Public Expenditure Tracking Surveys: Strengthening
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Transcript Public Expenditure Tracking Surveys: Strengthening
Detecting Leakage, Identifying
Inefficiencies, and
Assessing the Outcomes of PFM Reforms:
Public Expenditure Tracking Surveys
(PETS)
Doris Voorbraak, Kai Kaiser
Public Sector Governance Group
Poverty Reduction and Economic Management
The World Bank
IMF- FAD
December 19, 2007
The World Bank
PREM Public Sector Governance
Improving Service Delivery
Developing countries have increased
spending- with support of donor funding- to
fulfill their commitments to quality health and
education services for all
Problem remains that evidence shows that
there is a weak association between
spending and outcomes
Increased pressures to evaluate modalities
by which resource reach the frontline
(including country systems, special programs,
etc.)
The World Bank
PREM Public Sector Governance
Page 2
Why are services failing poor
people?
Increased public resources do not always translate
into better outcomes
Governments do not spend enough on public
goods or poor people
The money does not always reach frontline
service providers
Money does reach frontline service providers but
service delivery can still be inefficient
There is no demand for better services
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PREM Public Sector Governance
Page 3
Spending wisely
When services fail poor people, a good
place to start looking for the underlying
problem is the budget:
Budgets are misallocated
Budgets are misappropriated
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PREM Public Sector Governance
Page 4
Public expenditure management
Strengthening PEM is essential to improve service
delivery
Formulating, implementing and reporting annual
budgets is a challenging task when capacities are
limited and the broader governance environment
weak
But what about operational impact of budgets?
Even the best budget allocations are only as good as
their impact on desired outcomes for poor people
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PREM Public Sector Governance
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Judging operational impact of
budgets
PETS can help you judging operational impact- the
quality and quantity of service delivery, and where
and how, and to what effect allocated funds are spent
It therefore helps to shed light on budget allocation
and execution issues
Their common theme: the relationship between public
spending and development outcomes
The World Bank
PREM Public Sector Governance
Page 6
What is PETS?
Surveys that track, locate and
quantify the flow of public resources
across various administrative levels
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PREM Public Sector Governance
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PETS-Experience to Date
Pioneer was Uganda PETS (1996)
Majority of the studies so far cover African countries.
Most PETS cover health and education. Some are joint studies
Exceptions fiscal sustainability (Honduras), transport,
agriculture, rural development (Sierra Leone) PETS
prepared on justice sector (Burundi)
PETS team leaders (TTLs) as far as the WB is concerned
represent different professional affiliations-research (DEC),
Public sector governance (PREM) sectors (HD). PETS has
demonstrated to provide a good platform for collaboration
between sector-and governance specialists
In some countries, follow-up PETS exercises (Uganda,
Tanzania, Sierra Leone) but not necessarily with same research
questions and scope
Linked with Quantitative Service Delivery Surveys (QSDS)
(Zambia, Nigeria) or other facility-related surveys
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PREM Public Sector Governance
Page 8
PETS Objectives?
Identify/Quantify problems in expenditure items
Cash Leakages
In-kind Leakages (textbooks, drugs)
Absenteeism/Ghost Workers
Investigate specific issues (equity, transparency,
adequacy, timeliness of resources, regional
disparities)
Increase supply of and demand for information:
information is crucial as stimulus for public action, as
catalyst for change, as input to make reforms work
The World Bank
PREM Public Sector Governance
Page 9
Resource Flows to Frontline Facilities Vary
PEM Processes/Execution
Administrative
Layers
- Allocation Disbursement Procurement
Central
E.g.,
Uganda
Education
Capitation
Grant
Provincial
Flow
Junctures
Local
$ per
Student
Facility/
Frontline
The World Bank
E.g., Wages
In-Kind
Monetary
Cash Grants
In-Kind
Non-Monetary
PREM Public Sector Governance
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PETS-stocktaking
Region/ Country
Year
Sectors
Africa
Cameroon
Chad
DRC
Ghana
Kenya
Madagascar
Mali
Mozambique
Namibia
Nigeria
Rwanda
Senegal
Sierra Leone
Tanzania
Uganda
Zambia
2003
2004
2007
2000
2004
2003, 2005, 2006
2005
2001, 2004
2004
2004
2003, 2004
2002
2000/01, 2003
1999, 2001, 2003,2004
1996, 2001,2003,2004
2001,2002, 2004
Health/Education
Health, Service Delivery
Education
Health/ Education
Health/ Education
Health
Education
Health
Health, Education
Health
Education, Health/ Education
Health
Agric. /health/ educ./water & san.
Health, Educ., Pov. Reduction
Health, Education
Education, Service Delivery
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PREM Public Sector Governance
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PETS stocktaking-cont…
Region/ Country
Year
Sectors
2005
1998,2000
2006
2002
Health, Education
Education
Education
Health
2004
2006
Health, Education
Education
2006
2001
2002
Health
Pov. Reduc./Fiscal Sust.
Pov.Reduction, Education
2003
Health
2006
Education
EAP
Cambodia
Indonesia
Mongolia
Papua New Guinea
Europe and Central Asia
Albania
Azerbaijan
Latin America and Caribbean
Brazil
Honduras
Peru
South Asia
Bangladesh
Mid. East & N. Africa
Yemen
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PREM Public Sector Governance
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Clinics
Visited
The World Bank
117
35
Sen
ega
T an
l
zan
ia (
199
9)
T an
zan
ia (
200
1)
90
u
100
Per
190
185
PN
G
200
Mo
zam
biq
ue
Schools
Sampled
Ho
ndu
ras
200
Gh
ana
Ca
me
roo
n
Al
ba
ni
a
G
ha
H na
on
d
M ura
ad
s
ag
as
ca
r
PN
G
R
wa
nd Per
u
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wa 0
nd 00
Ta a ( )
nz 200
an 4
Ta ia ( )
nz 19
an 99
ia )
(
U
ga 200
nd 1)
a
U
(
ga 199
nd 6)
a
(1
99
9
Za )
m
bi
a
The Scale of PETS Vary
400
214
250
44
45
120
36
218
182
108
20
200
100
20
PREM Public Sector Governance
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PETS reveal a range of leakage estimates
Table 1: Leakage levels (%)
Education
Health
Chad, 2004
-
80
Ghana, 1998
49
80
Kenya, 2004
-
38
Tanzania, 1998
57
41
Uganda, 1991-95
87
-
10 (rule-based)
76 (discretionary)
-
Country
Zambia , 2001
-- Not available
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PREM Public Sector Governance
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Headline Leakages
The initial Uganda PETS in the mid-1990s estimated that
87% of non-wage capitation grants in education did not
reach its destination.
Tanzania and Ghana: leakage on non-wage education
expenditures was 41% and 50% respectively
Chad : leakage at the regional level is estimated at 73% and
only 1% of non-wage health expenditures to regional health
administrations was estimated to arrive at the health facility
level.
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PREM Public Sector Governance
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Challenges to Quantifying Leakages
In other surveys, no firm conclusions on leakage could
be made.
For instance: Cameroon, Mozambique, Nigeria, Namibia,
Rwanda, Senegal, Tanzania (2001)
Factors explaining this situation:
No rules based allocation “benchmarks” (in contrast to e.g.
Uganda’s capitation grants)
Poor or non existing official records, or inconsistent
records between levels
Inadequate design of instruments that did not match
administrative levels or the facilities’ record practice
Implementation problems
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PREM Public Sector Governance
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Staff Related Leakages
Absenteeism
PETS/QSDS have also allowed to measure provider
absenteeism, which affects service quality.
For instance: Uganda education: 27%, health 37%,
Mozambique (health) 19%
Supports findings of other studies (eg. Chaudhury et al,
2006)
Ghost Workers
In a few countries, allowed to measure number of staff
on official payroll who do not really work in facilities
In Uganda for instance, it was estimated that “ghost
workers” represented about 20% of the workforce
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PREM Public Sector Governance
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Ghost Worker Estimates
Country
Table 2. Ghost workers on payroll (%)
Ghosts workers
Education
Health
Honduras, 2000
5
8.3
Papua New Guinea, 2002
15
_
Uganda, 1993
20
_
Source: World Bank (2001) for Honduras; World Bank (2004) for Papua New Guinea;
and Reinikka (2001) for Uganda.-- Not available.
The World Bank
PREM Public Sector Governance
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PETS highlight problems beyond basic leakage…
Delays and bottlenecks in the allocation of resources
have also been measured
Salaries, allowances, financing, material, equipment, drugs
and vaccines
These issues could have important effects on the quality
of services, staff morale and the capacity of providers to
deliver services.
In some countries, such as Nigeria, in one state, 42% of
the health staff respondents reported not receiving salaries
for the 6 months or more.
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PREM Public Sector Governance
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Different problems for different flows
The measurement of delays proved sometimes easier to
estimate than quantitative data on the same flows (which would
have allowed measurement of leakage levels).
For instance in Zambia (as in most countries), staff
compensation flows were not tracked
Instead, information was collected on delays (and arrival time) in
the reception of salaries and four types of allowances at the
school level.
While salary payments were found to be efficient, for not well
defined allowances, more than 75% of recipients of “doubleclass allowances” (additional amount paid for overtime, etc)
experience at least 6 month’s overdue pay.
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PREM Public Sector Governance
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Facilities continue to rely on direct user fees
Tracking surveys have produced findings on the
importance and impact of user fees.
In several countries (e.g. Chad, Mozambique), user fees are
sometimes the only source of revenues for service providers.
On the demand side, however, they often constitute a very
important part of service costs for users and could have
considerable negative effects on accessibility.
For instance in Uganda, although the government was trying
to re-establish free education, the survey found that private
contributions represented more than 60% of education costs
at the school level.
In Chad, for the poorest quintile, the average out-of-pocket
medical expenses accounted for 21% of their monthly
incomes.
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PREM Public Sector Governance
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PETS perspectives on equity issues
In several countries, large variability of health and school
spending across regions and districts, as well as within
districts, was observed
For instance: Mozambique, nine-fold variation of per capita
health spending at the district level
Chad: non-wage per capita public health spending showed
important variations across districts (in a 16 to 1 ratio)
Zambia: the most funded school district received 8 times
more average per-student public resources than the least
funded district.
Uganda: poorer schools faced greater leakages
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PREM Public Sector Governance
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Policy Reforms
PETS/QSDS have led to the identification of areas where
reforms in information gathering and supervision systems
should be introduced.
In Uganda in particular, the policy reform following the PETS
targeted information flows through an information campaign,
in order to give clients potential power over service
providers.
Results have been spectacular as leakage rate was
reduced very substantially.
In Tanzania also, such an information campaign approach to
reducing corruption has been used.
No formal impact evaluation, but reports indicate that
the information campaign has reduced leakage
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PREM Public Sector Governance
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PETS as one means to an end to strengthen sectoral
public financial managent and outcomes
PETS are powerful tools to assess efficiency, equity and
corruption issues in public services.
A sound methodological basis is required for survey
implementation,
In particular with respect to samples, proper preliminary
institutional and data assessment, adequate choice of
tracking flows, use of efficient and relatively common
instruments, etc.
Tracking surveys are a means to an end.
The information on incentives and deficiencies in service
delivery organizational structures should be used to help
implement a reform agenda
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PREM Public Sector Governance
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PETS for Strengthening
Human Development
Outcomes:
PEM/PFM Perspectives
Presentation for
IMF/FAD 19 December, 2007
Kai Kaiser, Senior Economist,
Public Sector Group, World Bank, Washington, DC
Three Levels of PFM Concerns
Macroeconomic Management
Allocative Priorization
Operational Efficiency
See: Pradhan and Campos (1996)
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PREM Public Sector Governance
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Various Instruments
Public Expenditure Reviews (PERs)
Increasing Number Conducted by Sectors, including
HD
Sometimes include PETS
…also policy note/programmatic approach
PEIRs, CFAA, Portfolio Reviews
International Benchmarking
HIPC Indicators
PEFA Indicators
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PREM Public Sector Governance
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Key Stakeholders in PFM
Cross-Cutting Ministries
Ministry of Finance
Ministry of Planning/Economics
Ministry of Interior/Local Government
Sectoral-Cutting Ministries
Ministry of Education (various levels), Health, Social
Protection
Sub-National Government
Devolved and Deconcentrated Structures
World Bank Networks
PREM, HD, SDV
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PREM Public Sector Governance
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Challenges
Cross-cutting PFM dialogue to high level
Remains abstract, to focused on supply side strategies
…enhanced focus on actionable PFM Indicators
Dialogue with sectors/line agencies will vary
Sectors may be tempted to vertical lens
Emphasis on earmarking funds/vertical programs
Ambivalent about budgeting autonomy for sub-national
governments
Community Participation Advocates Neglect Supply Side
May create parallelism to get funds to frontline
Focuses on narrow volume of expenditures
Fiscal flow mapping and tracking inherent in PETS can serve to center
these discussion
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PREM Public Sector Governance
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Fiscal Architectures Vary
Institutional Architecture
How to funds get prioritized/budgeted,
executed, monitored for frontline service
delivery?
Intermediate/Decentralized Levels
Sub-National Governments
Does the center and or both allocate?
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Facility
Treasury Design
PREM Public Sector Governance
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International Initiatives for
PFM Performance Benchmarking
HIPC Indicators
Improved Monitoring of PFM systems as part
of debt reduction
Public Expenditure & Financial Accountability
(PEFA) Indicators
28 Performance Indicators + 3 for donors
Covers 8 and 23 cover fiscal decentralization
and front-line facility information
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PREM Public Sector Governance
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PEFA Indicators
Focused on Facility Financing (PI-23)
Score
A
Minimum requirements (Scoring methodology: M1)
(i) Routine data collection or accounting systems provide reliable information on all types of
resources received in cash and in kind by both primary schools and primary health clinics
across the country. The information is compiled into reports at least annually.
B
(i) Routine data collection or accounting systems provide reliable information on all types of
resources received in cash and in kind by either primary schools or primary health clinics
across most of the country with information compiled into reports at least annually; OR
special surveys undertaken within the last 3 years have demonstrated the level of resources
received in cash and in kind by both primary schools and primary health clinics across
most of the country (including by representative sampling).
C
(i) Special surveys undertaken within the last 3 years have demonstrated the level of resources
received in cash and in kind by either primary schools or primary health clinics covering a
significant part of the country OR by primary service delivery units at local community
level in several other sectors.
D
(i) No comprehensive data collection on resources to service delivery units in any major sector
has been collected and processed within the last 3 years.
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PEFA Indicators
Focused on Sub-National Transfers (PI-8)
PI-8
Transparency of inter-governmental fiscal relations
(i) Transparent and rules based systems in the horizontal allocation among
SN governments of unconditional and conditional transfers from
central government (both budgeted and actual allocations);
(ii) Timeliness of reliable information to SN governments on their
allocations from central government for the coming year;
(iii) Extent to which consolidated fiscal data (at least on revenue and
expeniture) is collected and reported for general government according
to sectoral categories.
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PEFA Fiscal Decentralization Outcomes
Vary
A
Fiscal Decentralization PEFA Score (Sub-Saharan Africa)
B
C
D
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Slide includes finalized and draft reports
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As do information on frontline service
delivery facility financial flows
Frontline Service Delivery PEFA Indicator (PI-23) (Sub-Saharan
Africa)
A
B
C
D
1
2 3
The World Bank
4
5
6 7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
PREM Public Sector Governance
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Facility and Local Government Frontline
Financing Indicators
PEFA Indicators on Decentralized Finance (PI-8 and 23)
A
B
C
D
1 2 3 4
The World Bank
5 6 7 8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
PREM Public Sector Governance
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How can PFM diagnostics and information
initiatives have impact?
PETS Can Promote Evidence Policy Dialogue
Better understanding of prevailing institutional
arrangements
Range of contexts (post-conflict to middle income)
“Hard” numbers on leakages underscore gap between
formal and informal practices
Supplement or substitute for audit functions?
Highlight Supply-Demand Side Interactions
Rules Based Allocations Prerequisite to enable
demand side accountability
Claims against budgetary entitlements at frontline
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PETS Process Challenges
Managing Expectations
Ability to quantify leakages in general
How to interpret findings
Specific flows versus general leakages
Catering method to context
Implications for supply side versus demand side
reform/capacity building…
How to disseminate findings
Mainstreaming in PFM and Sectoral
Dialogues…
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PREM Public Sector Governance
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Key Resources
PETS Database/Website
PREM Fiscal Leakages Note
HD PER Guidelines
Using Information to Enhance Demand Side
Accountability Stocktaking
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PREM Public Sector Governance
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