orienting public spending towards achieving results - performance and performance management: a...
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Orienting Public Spending towards Achieving Results -
Performance and Performance Management: A Conceptual
Overview
Joel Turkewitz
World Bank
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Outline of Presentation
The idea of performance in the public sector
Improving Performance Through the Budget Process
Results and Implications for Program Design
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Performance in the public sector
Not a new idea – previously around the concept of “public service ethic”
Altered in post World War II environment– Rapid expansion of government – need to
demonstrate the value of government spending.– Challenges to idea of “public interest”
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The idea of performance has remade the public sector
Re-engineered Processes– Program budgeting, MTEF, accrual,
performance auditing, etc. Reshaped the state
– Privatization, decentralization Changed accountability relations
– Monitoring and evaluation, citizen report cards, etc.
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Ideas Associated with Improved Performance
Performance improves when managers know what is expected of them and are measured against those expectations.
Performance improves when managers are given flexibility to use resources
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Performance ideas (2)
Performance improves through the devolution of authority to operating levels and units.
Performance improves when government decisions and controls focus on outputs/outcomes.
Performance improves when mangers are held accountable for the results produced.
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Core Performance Strategies
Increased Competition in the Public Sector
Enhanced Managerial Autonomy
Program Review
Deregulation and Simplification
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Each strategy=unique challenges
Performance improvement through competition – ensuring deep markets and reducing transaction costs.
Performance improvement through enhanced autonomy – creating incentives for managers to want to manage for results & establishing real accountability
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A quick aside – Measuring and Performance
Frequent assumption – monitoring per se yields improved performance.– “That which gets monitored gets done.”
Key question – how does monitoring/measuring act to improve performance.– Importance of interest in monitoring results
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Performance Budgeting
Sub-set of performance management
Definition: Performance Budgeting = procedures to enhance link between spending and outcomes/outputs through the use of formal performance information.
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Long History
Initial efforts can be traced back in the U.S. to turn of the 20th Century
First serious efforts – 1960’s – U.S. (PPBS) and Sweden.
Now commonplace– 70% of OECD countries include performance info in
their budgets
– 40% have measures that distinguish between outputs and outcomes
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Traditional Budgeting Performance
Inputs as ends in themselves
Relationship between inputs and outputs
Changes in inputs at the margin
Changes in inputs and results for program
Divorced from planning and management
Integrated with planning and management
Budgeted resources Costs
Traditional verses Performance Budgeting
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Types of Performance Budgeting
Ex ante targeting– U.K. Public Service Agreements U.K. Public
Service Agreements Output-based
– New Zealand output-purchase Ex poste linkages
– U.S. Program Assessment Rating Tool (PART), Performance Management Agenda (PMA)
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Challenges associated with ex ante and ex poste linkage
Ex Ante – translating expectations of performance into performance
Ex poste – managing the burden of evaluation in a process that does not create excessive conflict within the state administration
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Issues in Performance Bugdeting
Establishing a program structure
Identifying useful indicators
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Program structure
Fundamental to the dynamics of improved performance– Groups activities around a core objective– Groups costs associated with core objective
Not trivial– 10 years after the start of GPRA, fully 50% of
programs in U.S. could not be evaluated due to the absence of clear objectives.
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Principles of Program Design
One program – one objective Hierarchical structure: program –sub-
program-activities-projects. Size appropriate for efficient management Clear connection between resources used
and outputs produced (and outcomes). Capture all related activities – integrate
capital and recurrent spending
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Principles (2)
Establish accountability for the outputs of programs, sub-programs, and activities.
Responsibility for implementing each program aligned with a single vote in the budget.
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Keys to Success in Establishing Program Structure
Establish clear rules to guide program identification and the level of sub-program and activity aggregation.
Align programs and organizational structure of government.
Programs and their outputs need to be designed considering the informational resources of the government.
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Program Structure not just about grouping current activities
Program Structure – integrating design, management and accounting.– Strong implications for accounting, financial
reporting, internal auditing, and external oversight.
– Strong implications for the role of line ministries and central ministries, such as Min Fin.
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Identification of indicators
Yes, it is a problem.
Not the core problem
Availability of resources– Other countries, experienced practitioners
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Results and Implications for design
Widespread belief – Performance management does not work.
Where do we look for results.– Inter-sectoral allocations– But maybe, we should look instead at:
• Intra-sectoral allocations
• Intra-program re-allocations.
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Evidence of impact of performance info on allocation
Broaden out allocation to not only refer to central processes.
Look at papers in the session– Australia– Harry Hatry – local examples– Look at references in the paper
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Performance Improvement
Linked to:
– Better calibrated allocative process– Better designed programs– Managed in an environment that demands
performance.