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‘Managing for Results’ in‘Public Financial Management’
New ‘experiment’ in Public Sector Policy and Management
Very limited studies, literature and evidence Provide a bird’s view perspective Improve understanding of MfR Share observation and reflections on the topic Stimulate debate on MfR and its potentials for
MfR: results first; then resources, then … PFM : money first; then processes; then results?? MfR: impact mostly on developed country agencies MfR can potentially impact developing country PFM MfR to likely suffer from the ‘pendulum effect’ The impact of PFM: the improved wellbeing and
Managing for Results (MfR) is aStrategic Quest for Results MfR practiced for millenniums Strong military influence ‘Managing for Results’ - the precursor term for
‘Strategic Management’ MfR: envisioning results, aligning resources and
taking action to achieve results The private sector uses MfR to create wealth; The public sector can use MfR to deliver results to
Finance is finite AND “Do more with less!” - early 1990s recession Finance is not everything
o CIDA’s Strategic Review and Renewal Exercise (1990+)o The ‘Government Performance and Results Act’ is enacted in the U.S. (1993)o Results-Based Management (RBM) at CIDA (1993+)o Office of the Auditor General of Canada Report (1993+1995)o Aid Effectiveness Principles adopted by DAC-OECD (1996)o Assessing Aid: a World Bank report (1998)o Results for Canadians - a Government-wide RBM Policy (2000)o Many OEDC countries have adopted a results-focus (+ - 2000)o The Millennium Declaration on the MDGs at the UN (2000)o ‘Managing for Development Results’ – WB and OECD (2002)o Paris Declaration on Aid Effectiveness DAC-OECD-led process (2005+)
Global consensus on the need for a results focused approach
Comprehensive Audit: an early form of Performance Audit Performance Audit is: “… a systematic, purposeful, organized and objective
examination of government activities; … designed to promote accountable government; … includes the examination of economy, efficiency, cost effectiveness and environmental effects of government activities ...”
“A focus on performance covers both the benefits accomplished [for citizens] and due process and fairness in the delivery of services”(1)
Performance Audit calls for performance (1) Excerpts adapted from the Performance Audit Manual, Office of the Auditor
General of Canada - June 2004; pages 13 and 17)
Growing Impact of Supreme Audit Institutions On PFM Performance Improving SAIs capacity in Performance Audit Improving profile and independence Increasing innovative audit standards & specialties Increasing interaction with parliaments, civil
society, the media and citizens Increasing transparency, improved anti-corruption,
and increasing accountability Ultimately, improving PFM performance - results
Performance Budgeting -A First Step Towards MfR in PFM
Performance budgeting = Results-Based Budgeting Emerged within a decade or so Conveys government commitment to performance A Public Expenditures Management flavor Consists in ‘informing’ the ‘Budget’ with ‘Results’ Falls short of being truly ‘results-focused’ First step towards MfR in PFM for greater Public
A deliberate, systematic, rigorous pursuit of results A way of thinking; of doing business Linking of ‘Re$ources’ with ‘Results’ committed to Two “brands” of results-focused Management
o Original: ‘Results-Based Management’ (‘RBM’)1 - Inputs vs. Results (outputs, outcomes, and impacts)
o Consensus: ‘Managing for Development Results’ (‘MfDR’)2 1Original “brand”: Canadian International Development Agency (CIDA); 1993+ 2Subsequent consensus “brand”: DAC-OECD-led consultative process 2002+
Gender Equality Mainstreaming : responsiveness to specific issues of girls, boys, women and men
Sustainable Environment Mainstreaming: regulatory compliance and proactive developmental sustainability
Knowledge Management & Sharing; echoes a 4th RBM principle: ‘Learning by Doing’
7. Performance Management
Performance Management is a subset of MfR Expected results planned ahead Indicators selected and baseline data collected Performance management framework Implementation: activities; budgets; processes;
reports; risk mgt., work plans; etc. Continuous monitoring and analysis of results,
activities, risks, lessons learned Continuous improvement towards results
Results for citizens - girls, boys, women and men Strong focus: elimination of wasteful ‘activities’ ‘Guaranteed’ ‘Value for Re$ources’: right results at
right efficiency Capacity to demonstrate relevance and communicate
performance - ‘Results’ vs. ‘Re$ources’ ‘Rewards’: recognition; more funding; winning
competitive funding
MfR in PFM - Where Are We?
Application of MfR in PFM Developing country experiences Developed country experiences Selected country experiences Key challenges of MfR in PFM
Public Expenditures Management mentality Supremacy of the budget process Performance/Results-Based Budgeting mostly Some ‘Results for citizens’ reform: deliberate
MfR is a by-product of austerity and crisis management
Agency/departmental performance management Whole-of-government approaches Improvement of regulatory and policy frameworks Implementation through the budget process The pendulum effect after every crisis hardening vs.
easing of rules Dilemma of stimulus packages: quick results vs. fear
MfR in PFM: Key Challenges ‘Expenditure’ mentality; supremacy of the ‘Budget’ Risk-averse culture: across-the-board measures Complexity in government/self preserving structures Divided governance: Political; Legislative; Public
Service; Judiciary; Decentralized regimes… Short-to-medium term electoral cycle vision Increased discourse but still confusion and
insufficient practice Difficulty in moving beyond activities and outputs
MfR in PFM:Where Are We Going? MfR is increasing in awareness and appeal Performance budgeting is increasing in popularity Citizens will keep pushing for results Do we have a choice to practice MfR or not? Yes - BUT… We must master the art and the science for MfR in
‘Managing for Results’ is here to stay - citizens will keep pushing for results
Private sector uses MfR; creates enormous wealth Private sector flexibility: the budget is a tool Public sector rigidity: the budget is the law! The Public Sector can and must master MfR to
deliver sustainable wellbeing and prosperity - for citizens: girls, boys, women and men…
If Public Finance professionals catch up with MfR and lead for performance; results; outcome; impact