Public Sector Governance and Accountability Series: Budgeting and ...

Budget Methods and Practices 131
system: too much attention is given to scoring points rather than cooperating
to develop quality policies and spending programs. Ultimately, the
debate under such a system reverts to a discussion about inputs, rather than
outputs or outcomes. Meanwhile, both parties continue to hoard, rather
than share, information.
Several countries in Africa have evolved cooperative mechanisms to
build a common understanding between finance and spending agencies of
the policy choices and expenditure issues in each sector. A common variant
is the institutionalization of sector working groups that bring together
finance and spending agency officials, together with external stakeholders,
to review past spending effectiveness and forward objectives, spending programs,
tradeoffs, allocations, and expected achievements. These working
groups have the benefit of sharing the burdens of (a) developing an analytical
framework that can be used to identify and quantify choices between finance
and spending agencies and (b) calculating and creating cooperative forums
within which information asymmetry can be addressed and consensus built.
Experience with sector working groups in Kenya and Uganda points to the
need to make the decisions of these groups count. In both countries, sector
working groups form part of a strategic MTEF process that stands separately
from the annual budget process. Ministries soon learn that the budgeting
that results from appropriations (and which therefore really counts) still
occurs, as always, in a subsequent detailed estimates process. Participants
therefore quickly lose interest in the process and instead focus their attention
on the preparation of the annual budget.
Information-based mechanisms
Mechanisms under this category include using public expenditure reviews
(PERs) to frame budget requests, activity-based costing, and programming
techniques and using the budget submission to disentangle the components
of ministerial requests.
public expenditure reviews. Several developing countries
have institutionalized PERs in the budget process. PERs involve examining
ministerial programs and activities in line with the core functions of
the ministry and identifying problems of effectiveness and efficiency in
expenditure management. PERs that are conducted jointly by the finance
ministry and line ministries (for example, as part of a sector working group
process) encourage honesty in the budget process and build consensus on
expenditure issues that need to be addressed and on the impact of such
issues on forward budgets. PERs also have an internal function in helping