1. Monitoring Performance: lessons from international experience
Bill Dorotinsky
Budget Execution Course
January 17, 2003

2. New Public Management? Features
Formal contracting
Purchaser-provider split
Agencies - flexibility
Origins – advanced industrial countries
Applicable to developing countries?

3. Implementing effective performance monitoring requires:
Setting organizational incentives to support performance monitoring
Predictable funding
Flexible resource application at program level
Getting performance monitoring consistent with organizational culture
Individual versus group responsibility
Need for central unit to play active and effective leadership role in defining criteria and implementing practical performance monitoring
May not be MoF!!

4. Implementing effective performance monitoring requires (2):
Linking ongoing performance measurement with more periodic program and policy evaluations
Frequently, performance measures simply indicate the need for deeper evaluation
Attention to client/customer/citizen in developing performance monitoring
Citizen/beneficiary surveys not a substitute
Client satisfaction only one measure

5. Integration of performance and financial management is easier where
strategic/target objective setting is linked to resource allocation
global or output-based budgeting is in place
full-cost activity accounting is in place
programs consist of tangible and measurable products or services
integration is attempted at the level of program management and operational management
the impact of programs can be seen soon after delivery
the results can be attributed to the program with high degree of confidence

6. Other lessons
Measures should be ones program managers use regularly, find useful, and are part of normal management information systems
Clear model of program
Choosing the right goal and outcome measures – not easy!
Outcomes don’t supplant other measures
Performance monitoring creates “demand-pull” for better data; will change data systems
Performance monitoring as culture change, rather than merely a paper exercise: effects will vary.
stakeholder buy-in and partnering
decentralization

7. Other lessons
If central budget institutions lead performance budgeting efforts, which is natural, then a prerequisite of success is redefining the role of the central budget institution from command-and-control to collaboration.
Uncertainty breeds skepticism-- but also motivates
Great danger of misinterpretation and misuse
Underestimates of interdependence
Shorter the time horizon, more process oriented the measure
Performance budgeting is iterative, evolutionary
Need auditing of data systems and performance reports

8. Introducing performance orientation into budgets
Need not be complex
Piloting
Informal ’political’ contracts
Start with fundamentals
Mission statements
Defining programs within organizations
Defining outputs
Developing logic models of programs
Full costing of programs
Ex poste report of what was done
Benchmarking performance for similar activities

9. Other tools Other tools for getting some handle on performance:
Public expenditure tracking surveys
Client-satisfaction surveys