Third International Roundtable on Managing Results for Development Building Public Finance Systems to Achieve Planned Results – Building Capacity and Measuring Change

Increasing Recognition Importance of a Government owned and led strategy to reform planning and budgeting in an integrated way. –But must be genuine –Realistic timescales –Politically feasible Fragmented donor support can be part of the problem. –Fragmented –Unsequenced –No buy-in –Unrealistic politically

The Strengthened Approach to supporting PFM reforms 1.A country-led reform program – including a PFM reform strategy and action plan 2.A donor coordinated program of support (emerging use of multi-donor funds) 3.A common framework for measuring and monitoring results over time – The PFM Performance Measurement Framework

Planning and undertaking diagnostic work over time. Designing reform measures and integrating them in the reform program. Implementing reforms Monitoring of progress over time. 1. A country-led PFM reform program The government-led reform program The government reform program reflects country priorities, and is not driven by the donors agenda. The overall direction and responsibility for the reform program is integrated within the government structures. No blueprint for the government reform program, but some common defining features:

But What Sort of Strategy Is Necessary to bring Planning and Budgeting Together? Trying to blue print reform from beginning to end is not real world or sustainable. Distinguish between: –A broad overarching framework –More detailed planning on the next step Target and measure progress in terms of what the integrated planning and public finance system can achieve, not its technical detail. Deal with the whole of the planning/public financial management cycle.

Example of an Overarching Strategy - Cambodia

Pillars To Support Stages in Bringing Planning and Budgeting Together- Russian Example

Building Capacity Build for capacity rather than simply train. Address immediate tasks while also building for the future. Create the demand rather than push the supply Avoid change overload

Aligning Technical and Capacity Development – Cambodian Example

Organisational Change – Some Country Based Examples of Issues that Arise Face up to the barriers (Kyrgizstan and Russia) Create new units where necessary (Vietnam and Ghana) But dont build reform outside operational management (Cambodia and Indonesia) Address the need to manage cross cutting issues (All)

Motivation - Winning Support All the experience is that broadly based support is essential. From politicians –Get them involved in the Steering arrangements –Let them know what is in it for them From other central Ministries –Seek to align and support strategies that they may have –Neutralise any threats (for example for any MOEs) From those who must work within the PFM system –Use the measures of change to help them to understand what MOF is trying to do and what it will do to help them –Make it clear what they may gain, but that they will be dependent on their response to reform and their performance From the public –Develop media campaigns –Shout the successes

Some Different Types of Motivational Measures Managerial freedoms and flexibility Personal recognition and reward Providing additional resources

Some Examples of Counties that have Experimented with Motivational Measures in their PFM Reforms Consolidate donor related pay supplements ( Cambodia and Tanzania) Give access to management freedoms and flexibilities based on proven performance (Many) Reward spending bodies who respond to reforms with additional resources (Russia) Anticipate potential perverse incentives to resist reform and develop counter measures (Cambodia)

3. The PFM Performance Measurement Framework A standard set of high level indicators Widely accepted but limited in number Broad measures of performance relative to key PFM system characteristics Enabling credible monitoring of performance and progress over time A PFM Performance Report Integrative, narrative report based on the indicators and assessing performance; based on observable, empirical evidence. Updated periodically, depending on country circumstances and operational needs Contributing to coordinated assessment Feeds into government-donor policy dialogue