follow up actions by donors and countries, the case of pefa
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From May 2008 ICGFM Conference, Jim Brumby PREM Public Sector Governance, World BankTRANSCRIPT
The World Bank PREM Public Sector GovernancePage 1
Follow-up Actions by Donors and Countries
~ The case of PEFA ~
Session: “What Governments are Doing to Improve Governance”
ICGFM, Miami, May 20, 2008
Presented by:Jim BrumbyPREM Public Sector GovernanceThe World Bank
The World Bank PREM Public Sector GovernancePage 2
Outline
Placement of PFM in Governance How countries can use PEFAs
Action plan creation MOF strengthening and other capacity building
How donors can use PEFAs Mainstreaming into Country Policy & Institutional Assessments
(CPIA) and Country Assistance Strategies (CAS) Mainstreaming into country lending and analytical products
• Program lending• TA lending• Dialogue
Future issues Repeat assessments
• Goodhart’s law Increased publication From diagnosis to action
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Public Management
Public financial management & procurement,
monitored by PEFA
Administrative & civil service reform
Governance in SectorsTransparency & participation
Competition in service provision
Sector-level corruption issues (Extractive Industries Transparency Initiative, forestry)
Civil Society, Media & Oversight Institutions
State oversight institutions (parliament, judiciary, audit)
Transparency & participation (FOI, asset declaration, user
participation & oversight)
Civil society & media
Local GovernanceCommunity-driven development
Local government transparency
Downward accountability
Private Sector
Competitive investment climate
Responsible private sector
PEFA is part of improving governance through various ‘Entry-Points’
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Country use of PEFAs
1. Necessary for the country to ‘own’ the results1. Quality of process; nature and intensity of government engagement2. Quality of information flows; openness to reform3. Skills of assessors
2. Drill down from PEFA results to understanding the root causes1. Look at comparators2. Look at time series3. Look at key factors such as institutions, systems, human resources
3. Consider country effort in different areas1. What are the signals being sent by MOF and other management
1. E.g. Ghana2. Are the areas of weakness of equal importance
1. E.g. Norway
4. Create action plan that fits circumstances1. Engage with donors when important2. Capacity constraints can be limiting
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Donors use of PEFAs (esp. Bank)
PFM is the ‘core of the core’ of Governance work at the Bank GAC is central element of current President’s strategy
PEFA is having a very significant influence on Bank’s work in PFM Core aspect of the ‘strengthened approach’ Provided discipline and focus to Bank’s interaction Used by the IEG in reviewing performance of lending for PFM
CASs (e.g. Azerbaijan, Brazil (subnational level) Mali, Zambia) CPIAs (e.g. Q13; rigorous cross-check)
Influences IDA lending limits Investment and program lending
Creates baseline; major input to review Part of a growing portfolio
• From 2.6% Bank loans (2000) to 10.2% (2000-06) Recommend to replicate it for other public management work
Economic and Sector Work and Analytical & Advisory Activities Ghana PER 2006; Albania as part of Country Fiduciary Assessment and Public
Expenditure & Institutional Review 2006 Other donors
Increasingly used as input to fiduciary considerations Informing dialogue; shared understanding
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Going forward
Repeat assessments PEFA generally recommends about every 3 years
• About 10 repeat assessments either completed or planned Some countries may prefer self-conducted annual reassessments, with
periodic attestations by external parties Will provide ‘test’ of framework
• Team composition and incentives– Some common membership may be desirable– Watch for desire to retrofit assessments with reforms
• New information– New information suggest old judgments were wrong
• Quality improvements– Whether to correct for error
• Stakeholder engagements– Ensure many sided and sighted view of system
Is Goodhart’s law relevant to PEFAs Dissemination
Part of value is form common pool Drive to increase publication; reduce unpublished stock, and keep it low
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Action plans
Movement from diagnosis to action is fundamental to PEFA’s success For development and fiduciary reasons But in 2006, recommendations for actions included
• All reports 45%• Integrated products 100%• PFM-PR’s 23% - “No PFM-PR presents a thorough and systematic
narrative exposing coherent recommendations.”
Country is in the driver’s seat Needs space and time to develop its own action plan Needs to focus on what is important
• Prioritized actions• Reflect on sequencing
May need assistance to implement and to monitor the plan • Potential role for PEFA updates
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Conclusion
From both donor and country perspectives, indicators are usefully informing governance reform strategies PEFA directly very influential at the Bank PEFA model very influential at the Bank PEFA model spreading to other areas:
• HR indicators being piloted, as part of Actionable Governance Indicators
Other speakers Thusitha Pilapitiya; case of Malawi John Sitton; case of Mali Miguel Russi; case of Colombia
On-the-ground responses to various mechanisms to improve transparency and accountability
• Role of tracking indicators
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DiscussionDiscussion
Thank you for your attention