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.
