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Mrs. Yanembal Moorghen Mauritius October 2006 Antananarive Madagascar - PowerPoint PPT Presentation

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Management of financial resources , participation and pro-poor budgeting :challenges and opportunities. Mrs. Yanembal Moorghen Mauritius October 2006 Antananarive Madagascar. Objective of presentation.

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Management of financial resources participation and pro poor budgeting challenges and opportunities
Management of financial resources , participation and pro-poor budgeting :challenges and opportunities

Mrs. Yanembal Moorghen


October 2006



Objective of presentation
Objective of presentation pro-poor budgeting :challenges and opportunities

To provide a forum for the exchange of views in respect of the evolution of financial management in the public sector , theories and principles of people’s pro-poor budgeting in different countries and some useful insights to promote pro-poor strategies to address MDG and NEPAD goals


PART I pro-poor budgeting :challenges and opportunities

Evolution of financial management and its applicability to date

Role of government

Types of budgets

Challenges of the public sector


Participatory budgeting

Peoples’ budget case study of different countries including Mauritius

Part III

Monitoring and evaluation of the budget

The way forward

Lessons learned/ Critical success factors

Questions and answers


Challenges pro-poor budgeting :challenges and opportunities

  • Globalization

  • MDG goals to halve poverty by the year 2015

  • NEPAD Objective /Stellenbosch Declaration /charter for Africa

  • Challenges of governance and public administration :

    • Consolidation of democracy and the rule of Law;

    • Enhancement of implementation of public sector reforms that are based on adaptations to socio-economic and cultural contexts

    • Enhancement of citizens ‘participation in the decision- Making process

    • Promotion of good governance ,ethics, transparency and accountability

The first jobs of states
The first jobs of states pro-poor budgeting :challenges and opportunities

  • Getting the fundamentals right: five fundamental task lie at the core of any government ‘s mission without which sustainable shared , poverty-reducing development is impossible :

  • A foundation of Law

  • A benign policy environment including macro-economic stability

  • Investment in people and infrastructure

  • Protection of the vulnerable

  • Protection of the natural environment

    World Development Report 1997:The States in a changing World:P50

Role of government
Role of government pro-poor budgeting :challenges and opportunities

  • Government has through the budget to determine the level of public activity in the economy, a reasonable distribution of income and wealth and to provide some control over the overall level of economic activity

  • The 1980’s have seen an array of changes in the public sector including unprecedented cut-back strategies in expenditure , the drive for efficiency and the various forms of privatisation

New public management npm
New Public Management (NPM) pro-poor budgeting :challenges and opportunities

  • In response to the inadequacies of the traditional model of administration , the NPM brought the focus on the achievement of results and the personal responsibility of managers towards the achievements of the three Es’ namely Economy ,Efficiency and Effectiveness

Npm cont
NPM cont pro-poor budgeting :challenges and opportunities

  • As regards the financial aspect of reforms , countries took different approaches but the objective was the same .

  • The 1982 Financial Management Initiative of the United kingdom , the 1987 “ Management Improvement Programme of Australia , the “Government Management “ in New Zealand brought about sweeping reforms depending on the state of development of their respective countries , the state of their economy and their accounting standards coupled with their own philosophy.

Role of budget within the financial management fm
Role of budget within the Financial Management (FM) pro-poor budgeting :challenges and opportunities

  • The budget is the most important part of FM with the following functions:

  • Economic: allocation and distribution of resources and stabilisation of the economy

  • Financial : evaluate the total government and public activity expenditures within budget receipts and expenditures

Traditional financial management
Traditional financial management pro-poor budgeting :challenges and opportunities

  • Focused mainly on the budget called line-item or input budget .

  • Control mechanism to limit expenditure and provides areas of flexibility.

  • easier and more manageable and adaptable to all economic circumstances and conditions

  • problems associated are as follows:

    • Emphasis more on input than on output

    • Short-term (one year)

    • Incremental budgeting with out critical appraisal

    • Limiting linking costs to achievements

Evolution of the public budget
Evolution of the Public Budget pro-poor budgeting :challenges and opportunities

  • Line-item budgeting

  • Performance budgeting

  • Planning-programme budgeting

  • Zero-based budgeting

  • Result-based budgeting

  • Medium Term Expenditure framework

caution pro-poor budgeting :challenges and opportunities

  • Public Financial management reforms should strengthen basic financial controls before adopting ambitious modernization efforts namely credible budget that delivers resource reliably; improved internal controls, budget execution and performance accountability

  • The scope and sequencing of a PFM capacity development strategy can be informed by a performance assessment of the existing system

  • the type of accounting standards depends on

  • Sholu align

Experience of mtef in africa
Experience of MTEF in Africa pro-poor budgeting :challenges and opportunities

  • MTEFs are receiving renewed attention as they constitute the ideal tools for translating poverty reductions programs within a coherent macro-economic and fiscal framework

  • However following a a comparative assessment of the design and impact of MTEFs on public finance and economic management in nine African countries namely : Ghana ,Guinea , Kenya , Malawi , Mozambique, Rwanda , South Africa, Tanzania and Uganda the following conclusions were reached :

Experience of mtef in africa1
Experience of MTEF in Africa pro-poor budgeting :challenges and opportunities

  • MTEFs alone cannot deliver improved public expenditure management (PEM) in countries where other aspects of budget management , budget execution and reporting remain weak

  • To integrate MTEFs as part of a package of bundle of reforms programmes

  • To effect detailed diagnosis of budget management systems and processes

  • To sequence the overall PEM and to phase the MTEFs in terms of technical dimensions and pilot in terms of scope

  • To integrate MTEF in the budget document

  • To set up appropriate structures to handle MTEF

  • To designate the Ministry of Finance as the responsible organisation to both steer and row the project

  • Political motivations and incentives are primordial for the successful implementation of MTEF

Washington state budget
Washington state Budget pro-poor budgeting :challenges and opportunities

  • Washington state headed by Governor : 112 Agencies , Boards and Commissions representing a range of services for a population of 6 million and a workforce of 56,000 Public officers

  • Priorities of Government namely: education, health, Government Accountability, environment , economic development

  • Office of Financial Management responsible for the overall financial management systems including the following:

    • central procurement

    • Smart Buying Initiative

    • Strategic plans

    • Risk management

    • Accounting system-cash/ accrual/capital accounting systems

      Monitoring mechanism

      Government Management Accountability Framework (GMAP)

Role of engaged society
Role of engaged society pro-poor budgeting :challenges and opportunities

  • “Participates in public decision-making, contributes to the provision of public goods and services and hold authorities accountable for the means and results of public action . Societal engagement is thus both an end and a means”

  • Report of the World bank Task Force on Capacity Development In Africa

People s budget pro poor policy
People’s budget? Pro-poor policy pro-poor budgeting :challenges and opportunities

  • “Recent moves towards “participatory” budgeting have raised hopes and expectations that spending and revenue generation can be made more pro-poor if informed citizens and their non-traditional political organizations participate directly in budgeting decisions “

    Deborah Brautigam: the People's budget? Politics, Participation and Pro-Poor policy : Development Policy Review 2004,22(6): 653

    Associate Professor .school of International Service , American University ,Washington DC

Citizens participation and pro poor budgeting

Citizens participation and pro-poor budgeting pro-poor budgeting :challenges and opportunities

Are citizens consulted for a budget exercise ?

consultation with different target groups are held prior to the announcement of the budget with the private sector , trade unions, NGOs,

press coverage/ media

In the U.S and in Washington State in particular , there are a series of talks , citizens ‘for an evalaution of state government actions .

bottom-up approach through the citizens' initiative

Participation in the budget
Participation in the budget pro-poor budgeting :challenges and opportunities

  • Citizens participation in economic policy is advocated as a way of making government spending more “pro-poor”

  • Three central issues stand out :

  • Who participates?

    Civil society organizations, tripartite organizations of labor and business, donors, Unions and political parties

Participation in the budget 2
Participation in the budget(2) pro-poor budgeting :challenges and opportunities

  • What kind of institutional framework is necessary for participation to be pro-poor?

  • pro-poor political parties in power

  • independent auditing mechanisms

  • Institutions – media, public meetings

Participation in the budget 3
Participation in the budget(3) pro-poor budgeting :challenges and opportunities

  • 3. participation focused on the social expenditure side of the budget may neglect the revenue side : this might miss opportunities to strengthen the sustainability of the pro-poor spending as well as accountability .

  • A sustainable pro-poor economic strategy may require the inclusion of the business sector as a partner in participation

Analytical framework
Analytical framework pro-poor budgeting :challenges and opportunities

Participation can assume different forms:

  • Direct -when informed citizens debate fiscal priorities and submit conclusions

    Examples of Brazil’s Porto Alegre and Ireland ‘s National Economic and Social Council as direct participation in fiscal policy

    Direct participation of democratic pro-poor economic policy –Cases of Mauritius, Costa Rica and Chile

  • Indirect when citizens elect members of Parliament

  • Formal and informal-mechanisms through civil society organizations / protest and other forms of voice

Participatory budgeting
Participatory budgeting pro-poor budgeting :challenges and opportunities

  • Increases flow of information and promotes greater transparency

  • Serves an important education function

  • Can influence policy when combined with informed media and civil society organizations at every stage of the budget cycle namely formulation ,implementation

    auditing and evaluating the impact and outcome of pro-poor strategies

Alternate budgets
Alternate budgets pro-poor budgeting :challenges and opportunities

  • Represents a new and important form of resistance

  • Critique of policies of government

  • Embody more democratic vision

  • Provide new information and new insights to the public

  • Case study : CANADA

Ict as an enabler
ICT as an enabler pro-poor budgeting :challenges and opportunities

  • For citizens: ICT improves the delivery and easy access of services to citizens

  • Facilitates the transmission of information reduces transaction costs

  • Connects citizens and adds value to the transaction

  • For government : ICT provides a central management information system for informed decision-making

Evaluation pro-poor budgeting :challenges and opportunities

  • The MTEF framework facilitates monitoring and programme evaluation as the future predictions provide a baseline for assessing the effectiveness of past years programme .

  • Differ rent types of evaluation can be effected .

  • The World bank has developed a series of good practices to carry out Poverty and Social Impact Analysis to support development policy options .

  • Such evaluation will analyze intended and unintended consequences of policy interventions (ex-ante, during implementation and ex-post) on the well-being of different social groups with a particular focus on the poor and the vulnerable .

Mauritius case
Mauritius case pro-poor budgeting :challenges and opportunities

  • Has parliamentary democracy since 1968

  • has institutionalised consultations prior to the budget with major stakeholders such as the Unions , business associations , social welfare NGOS, the private sector as represented by the Joint Economic Council as well as other meetings and accepting written submissions

Budget 2006 2007 case study mauritius
Budget 2006/2007 pro-poor budgeting :challenges and opportunitiescase study Mauritius

  • Challenges

  • External shocks: oil, sugar and textile crunches

  • Internal shocks : government debt , budget deficits, high rate of unemployment and Low investment

Pro poor budgeting mauritius
Pro-poor budgeting -Mauritius pro-poor budgeting :challenges and opportunities

  • Prioritization of projects to address the needs of the poor through the following:

    • Financial assistance to the needy (old age, handicapped and others not gainfully employed)

    • Empowering those who are active to develop their skills by providing training and retraining for multi-skilling jobs, incentives , grants and loans

    • Ensure that the redistributive policy is fair and equitable that meets targeted vulnerable groups

    • Create an enabling environment and minimize administrative hassle to start a business

Mauritius pro-poor budgeting :challenges and opportunities

  • Budget casted within MTEF framework

  • 40 fundamental reforms in areas of economic restructuring , investment and business environment , fiscal stewardship and social justice and equity

  • Reorganization of the Ministry of Finance and Economic Development

  • review of existing regulations and elaboration of Finance Act and Business Facilitation Act

The way forward
The way Forward pro-poor budgeting :challenges and opportunities

  • Diagnosis/Needs assessment taking into consideration Nepad and MDG goals as well as local needs and external challenges

  • Develop a vision for development –strategic plan – beware paralysis by analysis

  • Creation of a data base management system

  • Develop a training plan for different target groups following training needs analysis and to include pro-poor training

  • Catalytical role of international agencies to assist in the development of home-grown strategies

  • Financial reforms should be part of a broader reform initiative

  • Setting up of high level monitoring mechanism like GMAP

  • Setting up of Implementation and Monitoring mechanisms both at central and departmental levels

  • Setting up of a Monitoring and Evaluation mechanism to ensure pre and post evaluation and base –line data

Lessons learned critical success factors
Lessons learned /Critical success factors pro-poor budgeting :challenges and opportunities

  • Political commitment

  • Leadership role of Administrators

  • Availability of resources

  • Role of change agents

  • Administrative capability /expertise

  • Institutional capacity

  • Communication strategy with stakeholders

  • Timing

  • Participation ( public officers /citizens)

  • use of statistics for analysis

  • Data management information system

Questions time
Questions time pro-poor budgeting :challenges and opportunities

Thank you