Transcript Session 5. Improving the Use of Performance Information for Resource Allocation in R&D: Funding and Priority Setting From the Central Budget Authority’s Perspective Nowook Park Center for.

Session 5. Improving the Use of
Performance Information for
Resource Allocation in R&D:
Funding and Priority Setting
From the Central Budget
Authority’s Perspective
Nowook Park
Center for Performance Evaluation & Management
Korea Institute of Public Finance (KIPF)
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Contents
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Performance information of R&D in Korea
Issues on performance information of R&D
Use of PI for resource allocation in R&D in Korea
Issues on the use of PI for resource allocation in
R&D
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1. Performance information of R&D in Korea
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R&D Performance Evaluation
System in Korea
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Law for R&D program performance evaluation and
management was enacted in 2005
Three evaluation systems
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Program review process (Self-Assessment)
 164 programs are evaluated for 2007’s performance
Evaluation process for selected programs
 Long-term program, big program, duplicative programs etc
 27 programs are evaluated for 2007’s performance
Evaluation on public research institute
 32 institutes are evaluated for 2007’s performance
Feasibility study on big R&D programs
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Programs with more than $ 50 million budget
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Performance Information of R&D
Programs
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Information from program reviews
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Based on checklist
Contents of checklist
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Program purpose
Program design
Program management
Performance plan
Results (mostly based on performance indicators)
Feedback
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Performance Indicators of R&D
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For the sake of line ministries, pools of PI for 28
program types are provided
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28 programs are based on program purpose and utilization
of program outputs
Program purposes are classified into 4 categories
 R&D, HR development, international cooperation and
infrastructure development
Utilization of program outputs is divided into 7 categories
 Knowledge promotion (basic and applied)
 Industrial development (short-term, medium/long-term
development)
 Public and social welfare (public service, public health and
social welfare, region)
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2. Issues on performance information
of R&D
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Issues on Performance
Information of R&D
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Hard to develop relevant performance information
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Peer reviews are widely used method
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Results are realized in long term
Sometimes even establishing milestone indicator is not
easy, because the process is not certain ex ante
Hard to evaluate R&D programs based on indicators
Expertise, balance and independence are required
Need to find optimal mix of expert judgment and
alternative method
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Issues on Performance
Information of R&D in Korea
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PI from evaluation process is based on checklist
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Cost-benefit indicators are rarely adopted in the
evaluation process, even though they suggested in
the PI pool
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Evaluation on program results heavily relies on
performance indicators
Hard to come up with relevant information
Establishing reliable peer review process is hard
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Existence of strong social ties among scientists tends to
hinder objective evaluation process
Influences from line ministries may exist
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3. Use of PI for R&D resource
allocation in Korea
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Overview of R&D Resource
Allocation in Korea
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Korea becomes 8th country whose R&D spending exceeds $10
billion in 2008
Ratio of R&D spending to total government spending is 4.7% in
2008
Based on “National R&D Program Total-Road Map”, strategic
resource allocation occurred
 Increased spending on small scale basic research by individuals
 Increased ratio of spending on the areas where spillover effects
are big
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Biotechnology, Energy, Basic research
Decreased ratios of spending on the area where private sector’s
capability is mature
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Machinery, IT and electronics
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Changes of R&D Budget Process in
Korea (1)
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National Science and Technology Council (NSTC)
was established in 1998
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Centralized budget process for R&D
Previously there was no systematic budget process for
R&D programs
Science and Technology Innovation Bureau within
Ministry of Science and Technology was established
in 2004
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Has authority of budget allocation of R&D programs
Central budget authority usually accepted the budget
proposal from Science and Technology Innovation Bureau
with little modification
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Changes of R&D Budget Process in
Korea (2)
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Ministry of Strategy and Finance takes over the
authority of budget allocation for R&D programs in
2008
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Science and Technology Innovation Bureau was abolished
with the inception of New Administration
Implies strengthening the role of the central budget
authority in R&D budget allocation
Expect more active use of performance information for
R&D budget allocation
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Strategic Resource Allocation
of R&D
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R&D is one of 14 areas in National Fiscal
Management Plan (Medium Term Expenditure
Framework)
For FY 2008, strategic resource allocation is
based on “National R&D Program Total-Road
Map”
Role of PI in strategic resource allocation
appears to be limited
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Resource allocation among
R&D Programs
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PI from existing R&D evaluation systems are
not actively utilized in budget allocation so far
However, as the authority of resource
allocation is transferred to the central budget
authority, more active use of PI is expected
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Evaluated as lower 10% of programs in each line
ministry will be in danger of 10% budget cut
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4. Issues on Using PI for Resource
Allocation in R&D
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Use of PI for R&D Resource
Allocation
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Strategic resource allocation
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Resource allocation among different areas, such
as education, defense, R&D and so on
Resource allocation among R&D programs
pursuing different goals
Resource allocation among R&D programs
pursuing similar goals
Resource allocation among R&D programs
within spending ministries/agencies
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Issues on the Use of PI for Strategic
Resource Allocation in R&D
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Strategic plan and PI should be consistently
integrated
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PI at the national level may give rough signals for
strategic resource allocation when it is combined
with other considerations
It is not easy to use PI to set the priority among
different areas, such as education, defense, R&D
and so on
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Other factors may play a bigger role
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Issues on the Use of PI for Resource
Allocation for R&D Programs
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Selecting appropriate units for evaluation is
important to use PI for setting the priority among
R&D programs pursuing similar goals
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Identifying programs pursuing similar goals is the first step
Program review process may facilitate the process
Crosscut analysis can be used for resource allocation if
relevant PI is available for each program
Using PI for setting priority among programs
pursuing different goals is not easy
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Use of PI for management improvement is feasible
Use of PI for resource allocation is more complicated
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Issues on the Use of PI for R&D
Resource Allocation in Korea
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PI has not been systematically used in strategic
resource allocation
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Use of PI in the national fiscal management plan need to
be improved
More active use of PI for resource allocation is
expected but it remains to be seen how effective it
will be
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So far, the focus is given to resource allocation within each
spending ministry
Uniform criteria may be adopted to strengthen use of PI
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Thank You!
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