Budget Support and Performance Assessment Frameworks

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Budget Support and Performance Assessment Frameworks. CABRI Workshop on Aid and the Budget Mauritius, 17-18 May 2007. Stephen Lister. Overview of Presentation. Aims Summarise findings of Joint Evaluation of General Budget Support (especially findings as they relate to PFM)
Budget Support and Performance Assessment FrameworksCABRI Workshop on Aid and the BudgetMauritius, 17-18 May 2007Stephen ListerOverview of Presentation
  • Aims
  • Summarise findings of Joint Evaluation of General Budget Support (especially findings as they relate to PFM)
  • Identify key issues in linking budgets, budget support and performance assessment frameworks (PAFs).
  • Sequence of session
  • Overview and main findings from GBS evaluation
  • Challenges in performance assessment and PAFs
  • Country experiences from Mozambique and Mauritius
  • General discussion – what good practices are emerging?
  • Budget Support and Performance Assessment FrameworksPart 1Key Findings from Joint Evaluation of General Budget SupportBudget Support and Performance Assessment FrameworksScope of evaluation
  • illustrative sample of countries
  • focus on partnership GBS
  • identified by country-level inventories
  • large volume, but recent, uneven distribution of PGBS
  • useful contrasts in “penetration”
  • PGBS flows (Table 3.3)Budget Support and Performance Assessment FrameworksPositive FeaturesLimitations/Scope for ImprovementRelevant response to problems in aidAffected by continuation of otherØØeffectiveness.modalities; need to considerSpill-over effects enhance quality of aidinteractions (see next slide).Øas a whole.Efficient, effective and sustainable wayNot a panacea; risk of overload and/orØØof supporting national povertyunrealistic expectations.reduction strategies.Ultimate effects will depend on theØInitial effects on poverty mainlyquality of the national povertyØthrough expanding public services.reduction strategy.Positive systemic effects on capacity byLimited links to other capacityØØproviding discretionary funds todevelopment efforts.national budget system.Did not find unintended effects or side-Sustainability requires more attentionØØeffects that would outweigh benefits.to mitigation of risks.Capacity for learning suggests instrument can become more effective over time.ØFindings are more widely relevant to sector budget support and programme-basedØapproaches which sharePGBS design principles.Overall assessmentOverall positive assessment in 5 of 7 cases (exceptions, Nicaragua and Malawi).Budget Support and Performance Assessment FrameworksPFM-relevant findings
  • Efficiency effects of bringing discretionary funds on budget
  • Systemic effects in strengthening PFM, including budget process
  • Predictability: short-term alignment with budget calendar improving, but weak on medium/long term commitments
  • Transaction cost gains for government at disbursement stage
  • PFM a natural core focus for GBS, but TA and capacity building are the least well specified or coordinated inputs of PGBS. [supports case for “strengthened approach”]
  • Absolute PFM benchmarks not applied, nor appropriate
  • Fiduciary risk and corruption?
  • PGBS increases focus on PFM strengthening, transparency etc
  • no clear evidence that PGBS funds have been more vulnerable than other modalities
  • Budget Support and Performance Assessment FrameworksImplications for Good Practice
  • Interaction between aid modalities
  • Overlap between “general” and “sector” budget support
  • Important interactions include:
  • Broad influence on harmonisation and alignment.
  • Increased policy coherence across sectors.
  • PGBS flexibility improves expenditure efficiency across all funding sources.
  • General benefit of PFM strengthening.
  • Complementarity between PGBS and other instruments (e.g. on cross-cutting issues, capacity building, corruption).
  • PGBS benefits (e.g. on efficiency and t-costs) are diminished when off-budget modalities persist.
  • Need more systematic consideration of aid portfolios at country, donor and sector levels.
  • Budget Support and Performance Assessment FrameworksPart 2Budget Support and Performance Assessment FrameworksBudget Support and Performance Assessment FrameworksPRSPs and Performance Assessment
  • Issues in monitoring PRSPs, including:
  • focus on poverty outcomes
  • strength/weakness of links to the budget
  • monitoring requirements of different stakeholders
  • calendar and content of Annual Progress Reports (APRs)
  • Budget Support and Performance Assessment FrameworksPerformance Assessment and Budget Support
  • Links between PRSP approach and trends towards budget support
  • Implications for the information required by budget support donors
  • Hence the development of various performance assessment frameworks, linked to budget support disbursement conditions
  • Recognised problems:
  • diversity of donor approaches, transaction costs
  • potential for unpredictable finance
  • ownership and accountability effects
  • Budget Support and Performance Assessment FrameworksContrasting Approaches to Performance Assessment
  • Different styles of performance assessment, practiced by:
  • IMF
  • World Bank
  • European Commission
  • Bilateral donors
  • Efforts to converge on common PAF, and increasingly to link PAF to PRSP
  • Budget Support and Performance Assessment FrameworksIssues and Implications for Budget Managers
  • Links between PRSP and budget
  • Implications for predictability of finance
  • Good practice in selection of indicators
  • Implications for accountability (to whom? and, for what?)
  • Budget Support and Performance Assessment Frameworks
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