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

430 Salvatore Schiavo-Campo
and without support from the top political leadership, budget reforms
have generally remained largely a paper exercise to satisfy donor demands.
Pushing on a string is not an option. Thus, the sequencing and time period
of the reform process should be very carefully considered to make sure that
it will fit the absorptive capacity of the system over time and not cause reform
fatigue. Moreover, just as ex post evaluation is necessary for good budgeting,
periodic reassessments of the actual costs and benefits of specific budget
reforms and midcourse adjustments are necessary for sustainable reform.
This discussion leads to the advisability of occasional “digestion and
consolidation” periods to make sure that the people in the system have
understood, internalized, and learned how to use those changes and to give
them a temporary respite from further change and the concomitant uncertainty.
Accordingly, it appears wise to call a reform timeout from time to
time. Without in any way halting the reform momentum and progress
already under way, such timeouts will permit adjusting the course or speed
of specific reforms, giving a fresh look at the marginal opportunity cost
(including the transaction cost on the public administrators) of expanding
certain activities as opposed to others, and carrying out reality checks on the
various claims of reform success or, conversely, on the alibis for nonperformance.
Introducing budget reforms is not difficult. But merely introducing
the reforms, of course, is not the goal. The goal is to help achieve permanent
improvements in expenditure control, strategic resource allocation,
operational effectiveness, and public financial integrity in Africa.
Notes
1. The World Bank’s (1989) public expenditure review for Madagascar (Madagascar:
Public Expenditure, Adjustment, and Growth) was the first to include a major institutional
component.
2. Wagner’s Law states that the relative role of government in the economy tends to
expand along with economic growth. Convincing evidence indicates that the “law,”
whatever its dynamics, has been operative through at least the latter part of the 20th
century, as shown by the greater ratio of government expenditure to gross domestic
product (or of government employment to population) in rich as compared with
middle-income countries, and in the latter as compared with developing countries.
From the late 1980s, Wagner’s Law seems to no longer be operative in industrial
countries––with government expenditure (or employment) essentially steady or, in
some cases, declining.
3. The terminology originates with Stewart and Ranson (1988) and has been developed
in Schiavo-Campo and McFerson (forthcoming).
4. A recent International Monetary Fund study (Diamond and others 2006: 8) lists
among the major weaknesses in governance that have caused problems in PEM in
Africa the failure to “restrain politicians and senior bureaucrats from benefiting