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

422 Salvatore Schiavo-Campo
literature on the subject (see Schiavo-Campo 1999 and Smith 1996 for an
introduction), but the key requirements for a good performance indicator
can be summarized in the “CREAM” rule: a good performance indicator
must be clear, relevant, economical, adequate, and monitorable. Also essential
are the following criteria:
Never use either one single performance indicator to measure performance
or too many. Usually, three or four well-chosen indicators are appropriate.
Because precise weights cannot be assigned to different indicators, and
they cannot therefore be aggregated into a single quantitative measure of
performance, the indicators should serve as the basis for a dialogue on
performance and not be used to assign mechanical “points.”
The process of choosing the performance indicators is critical. Because both
front-line staff and the service users possess relevant information on the
public activity in question, they must both be brought into the definition
of the appropriate performance indicators, from the start of the process, as
well as provide feedback after the fact.
Recently, an operational guide has been produced to measure and monitor
performance in PEM (Collange, Demangel, and Poinsard 2006).Although
developed for Morocco, and thus more directly applicable to francophone
African countries, this guide is an excellent example of how to approach the
important issue of introducing better orientation to results, in a pragmatic and
sensible way that takes into account the lessons of international experience.
Lessons of International Experience
Among those lessons of experience, the fundamental one is that injecting
new formal performance-related elements into the budget process requires
extreme caution—both because better performance orientation is critical
for improving PEM and because there are many wrong ways of pushing it
and only a few ways of doing it right. In particular, international experience
suggests the following:
Never confuse the end of better performance orientation with any one
of the specific means for achieving it. In particular, there are many ways
to foster attention to results, short of making formal changes in the
budgeting system.
If the PEM system is performing reasonably well, be particularly mindful
of the risk that changes may actually make the situation worse. Conversely,