World Bank/DFID Partnership Program Prepared By Richard Anson (Consultant)

1. PRACTITIONERS’ TOOLKIT FOR AGRICULTURE PUBLIC EXPENDITURE ANALYSIS:“ROAD MAP” OF DRAFT REPORT CONSULTATION WORKSHOP (May 11 and 12, 2009, Addis Ababa) (updated: May 11) World Bank/DFID Partnership Program Prepared By Richard Anson (Consultant)

2. Ag. Public Expenditure Analysis requires integrated approach and tools + effective implementation + strong teamwork (at various levels & stages) = coherent agr. policy-PE allocation linkages, enhanced quality and sustainable impacts “Without” Key Elements “With” Key Elements 2

3. OUTLINE OF PRESENTATION • CONTEXT & INTRODUCTION • ROADMAP OF VOLUME I: “CORE GUIDANCE” COMPONENT • PROPOSED NEXT STEPS • KEY ISSUES FOR DISCUSSION/FEEDBACK 3

4. I) CONTEXT AND INTRODUCTION (1) A) Context and Rationale for APEA and Toolkit: Why and Why Now? B) Objectives of Toolkit • to provide conceptual and practical support, reminders and guidance for practitioners tasked with carrying out various types of agriculture public expenditure analyses; and • To facilitate innovative use and application of an extensive and growing body of information and studies in macro-level and agriculture public expenditure analysis, thereby contributing to an enhanced quality and implementation of expenditure analysis, and eventually to sustainable and strategic outcomes and impacts.

5. I) CONTEXT AND INTRODUCTION (2) C) Primary Audience • WB TTLs and other donor ARD specialists (DFID, FAO, IDB, IFAD, RUTA, others) • Govt. counterparts charged with Ag./RD Strategies & public expenditures (Min. of Agric., Finance, Planning) A secondary audience could include farmer apex organizations and other private sector org. who also are potential advocates for promoting adequate public funding. D) Diversity,Types and Approach • Broad diversity of types of APEA and “products”, whereby the APEA toolkit provides a “menu” of options, to be determined on a case-by-case and demand-oriented basis. There are 3 Prototype APEAs: (i) comprehensive; (ii) “rapid”/”mini”; (iii) thematic • Consultative and Participatory Approach, drawing on inputs and experiences from key practitioners and other stakeholders

6. ILLUSTRATIVE FEATURES/DIFFERENCES OF THE 3 MAJOR PROTOTYPES OF PUBLIC AG. EXPENDITURE ANALYSIS (3)

7. E) Structure and Content of Toolkit (4) • Volume I: Outlines the “core” component, which covers cross-cutting topics, comprised of 4 sections: • A guide of “strategic” questions/themes which could be covered (taking a “menu” approach) • Selected notes (57) on methodological and/or conceptual issues and/or clarifications outlined in the guide • Selected examples (98) to illustrate the way that specific expenditure analyses have addressed the key themes outlined in the guide and notes • A summary of relevant references and resources (with regional and organizational diversity)

8. F) Structure and Content of Toolkit (5) (2) Volume II: Outlines “specialized guidance”/SG component, which covers similar structure/information as the core component: guidelines, notes, examples and references, but focused on the following strategic subsectors or themes (work in progress…..): • Agriculture Innovation Systems (AIS) * • Irrigation Subsector • Livestock Subsector * • Forestry Subsector • Fisheries Subsector * AIS and Livestock will be presented in the p.m.

9. II) ROAD MAP OF “CORE GUIDANCE” COMPONENT (1)

10. II) ROADMAP OF “CORE GUIDANCE” COMPONENT (2) • Preparation Phase: Secure ownership and clear focus 1. Country/Sectoral Context; Scope and Objectives of the APEA 2. Participatory Approach: find the “right” balance 3. Defining the Agriculture Sector: use COFOG definition + consensus according to country/sector situation 4. Task Budget and Time Frame: they vary widely…”optimize” 5. Sources of Data and Information: normally a challenge - build & promote a reliable data base, & try build on & link with other efforts 6. Sample TOR/Concept Note: develop framework and consensus on focus and approach 7. Initial Formulation Task: secure ownership and agree on focus and approach, and actively involve key stakeholders

11. B) Analysis and Report Preparation Phase: PE Diagnostic Aspects (1) - Focus on descriptive analysis (1) Sectoral Context (a) Context for APEA: what are sector role & performance issues? (b) Political economy aspects: what are key political-economy “dynamics”? (c) Rationale for public intervention in agr: (ref. public/private good issues) (2) Key Sectoral Budgetary Features: Level, Structure/Composition & Financing (How efficiently and equitably is the ag. sector spending & managing of public funds? What are the key descriptive features?) (a) Expenditure Allocations/Level and Trends (b) Composition (See Note #15/p.33: Classification of Expenditures) (c) Financing of Agriculture Public & Private Expenditures (d) Public – Private Partnerships/Mechanisms (e) Agriculture Subsidies (f) Fiscal Decentralization (g) Linkages with Climate Change

12. Example of a Note : Classification of Public and Private Goods for Expenditure Analysis: (extract from MEX. Ag. PER) See Note # 15 (p. 33) As part of a public expenditure analysis, it is desirable to classify the agriculture expenditures according to various categories (public-private, social-productive) to better understand the structure of agriculture expenditures. The classification exercise can be complex and leaves room for subjective judgment, partly because the categories themselves often are not always clear-cut, and partly because many programs have sub-programs and components falling under different categories. • Public goods programs. Included here are programs typically provided by governments in market economies, generally because they supply goods or services whose consumption is neither excludable nor rivalrous. • Private goods programs. Included here are programs that are usually provided (or could be provided) by the private sector in market economies (mostly because they supply goods or services whose consumption is excludable and rivalrous), and also government programs that provide measurable subsidies to individuals or families usually under some targeting criteria.

13. B)Analysis and Report Preparation Phase: Diagnosis- (2): (3) Budgetary Performance: Efficiency and Emerging Impacts This section should focus on assessing efficiency, effectiveness and equity/poverty reduction progress and related measures, with a focus on good descriptive analysis of spending/input-output-outcome links. (a) Efficiency Analyses:Counting Outputs…should cover “allocative” and “technical” efficiency; What are measures of sound “priorities”, “good value for money”, efficient and timely expenditures? (ex.: “disconnect”; unit costs for XXX units of services; budgetary expenditures as % of budgetary allocations? (assess trends over the past 5 yrs and perform comparative country analysis); (b) Effectiveness: Counting outcomes..how much reaches intended ben. (b) Impacts of Inst’al & Sectoral APEs: Focus on assessing agr. exp. links with ag. growth, poverty reduction, private investment, increasing agricultural productivity, food security, incomes, exports: use various tools, largely drawing on results from M&E system and existing analytical studies

14. B) Analysis and Report Preparation Phase: Diagnosis (3) 4) Institutional and Budgetary Management Aspects(this topic should form a “core” element in PERs, given links to efficiency and impacts of APE) (a) Institutional arrangements, roles and capacities: • Assess at various levels/tiers: central, sectoral, sub-national/local (decentralization can be key topic) • Review the inter and intra-sectoral coordination arrangements • Assess Capacities also at various levels of government (b) Budgetary Planning, Formulation, Execution & Governance “Cycle” (“BPEG Cycle”) (Key processes to be assessed for each phase and each level) • What is the assessment of the guidelines, rules, and instruments (ceilings, circulars, MTEF, annual budget/work plan, port. review)? plan vs. practice? • What is the effectiveness of a sectoral M&E system?

15. (C) Analysis and Report Preparation Phase: Strategic Aspects (1):Formulating Enhanced APE Strategies and Recommendations (1) Suggested Framework of 5 “Core” Strategic Elements ----- APEA to help stimulate; could take a phased approach….. • Updated “sound” Agricultural Strategy • Enhanced institutional and sectoral planning & budgetary processes (macro-sectoral linkages involving 2 key elements: medium term expenditure framework and annual budgetary processes) • Sound agriculture Institutional & Governance Strengthening Plan • Enhanced inst’al and/or sectoral financing strategy: shift toward a program approach and application of Paris Declaration Principles (see Note) • Effective inst’al and sectoral M&E plan with indicators/action plan (2)Conclusions and Recommendations - should include a sound/agreed action plan matrix (see Example 94/p. 226: Mexico summary matrix)

16. Mexico: Summary Matrix (Example)

17. (D) Dissemination and Support for Implementation Phase(essential phase to achieve the objective of contributing toward improved APE policies, implementation, and impact) (1) Report Dissemination: Key questions • Target audience? • Most appropriate dialogue approaches? (2) Implementation Phase: often neglected, resulting in limited impacts • Jointly draw up implementation plan (Govt/donor working group) • What is most appropriate institutional mechanism(s) to ensure effective implementation? (and linked to the annual macro-budgetary process as a key “entry point”) • What is the most appropriate type of donor support to ensure enhanced Govt. ownership, capacities, and tangible results?

18. References and Tools A) The toolkit provides a comprehensive list of references and tools. The five core themes covered are: • Public Expenditure Tools: Overall References • Public Expenditure in the Context of Agriculture (main source for notes/examples) • Expenditure Impact and Public Goods in Agriculture • Decentralization and Agriculture • Sources of Data for Conducting Expenditure Analysis in Agriculture B) See ARD’s Website for examples of Ag. PER documentation/resources: web.worldbank.org/apea C) The toolkit will be web-based and updated periodically, drawing on extensive references and experiences

19. II) ROAD MAP OF “CORE GUIDANCE” COMPONENT (1)

20. Ag. Public Expenditure Analysis requires integrated approach and tools + effective implementation + strong teamwork (at various levels & stages) = coherent agr. policy-PE allocation linkages, enhanced quality and sustainable impacts “Without” Key Elements “With” Key Elements 20

21. IV) PROPOSED NEXT STEPS

22. Framework of Possible Training Module (“101”) Approach: Focused on key concepts, tools and examples, and inter-active Day 1: • Morning Session (1): Intro and Macro-fiscal Overview • Afternoon Session (2): APEA Overview and Preparation Phase Day 2 • Morning Session (3):Analysis and Report Preparation Phase: Diagnostic Aspects • Afternoon Session (4): cont. of Diagnostic Aspects… Day 3 • Morning Session (5): cont. of Diagnostic Aspects • Afternoon Session (6):Analysis and Report Preparation & Implementation Phases Wrap-up of Training Session: Participant Conclusions and Feedback (modules would be tailored to the specific participant needs)

23. V) KEY ISSUES FOR DISCUSSION (1) Soundness & Usefulness of the Draft Toolkit? (especially from the perspective of Government counterparts) • Does the structure & content meet priority operational needs? • Are there other more important themes and key questions, notes and examples which have been omitted, need to be sharpened, or dropped? • What are approaches/options to help ensure the draft APEA Toolkit can be packaged & navigated to be more useful? (2) Toolkit’s balance in providing “technical tools” vis-a-vis “integrated” approach to APEA? (especially through the notes and examples, for both Core and SG components) (3) What are “strategic” entry points for the timely and effective application of the APEA toolkit?

24. MANY THANKS!!