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(c) 1999 Arunaselam Rasappan
““RESULTS ORIENTED RESULTS ORIENTED BUDGETING REFORMS:BUDGETING REFORMS:
MALAYSIA & SINGAPORE”MALAYSIA & SINGAPORE”
WORLD BANKWORLD BANKWashington, DCWashington, DC15 JULY, 199915 JULY, 1999
ARUNASELAM RASAPPAN, PhD.
EXECUTIVE DIRECTOR
ARTD (Malaysia)
Management, Evaluation, & Research AssociatesKuala Lumpur
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(c) 1999 Arunaselam Rasappan
THE SOCIO-ECONOMIC THE SOCIO-ECONOMIC ENVIRONMENTENVIRONMENT
ininMALAYSIA/MALAYSIA/SINGAPORESINGAPORE
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BUDGET REFORMS & NATIONAL BUDGET REFORMS & NATIONAL STRATEGIES / AGENDASTRATEGIES / AGENDA
__________________________________________________________________________________
* DYNAMIC SOCIO-ECONOMIC * DYNAMIC SOCIO-ECONOMIC ENVIRONMENTENVIRONMENT
* SOCIO-ECONOMIC * SOCIO-ECONOMIC DEVELOPMENTDEVELOPMENT
* NATION-BUILDING* NATION-BUILDING
* GLOBALIZATION * GLOBALIZATION
* COMPETITIVENESS* COMPETITIVENESS
* ENABLING MECHANISMS* ENABLING MECHANISMS
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BUDGET REFORMS & OTHER BUDGET REFORMS & OTHER CAUSAL FACTORSCAUSAL FACTORS
__________________________________________________________________________________
* RISING EXPECTATIONS* RISING EXPECTATIONS
* TREND TOWARDS* TREND TOWARDS RIGHTSIZING RIGHTSIZING
* SCARCE RESOURCES* SCARCE RESOURCES
* NEW PUBLIC MANAGEMENT* NEW PUBLIC MANAGEMENTINITIATIVESINITIATIVES
* INCREASING DEMAND FOR * INCREASING DEMAND FOR GREATER ACCOUNTABILITY GREATER ACCOUNTABILITY
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THE THE ACCOUNTABILITY AGENDAACCOUNTABILITY AGENDA
__________________________________________________________________________________
“PROGRAM RESULTS”“PROGRAM RESULTS”
“SERVICE QUALITY”“SERVICE QUALITY”
“MORE WITH LESS” “MORE WITH LESS”
“VALUE FOR MONEY” “VALUE FOR MONEY”
“RESOURCES OPTIMIZATION”“RESOURCES OPTIMIZATION”
“IMPROVED ACCOUNTABILITY” “IMPROVED ACCOUNTABILITY”
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BUDGET BUDGET REFORMSREFORMS
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BUDGET REFORMSBUDGET REFORMS
* LINE-ITEM BUDGETING (Pre 60s)
* CENTRALIZED * DETAILED CONTROL * INCREMENTAL * REACTIVE BUDGETS
* PROGRAM PERFORMANCE BUDGETING SYSTEM (PPBS) (1960s TO 1990s)
* PROGRAM/ACTIVITY BASED * PERFORMANCE FOCUS * DETAILED CONTROL * CENTRALIZED
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BUDGET REFORMSBUDGET REFORMS
PERFORMANCE-ORIENTEDBUDGETING (1990s)
* MODIFICATION TO PPBS
* PROGRAM / ACTIVITY BASED
* AGGREGATE CONTROL
* GREATER FLEXIBILITY
* PERFORMANCE BASED
* RESULTS FOCUS
* PERFORMANCE TOOLS
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BUDGET REFORM BUDGET REFORM SEQUENCING ISSUESSEQUENCING ISSUES
STAGE OF SOCIO-ECON DEV’T
RESOURCE AVAILABILITY
RESOURCE CAPACITIES
CULTURAL & VALUE SYSTEMS
FOCUSSED & STRUCTURED
PRACTICAL EXAMPLES
TECHNICAL ASSISTANCE
LEADERSHIP & VISION
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ASSOCIATED ASSOCIATED PUBLIC SECTOR PUBLIC SECTOR
REFORMSREFORMS
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DRIVERS OF OTHER PUBLIC DRIVERS OF OTHER PUBLIC SECTOR REFORMS & FOCUSSECTOR REFORMS & FOCUS
CRITICAL DEVELOPMENT MECHANISMS
* CHANGE AGENTS * DEV’T FACILITATORS
GLOBAL COMPETITIVENESS
* MALAYSIA INC. * CHANGE AGENTS * GROWTH FACILITATORS
CAPACITY & CAPABILITY BUILDING
PUBLIC SERVICE FOCUS
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ASSOCIATED PUBLIC SECTOR ASSOCIATED PUBLIC SECTOR REFORM INITIATIVESREFORM INITIATIVES
PRODUCTIVITY IMPROVEMENTS
TQM
ISO 9000
QUALITY IMPROVEMENTS
CONTINUOUS IMPROVEMENTS
PERFORMANCE REPORTING
INNOVATIONS IN GOVERNMENT
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ASSET MANAGEMENT
COSTING OUTPUTS/ACTIVITIES
CLIENT CHARTERS
SERVICE RECOVERY
COUNTER SERVICE
COMPLAINTS HANDLING
PERFORMANCE BUDGETING
ASSOCIATED PUBLIC SECTOR ASSOCIATED PUBLIC SECTOR REFORM INITIATIVESREFORM INITIATIVES
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LINKAGE BETWEEN LINKAGE BETWEEN BUDGET REFORMS &BUDGET REFORMS &
MANAGEMENT MANAGEMENT REFORMSREFORMS
CRITICAL ROLE OF MANAGEMENT REFORMS
LINK WITH NATIONAL DEV’T
LINK WITH ECON. GROWTH
LINK WITH SERVICE QUALITY
MISSING LINKS WITH BUDGET REFORMS
INTEGRATED PERFORMANCE MANAGEMENT FRAMEWORK
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DIFFICULTIES IN ADOPTING AN DIFFICULTIES IN ADOPTING AN INTEGRATED PERFORMANCE INTEGRATED PERFORMANCE MANAGEMENT FRAMEWORKMANAGEMENT FRAMEWORK
LACK OF PROVEN AND WORKABLE MODELS
INTRICACIES & DIFFICULTIES
INABILITY OF POLICY-MAKERS AND PROGRAM MANAGERS
LACK OF RESOURCES
LACK OF EXPOSURE AND GUIDANCE
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The The Results-Oriented Results-Oriented
BudgetingBudgeting System System(MBS/PBS)(MBS/PBS)
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THE RBB SYSTEMTHE RBB SYSTEM
IMPLEMENTED IN 1990 (1996)
BASED ON THE PPBS (1969)
NOW INTEGRATED WITH KEY ELEMENTS OF THE PPBS, ZBB, AND MBO
BASED ON THREE MAJOR
ACCOUNTABILITY TYPES
“LET MANAGERS MANAGE & MAKE MANAGERS MANAGE”
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THE RBB SYSTEMTHE RBB SYSTEM
TRUST & EMPOWERMENT
ACCOUNTABILITY FOR
FLEXIBILITY
PERFORMANCE AGREEMENTS BETWEEN CEO & MINISTRY OF FINANCE
EXPENDITURE TARGETS BASED ON THREE YEAR BUDGET TRENDS & BUDGET FORMULA
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THE RBB SYSTEMTHE RBB SYSTEM
TREATMENT OF CURRENT
POLICIES, NEW POLICIES, &
ONE-OFFS
PERFORMANCE AGREEMENT & ANNUAL REPORTING
VARIANCE ANALYSIS & EXCEPTIONS REPORTING
EFFICIENCY DIVIDEND
“THRESHOLD” OR EXCESS
CLAUSE
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THE THE PERFORMANCE PERFORMANCE MANAGEMENT MANAGEMENT FRAMEWORKFRAMEWORK
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THE MISSION & PiL
STRATEGIC PLAN
GOALS & OBJECTIVES
PERFORMANCE PLAN
PERFORMANCE MANAGEMENT ELEMENTS
PERFORMANCE REPORTING
PERFORMANCE EVALUATION
USE OF PROGRAM LOGIC
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Program Logic & Linkages Program Logic & Linkages ModelModel
(ProLL Model) (ProLL Model)CLIENTS
NEEDS / PROBLEMS
POLICIES
PROGRAM/ACTIVITY
INPUT(RESOURCES)
PROCESS
OUTPUT OUTCOMEOUTCOME
Objective Achievement(rate / level )
OBJECTIVE
Needs Fulfillment /Problem alleviation
(rate / level)
MissionGoals
Arunaselam Rasappan (1992)
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BUDGET REFORM BUDGET REFORM IMPLEMENTATON STRATEGIESIMPLEMENTATON STRATEGIES
* STRATEGIC PLANNING* STRATEGIC PLANNING
* PREPARATORY WORK* PREPARATORY WORK
* INTER-AGENCY* INTER-AGENCYCOORDINATIONCOORDINATION
* ENABLING MECHANISMS* ENABLING MECHANISMS
* PILOT TESTING* PILOT TESTING
* STAGGERED IMPLEMENTATION* STAGGERED IMPLEMENTATION
* STAGGERED INTENSITY * STAGGERED INTENSITY
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BUDGET REFORM BUDGET REFORM IMPLEMENTATON - MISSING IMPLEMENTATON - MISSING
LINKSLINKS
* OWNERSHIP & COMMITMENT * OWNERSHIP & COMMITMENT FROM ALL LEVELSFROM ALL LEVELS
* PERFORMANCE * PERFORMANCE MEASUREMENT SYSTEMMEASUREMENT SYSTEM
* PERFORMANCE INFORMATION* PERFORMANCE INFORMATIONSYSTEMSYSTEM
* INTEGRATION WITH OTHER * INTEGRATION WITH OTHER MANAGEMENT REFORMSMANAGEMENT REFORMS
* INTER-AGENCY* INTER-AGENCYCOORDINATIONCOORDINATION
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BUDGET REFORM & POLICY-BUDGET REFORM & POLICY-MAKINGMAKING
* MAJOR MISSING LINK* MAJOR MISSING LINK
* INTRICACIES OF POLITICAL * INTRICACIES OF POLITICAL CONSIDERATIONSCONSIDERATIONS
* POLITICAL V/S * POLITICAL V/S ADMINISTRATIVE DRIVENADMINISTRATIVE DRIVEN
* POLICY CONSIDERATIONS AS * POLICY CONSIDERATIONS AS KEY COMPONENT OF BUDGETINGKEY COMPONENT OF BUDGETING
* NEED FOR INTEGRATION * NEED FOR INTEGRATION BETWEEN PERF. MNGT, PERF. BETWEEN PERF. MNGT, PERF.
EVALUATION & POLICY-MAKINGEVALUATION & POLICY-MAKING
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BUDGETING, BUDGETING, FISCAL DISCIPLINE, FISCAL DISCIPLINE,
ALLOCATIVE EFFICIENCYALLOCATIVE EFFICIENCY&&
OPERATIONAL EFFICIENCYOPERATIONAL EFFICIENCY
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BUDGETING, FISCAL DISCIPLINE, BUDGETING, FISCAL DISCIPLINE, ALLOCATIVE EFFICIENCY & ALLOCATIVE EFFICIENCY & OPERATIONAL EFFICIENCYOPERATIONAL EFFICIENCY
* IMPROVED FISCAL DISCIPLINE* IMPROVED FISCAL DISCIPLINE
* Budget Discipline* Budget Discipline* Resource Predictability* Resource Predictability
* Improved Planning* Improved Planning* Reduced Supplementaries* Reduced Supplementaries
* IMPROVED OPERATIONAL * IMPROVED OPERATIONAL DISCIPLINEDISCIPLINE
* Improved financial mng’t* Improved financial mng’t* Less budget overruns* Less budget overruns* Focused Expenditures* Focused Expenditures* Better value-for-money* Better value-for-money
* Reduced Wastage* Reduced Wastage
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BUDGETING, FISCAL DISCIPLINE, BUDGETING, FISCAL DISCIPLINE, ALLOCATIVE EFFICIENCY & ALLOCATIVE EFFICIENCY & OPERATIONAL EFFICIENCYOPERATIONAL EFFICIENCY
* LIMITED ALLOCATIVE * LIMITED ALLOCATIVE EFFICIENCYEFFICIENCY
* Reasonable success at agency * Reasonable success at agency levelslevels
* Limited success at politiical * Limited success at politiical levelslevels
* Room for improvement* Room for improvement
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BUDGETING EFFORTS TOWARDSBUDGETING EFFORTS TOWARDSIMPROVING EFFICIENCYIMPROVING EFFICIENCY
GOVERNMENT COMMITED GOVERNMENT COMMITED TOWARDS IMPROVING TOWARDS IMPROVING
EFFICIENCY:EFFICIENCY:
* ENHANCED STRATEGIC PLANNING* ENHANCED STRATEGIC PLANNING* PERFORMANCE PLANNING* PERFORMANCE PLANNING
* MINIMIZING AD-HOC BUDGETS* MINIMIZING AD-HOC BUDGETS* LINKING RESOURCES & POLICY* LINKING RESOURCES & POLICY
* MINIMIZE ONE-OFFS* MINIMIZE ONE-OFFS* EXPENDITURE CAPS* EXPENDITURE CAPS
* BALANCED BUDGET APPROACH* BALANCED BUDGET APPROACH* REDUCED ENTITLEMENTS &* REDUCED ENTITLEMENTS & CHARGED EXPENDITURES CHARGED EXPENDITURES* EXCEPTIONS REPORTING* EXCEPTIONS REPORTING
* COST CONSCIOUSNESS* COST CONSCIOUSNESS* FLEXIBILITY FOR ACCOUNTABILITY* FLEXIBILITY FOR ACCOUNTABILITY
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ACCOUNTING ACCOUNTING REFORMSREFORMS
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ACCOUNTING ACCOUNTING REFORMSREFORMS
MINIMAL LINKS WITH BUDGET REFORMS
ACCOUNTING REFORMS FROM 1960s
MAJOR REFORMS LINKED BUT OTHERS WERE PIECEMEAL
MAJOR ACCOUNTING REFORMS LINKED TO BUDGETS:
MODIFIED CASH ACCOUNTING COST INFORMATION DECENTRALIZED ACCOUNTING INTEGRATED INFORMATION
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ACCOUNTING ACCOUNTING REFORMSREFORMS
CASH ACCOUNTING
MODIFIED CASH ACCOUNTING
SELF-ACCOUNTING AGENCIES
DECENTRALIZATION TO STATES AND AGENCIES
INTEGRATED REPORTING
MICRO-ACCOUNTING
ELECTRONIC GOVERNMENT
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BUDGETING, FISCAL RISKS BUDGETING, FISCAL RISKS & CONTINGENT LIABILITIES& CONTINGENT LIABILITIES
SPECIAL CIRCUMSTANCES OF DEVELOPING COUNTRIES
TRANSPARENCY ISSUES IN BUDGETING
COMPLIANCE WITH ACCOUNTING PRINCIPLES
LINKAGE WITH BUDGETING PRACTICES
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TIME FRAMEWORK FOR TIME FRAMEWORK FOR BUDGETINGBUDGETING
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TIME FRAMEWORK FOR TIME FRAMEWORK FOR BUDGETINGBUDGETING
ANNUAL BUDGETING
PERFORMANCE BUDGETS & MULTI-YEAR FOCUS
ELEMENTS OF MULTI-YEAR PLANNING & CEILINGS
MODIFIED MULTI-YEAR BUDGETING WITH ESTIMATED RESOURCE CERTAINTY
FORWARD ESTIMATES - DEVT V/S OPERATING BUDGETS
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IMPACT OF BUDGET REFORMS -IMPACT OF BUDGET REFORMS -MAJOR REFORM FEATURES & MAJOR REFORM FEATURES &
IMPACTIMPACT
ACCOUNTABILITY FOR FLEXIBILITY
ANNUAL BUDGET CEILINGS
PROGRAM AGREEMENTS & PERFORMANCE FRAMEWORKS
FUNDS TRANSFER FLEXIBILITY
EFFICIENCY DIVIDENDS
PERFORMANCE MEASUREMENT
PROGRAM EVALUATION & POLICY-MAKING PROCESSES
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(c) 1999 Arunaselam Rasappan
““RESULTS ORIENTED RESULTS ORIENTED BUDGETING REFORMS:BUDGETING REFORMS:
MALAYSIA & SINGAPORE”MALAYSIA & SINGAPORE”
WORLD BANKWORLD BANKWashington, DCWashington, DC15 JULY, 199915 JULY, 1999
ARUNASELAM RASAPPAN, PhD.
EXECUTIVE DIRECTOR
ARTD (Malaysia)
Management, Evaluation, & Research AssociatesKuala Lumpur