Has there ever been a donor analysis of a developing country that has not lamented the government's apparent inability to "set priorities" and duly counseled that going forward the government should make some tough choices among competing priorities and ensure that the budget is aligned with national policy priorities. Certainly sounds sensible. Why then is this so hard to do?
First, let's look at developed countries, which also like to have priorities. In practice, this usually means that the Prime Minister or Minister of Finance will make some kind of annual address or speech in which four or five themes or commitments will be suggested, each of which will likely involve a piece of legislation and/or some expenditure shifts. In some instances, a deeper sector reform may be promised, but rarely more than one. Well, that certainly does seem to meet the spirit of priority-setting. Now, let's turn back to developing countries, and use the EU aspirant countries as examples. Here, concurrently, governments will be typically pressured to:
1. (from the IMF) review all government programs to achieve wage bill savings of x%, while divesting or cutting subsidies to sundry state-owned enterprises:
2. (from the World Bank) dramatically reform their social protection, health, education, business regulation, public finance and infrastructure planning sectors as per the appended three-year matrix; and
3. (from the EC) implement the 120,000 page acquis communitaire and the related hundreds of actions set out in the multi-year indicative plan.
4. (from other donors) develop medium term sector strategies for anything not covered by the above and implement service-wide capacity building programs. Tome-length action plans will be developed for each to be rigorously implemented and monitored by a beleaguered government and an overwhelmed, underfunded public administration.
A couple of years on, the next round of donor analyses will assess that the government is apparently unable to "set priorities" and going forward should make some tough choices among competing priorities and ensure that the budget is aligned with national policy priorities.
