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Minding the Gaps Integrating PRSs and Budgets for Domestic Accountability

Minding the Gaps Integrating PRSs and Budgets for Domestic Accountability. Vera A. Wilhelm The World Bank. Key questions of the study. Role of PRS and budget for domestic accountability Main challenges in countries when trying to integrate PRS with the budget

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Minding the Gaps Integrating PRSs and Budgets for Domestic Accountability

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  1. Minding the GapsIntegrating PRSs and Budgets for Domestic Accountability Vera A. Wilhelm The World Bank

  2. Key questions of the study • Role of PRS and budget for domestic accountability • Main challenges in countries when trying to integrate PRS with the budget • Main entry points and lessons, with particular focus on reporting mechanisms

  3. Accountability: A simple framework Principal demands accountability from agent for x Principal has powers to ensure that agent delivers x ACCOUNTABILITY Agent considers itself accountable for x It is in the agent’s interest to deliver x Capacity The agent has the ability to deliver x O W N E R S H I P I N C E N T I V E S

  4. PRS and budget: Ownership The PRSP The Budget Parlia-ment Executive Parlia-ment Executive Finance Ministry Cabinet Cabinet Line Ministries & Providers Planning Planning Finance Finance Sectors Sectors Civil Society Electorate Civil Society Electorate Strong Ownership Moderate Weak I Societal Societal

  5. PRS and budget: Incentives In theory: • Results orientation • Transparency of decision making In practice: • Proliferation of products • Poor budget execution

  6. Sector Strategies Budget Formulation Budget Execution MTEF PRSP Policies & Plans Budget Reporting & Accountability Budget accountability: Multiple gaps and fractures

  7. However, there’s hope • HIPC evaluation shows that several countries can improve their performance significantly within three years (GH, Mali, MZ) • Budgets increasingly include some elements of results orientation • Second generation PRS try to make a more explicit link with the budget (Tanzania, Rwanda, Mozambique, Madagascar)

  8. Linking PRS and budgets 3 principal approaches in LICS: • Pro-poor spending priorities • MTEFs • Results-oriented budgets Main Lesson: Narrow technical solutions suffer from low ownership and weak incentives for reform

  9. Success stories 3 Insights: • Centrally led reform initiatives to achieve domestically owned objectives • Absence of institutional fragmentation enables integrated reforms • Gradual approach starting with strengthening budget basics allowing sufficient time

  10. Integrated Reporting: Challenges Local Government & MDA Sector National Impact Outcomes PEAP Results Matrix Poverty Status Report Annual Sector Reports Outputs/ Activities Assessment Reports Sector MIS Returns MIS Reports, League tables Budget Performance Reports Ministerial Policy Statements PAF Grant Reports FDS Reports Inputs/ Funds LG Financial Statements CCS Returns

  11. The Incentive Challenge • Incentives to supply information and sources of demand • Donor driven (e.g. APR) • Incentives to use information to improve performance • Internally driven (e.g. Uganda)

  12. Summary Findings • Contested ownership weakens domestic accountability • Policy making, planning and budgeting are embedded in fragmented processes and institutions • Technical fixes alone won’t do it

  13. The way forward: Lessons 1. Focus on strengthening and harmonization of existing processes and adopt a gradual approach to reform 2. Support from within: High level ownership of policies, a challenge function within the executive and clear sector roles. 3. Foster incentives for integration 4. Keep it simple

  14. THANK YOU

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