Upload
sophia-shaw
View
212
Download
0
Embed Size (px)
Citation preview
The PEFA Indicators – How are they being used
Actionable Governance Indicators Course - April 29th, 2010
Frans RonsholtPEFA Secretariat
2
Characteristics and roll-out of the PEFA / PFM Performance Measurement Framework
What may PEFA Assessments be used for?
Content
PEFA indicators characteristics PFM Performance Measurement Framework
– 28 performance indicators + 3 donor indicators– Evidence based, rated on 4-point ordinal scale– PFM Performance Report with standard format
Launched in June 2005 – multi-agency initiative Application is decentralized
– Country teams/stakeholder groups decide if, when and how to implement the assessment work
PEFA Secretariat – Neutral body - supports users, monitors application
3
PFM Links to Development Goals
PFM system performance
Budgetary Outcomes
Fiscal / Exp Policy Goals
Dev Goals
MDGs, PRSP, Political Manifesto
Budget deficit, Sector allocations, Investment, Debt
ratio, Tax burden etc
Fiscal discipline, Strategic allocation,
Operational efficiency
PEFA Framework
Other influencing factors
Evolution of Number of Assessments
6
Regional Coverage of PEFA AssessmentsApril 2010
AFR EAP ECA LAC MENA SAR Other Total0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
Not Covered
Planned
Commenced
Substantially Completed
Regions
Perc
enta
ge o
f Reg
ion
Cove
red
7
Data coverage– 175 assessments done in 110 countries– 31 repeat assessments in 27 countries
Increasingly used for Sub-National government– 27 SN assessments in 14 countries
Wide stakeholder involvement– WB & EC leading 85% of assessments, 25 other agencies
involved– Government leadership/self-assessment increasing, but not
yet norm Public access to reports
− Only 56% of final reports in public domain− Links provided at www.pefa.org
PEFA Framework adoption
Assessment in HICs & MICs - examples OECD/HICs
– Norway (national), Switzerland (Canton/state) Large Upper MICs
– Brazil, Turkey, Belarus, (Russian Federation), South Africa
Large Lower MICs– India, Kazakhstan, Ukraine, Morocco, Egypt,
Thailand, Philippines, Indonesia, Colombia, Peru
8
9
What can countries use the PEFA assessments for?
Harmonize information needs for all stakeholders
Inform PFM reform formulation Monitor results of reform efforts Aid allocation and operational decisions Cross-country comparison
Harmonize information needs Create a shared view of PFM system
performance among all major stakeholders at country level – for various purposes
Reduce transactions costs of analytical work Provide a starting point for subsequent,
collaborative work on PFM reform and capacity building
10
Implement PFM reforms
Recommend PFM reform measures
Identify main PFM
weaknesses
High level performance
overview
Coverage of PFM-PR in Reform Cycle
Investigate underlying
causes
Formulate PFM reform
program
Identify main PFM
weaknesses
Recommend PFM reform measures
PFM-PR
Inform PFM reform formulation (1)
• PEFA report is one of several inputs – Identification of main strengths and weaknesses – and potential
impact on budgetary outcomes – Other factors: political economy, culture, constitution/legal,
resources, capacity at entry
• Ownership means government decisions on priorities– Government to consider all factors in deciding priorities– Allow ample space for government’s prioritization in the reform
dialogue with International Agencies
• Do not use Indicator scores simplistically – A low score is not sufficient justification for reform – Other factors: relative importance of subject, complexity
/timeframe for improvement, interdependence with other elements
Inform PFM reform formulation (2)• Complementary analysis to PEFA may be required
– Detailed analysis of underlying causes needed for formulation of detailed action plan
– Limit such analysis to priority areas – Drill-down tools – some exist, others under development
• Guidance on using reports for reform formulation – How to establish if a reform program is ‘credible’– Challenge to develop general approach and toolkit to
help government/donor teams identify priorities/sequencing– Such an approach could strengthen country ownership of
reform and coordination of donor support– Work in progress
Monitor results of reform efforts Schedule full repeat assessments – every 3-5
years Select a few indicators to monitor more
frequently Incorporate into the M&E component of the
PFM reform program (Kenya, Zambia)
Incorporate as monitoring tool in CAS (Bangladesh)
PEFA indicators being used for PFM reform program evaluations (IEG, Multi-donor evaluations)
14
Aid allocation & operational decisions Help to define main system weaknesses & related
safeguards for use of country systems PEFA indicators used by many agencies as input to
– fiduciary risk assessments (WB/CIFA, DFID, KfW, AFD) – aid allocation instruments (WB/CPIA, NL track record)
Do not use PEFA performance ratings as conditionality for disbursements– activity indicators may be more suitable– such measures to be under direct government control
15
Cross-country comparison Regional peer learning events
– Eastern Europe, West Africa, Caribbean, Pacific– Suitable for countries that share key characteristics– Often arranged in collaboration with IMF TACs
Research– AFTFM/Brookings study identifying regional performance
characteristics and reform trends– ODI/di Renzio study – correlating country characteristics
to PFM performance
16
17
Issues in country comparison• Comparison of two countries must be
done very cautiously: - Technical definitions may be different- Need to carefully read each report to understand
performance differences behind the scores.- Consider country context, ensure comparison of
like with like
• Comparing the scores alone can be misleading
18
Comparing groups of countries
• Aggregation requires three decisions
– Conversion from ordinal to numerical scale
– Weighting of indicators (generally and country specific)
– Weighting of countries (for country cluster analysis)
19
Comparing groups of countries
• No scientifically correct or superior basis for deciding conversion and weights exists– Each user takes those decisions on individual opinion– PEFA program does not endorse any particular
method
• In case aggregation is desired:– Be transparent on aggregation methods used– Discuss reasons for choice– Sensitivity analysis to illustrate impact on findings
Discussion