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The ABCs of RBB (Results-Based Budgeting)
Dear Colleagues,
For this online discussion on results-based budgeting, we’ve been lucky to receive support from experts in the field: the UNDP Regional Center in Dakar Senegal. The Center has crafted the framework and content of this ediscussion, and will be intervening on occasion to respond to any burning questions or issues raised. We are really grateful for their experience and advice and look forward to working with this on this discussion.
Overview
As you know, in Africa, citizens and development partners are increasingly demanding greater accountability and transparency from their governments. Dissatisfied with the often lacklustre growth and performance in fighting poverty, development stakeholders are insisting that budgets be more effective and have a clear link between resources and results.
The most direct way to link resources with results is through results-based budgeting. Results-based budgeting systems are gradually being adopted throughout African, with English-speaking countries leading the way. For the past 10 years or so, more and more African countries have begun developing medium-term expenditure frameworks and program budgets. This means that sector ministries and departments are required to propose public expenditure programming for several years (generally three or four), broken down into programs and accompanied by specific goals (as opposed to yearly budgets that don’t focus on results).
A recent results based budgeting milestone has been achieved. A newly harmonized public finance framework was adopted in 2009 by the West African Economic and Monetary Union (WAEMU). This marks the transition from a line item budgeting approach to a results-based logic, characterized by budgets built around public policy objectives and tracking and monitoring systems. These monitoring systems are less focused on the amounts spent and more focused on results achieved. This reform is causing stakeholders to review the structure of responsibilities within departments/ministries and institutions. Program mangers are now becoming key players in the budgeting process. This reform, already under way in the WAEMU, is now being proposed in the countries of the Monetary and Economic Community of Central Africa (CEMAC), and will likely take place in the Economic Community of West African States (ECOWAS).
In short, reform today is no longer limited to proposing programming tools alongside classical budgets. Results based budgeting is a radical change, the focus of which is the ways in which budgets are put together, presented and discussed. Secondly, it addresses how responsibilities are structured and the nature of budget dialogue at the managerial level in each ministry/department and public institution. It also aims to strengthen parliamentary prerogatives for the preliminary evaluation of the government’s major budget directions and the subsequent monitoring of the use of public resources and results achieved.
Discussion Format
By comparing and highlighting individual experiences, the discussion will focus on the array of processes used, take stock of difficulties encountered, and identify best practices. The discussion will also try to dispel myths and clarify technical terms.
The discussion will run for approximately two months, with a set of questions posted weekly. Furthermore, the main findings will be summarized on a regular basis.
The discussion will focus on seven topics:
- Lessons learned from line item budgeting and how to transition from line item budgeting to results-based budgeting
- Key concepts, areas in need of clarification, objectives to be attained
- General results-based budgeting process framework
- Technical options for transitioning to results-based budgeting
- Results-based budgeting and enhancing social and economic performance
- Results-based budgeting and organizational change
- Results-based budgeting, strengthening of parliamentary institutions and developing citizen oversight
- Summary
To get started, please find a list of helpful resources below!
Please let me know if you have any questions, comments, or thoughts.
I am really looking forward to this discussion.
Recent Resources
- Allen R. (2009), The Challenge of Reforming Budgetary Institutions in Developing Countries, IMF Working Paper 09/96, Washington.
- Ljungman G. (2009), Top-Down Budgeting – An Instrument to Strengthen Budget Management, IMF Working Paper 09/247, Washington DC.
- Schiavo-Campo S. (2009), Potemkin Villages: ‘The’ Medium-Term Expenditure Framework in Developing Countries, Public Budgeting & Finance, Vol. 29, Issue 2, Summer 2009.
- World Bank (2007), Results-Based National Development Strategies: Assessment and Challenges Ahead, Washington DC.
- World Bank and GTZ (2007), Minding the Gaps: Integrating Poverty Reduction Strategies and Budgets for Domestic Accountability, Washington DC.
The Pole - Development Strategies and Public Financial Management was established in 2007 within the UNDP Regional Centre in Dakar.
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Views: 434
Replies to This Discussion
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Permalink Reply by Willem H.M. van Immerzeel on -
Dear Hannah
So many questions... I'll try to answer only where I can and if applicable.
What kind of prizes are you offering? Whenever possible, we will give prizes in cash. This is easier, and best motivator money can buy is cash. However, institutional limitations do not always allow giving money to families or communities. In such cases, prizes are awarded in kind (alfalfa seed, tools, barbed wire, etc. but also in small projects such as a stable, a bridge, a well, etc.).
This sounds a bit like some of the ideas behind conditional cash transfers - is that correct? Yes, it is a bit like CCT, however, with Pachamama Raymi peer-learning is at the heart of things. With Pachamama Raymi, the (cash) prizes are only for those who achieve best results, and not for all who send their children to school, or attend pre-natal care, et.
How did your government or organization engage the transition from means-based budgeting to results-based budgeting?
The project in Malawi is still in a preliminary stage. But I can speak about experience elsewhere. Where projects where not designed based on results-based budgeting, there is often stiff resistance from project staff. They need to go through a fundamental change in their role, which some find rather difficult.
Was this process engaged within the framework of a pre-determined action plan? Yes. In the first project where I assisted in this process, I provided the staff with a rough outline of the action plan and had the staff design the gaps, altering the action plan in the process. This was in PAC-II, Bolivia.
Kind regards,
Wim
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Permalink Reply by Charles Warria on -
Dear Hannah,
The journey toward Results-based budgeting is slowly, but steadily taking shape in Kenya, and especially within the Public expenditure framework. The Kenya Government has made tremendous strides in streamlining the public results framework, through the Performance Contracting and Rapid Results Initiative (RRI), two new requirements for service delivery by all Government agencies and Civil Servants. Since the onset of these two initiatives, the Kenya Government has developed the National Integrated Monitoring and Evaluation System (NIMES) and the National Results Indicators that guide performance by all Ministries and Parastatals. The Prime Minister's Office is directly in-charge of over-seeing the implementation of Performance contracting and awarding best-performing Ministries and Agencies. The establishment of the NIMES has necessitated the Ministry of Finance (Treasury) to streamline budgetting, budgetary allocation and allotment of funds to specific key result areas. The Prime Minister's Quarterly Round-table discussions, bringing together a Public-Private partnership, reviews the sector performances in achieving rapid results for the Kenyan public, vis-avis, the public expenditure.
As a Country, Kenya may still have a distance to go in results-based budgeting, but the wonderful news is that there are indications of movement toward that direction.
Thanks
Charles Warria
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Permalink Reply by Hannah J Cooper on -
Dear Wim and Charles,
Thank you so much for your responses and for providing snapshots of what is taking place in your countries!
Colleagues, I’d like to move to a slightly more technical set of questions:
- In what order were the general Medium Term Expenditure Frameworks (MTEFs) and the sector or departmental/ministerial MTEFs developed? Were other tools recommended?
- What methodological choices were made to define program structures and determine their logical framework?
- What methods are being used to quantify costs and reconcile classical budget/program budget data?
- Have standard rules for defining program indicators been developed? Is program quality subject to specific controls in each department/ministry or externally?
I really look forward to your thought and feedback on this!
Thanks so much!
Hannah
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Permalink Reply by Hannah J Cooper on
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Dear Colleagues,
I know many of you have been travelling to the AfCoP Annual Meeting. I hope that you have all had a safe return home. In addition to the Annual Meeting, there was a two day training provided by the CLEAR Initiativeon Results Based Budgeting.
I'd love to hear any insights that you learned through this training. I think that the approaches discussed could be very useful for other members.
In addition, Michiel Verweij has posted a blog on Rwanda's multi stakeholder forms, which focuses on citizen participation in program planning and implementation. You can read his post here. The post raises interesting posts on involving stakeholders in results based budgeting processes. It would be great to get your thoughts on this as well!
I look forward to hearing from you!
Hannah
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Permalink Reply by Hannah J Cooper on
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Dear Colleagues,
I hope that you are all having an enjoyable summer thus far.
I'd like to propose the following:
Unfortunately, we've had very little response to this ediscussion, so I am posting the remaining questions that we had planned for the upcoming posts. I hope that they will elicit some responses!
I will also start working on our next ediscussion. I would be really grateful for any suggestions that you may have! Please feel free to post them below or send them to me via email: hjcooper12@gmail.com.
I look forward to hearing from you!
Kind regards,
Hannah
1. Results-based budgeting and enhancement of social and economic performance
- Has the use of these new tools resulted in a significant increase in the allocation of expenditures between the sectors and in each sector?
- Were the changes in budgetary appropriations that were chosen confirmed in terms of actual expenditure?
- Have you noted in your country any improvements in public service performance and in attainment of Millennium Development Goals (MDGs) that can be attributed directly to the adoption of results-based budget systems?
2. Results-based budgeting and organizational change
- Has the introduction of results-based budgeting had significant repercussions on administrative structures and on the identification of responsibilities regarding implementation of budgets and activity programs? If so, what are they?
- Have the budgeting changes resulted in enhanced productivity/motivation among the units concerned?
- Was an explicit relationship found to exist between the ability of programs to attain their performance indicators and the motivation of the administrative units concerned?
- Where WAEMU countries are concerned, “program managers” with considerable management autonomy are going to be introduced in each department/ministry. If you belong to a country in the WAEMU zone, how do you actually see these managers being introduced? Do you think there will be difficulties, and, if so, what are they? If you are not a member of the WAEMU zone and your country opted for a results-based budget system, do you think it would be desirable for such a measure to be implemented in your country?
3. Results-based budgeting, strengthening of parliamentary institutions and development of citizen insight
- If the results-based budgeting approach has been used in your country, did it result in the presentation of clearer and more transparent budget documents showing an explicit relationship between the resources allocated to departments/ministries and the results to be attained?
- Did the new tools further discussion about budget options, for example, through budget debates or more extensive analysis of underlying policies by specialized parliamentary committees?
- Were parliamentary powers strengthened through the reform?
- Were civil society organizations involved in one way or another in implementation of the reform? Were they instructed in the new approach and in the associated techniques? Did the reform strengthen citizen oversight practices overall?
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Permalink Reply by PAUL GAKUMBA on
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This is so gud it is better we brain braistorm effectivelly and efficiently, based on quality standards.
thanks
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