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

Country Case Study: South Africa 531
framework, considerably more leeway exists for action in cases of poor
performance than is being taken.
Effective medium-term planning at the departmental level cannot be
taken for granted. A lot of work needs to be done to realize the benefits of a
medium-term planning horizon. The medium-term allocations stop at the
program level, with financial planning lower down still being done largely
on an annual basis. Deepening the reforms in this direction would require
working with individual departments at the national and provincial levels
to develop managerial capacities. The South African process allowed for that
approach, and major reforms were implemented over a number of years.
Table 15.1 shows the pace at which the reclassification of the budget and
redevelopment of the chart of accounts were implemented.
Donaldson (2006: 4) notes that recent South African budget and policy
reform history is marked by some successful reforms. However, many cases
of ineffective or delayed reforms and persistent service delivery failures have
also occurred. Although there “may have been cases of policy error, poor
advice, or poorly planned reforms [and] cases in which the resource requirements
for successful reform have been too steep, or where key personnel
have not been equal to the task,” these instances are not fundamental barriers
to progress. Donaldson discusses two more fundamental problems, namely,
that the South African reform case is plagued by institutional overload and
that the assignment of powers and some objectives of reforms may have
been incompatible with incentives.
In the case of the first problem, the argument is that in many areas of
public service delivery, significant policy changes have preceded institutional
capacity building, leading to delays and ineffective implementation. An
overload of policy obligations has been a significant impediment to successful
transformation of the South African state. This is true for sectoral
reforms as well as for the underlying systemic reforms. However, as is illustrated
in the following discussion on reform of the classification system and
the chart of accounts, success is more likely when care is taken to systematically
build human resource capacity together with systems capacity.
Donaldson’s second argument touches on a key shortcoming of the
South African reforms: the lack of a credible budget performance management
system and lack of alignment between the accountability chain, institutional
governance, managerial incentives, and public policy objectives. In
South Africa, efforts to put in place performance management systems were
not well located in a sensible existing framework of accountability, objectives,
and performance indicators. Although pockets of sectoral reform progress
exist across the government, the functional devolution of responsibilities and