Medium Term Expenditure Framework > Public expenditure management

Improving the Management of Public Expenditures: Evidence from India

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Anand:


I am Anand P Gupta, Director, Economic Management Institute, New Delhi, and Member, Board of Directors, IC Centre for Governance, New Delhi.  A former Professor of Economics and Chairman, Economics Area, Indian Institute of Management, Ahmedabad, Public Finance and Fiscal Policy Specialist at The World Bank, Guest Scholar at the Brookings Institution and Visiting Scholar at the George Mason University's Center for Study of Public Choice, I have published the attached article in the July 2015 issue of The Journal of Governance.  I will greatly appreciate your advice and comments.

Napodano:
Hi, Anand;

Welcome to the PFM Board. I read your article with interest.

On the aspects of Performance Budgeting, it takes time to make it work as it requires a cultural shift in civil servants. What is essential is a continuous commitment by the Prime Minister Office (PMO) to request quality information out of the outcome targeting (better saying ‘forecasting) and the M&E of those outcomes . This information needs to be debated in dedicated meetings of the Council of Ministers or other Central Economic Committees , which the Prime Minister attends in person and where he makes an alliance with the Minister of Finance to ensure the credibility of the performance system. A dedicated service in the Prime Minister Office  should work hand-in-hand with the MoF Budget Dept. to meaningfully review and use this information for future planning and expenditure allocations. In this way Line Ministers will take notice.

For a good practice on Performance Budgeting and the link to planning you could have a look at the experience in Albania. Attached to this post you have a short presentation about the institutional set-up in Albania PMO. You could also read the professional diaries of Gordon Evans at http://pfmboard.com/index.php?topic=7363.0

Let’s see what other PFM Board members have to say.

Cheers, Mauro

Napodano:
Another example of a program budget, from a large country this time, is Brazil.
From http://www.planejamento.gov.br/assuntos/planejamento-e-investimentos/plano-plurianual/o-ppa you can download the Brazilian MTEF (PPA). It is in Portuguese only, though.

John Short:
As well as the Fireside Chat with Gord Evans there is the Fireside Chat with Marc Robinson with a good interplay Q&A and comments.

FitzFord:
Anand,

I tried earlier in this discussion to respond to well known but frustrating designing and management financial programs in India. I am glad that you have taken on the task, with your knowledge of both the subject and the country. I have been thinking about whether the types of problems and barriers may be addressed by a radical approach (not just in India). In précis, it is making use of the technology that can convey realities of performance and results  essentially immediately. Health delivery may be observed in any part of the country to any other part, the effect of floods similarly including projecting the likely consequence on roads, disease and loss of agricultural production. The list is, as you know, of much of meaningful performance in almost all spheres public services is substantial and can be made transparent. There are, of course, cultural differences that would determine responding, interpretation and reaction (Francis Fukuyama...) but opening these gates may (most likely?) open the society as a whole, to changes, hopefully, more in positive directions, rather crashing into the same walls.

If this approach seems useful to your direction, please let me know.

Fitz.

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