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

368 Matthew Andrews
This dichotomous approach to the subject is arguably outdated, and
it is hard to find scholars or practitioners who are unaware of the political
nature of budgeting and public financial management structures and
processes. 10 The G8 finance ministers explicitly note the importance of the
policy orientation of spending as something they want reflected in their
code, which “should make people understand how the financial policy
priorities are chosen” (RosBusinessConsulting 2006). This characteristic
will not be easy to reflect, but it certainly should be given some explicit
treatment, especially for governments interested in the policy or performance
orientation of their budgets. (Such interest explicitly requires that
these governments think about their policy-making processes in a comparative
sense.) Box 11.2 proposes a basic structure for incorporating this
BOX 11.2 Basic Characteristics of Effective
Policy-Making Processes
Effective policy-making processes have the following basic characteristics:
National policy-making and review process
—A national policy-making process exists, producing a national policy
product.
—National policy is reviewed annually, and policy changes are transparent
(fiscal and sectoral policy changes).
—The national policy-making and review process has political and technical
dimensions (hence ensuring that policy enjoys political support and is
technically sound).
National policy product
—The national policy product details, concisely and clearly, multiyear fiscal
strategy and clear sectoral priorities.
—The national policy product provides clear and prioritized policy goals
and measurable indicators of those goals.
Connection between policy and PFM processes
—Sectoral plans and multiyear budget frameworks explicitly show how
allocations reflect national priorities.
—Budget proposals show how spending requests contribute to meeting
national goals.
—The annual budget document shows how spending allocations contribute
to meeting national goals.
—A formal process ensures that national goal achievement is monitored
and that there is (at least) annual reporting on progress in meeting
national goals.
—Ministers have to report to the cabinet on their ministries’ progress in
meeting national goals.
Source: Author’s representation, accessible at http://ksghome.harvard.edu/~mandrew/.