2 GBSand PAFs Stephen Lister

Budget Support and Performance Assessment Frameworks: 

Budget Support and Performance Assessment Frameworks CABRI Workshop on Aid and the Budget Mauritius, 17-18 May 2007 Stephen Lister

Overview of Presentation: 

Overview 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?

Part 1: 

Part 1 Key Findings from Joint Evaluation of General Budget Support

Scope of evaluation : 

Scope 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)

Overall assessment Overall positive assessment in 5 of 7 cases (exceptions, Nicaragua and Malawi).: 

Overall assessment Overall positive assessment in 5 of 7 cases (exceptions, Nicaragua and Malawi).

PFM-relevant findings: 

PFM-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

Implications for Good Practice: 

Implications 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.

Part 2: 

Part 2 Budget Support and Performance Assessment Frameworks

PRSPs and Performance Assessment: 

PRSPs 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)

Performance Assessment and Budget Support : 

Performance 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

Contrasting Approaches to Performance Assessment : 

Contrasting 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

Issues and Implications for Budget Managers : 

Issues 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?)