1. PUBLIC EXPENDITURE REVIEW CLINIC FOR BENIN 13 December, 1999
OUTLINE OF PRESENTATION
BY DAVID SHAND
Measuring, Monitoring And Evaluating Government Performance

2. - but relevance and quality?
Many Countries Have Reasonable Aggregate Control
a comprehensive budget
satisfactory accounting and reporting systems
But little information on public expenditure outputs or outcomes - little link with “policy”. What are they buying?
But nevertheless in some countries a lot of performance information
- but relevance and quality?

3. Problems in prioritization
Lack of clear government priorities - a national plan?
Budget fragmentation
- Investment budget versus ordinary budget
- Enclaving by Donors
Lack of a firm budget constraint
Lack of a medium term perspective
Therefore difficult To reallocate resources
- Resulting in an “add on” mentality
- Rather than prioritizing expenditures based on results or performance

4. Commencing Thoughts….. Performance Measurement
- For performance improvement
- For accountability (contracting)
Performance Management Through The Budget
- Creating An enabling environment - flexibility and predictability
- Making people perform

5. Performance Management (Budgeting)
Ex ante specification of required outputs/outcomes
Performance or resource agreements; budget funding is provided in return for agreed output and performance levels
Reporting on actual versus targeted outputs and performance
Consequences of actual performance compared with targets?

6. Performance Management (Budgeting)
Improved information on what is being purchased with the budget allocation. Better basis for budget dialogue.
Informs the budget allocation process, does not control it
Benchmarking - comparisons may improve performance
Performance agreements/contracts in the budget process

7. Different Aspects of Performance Measurement
Social Indicators
(Program) effectiveness (Outcomes)
(Operational) efficiency (Outputs)
Service quality - timeliness, accessibility, accuracy, etc. (a mixture of outcomes and outputs)
Financial performance - cost recovery, rate of return, cost containment
User satisfaction surveys
Process measures (“Best Practices”)

8. Performance Measurement - General Comments
Need to prioritize and understand inter-relationships
Don’t forget probity (and equity?)
The public sector production function
inputs
processes (“best practices”)
outputs
outcomes
overall social impacts

9. Performance Measurement- General Comments
Full diagnosis of performance requires an understanding of this production function
Allow adequate time and recognize complexity (easy to do badly- inherent limitations)
Ensure comprehensiveness, but don’t over-complicate
Measure the right thing
how to legitimate performance measures (planning processes, consultation with stakeholders)
avoid dysfunctional performance measurement

10. Performance Measurement - General Comments
In principle it applies to all public sector activities - but difficult in some areas (e.g. research, policy advice, foreign affairs)
Setting targets - at what level? - attainable with difficulty?
Reviewing performance - basis of comparison?
previous performance
targets - what is reasonably achievable, with effort
with comparable organizations (benchmarking, including international comparisons)

11. Performance Measurement - General Comments
Input Side is also Important
- understanding input/outcome or output relationships
- accrual accounting
Positive and negative uses of performance information
Allow for dialogue and interpretation
Accuracy and verification of information
Separate from performance pay issues

12. Program Evaluation - Going Beyond or Behind Performance Measures
An art, not a science-subjectivity and need for demystification
Analysis of past or projected performance
Determining objectives
Evaluating each part of the production function
Quantifying costs and benefits
Understanding cause-effect relationships
Forecasting and uncertainty

13. Program Evaluation - Going Beyond or Behind Performance Measures
A normal part of management life
Whose responsibility?
Self evaluation?
Relationship with audit?
An example - Basic Education
Evaluating the impact on educational outcomes of
- more teachers
- better teachers
- better classrooms
- better equipment
- better textbooks
- better curriculum

14. Medium-Term Expenditure Framework (MTEF)
Fiscal targets - what is affordable?
Forward estimates of cost of existing policy
How do forward estimates compare with what is affordable?
Make the necessary changes/adjustments now- medium-term expenditure planning i.e. MTEF becomes the budget process
Provide indicative forward levels of expenditure allocations - aggregate, sectoral, ministry

15. Medium-Term Expenditure Framework (MTEF)
Provides reasonable predictability
But not multi-year expenditure appropriations or an agreed entitlement
Issues
ability to forecast revenues and expenditures
taking the fiscal targets seriously
publish the MTEF for greater fiscal transparency
baseline figures must be controlled by the Budget Office
need for regular review and updating

16. Medium-Term Expenditure Framework (MTEF)
A basis of enforcing prioritization Proposals for funding must compete within the limits set, based on
- affordability
- relative priority or performance