breakfast of reforms in 2003.  If this realization does not take too long, those who formerly worked with the previous system will quietly dust off the old manuals, change the acronym, and get back to ensuring that the word “policy” does find its way into financial planning.

A good memory.  Many thanks to the numerous Albanian colleagues and that small group of internationals (many of whom are regular contributors to the PFM Board) who were part of this governance adventure.  Gëzuar (you can look it up in Google Translate)
« Last Edit: March 03, 2015, 09:06:58 GMT by Napodano »

Gord Evans

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Re: Professional Diaries #1: Integrated Planning: the Good, the Bad and the Ugly
« Reply #6 on: September 18, 2015, 13:22:24 GMT »
REFLECTIONS ON A CAREER IN CONSULTING – WHAT NOT TO DO

The development consulting profession has, often justly, come under sustained attack in recent years.  We’ve all seen them – the cynical, ruddy-faced, washed-up resident consultant dispensing generic advice between shots of the local brandy; lavishly budgeted and staffed projects churning out glossy report after glossy report with little chance of anyone reading, let alone implementing the recommendations; donors pushing beneficiaries to sign onto the latest governance fad regardless of its applicability to the actual problems being faced in-country. 

Criticism is not just coming from entrenched skeptics (Dambisa Moyo, William Easterly, et al), but from self assessments by development institutions.  Internal evaluations by the World Bank have highlighted public sector reforms as being particularly prone to having less-than-stellar impacts.  Matt Andrews work (check out the “fireplace conversation” with Matt elsewhere on this website), underscores the perils of flogging cookie-cutter approaches by the development community based on best-practice approaches from developed countries.  So, why work in this area at all?

For my final post, I thought I’d offer a few reflections on our oft-maligned profession.  So as to end positively, I’ll start with what, in my experience, does not work.
When I left government to embark on an international consulting career seventeen years ago, I was expecting to find work helping governments do similar tasks that I had performed or encountered within the Canadian government.  There, consultants were often contracted to assist government departments solve a problem, complete a task beyond the skill set of existing staff or, occasionally, provide a fresh perspective on some particularly vexing issue.   

To my initial surprise, consulting in the governance industry worked quite differently.  The majority of projects I encountered comprised a phalanx of international and local consultants working in a project office (sometimes near the client; sometimes not) trying to implement a far-reaching, multi-pronged reform in three years or less. 

The biggest of all was termed public administration reform, or PAR.  Here, governments were somehow convinced that what they needed to do was concurrently, rapidly and comprehensively change their existing approach to managing the civil service, structuring their organizations, training their staff, formulating multi-year budgets, preparing and reviewing policy and legal documents, making decisions, monitoring results, auditing themselves, fighting corruption, eliminating red tape from regulations, mainstreaming gender equality, delivering services to citizens, introducing e-government, consulting with external stakeholders, strengthening public accountability, decentralizing to local government, interacting with parliament and, in case they weren’t busy enough, eliminating poverty by radically restructuring their health, pension, education and social assistance sectors while fostering the expansion of their private sectors and reducing the wage bill .  Not surprisingly, PAR work plans tended to be Tolstoyan in their breadth and scope, testing the outer limits of complexity theory while proving that it is possible to coordinate yourself into total paralysis.

Another favourite was the iconic whole-of-government functional review, which remarkably persists today.  Here, hordes of consultants were brought in to streamline government, eliminate duplication and increase productivity – what government would not want that?  Fanning out across government, the review teams compiled incredibly complex tables of functions, sub-functions and sub-sub functions (most often unrelated to the budget structure) which then fed into a master design indicating that by consolidating, eliminating, divesting, deconcentrating and/or decentralizing various functions, government could function more efficiently with fewer ministries, many fewer agencies and many, many fewer employees.  At some point, an impressive and encyclopaedic report would be submitted for approval to Cabinet.  At this point, the Prime Minister finally realizes that streamlining government, however appealing it sounds, means breaking up his Cabinet, terminating rafts of patronage appointments in agencies and provoking a civil service strike by laying off hundreds of staff.  Needless to say, while thanks was duly expressed to the functional review teams for their thoughtful advice, implementation was felt to require a little more thought...indefinitely.

And then there was cumulative effect.  While implementing a full-fledged PAR reform could keep a government and civil service actively engaged for a decade or more in a developed country, it was just one among many reforms being urged on the beneficiary developing country.  Each and every sector had its own donors and consulting teams overhauling the way that sector delivered its services.  Perversely, it seemed that the less able a country was to absorb aid, the more it received – Let’s call it the donor Disneyland paradox

I could go on, but you get the idea.  (Excuse the biblical paraphrase)  I certainly did wonder at times why we were doing unto others what we would never do unto ourselves.  Yes, the context is different in developing countries, but the demands on government are pretty much the same.

REFLECTIONS ON A CAREER IN CONSULTING – WHAT TO DO

Fortunately, amid the chaotic swirl of public sector reforms, I did find some familiar terrain and tangible problems that seemed worth tackling.  In my field, this meant working with a Prime Minister’s/Cabinet Office to improve the quality of policy advice and planning provided to decision makers.  In most countries, I found others, usually across the street, helping the Ministry of Finance prepare and oversee the implementation of better budgets.  Together, these organizations can make a lot happen across government.

Working at the centre is always high risk/high reward and I’ve described in earlier posts both successes and failures.  As for the keys to effective engagements, in true consultant fashion, let’s look at a few critical success factors.

1.  Don’t overreach: Things tend to work best when the task is initially defined and perceived as strengthening rather than reforming the centre of government.  Every now and then a Prime Minister gets excited about doing this, makes a lot happen very quickly, and rightfully decides that this should be touted as a big reform – this is fine, of course, but should not be the assumption going in.  What one can do is find out what problems are facing senior management and provide pragmatic advice on solving them; i.e., take something off their plate rather than heaping ten new things on it.  This makes their day job easier, builds rapport and makes your arrival in the office a welcome rather than anxiety-inducing event.  Work with them, not at them.  Over time, if things go well, the Prime Minister may notice that his or her office is starting to function more effectively and may give it more authority and face-time.  In turn, this increases the office’s stature at the centre and across government.  At this point, and especially in those project reports back to the sponsoring donor, feel free to refer to the successful completion of a series of client-identified problem-solving tasks as a gloriously-conceived, flawlessly executed reform package.   

2. Pick the most viable entry point.  Various assessments have identified anywhere between 6 and 10 core coordinating functions of Prime Ministers or Cabinet Offices.  Sometimes one might begin with strengthening policy coordination and the quality of ministry policy proposals (e.g., Latvia), sometimes with strategic planning (e.g., Lithuania), sometimes with a Government Work Plan (e.g., Romania), sometimes with the office organization (e.g. Palestine).  To some degree this reiterates the previous CSF – begin with something that your client needs now.       

3. Engage the political level: A Prime Minister, Minister of Finance or Chief of Staff will rarely be working with you on a weekly basis, but that is no reason to avoid them.  First, you need to understand their needs since the person you are working for works for them.  Second, a gulf often exists between the political and administrative levels.  In such cases, you may be able to play a bridging or legitimization  role.  If your project does not have any political access, the risk of it failing at the approval and implementation stages increases significantly.  Finally, it also gives one the opportunity to pre-empt or at least limit failure.  If the political level is truly disinterested in the improvements one has been asked to make, then the project should be refocused on matters that can be addressed by the administrative level, or, in extreme circumstances, discontinued.  In a couple of instances, over the years, I have in essence fired myself.  Although disappointing, such consultancy mercy killings are ultimately better for the donor, client and consultant.   

4. Make your own connections: For any number of reasons, governments tend to work in silos.  However, in any government one silo that must be broken is the one between the Ministry of Finance and the centre of government.  Otherwise, disconnected policy, planning and budget processes will ultimately fail at the implementation stage.  If these two critical areas do not interact, try and make it happen.  If you are working on a PFM project, make sure you connect with whomever is working with the Prime Minister’s/Cabinet Office or vice versa.  And then encourage your respective clients, at the appropriate time, to work together.  If that works, go meet some people in ministries.  Central institutions, however important they perceive themselves to be, do not implement anything.  If line ministries are ignoring all those cleverly-formulated directives from the centre, their impact outside the government building will be zero.

5. Avoid loitering: Curiously, the term “fly-in, fly-out consultants” is used pejoratively.  Well, that’s what I am, and for good reason.  Senior officials are too busy to have me hanging around their desks for days on end.  And it’s hardly value for money to stash oneself away in a project office for weeks at a time.  I like to arrive, work hard and collaboratively, see the right people, re-energize momentum if required, leave homework and get out of the way.

6. Make time for junior staff: Even the most lacklustre project can be beneficial if it helps some bright, young analyst see a path forward in their public service career.  I can think of several cases where that young person who was somehow always around at coffee breaks or dropped by for an informal chat after work went on to become a superb senior manager, political candidate or consultant.
Well there we are.  Having begun to talk about passing one’s knowledge on to the younger generation, I am clearly at risk of crossing the geezer threshold – my pet term for consultants who have exceeded their best before date and spout random, largely irrelevant pearls of “wisdom” while regaling anyone who will listen with mostly tedious anecdotes from projects past. 

As I reflect back on the last seventeen years, I can say that nothing I did increased any nation’s GDP or even their percentile on the World Bank’s governance indicator for government effectiveness.  However, I do feel that I was reasonably nimble in avoiding dead-end projects and did help a number of high-calibre public officials around the world solve some pressing problems.  In several cases, over time, this produced a better-managed PM/Cabinet Office able to coordinate effectively with the Ministry of Finance and line ministries.  Such an outcome was always considered valuable in the Canadian government.  I would like to think the same holds true in the over 25 countries in which I have worked since.  And, of course, I did meet a lot of great people and did have a great deal of fun.  Bon voyage with your careers.


harnett

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Re: Professional Diaries #1: Integrated Planning: the Good, the Bad and the Ugly
« Reply #7 on: September 19, 2015, 09:13:00 GMT »
Greetings from Albania and what's more from an attempt to resuscitate the IPS (through the vehicle of an MOF functional review - Arggh).  Not looking easy!!  Thanks for the posts -  the best things I've read in a long time.  Gëzuar

sybihida

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Re: Professional Diaries #1: Integrated Planning: the Good, the Bad and the Ugly
« Reply #8 on: September 24, 2015, 08:34:47 GMT »
Gëzuar from Mauritius! It has been nice to read Gord's work and pleasant to discuss with him as a civil servant, but very helpful to read his advice in our job as consultants.  Thanks Gord.

 

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