Transcript Strengthening Country Capacity to Manage for Development

Two years on: Chile’s Experience in
Public Sector Management Processes
Mario Marcel, Budget Director
Ministry of Finance of Chile
Managing for
Development
Results
MARRAKECH 2004
Plenary Session: How the Global Context Shapes Country Approaches to Managing for Development Results
Managing for Development Results, Second International Roundtable
Marrakech 2004
2002 Roundtable
• Chile’s experience presented
• Performance monitoring system comprised of
five tools:
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–
–
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Performance indicators (1994)
Program evaluations (1997)
Management improvement programs (1998)
Comprehensive performance reports (1997)
Budget bidding fund (2000)
Managing for
Development
Results
MARRAKECH 2004
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Main feature: PMS related to budgeting
Performance
targets
Programs
for evaluation
APPROVAL
Program
evaluations
Performance
pay
PREPARATION
EXECUTION
Performance
Indicators
indicators and
targets
EVALUATION
Managing for
Development
Results
MARRAKECH 2004
New
requirements
Comprehensive
to PMS
performance reports
3
Main conclusions in 2002
• All instruments in working order
• Chile’s experience proves that it is possible to build and
operate a performance monitoring system in an
emerging country
• PMS development motivated by frustration with value
for money rather than by a crisis
• System helped in reallocating resources in the face of
tighter budget contraints 2000-2002
• Be aware of enabling factors (transparency, fiscal
discipline, hierarchical budget institutions)
Managing for
Development
Results
MARRAKECH 2004
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...and some pending issues
• Consolidation of reforms and political support
• Balance between effectiveness and transparency
difficult to obtain
• Different views of PS modernisation in people´s minds
• Citizens’ participation and role of Legislature
• Performance, trust and devolution
• High centralization discussed
Managing for
Development
Results
MARRAKECH 2004
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TWO YEARS LATER: TOOLS HAVE DEVELOPED
TOOL
DESCRIPTION
2002
2004
Performance
indicators
Indicators of effectiveness, economy,
efficiency, quality of service with goals
in budget process
-537 indicators
-Limited coverage
-Performance against
targets still not reported
-1,684 indicators
-Number appropriate, still need to diversify
-Performance reported to Budget and Congress in
budget process and CPRs
Program
evaluation
Programs selected annually for
evaluation by independent panels,
conclusions ans recommendations
reported to Congress
-120 evaluations
performed, 48% of gov
program spending
-All desk evaluations
-Ministry-Budget
agreements signed
-170 evaluations performed or in progress, 75% of
gov program spending
-Growing share ofImpact and comprehensive
evaluations
-Ministry-Budget agreements assessed and
reported to Congress in CPRs
Management
Improvement
Programs
(MIP)
Annual bonus paid on basis of agency’s
progress against goals in seven key
management areas, benchmark-based
approach
-Bonus 2%-4%
-96% of staff on
maximum bonus
-Bonus 2,5%-5%
-Team performance bonus, max 3%
-MIP results reported to Congress in CPRs
-75% of staff on maximum bonus
-External ISO 9000-type certification
-Devolution of financial authority to top
performers
Comprehensive
Performance
Reports (CPR)
Annual report prepared by every agency
on performance against budget, targets,
institutional commitments
-200 agencies send
CPRs to Finance
Committes of Congress
-200 agencies send CPRs to permanent Budget
Committee of Congress
-CPRs basis for President’s report and review by
permanent Budget Committee of Congress
Pool of funds allocated to innovative
programs on basis of quality and
consistency of bids from ministries
- 4% of gov expenditure
allocated through BF
-10% of gov expenditure allocated through BF
-BF suspended for last half of administration
Managing for
Bidding Fund
Development
(BF)
Results
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Three key reforms
1.
Accountability. Reform of Congress Regulations (March 2003):
•
•
2.
Consolidation of Performance Monitoring System. Reform of
Financial Management Law (June 2003):
•
•
3.
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MARRAKECH 2004
Permanent authority to Ministry of Finance to request and provide
performance information with Budget
Further reporting mandates: medium-term expenditure framework
Human resource management. Reform of Statute of Public
Employees (May 2003):
•
•
•
•
Development
Joint Budget Committee of Congress made permanent (from 2-month to
year-round work)
JBC to hear, analyze and give guidance on basis of reporting from
Performance Monitoring System ahead of budget discussion
•
•
Performance-based pay doubles share of wage bill to 7%
Seniority-based career changes to merit-based career
Political appointees reduced from 4,000 to 400
Chief executives to be selected by President from short list provided by
independent commission after professional screening of candidates
Chief executives to sign performance agreements with ministers
Civil Service Agency created
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Not a coincidence - How PMS became a
political winner
• In November 2002 allegations of irregularities in Public Works
Ministry, followed by financial scandal in development agency
• Politicians, business leaders, media blame public sector
backwardness
• In January contacts between government and opposition to respond
with public sector reform. What reform?
• Political agreement around performance-based management,
budgeting, promotion and pay, based on cumulative experience,
thinking on results-oriented management over previous years
Managing for
Development
Results
MARRAKECH 2004
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The value added by performance
management
Managing for
• Performance management provided “meat” to Public Sector
Reform Agreement
• In some cases, voluntary, administrative developments made
statutory
• In others, performance orientation and mechanisms incorporated
into new systems (HRM)
• Accountability to Congress strengthened
• Reforms enacted in matter of weeks
• Trust in Chilean public sector restored, transparency assessments
suffer little damage, country risk drops
• ...and value gained: consolidation of reforms
Development
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Summing up
• In the end, there was some sort of crisis
• But it was sorted out better because of previous progress in
performance-based management
• Crisis provided an opportunity to consolidate reform and gain
bipartisan political support
• Lessons for discussion of influence of Global Context on country
approaches to managing for results:
– External pressure is unavoidable, even necessary for reform
– But readiness of government institutions to respond with
effective solutions is key to success
Managing for
Development
Results
MARRAKECH 2004
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See system in practice:
www.dipres.cl
Managing for
Development
Results
MARRAKECH 2004
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