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

Overview 17
is asked to perform. Too often, technical assistance and international
consultants have pushed complex budgeting practices onto a reasonably
well-functioning system and thus created capacity constraints where none
may have existed. In turn, these capacity limitations are then used to justify
the need for continuing external assistance. The perverse outcome is that the
creation of local African capacity is preempted by the expatriate assistance
rather than facilitated by it.
The components of an entity’s capacity go well beyond employee skills;
they include the institutions—that is, the rules and incentives governing the
behavior of individuals in that entity; the organization that enforces or
implements those rules; the information needed; and, finally, the stock and
quality of resources in the organization, including, of course, human capital.
With reference to information, experience demonstrates how the implementation
of integrated financial management systems is a costly, complex,
and lengthy process that has been successfully accomplished in only a few
countries and has failed in most. With reference to human capital formation,
generic training in budgeting is useful, but training should normally focus
on the specific skills required for better employee performance in a current
or prospective job. Thus, training programs should be designed as a corollary
of the institutional, organizational, and information changes and should be
initiated only after these changes have been put in place—or at least concurrently
with them.
An important priority in every African country is gradually to impart
to public expenditure management a stronger orientation to actual results.
The pitfalls of performance measurement are legion; results indicators must
be introduced only when appropriate, and then through a careful and
consultative process; and reform must be mindful of diminishing returns,
never pushing a good new practice past the point at which the marginal costs
outweigh the marginal benefit. Nevertheless, a more robust dialogue on
actual achievements of the previous fiscal year should systematically become
part of the preparation of the new budget.
Finally, the need for appropriate sequencing and time period of a reform
is generally recognized, particularly to make sure that the reform will fit the
absorptive capacity of the system and not cause reform fatigue. Moreover,
just as ex post evaluation is necessary for good budgeting, periodic reassessments
of actual costs and benefits and midcourse adjustments are typically
necessary for sustainable reform. Occasional digestion and consolidation
periods are therefore advisable—to make sure that the people in the system
have understood and internalized the changes and to give them a temporary
respite from uncertainty. Accordingly, it appears wise to call from time to