Author Topic: Conversation with Gord Evans on integrated planning system  (Read 45327 times)

Napodano

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Conversation with Gord Evans on integrated planning system
« on: March 07, 2011, 08:30:53 GMT »
For our second conversation on the Board, it is a big pleasure for me personally to have Gord Evans, a colleague and a friend whom I met in Albania. He is a free-lance with extensive experience in public administration reform, in particular on strategy planning.

His experience is especially important for us PFM Boarders, when discussing the fundamental links to policy of medium term expenditure frameworks (MTEF's). This aspect of the budget reform is often referred to as Integrated Planning System.

If you are a registered member of the Board, you have the possibility to pose a question to Gord by making a post (REPLY button) to this topic. The time allotted for questions is  Monday 7th to Wednesday 16th March 2011. After this period the interview will be closed and remain in the archive for future reference.


Gord, welcome on the Board. Let me kick off the conversation by asking

Question 1 how would you define "integrated planning”, when did it take hold as a concept, and what is its relevance as a development strategy?

Question 2 can you contextualize the integrated planning system within a couple of countries where you have provided your advisory services?
« Last Edit: March 07, 2011, 09:51:42 GMT by Napodano »

Re: Conversation with Gord Evans on integrated planning system
« Reply #1 on: March 07, 2011, 09:21:50 GMT »
Dear Gord,

Question 3: I would be very interested in getting your views on possible / reliable links between integrated planning system and MTEF (as budget tool). Mainly regarding the timeframe on outter years (from 3 to 5?)

Guillaume Barraut
« Last Edit: March 07, 2011, 09:27:41 GMT by Napodano »

Gord Evans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #2 on: March 07, 2011, 17:06:22 GMT »
Greetings PFM nation.  First to Mauro's lead questions. 

Answer to question 1 - Broadly, the concept of integrated planning emerged in the late 1960s with the introduction of PPBS in the United States.  Although PPBS was ultimately found to be overly complex, it did set in motion an acceptance that political and/or policy (same word in most languages) decisions needed to be directly linked to fiscal decisions and vice versa.  Basically, integrated planning is the attempt by governments to do just that.  Of course, what sounds eminently logical and practical in theory has proven enormously complex to implement in practice.  Over the succeeding decades, numerous variants of PPBS have tried to bridge this gap, some with more success than others.  A good summation of the dilemma can be found in Allen Schick's 2004 presentation title: "Why efforts to integrate planning and budgeting usually fail...and why it is important that they succeed."

The most common problem is that, too often, the institutional worlds of policy/politics (i.e., the government led by a president or prime minister) and finances (led by the Minister of Finance) operate more like parallel universes than two parts of a whole.  For instance, an MTEF can very adroitly set out the sector priorities and fiscal envelopes within an aggregate expenditure envelope, receive favourable comments from the IMF and World Bank, and even pass through the Government with barely a word changed.  However, this does not mean that the MTEF will actually be implemented.  For one thing, it is typically a very long document that few Prime Ministers or Ministers will have read; second, the way in which the weekly business of government/cabinet meetings is structured (most of their time is spent reviewing individual draft laws or policy proposals) does not seem to connect to the MTEF in any tangible way.  We can explore this disconnect further another time, but it is at the root of non-integrated planning.

Answer to question 2 - Integrated planning has increasingly been looked to as a development strategy in response to frustrations with unimplemented national development plans/strategies, unfunded mandates for numreous approved laws, and ever-increasing fiscal pressures from cabinet decisions that were not  properly vetted for fiscal impact. 

Two examples of countries that have implemented integrated planning include Lithuania, which implemented a strategic planning system in 2000 that was tied directly to budget planning and Albania, which implemented a similar approach in 2005.  Neither system is perfect, but those who work at the centre of government would agree that this approach did significantly improve the capacity of the government to plan and spend more realistically.  In Lithuania's case, a 2006 World Bank Report (Administrative Capacity in New Member States: The Limits of Innovation) observed that this reform had been a key reason why Lithuania was able to avoid the decline of administrative capacity that had occurred in other new member states.  So let's leave this here for now.  It would be interesting to hear from other countries how their governments link (or not) policy/political decision-making with macro/fiscal decision-making and whether any of this actually affects policy or program implementation.
« Last Edit: March 08, 2011, 13:56:55 GMT by Napodano »

Gord Evans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #3 on: March 07, 2011, 20:04:48 GMT »
Answer to Question 3

We have dealt a little with MTEFs already, but this question raises the interesting point about the link between policy/political decisions and the outer (3-5) years of the MTEF.  Most significant policy decisions do not have an immediate (i.e., within the current budget year) fiscal impact since they typically set out a medium to longer-term path for changes to a particular sector or sector program.  To implement these changes may involve a multi-year process requiring the approval of a law, then implementing regulations, then start up activities (e.g., hiring staff); and finally implementation.  Major changes, for example to health care, education or legal systems, can be very costly although the fully annualized cost may not be realized for several years following the approval of the policy.  In poorly integrated systems, the fiscal consequences are addressed through the budget process when they become relevant to an upcoming budget year.  Basically, the ministry points out in their budget submission that they need the money to implement what is now a legal obligation.  The Ministry of Finance then responds as expected (sorry there is very little or no money for that) and an unfunded mandate begins.  Compound this across multiple sectors and dozens of laws and a serious credibility problem for the government begins to exist (they cannot keep their promises or adhere to the law).     

In a more integrated system, the potential multi-year fiscal impact is assessed at the time a policy is approved by government and revisited again as it progresses through the legal approval and implementation stages.  In this way, the Ministry of Finance can continually adjust their medium-term fiscal plan to accommodate future cost pressures.  To ensure the government is onside, there will be a regular mechanism where these impacts are discussed at the political level.  To give one example (from Ontario Canada), the Minister of Finance would present a quarterly fiscal update to a small committee of senior ministers chaired by the Premier that indicated the individual and cumulative fiscal effect of actual government policy decisions, potential government policy decisions (i.e., public political commitments) and other cost pressures looking several years forward.  In this way, the government would then decide how best to manage it; i.e., changes in revenue policies; adjustments to implementation time frames; imposition of savings targets in low priority areas; etc.  Although these deliberations did not appear in a public document (i.e., Canada's equivalent of the MTEF), they did serve as a continuous unofficial MTEF that looked up to 5 years ahead and anticipated and managed potential shocks that would otherwise have appeared in the public document (published semi-annually).   If there was one factor that made this work, it was that the Premier and the Minsiter of Finance, along with senior ministers, were in the same room, working with the same information, and agreeing on a path that was sustainable in both financial and political terms.
« Last Edit: March 07, 2011, 20:46:32 GMT by Napodano »

John Short

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Re: Conversation with Gord Evans on integrated planning system
« Reply #4 on: March 07, 2011, 21:12:06 GMT »
Question 4

Gord,

Greetings from Pristina

In a non IPS system do you think Spending Reviews which cover the next three years as in the UK would somehow act as a half (or three-quarter) way house?  They should review individual sectoral policies, plans and programmes in the context of some resource constraint and get thrown into the overall horse-trading at the MoF level without necessarily benefiting from the whole of the IPS process.
« Last Edit: March 07, 2011, 22:19:59 GMT by Napodano »

Eugene McQuaid

Re: Conversation with Gord Evans on integrated planning system
« Reply #5 on: March 08, 2011, 07:28:00 GMT »
Gord,

Good morning from Qatar,

Ref Q1: Your comment on the institutional realities and disconnect i.e. parallel universes than two parts of a whole hits a cord. We experienced this issue in MoF, Bangladesh during  the mid-2000's. In attempt to improve the appetite for readership and in an effort to address the institutional disconnect we considered the concept of an MTEF 'light' (naturally using the MTBF as the starting point - salient features etc).

Unfortunately, the concept note never made the light of day and thus,

Question 5 -  I would be most interested to hear if this approach has been adopted or even discussed in your experience?...personal experience has a way of repeating itself so I am most grateful for any relevant insight.

Many thanks, Eugene
« Last Edit: March 08, 2011, 08:09:57 GMT by Napodano »

Glen Wright

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Re: Conversation with Gord Evans on integrated planning system
« Reply #6 on: March 08, 2011, 13:06:59 GMT »
Question 6: Are there some assessments of IPS on a country basis that you can identify.  Much has been written about MTEFs, but I don't know of anything on IPS.  Are there not enough examples other than the ones you have identified, Lithuania and Albania, and more emphasis needs to be given to implementing IPS prior to implementing or in parallel with implementing MTEF.
« Last Edit: March 08, 2011, 13:11:48 GMT by Napodano »

Gord Evans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #7 on: March 08, 2011, 16:17:57 GMT »
Answer to Question 4

Greetings John, and thanks for raising the issue of what to do in non-IPS systems (which are in no danger of extinction).  The spending review, whether one-time or cyclical, represents a powerful tool that can be used to link policy and financial planning.  Broadly, such reviews assess whether existing expenditures have produced the desired results in a cost-effective manner and, by extension, whether future planned expenditures will achieve future desired results.  Since such discussions invariably raise both policy and financial considerations together, they definitely have potential to bridge, at least partially, the policy-financial universes.
But, as you say, this is a half-way approach. 

Commonly, obstacles may arise which limit the effectiveness of these exercises.  The first regards the quality of information; i.e., does anyone really know what outputs are being produced with what specific expenditures?  The second regards the ongoing government decision-making process which, operating in relative isolation from the financial processes, may inadvertently supersede the spending reviews by foisting new demands on a sector as new policies/regulations/laws are approved without a fiscal impact assessment and without reference to the spending review.

On balance, though, spending reviews do serve to raise these linkages and may even serve to initiate a dialogue on removing the above obstacles.  Half an answer is clearly superior to none.

Answer to Question 5

The issue of “MTEF light” revisits the issue of incomprehensible financial documents that are only ever read by budget analysts or IFI officials.  Certainly, there is a compelling case to produce these.  In a sense, the various “Citizens’ Guides to the Budget” respond to this need.

However, this is different than the type of document that would be produced for a cabinet or cabinet committee meeting.  Many countries have strict rules about the way information is presented to decision makers (several countries’ procedures guides are public, but these do not cover how budget-related material, which has special confidentiality provisions, should be presented).  In particular, lengthy documents without clear, explicit decision points (such as most MTEF documents) would never be permitted.  So how is such information presented?

Unfortunately, these documents are usually confidential so there are not many public examples.  Drawing on my own experience though, a series of presentations (averaging 10 pages) would be prepared (often jointly by the Prime Minister’s/Cabinet Office and Ministry of Finance) for the Prime Minister, Minister of Finance and senior Ministers which set out the macro/fiscal framework and a series of options on major new policies and the related new spending; spending cuts; and revenue options.  These would be debated and instructions issued to return with different options or more analysis of impacts (policy as well as fiscal impacts would always be included).  Over three or four meetings, and sometimes a Cabinet retreat, the fiscal framework would be finalized along a broad agreement on policy priorities, major cuts, revenue decisions, and shifts in expenditure.  This then served as the input to the eventual budget speech and document (i.e., MTEF equivalent).  The key to a successful process was to present these options concisely and in a way that was meaningful to the decision makers.

Answer to Question 6

Here it is important to distinguish between the term “integrated planning system” and the principles (linking policy and financial planning) that are the basis of IPS systems.  In Albania or the US Homeland Security department, “IPS” is a brand name that describes a particular planning system.  However, numerous countries (mostly but not exclusively developed countries) have IPS systems; they simply call them something else.

I am unaware of any formal assessment of Albania’s IPS, although SIGMA did produce some related analyses on Albania’s policy-making and public expenditure management systems (generally, the assessment was mixed, concluding that IPS had successfully brought together policy and financial decisions and generated political commitment, but that it remained a complex system and that overall policy management and monitoring systems were still weak). 

A partial assessment of Lithuania’s system was conducted through a World Bank Trust Fund; an article on this appeared in a Canadian Journal (I will forward to Mauro for posting).  Also, the previously cited World Bank publication (Administrative Capacity in New Member States: The Limits of Innovation) did assess the current state of Lithuania’s reforms alongside several other new member countries.

Other assessments can be found that do not explicitly relate to integrated planning but touch on these issues.  The Office of the Auditor General (supreme audit institution) may produce reports on financial management systems that address these issues.  Publications such as the OECD Journal of Budgeting do country studies that may deal with such issues.  Governments themselves may request evaluations of their Cabinet Offices (e.g. UK capability reviews).

But this question, and the paucity of relevant assessments, does indicate a major gap.  Although public expenditure management is thoroughly and systematically reviewed through instruments such as PEFA, there is no equivalent on the policy planning side.  PEFA does acknowledge the link, but does not in any way assess how the policy planning and decision-making systems intersect with financial planning systems.  A companion tool is definitely required if both houses are to be put in order.   
« Last Edit: March 08, 2011, 16:55:11 GMT by Napodano »

Frans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #8 on: March 08, 2011, 16:31:36 GMT »
Gord
Greetings from Washington DC.

Question #7
Effective IPS obviously depends on the ability to prepare realistic estimates of the fiscal impact of individual policy decisions. In your experience, what are the main challenges faced by finance and sector ministries in preparing credible estimates and keeping them updated?

Question #8
Countries at different stages of development operate under budget frameworks ranging from quarterly (if not monthly) cash budgets, through credible annual budgets, medium term (3-5 year) budget frameworks and - in a limited number of cases - long term (20-60 years) fiscal projections. Most governments - even in poor countries - continuously take decisions that have implications over at least a 10-year perspective and as you righly point out the implications of a decision often does not show its full impact until several years after it has been taken, e.g. most infrastructure investments have a life exceeding 10 years from project completion. So even an MTEF has limited value from that perspective. Yet long term projections are rare in low and middle income countries and as a global initiative has only been promoted for debt sustainability. What do you see as the main challenges and pre-conditions for successfully moving stepwise up the ladder of gradually longer perspectives in the IPS?

Thanks for this interesting discussion
Frans
« Last Edit: March 08, 2011, 16:36:46 GMT by Napodano »

Henry Higgins

Re: Conversation with Gord Evans on integrated planning system
« Reply #9 on: March 08, 2011, 18:45:37 GMT »
Talofa Gord, from Apia, Samoa (where it is much warmer than Ramallah)

Your example from Ontario, with the Premier and the Minister of Finance being in the same room is telling. A similar process might be the ERC from Australia - the common factor being a policy/planning process that is imposed on or drives the budget process.  A ruling party/government policy agenda is the cornerstone of the budget process.  In most developing countries i have worked in, the PRS or other form of national development plan comes out of the planning ministry department (with at best a sign off by Cabinet), i.e. it is a bureaucratic process, and no matter how sincere and extensive is the consultation process with communities and stakeholders, it will struggle to gain traction with the officials in the other parallel universe of the finance ministry/department, who jealously guard their turf, and whose dealings with Cabinet do not involve the PRS or national development plan. 

Question 9: So would you agree that whilst this parallel universe problem of planning and budgeting processes not meeting is a major problem, it could be overcome if there was sufficiently high level political ownership of both processes from both the premier/prime minister and the finance minister?
« Last Edit: March 08, 2011, 18:52:53 GMT by Napodano »

Albani

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Re: Conversation with Gord Evans on integrated planning system
« Reply #10 on: March 08, 2011, 19:51:11 GMT »
Gord
Greetings from Prishtina
 
Having seen the functioning of IPS in numerous visits in Albania, and the need for Kosovo to establish such system for better performance in some vital processes ahead, and assuming that you are familiar with current situation in Kosovo, I would like to ask as in following:
 
Question #10
Briefly, what needs to be done in order to replicate the Albania IPS in Kosovo under current circumstances?

Thanks for the very interesting discussions
Alban

Napodano

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Re: Conversation with Gord Evans on integrated planning system
« Reply #11 on: March 08, 2011, 20:17:18 GMT »

If I can append a question to that of Albani

Question 10bis
Under what conditions is an integrated planning approach likely to work, or not?  Is there a specific sequence to introduce an integrated planning system?

Gord Evans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #12 on: March 08, 2011, 21:40:47 GMT »
Answer to questions 7 and 8.

Frans; greetings from your weather-challenged neighbour.  As you infer, the practice of estimating fiscal costs of policy/legal decisions is less than stellar in many countries.  A few critical success factors that come to mind (perhaps other readers can suggest additional points) include:

1.   The Ministry of Finance dedicates resources to not only reviewing, but tracking each fiscal commitment and the cumulative effect on the fiscal plan; i.e., they maintain a “living” fiscal plan (with scenarios) that looks at least three years forward (and more for significant long-term investments).  In some countries, I have noticed that multi-year fiscal assessments of future costs are made and validated by the Ministry of Finance for items going to Cabinet, but then disappear into the ether until they crop up again a year or two later in an annual budget request; i.e., no one keeps track of them as they do not affect the immediate budget year.

2.   There is an actual policy process in place which requires not only that policy proposals be accompanied by multi-year fiscal impact assessments, but an also by an explanation of the costing assumptions.  If decision-making simply involves the production of legal texts and an appended explanatory note with a 3-year chart of presumed costs, there is very little chance of accurate fiscal estimates.

3.   The costing assumptions are revisited at several steps along the way towards implementation.  Typically, the initial costing (affecting an outer year of the fiscal plan) will be more of a guestimate than a costing.  However, the costing assumptions should be significantly refined by the time a policy submission is prepared and even more refined after the related implementing regulations have been developed.  MoF’s “living” fiscal plan should continuously incorporate the most current costing information for significant commitments.

4.   The challenge function is alive and well.  This requires that the Ministry of Finance and line ministry are able to challenge each others’ assumptions and arguments.  To do this requires information.   This may come from an accessible archive of prior costing efforts or of comparative expenditure information from other countries or jurisdictions.  In developing countries, information may be available through donors (e.g., the World Bank may have information on average cost of different types of public investments).   

The importance of longer-term costing has become quite topical at the moment in countries with aging populations – note the current debate in the US on future health care and social security programs and costs.  Since it isn’t feasible or necessary to ask all programs to do long-term forecasts, the key is to distinguish between different types of expenditures.  Two types in particular require long-term costing and planning: major public investments and demographically-affected expenditures (e.g., pensions, elements of health care and education).  If only planned two or three-years forward, the proverbial problem of over-committing will usually occur with major public investments as numerous projects are initiated with mushrooming downstream costs.  In one country I was in recently, it can take decades to complete highways (a few kilometres on each are completed each year) as so many have been started and no one is willing to mothball the majority.  For demographically-driven expenditures, the issue of long-term sustainability is essential to put on the table many years in advance.  In a sense then, the Ministry of Finance needs to stretch out its “living” fiscal plan for these types of expenditures and policy options will need to be developed that look forward far beyond the MTEF time frame.

Answer to question 9

I would certainly agree that having the Prime Minister and Minister of Finance working from the same page is a major step towards bridging the disconnect between policy and financial planning (in some systems, there will be variations involving coalition leaders).  When it works well, it means that the dynamic is avoided where the PM becomes an appeal court for line ministers to circumvent the fiscal plan.  It is much more difficult for line Ministers to argue at Cabinet against a decision that already has the combined support from the two crucial players.

You bring up the all-too-common issue of un-implementable national plans.  Even more than MTEFs, these documents can be truly confounding for Ministers.  Although they of course go through and are approved by the government, it is rarely clear what is being approved and even more rarely certain what anything will cost.  While the principle of PM-Minister of Finance buy-in still applies, it is equally important that such plans be understood as statements of policy intent (not explicit budget commitments) and that some form of at least rudimentary sector costing has been completed.  Otherwise, implementation will either blow the fiscal plan out of the water or (more likely) few of the commitments will ever be acted on and the government and planning process will both lose credibility. 

Answer to questions 10a b

It’s been awhile since I’ve been in either Kosovo or Albania, but as a principle, Kosovo should only adopt those elements of IPS (or any other system) that will work well in Kosovo’s context.  But let’s look at what contributes to a more integrated planning system.

1.   We’ve discussed this above, but it is essential that some forum exists where the Prime Minister and Minister of Finance (perhaps with other ministers) can determine policy priorities within a sound fiscal context at the outset of the budget process.  Without this political buy-in (and in many countries this is not possible), the reality is that a plan B will be required.  Here, the processes will remain separate, but they are required to produce both policy and fiscal information (earlier we talked of how an expenditure review can do this; similarly, an annual government work plan may identify items likely to have fiscal implications).
 
2.   Line ministries understand that the Prime Minister’s/Cabinet Office and Ministry of Finance talk to and involve each other as required.  In some countries, meetings of Ministry permanent secretaries are used to convey a united front (between Cabinet Office and the Ministry of Finance) and to exchange information.

3.   The procedures reinforce the linking of processes.  For example, in Albania an integrated planning calendar is produced.

4.   Ministries buy-in to the process.  If the Minister, permanent secretary and senior managers do not lead the planning process and view it as something imposed from the centre that simply requires a pro forma response, it will fail.

The issue of sequencing reforms is interesting.  I don’t think there is a right sequence and success will likely depend on a more tactical response; i.e., opportunities must be taken when they arise.  Both Lithuania and Latvia were highly rated in the 2006 World Bank study on administrative capacity.  However, they took very different reform paths; Latvia focused initially on implementing a solid policy process and only later developed a strategic planning system, whereas Lithuania began with strategic planning.  In sum, whatever works.
« Last Edit: March 08, 2011, 21:53:21 GMT by Napodano »

Napodano

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Re: Conversation with Gord Evans on integrated planning system
« Reply #13 on: March 09, 2011, 16:19:43 GMT »
Gord,

I have two more questions:

Question 11 - Policy Impact Assessment (PIA), Regulatory Impact Assessment (RIA), legislation plan... how to avoid red tape in the process while keeping the focus of Cabinet on the key issues. Bagehot on this-week Economist says: '... Mr. Osborne's idea has become a slab of red tape accompanied by 108 clauses of box-ticking explanatory notes'.
Is it right to assume that all the assessment works are not pushed through to the Cabinet but just summarized in a consolidated option paper?

Question 12 - specifically on legislation drafting: which are the steps to be undertaken before the intended policy is transformed into a legislation draft with all its legal jargon?

Thanks from Rome
« Last Edit: March 09, 2011, 16:25:15 GMT by Napodano »

Frans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #14 on: March 09, 2011, 19:00:25 GMT »
Gord,
Yeah, here in Washington DC we are looking forward to Spring and the Cherry Blossom Festival at the end of the month. Hope you enjoy skiing.

Thanks for your elaborations on my questions 7 and 8.

In your anser to question 6, you end by saying: 'Although public expenditure management is thoroughly and systematically reviewed through instruments such as PEFA, there is no equivalent on the policy planning side.  PEFA does acknowledge the link, but does not in any way assess how the policy planning and decision-making systems intersect with financial planning systems.'

I totally agree that the coverage of this subject in the PEFA Framework is fairly limited and there is a need for a detailed (drill-down) assessment tool if one wants to get to the details (as with most other subjects in PEFA - it is the very nature of a broad, high level tool). However, it may be worth providing a little more detail on how PEFA covers the subject, which I will try to do here, seen from the PEFA Secretariat's point of view.

The main elements are found in indicator PI-12 on multi-year perspective in fiscal planning, expenditure policy and budgeting, but with the indicator (PI-5) on the budget classification system being a supporting element. PI-12 is based on an assessment of whether there is combination of on the one hand multi-year fiscal forecasts at the aggregate and sector/program level (in dimension (i)) i.e. an approach similar to an MTBF and/or MTEF; and on the other hand a Strategic Planning process at the sector level which includes full costing of both capital and recurrent expenditure and is kept within the aggregate allocations in the MTBF/MTEF (in dimension (iii)). These elements correspond to two of the three comtemporary approaches mentioned towards the end of Allen Schick's presentation from 2004, which you attached to the first part of the fireplace conversation. However, the PEFA indicator does not say anything about the detailed sequence of steps in preparing and updating the two parts of the IPS or the roles of particular actors in the process. This is left as too country specific for a general high-level tool to address. PI-12 then adds two dimensions on specific areas where medium/long term projections are particularly important at a global level, namely debt service/sustainability (dimension (ii)) and recurrent cost implications of major investments as well as their selection on the basis of the strategic plans (in dimension (iv)) ref. your example about road construction in your answer to my question 8.

Question 13 My additional question is then, whether your perception of IPS in the PEFA Framework (as a practitioner in the field) is the same as mine (as the custodian of the PEFA Framework).
« Last Edit: March 09, 2011, 19:16:31 GMT by Napodano »

Gord Evans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #15 on: March 09, 2011, 21:49:25 GMT »
Answer to question 11

This is an important point.  The policy process exists to ensure due diligence and to inform decision-making, not to create a cottage industry for policy analysts and consultants.  A sense of proportion must be applied.  Not every policy initiative requires a full-blown assessment; not every law or regulation (there may be dozens of purely administrative or technical laws) requires an impact assessment.  For decision makers, time is a finite quantity, so control must be exercised to ensure that the right decisions with the right level of analysis are submitted to decision-making bodies in a timely, predictable manner.  Our simplistic rule of thumb used to be that complex, contentious or costly initiatives required an ex-ante impact assessment.

In terms of what Cabinet actually sees, there is no universal standard, but generally a very short summary or decision-making document (perhaps 2-3 pages) will be accompanied by a longer document or analysis paper (perhaps 10-15 pages).  Both of these follow prescribed formats.  Rarely would a full analysis or impact assessment (which may be very long) prepared by the ministry be included as a Cabinet document. 

Answer to question 12

This answer applies to significant rather than purely technical laws.  Prior to even beginning legal drafting, it is important to obtain explicit policy directions from Cabinet for the significant policy issues to be addressed by a law or set of actions including laws.  The policy process, where a formal paper with options, impacts and costs is submitted for approval by Cabinet or a Cabinet Committee, produces this guidance.  Once the guidance has been received (usually in the form of a government decision), it should be translated into drafting instructions.  A drafting team is then assembled, comprising both legal and program officials, and the legal drafting process commenced. 

In many countries, the policy process either does not exist at all or occurs in parallel with legal drafting.  For major laws, this will squander time and resources as numerous unvetted policy assumptions will need to be built into the law.  Moreover, it is very difficult for Cabinet, faced with a lengthy legal text, to determine the full range of policy positions that are embedded in the draft law.  This can lead to unpleasant surprises by the time implementation rolls around.

Answer to question 13

Frans; thanks for this elaboration, which I think underscores how the PEFA framework can reveal, at a high level, whether the core attributes of an integrated policy and financial planning system are in place in a country’s public finance system.  I notice that policy-based budgeting is one of the core PEFA dimensions and you quite rightly mention that several indicators address IPS issues (for example, PI 5, 6, 11, 12 acknowledge the importance of political direction at the outset of the budget process; the linkage with the budget classification system; the inclusion of new policy initiatives and cost estimates in annual budget documentation; the importance of costed sector strategies; etc.).  These are all critical.   

You also mention that PEFA does not assess how policy planning and decision-making systems intersect with financial planning systems.  This gets to the heart of the “parallel universes” problem.  In most governments, there are unique processes that occur at the centre of government but outside the direct purview of the Ministry of Finance (e.g., political priority-setting exercises; preparation of an annual government work plan; approval of policy documents and draft laws; etc.).  The more disconnected these policy and planning processes are from the public finance process, the more likely they are to inflict damage on the government’s fiscal framework.  In a country I recently worked in for the Bank, the two key problems that continually undermined the credibility of the budget included: lack of control over the outer-year implications of public investments and lack of control over the immediate and outer-year implications of the 200+ laws that were sent on to Parliament on an annual basis. 

As you say, some of these non-finance processes would be picked up by drilling down from the high-level PEFA observations.  However, other problems may only come to light with a companion assessment of the core processes at the centre of government and how they do or do not intersect with public finance.  I’m being speculative here, but this type of assessment may enrich even further the growing, comparative information bank and points of departure for reform that PEFA is creating. 
« Last Edit: March 09, 2011, 21:54:17 GMT by Napodano »

petagny

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Re: Conversation with Gord Evans on integrated planning system
« Reply #16 on: March 11, 2011, 11:36:42 GMT »
Gord & Frans,

I've been following your exchanges with great interest. I've raised this issue before on the Board, but my concern is that PEFA does not go far enough in addressing the relationship between policy-making and budgeting. I acknowledge that the PEFA framework is meant to be a high-level instrument and that it is necessary to 'drill down' on specific areas (public investment management, for instance), but this seems to be more fundamental and part of the essence of budgeting that is not fully captured in the existing indicators (including PI-12). I suppose in the end it comes down to how you define PFM: should it cover policy-making processes or be limited to policy implementation?

Some time back, Matthew Andrews tried to assemble some objective criteria for assessing the effectiveness of policy-making processes and came up with the following:

National policy-making and review process:
•   A national policy-making process exists, producing a national policy product.
•   National policy is reviewed annually, and policy changes are transparent (fiscal and sectoral policy changes).
•   The national policy-making and review process has political and technical dimensions (hence ensuring that policy enjoys political support and is technically sound).

National policy product:
•   The national policy product details, concisely and clearly, multiyear fiscal strategy and clear sectoral priorities.
•   The national policy product provides clear and prioritized policy goals and measurable indicators of those goals.

Connection between policy and PFM processes:
•   Sectoral plans and multiyear budget frameworks explicitly show how allocations reflect national priorities.
•   Budget proposals show how spending requests contribute to meeting national goals.
•   The annual budget document shows how spending allocations contribute to meeting national goals.
•   A formal process ensures that national goal achievement is monitored and that there is (at least) annual reporting on progress in meeting national goals.
•   Ministers have to report to the cabinet on their ministries’ progress in meeting national goals.


Question 14:

Gord, Do you see these criteria as a useful starting point for assessing the policy-making process? Would you add (or subtract) any?



Gord Evans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #17 on: March 11, 2011, 15:32:33 GMT »
Answer to question 14

Thanks for raising this and putting Matthew’s criteria back on the table.  They were thoughtfully developed and should be considered alongside similar efforts to get at this issue.  Your comments recall a number of discussions, and some cursory attempts to get at this issue (all pre-PEFA), over the years with the Bank.  Just for reference, there is a booklet that Nick Manning and I worked on a number of years ago (Helping Governments Keep Their Promises); also note that the previously attached article (from Canadian Public Administration) drew on the results of some Bank-funded research.  SIGMA has also done a lot of work in this area and developed some baselines by which policy-making systems might be assessed and identified the core coordination functions at the centre of government.  But back to your question.
I think there are at least three dimensions that needed to be considered when answering this question: 1. those elements of the policy-financial interface that affect the fiscal plan/budget credibility that could be accommodated by drilling down using the existing PEFA methodology; 2. those elements affecting the fiscal plan/budget credibility that occur outside the PFM system and would be unlikely to be captured through a PEFA assessment; and 3. those elements that may or may not affect the fiscal plan/budget credibility but are fundamental to a sound policy-making system.

I will defer to Frans on the explicit PEFA linkages to Matthew’s criteria, but have a few general thoughts that will hopefully contribute to this discussion.  I suspect that a number of Matthew’s criteria, if missed in a PEFA assessment, would be more due to the scope/depth of the assessment (e.g., an exclusive focus on the Ministry of Finance) than a gap in the methodology per se (i.e., category 1 above).  In other cases, there will be fundamental processes of government that in most cases occur outside the Ministry of Finance that nonetheless affect PFM systems.  The most important ones, in my view, are: the way in which political/policy priorities and commitments are established, reflected in a government work plan and translated into concrete policies and laws; and, the way in which detailed policies/laws/regulations are drafted and approved by government (i.e., category 2 above).  In this instance, as mentioned above, a companion assessment to PEFA would be required to determine if and how these processes intersect with public finance systems.
 
Finally (i.e., category 3), this raises the issue of whether some rough equivalent to PEFA for public policy would be worth developing.  Here, the purpose would be to assess the quality and transparency of the policy-making system as a whole.  This more ambitious effort would encompass not only those elements that intersect with public finance systems (the majority should) but other elements related to good governance.  The art of such an effort would be, and this is where PEFA has succeeded, to find decent, universal indicators that rise above the particularities of individual governance and decision-making systems.  Since the vast majority of governments are based on a cabinet or collective decision-making model which are supported by a unique administrative body (Prime Minister’s/Cabinet Office; also known by many other terms), this may be feasible.  If undertaken, this effort could be linked to the Bank’s work on “actionable governance indictors” which thus far has focused more on civil service and administrative reform.
« Last Edit: March 11, 2011, 16:28:34 GMT by Napodano »

Martin Johnson

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Re: Conversation with Gord Evans on integrated planning system
« Reply #18 on: March 13, 2011, 11:19:09 GMT »
Hi Gord. Greeting from North Wales (s’mae!)

As with Petangy, I have followed the general discussion with interest but the discussion on PI-12 related issues with particular interest. 

Discussing policy-making and its interface with the budget process in the context of Matthew Andrew’s criteria is helpful and the three categories you put this discussion into are helpful also. I hope this is a debate that has legs and goes beyond our PFM Board.

Given the nature and the detail of the budget-policy link that underlies PI-12, given the ‘different universes’ scenarios that you (and others) refer to (and that many of us are familiar with) and given the high-level nature of this indicator in particular, it strikes me that one should expect to see few scores above C+.

Question 15

My first question, Gord, with your experience, would you also expect PEFA scores for PI-12 to be generally low?

Question 16

Following on from this, my second question is really one directed at Frans. Does the PEFA Secretariat have data on the distribution of scores for PI-12 for PEFA assessments carried out to date?

My own experience suggests to me that PI-12 is not always well understood. When I have come to use PEFAs in some situations where I know the context reasonably well, the score allocated for PI-12 has been too high. I suspect part of the reason for this is that PI-12 may be covering too much ground and may be too high level. This would be consistent in part with your suggestion that the scope/depth of some PEFA assessments in practice may not always capture Matthew’s criteria for those elements of the policy-financial interface that affect the fiscal plan/budget credibility and that could be accommodated by drilling down using the existing PEFA methodology.

Along the same lines, I recently advised on a log-frame that anticipated a movement in indicator PI-12 from C to A for a particular country over a period of just 2-3 years. A case of wishful thinking prevailing over evidence and common sense - or simply the requirements for PI-12 not being well understood. Given the possibility of a country implementing key aspects of reform within the realm of PI-12 without moving across a category of score (which is already the case for the country referred to above), I advised that the log-frame should instead refer to specific process improvements rather than changes in the score for the indicator per se.

Linking this into your discussion and Petagny’s inputs on this, and notwithstanding Franz’s helpful clarification on the policy-budget link within PI-12, I suspect there may be two requirements for presenting clear information on the quality of budget-policy links. The first would be your contention that a companion assessment is required to address your ‘category 2’ issues. The second would be the development of a wider set of indicators for PI-12 to more effectively capture the budget-policy links already inherent within the (very) high level indicator that is PI-12 (so that they are addressed in all PEFAs and not just those that have done an appropriate ‘drill-down’). Aside from delivering more revealing information, this would also address the concern I have raised (if I were to be correct) that PI-12 may not always be well understood (and may be ‘over-scored’) and may also address a potential ‘reform frustration’ issue with PI-12 where very good and positive progress over 1, 2 or more years does not necessarily result in a categorical change in score.

Having got to this point, I feel like I should have a question to ask on the above, given that this is a fireside chat, but I’m not sure I do …… err …… sorry Gord.
« Last Edit: March 13, 2011, 16:28:16 GMT by Napodano »

Napodano

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Re: Conversation with Gord Evans on integrated planning system
« Reply #19 on: March 13, 2011, 16:36:42 GMT »
To reinforce the point on PI-12 made by Martin, I like to point out that

this indicator is the only one among the others to have 4 dimensions (the others have max 3). Each of them could be an indicator in its own merit with further dimensions underneath.
« Last Edit: March 13, 2011, 18:35:46 GMT by Napodano »

Gord Evans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #20 on: March 13, 2011, 21:14:47 GMT »
Answer to question 15

Hi Martin; my condolences on your favourite football team.  As a non-PFM expert, I will defer to others on commenting on the quality of PI-12 ratings, but this raises a broad issue that could explain why such over-ratings may occur.  This involves the institutional landscape of central institutions and how those institutions relate to the donor and consulting community.   

In governments where the Minister and Ministry of Finance are plugged into and effectively play their role as a veto point in the decision-making process, then a good rating on PI-12 should be valid.  However, for this to happen, the decision-making process itself either has to flow through them (i.e., they are the predominant central coordinating institution for policy and financial planning) or they need to work very closely with the institution that does coordinate the policy process; i.e., the Prime Minister’s/Cabinet Office (this can be two institutions but for simplicity’s sake I’m considering them as a single entity). 

When this is not the case, problems can occur.  For instance, even if fully costed, approved sector strategies exist (and how often does that happen?), these tend to represent highly indicative costings as they are developed at the strategic rather than detailed policy level.  A more informed costing of policy implementation comes to light when the implementing policies, laws and regulations are prepared (a few hundred such documents go through most Cabinets on an annual basis).  If this process, which in most governments is coordinated by the Prime Minister’s/Cabinet Office, remains disconnected from the financial planning process and the Ministry of Finance, then an increasing gap between the fiscal plan (based on approved sector strategies) and implementation requirements (based on approved policies, regulations and laws) will emerge.  Over time, the credibility of the fiscal plan will suffer as its basis becomes less and less relevant to what the Government is doing.  Unless the two primary central institutions are working effectively together, decision makers will not even be aware that this is happening until the problems become acute. 

An interesting side issue to this is: can donors and consultants unintentionally exacerbate this problem?  For instance, if in some countries the IMF and World Bank only work through the Ministry of Finance and assume that their client ministry can effectively coordinate the implementation of massive policy reform programs across government (linked to loan/grant conditions), are they missing half the boat?  If PFM consultants focus exclusively on those processes within the purview of the Ministry of Finance are they doing the same?  And vice versa of course applies equally; when donors/consultants working at the centre of government do not ensure that the Ministry of Finance is fully linked into what they are doing with their client (PM/Cabinet Office), similar problems will certainly arise.

I think this is a long-winded explanation of why integrated planning, however messy, is important.
« Last Edit: March 14, 2011, 06:16:31 GMT by Napodano »

petagny

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Re: Conversation with Gord Evans on integrated planning system
« Reply #21 on: March 14, 2011, 08:51:21 GMT »
An interesting side issue to this is: can donors and consultants unintentionally exacerbate this problem?  For instance, if in some countries the IMF and World Bank only work through the Ministry of Finance and assume that their client ministry can effectively coordinate the implementation of massive policy reform programs across government (linked to loan/grant conditions), are they missing half the boat?  If PFM consultants focus exclusively on those processes within the purview of the Ministry of Finance are they doing the same?  And vice versa of course applies equally; when donors/consultants working at the centre of government do not ensure that the Ministry of Finance is fully linked into what they are doing with their client (PM/Cabinet Office), similar problems will certainly arise.

Gord, I think there is a lot of truth in what you say. Particularly in formerly centrally planned economies, IFIs and other donors have focused too much on finance ministries. Under central planning, finance ministries were rarely where the power rested and were simply 'counting houses'. During the transition, few have managed to transform themselves into the powerful finance ministries of the Westminster system or even 'the first amongst equals' of the Dutch model. This has led to much frustration with the progress in implementing strategic budgeting and some examples of strategic budgeting that are merely facades. In Macedonia, the DFID Public Administration Reform Project tried to do something different and work on establishing a policy development and review process at the centre of government, including a system for fiscal impact assessment for all proposals going to Cabinet. Unfortunately, I have the impression that the reforms were not as successful as they might have been, partly as a result of the second problem you highlight - the Ministry of Finance was not fully linked in.

PSCANDIZZO

Re: Conversation with Gord Evans on integrated planning system
« Reply #22 on: March 14, 2011, 21:27:27 GMT »
Dear Gord:

Question 17

how do you see impact evaluation within the framework of integrated planning?

 :)
« Last Edit: March 14, 2011, 22:07:49 GMT by Napodano »

Frans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #23 on: March 14, 2011, 23:23:42 GMT »
Answer to question 16

A short response to Gord and Martin on the PI-12 discussion.

The PEFA Secretariat noted with interest Matthew Andrews suggestions for the Policy-Planning-Finance linkages, but did not take the proposal any further because (1) the PEFA Framework is managed under a hard budget constraint (= total number of indicators) so where would we make correspondingn savings? (2) we do not develop drill-down indicator sets, and I agree that this area may be suitable for development of such a companion set, and (3) the strategy has so far been to ensure stability of the PEFA Framework for steady roll-out, improving understanding of what it already contains and maintain the ability to compare to earlier assessments and measure changes over time.

As for the score of PI-12, the most common score is indeed C+ (27%) with B or B+ being achieved in 21% of assessments. It is particularly dim(iv) that pulls results down whereas dim(ii) does much better than the other dimensions. I attach the database of indicator scores from publicly available assessments so you may investigate for yourself.
« Last Edit: March 15, 2011, 06:19:36 GMT by Napodano »

Gord Evans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #24 on: March 15, 2011, 02:30:23 GMT »
Answer to question 17

The term “impact evaluation” generally refers to an ex-post assessment of a policy or program to determine whether its goals/objectives are being met in a cost effective manner and whether other options exist that would improve the cost-effective delivery of those goals.  It is important to distinguish this term from “impact assessment”, which usually refers to an ex-ante analysis that is reflected in a government decision-making document submitted for review and approval by Cabinet prior to the adoption of a major policy or program change.

In principle, evaluation should be a robust component of any planning system.  In non-integrated systems, there may be parallel evaluations (program evaluations under the purview of the Ministry of Finance; policy evaluations coordinated by Cabinet Office), the results of which may be inconsistent or inconsistently applied.  The existence of donor evaluations in developing countries can further complicate the landscape.  In more integrated systems, evaluation occurs under a single framework with the results informing both the policy and financial planning processes.  In Canada, for instance, Treasury Board oversees the implementation of an evaluation policy affecting every ministry and both policy and financial planning. 

However, the biggest challenge for evaluations is gaining acceptance and commitment to them.  For a variety of reasons, evaluation is very often the weakest link in the planning cycle.  First, the political incentives to criticize objectively the way in which major policies and programs have been managed are only strong in the early days after a new government assumes power (otherwise, the government is publicly criticizing itself).  Second, the results of evaluations are so much after the fact that they do not seem relevant to decision makers who live more in the here and now (i.e., an evaluation of a new policy would need to wait, often for several years, until the policy outcomes of that policy have become evident).  Finally, there are a variety of logistical reasons that limit the quality and quantity of evaluations: lack of an evaluation budget; lack of internal capacity; lack of good quality, comparative, historical data; lack of (as previously mentioned) political incentives.

In sum, while the issue of ensuring an integrated approach to evaluation is important, the more immediate challenge in most governments is ensuring that a credible evaluation approach exists at all.
« Last Edit: March 15, 2011, 06:23:19 GMT by Napodano »

Napodano

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Re: Conversation with Gord Evans on integrated planning system
« Reply #25 on: March 15, 2011, 11:13:07 GMT »
On behalf of PFMBoarder moindzemohamed (who has had problem with internet access for the last days in Madagascar) here is a new question for you, Gord

Question 18

"La plupart des pays africains ont des difficultés pour bien élaborer leur budget annuel. Ils éprouvent d'énormes difficultés pour prévoir leurs ressources propres et arbitrer en termes de priorités. Ils ont également des difficultés pour mobiliser l'aide internationale disponible (même si certaines proviennent des bailleurs de fonds) et bien les gérer. Il est facile de constater qu'il existe plusieurs portes d'entrée de l'aide dans ces pays; ce qui n'est pas favorable à une bonne coordination qui est nécessaire pour la budgétisation de l'aide. Je suis alors entrain de me poser des questions concernant les programmes de réformes des finances publiques en cours dans ces pays puisqu'ils mettent de l'avant des systèmes avancés de programmation budgétaires tels que le budget programme et les CDMT. Ces programmes sont -ils réalistes? Il est nécessaire pour élaborer un bon budget d'avoir les résultats à mi-parcours de l'exercice en  cours et ceux des exercices antérieurs (au moins deux ans) pour avoir un bon profil budgétaire. Ces pays n'ont pas l'habitude d'élaborer des situations de l'exercice en cours et de les rendre publics à temps pour aider les diverses parties prenantes. Pire, les lois de règlement des exercices clos ne sont adoptés en moyenne qu'en 3 ans après. Les rapports qui leur sont liés ne sont que rarement publiés. Ne sera-t-il pas prioritaire pour ces pays de mettre en place des activités leur permettant de bien coordonner la gestion de l'aide, de bien élaborer leurs prévisions des ressources, de pouvoir établir à temps opportun les situations d'exécution budgétaire infra annuelles et de les publier ainsi que d'élaborer et les faire adopter les lois de règlement dans une période de 12 mois avant d'entrer dans ces réformes importantes certes, mais qui sont très avancées pour ces pays?"
« Last Edit: March 15, 2011, 15:29:07 GMT by Napodano »

Gord Evans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #26 on: March 15, 2011, 22:42:07 GMT »
Answer to question 18

Merci pour votre question.  Permettez-moi de repondre a la question en anglais.

The question raises the issue of whether it is realistic to pursue more complex reforms in countries where basic policy and financial planning systems function poorly, aid is inappropriately targeted, proposed laws take years to implement, and decision-making is non-transparent. 

Personally, I have a lot of sympathy with this position, which reinforces the importance of getting the basics right before launching elaborate strategic planning and/or program budgeting systems.  Why further complicate things by trying to integrate two dysfunctional systems?  Since donors are most often behind the advocacy of such reforms, this also raises a strong aid effectiveness issue.

There may, however, be ways in which the principles of integrated planning can and should be applied even in systems which are struggling with basic systems.  For instance, simply having the Cabinet Office and Ministry of Finance’s budget department meet occasionally to share problems and co-develop practical improvements (e.g., reducing ministries’ reporting burden; understanding each others’ information needs; creating forums to share information with permanent secretaries) can be very useful.  Ensuring that the official Cabinet document includes a brief fiscal impact statement to be reviewed by the Ministry of Finance is another practical measure. 
Accordingly, I agree that complex integrated planning systems should be avoided in countries which are struggling with basic systems or fundamental transparency issues.  However, I do think there are a number of practical measures where the principles of integrated planning can be usefully applied as part of efforts to get the basics right.
« Last Edit: March 16, 2011, 06:28:41 GMT by Napodano »

Martin Johnson

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Re: Conversation with Gord Evans on integrated planning system
« Reply #27 on: March 16, 2011, 10:58:45 GMT »
Just a quick thank you to Franz for his response re PI-12 and for the helpful information therein and attached

Napodano

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Re: Conversation with Gord Evans on integrated planning system
« Reply #28 on: March 16, 2011, 14:16:14 GMT »
PFMBoarders,
time is over to pose questions.

This interview has got well beyond expectation. It has been at the same time:
  • a professional conversation
  • a multi-voice discussion
  • a learning/finetuning opportunity
  • the creation of a knowledge area

Well, Gord, thank you. You have the last word

Gord Evans

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Re: Conversation with Gord Evans on integrated planning system
« Reply #29 on: March 16, 2011, 15:30:07 GMT »
Well, that wraps up the “conversation.”  As a public policy guy, I’ve very much enjoyed my 10-day tourist visa to PFM-land, so thank you Mauro for what turned out to be a busy visit and thanks to all of the outside contributors for such a spirited discussion.  Couple of concluding comments:

The most popular topic involved the lack of and need for a systematic approach to assessing the impacts on PFM systems of the policy decision-making process or, at a more ambitious level, developing an assessment model for public policy that could serve as a counterpart to PEFA or other PFM assessment frameworks.  A special thanks to Frans for helping with the PEFA discussions.  It is worth reiterating his point that it is not PEFA’s job to develop the counterpart assessment framework, as it has its own mandate to deliver, but any measures to explore more fully the way in which the policy process intersects with PFM and vice versa would certainly enhance the capacity of governments to design more successful and coherent reforms. 

There is certainly a lot of work to do in this area; for example, to develop indicators for policy management that could be applied generically across government in the way that PEFA has done.  Part of the reason for this relative lack of progress on policy management reform is simply newness.  Policy management/centre of government reform, as a development strategy, only began to emerge in the mid to late 1990s.  Another problem, perhaps related to the above point, is institutional misunderstanding.

For example, although the World Bank (in PREM) has done some good work in this area, the Bank overall has not figured out how this type of reform should be incorporated into their analytic work on a consistent basis; some public expenditure/institutional reviews look at these issues; others avoid it altogether; in these latter cases, this often conveys the curious impression that the entire government decision-making process falls within the domain of the Ministry of Finance.  DfID almost certainly has supported the largest number of policy management reform projects, but has not yet evaluated systematically the lessons learned or the linkages of these with other reforms, pubic finance in particular.  OECD, through SIGMA, has completed a solid body of work on policy management reforms (e.g., centre of government profiles), but this has not migrated over to OECD’s overall view of public governance which focuses on a variety of topics of interest (e.g., e-government; regulatory reform) but not policy management.

To me, the most curious thing about these misunderstandings/omissions within the development community is that they are at such odds with what actually occurs inside most governments.  Here, policy and financial issues serve (and have for decades) as the twin drivers of government decision-making.  If the necessary connections are not made, and the Prime Minister’s/Cabinet Office and the Ministry of Finance work in isolation, things begin to break down.  In government, policy-making is at the heart of what cabinets do, and does not exist as an obscure component of public administration reform (whatever that means). 

Well, nothing like a good rant to conclude things.  From all of your comments, it is clear that a large number of PFM professionals do understand the importance of these linkages.  I look forward to our future collaboration down the road.  Cheers.

 

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