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Public Expenditure Analysis & Management Staff Training Course
May 21-23, 2002
MC2-800
This is a core staff training course on public expenditure analysis and management. This three-day event will provide comprehensive coverage of public expenditure related topics including fiscal sustainability; budget formulation, execution and monitoring; social and economic expenditures; thematic issues of employment and wage policy; social protection; and intergovernmental fiscal relations. Participants will be introduced to concepts in each of these areas and provided with practical tools for use in both economic and sector work (e.g., public expenditure reviews) and lending programs (e.g., poverty reduction support credits).
The course format will include presentations and discussion (as appropriate) of country cases. Ample time will be given at the end of each session for discussion.
Sponsored by:
Public Expenditure Thematic Group, PREM Network
World Bank
Course Program
Day 1: Tuesday, May 21
I. General PE Issues and Macro framework
9:00 – 10:45 a.m.
Session 1: Introduction to the Course; Managing Public Budget to Facilitate Economic Growth and reduce Poverty
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An overview session, it will highlight how the public sector can help in creating (a) the enabling environment to facilitate the private sector led growth process; and (b) helping those who are poor and need help from the government. A framework to assess the public budget will be discussed and it will be shown how economic analysis can be applied to the rationale for public spending, the choice of instruments (public provision vs. subsidy vs. regulation) and deciding among competing demand for public resources. The process to improve budgetary management as well as the link to the sub-national level of governments will be discussed. In discussing these themes, a reference to the various sessions in the seminar will be made.
Speaker and Chair: Vinaya Swaroop, Lead Economist, DECRG/ PRMPS.
10:45 – 11:00 a.m.Break
11:00 – 12:30 p.m.Session 2: Public Expenditures, Budget Deficits & the Macroeconomic Framework.
This session will discuss the link between public expenditures and the macroeconomic framework, focusing on budget deficits, public/private borrowing and inflation. It will discuss how financial programming exercise defines the limits for private and public sector credit, and together with other forms of budget financing, establish the size of the budgetary envelope that is consistent with the overall macro goals, or methodologies in arriving at a resource envelope for public expenditures. How excessive public spending can effect debt sustainability will also be discussed.
Chair: Vinaya Swaroop.
Speaker: Bill Easterly, Senior Fellow, Center for Global Development and Institute for International Economics.
12:30 – 2:00 p.m.Luncheon Session, Location: Private Dining Rooms D & E.
Professor Allen Schick, Professor of Public Policy, University of Maryland.
II. Issues in Public Expenditure Management and Accountability
2:00 – 3:30 p.m.Session 3: Linking Policy, Planning and Budgeting.
This session will examine approaches to linking policy and budgeting in the reform of public expenditure management, looking particularly at the instrument of program budgets, or medium term expenditure frameworks. The session will briefly examine experience with program budgets, both in developed and developing countries, drawing in part on the recent review for Africa and on work in Benin. The session will discuss definitions and terminology, the relevance of program budgeting in developing countries, its place within a broader PEM agenda, institutional requirements, and lessons learnt so far on how to introduce program budgeting.
Chair: Bill Dorotinsky, Senior Public Sector Specialist, PRMPS.
Speakers: Chuck Humphreys, Lead Economist, MNSED and
Pierre Demangel, Senior Country Economist, MNSED.
3:30 – 3:45 p.m.Break
3:45 – 5:00 p.m.Session 4: Public Budget Execution and Monitoring.
A great deal of attention has been given to budget formulation issues, ranging from resource allocation decisions, participation, and processes. Comparatively less attention is given to budget execution. And, even when budget execution is addressed, it tends to be viewed narrowly in terms of Treasury systems or cash management. This session will present an overview of budget execution issues, including why it is important, linkages to budget formulation, and to cash management issues, with country issues used to illustrate key points.
Chair: Richard Allen, Senior Public Sector Specialist, PRMPS.
Speakers: Bill Dorotinsky and David Shand, Financial Management Advisor, OPCFM.
Day 2: Wednesday, May 22
III. Issues in Sectoral Analysis
9:00 – 10:30 a.m.Session 5: Issues in Education Spending.
Public expenditures on education represent a high percentage of total expenditures. The allocation of such resources has not always produced the best results. This session will discuss the public rationale for education expenditures, the finance and provision mix, and recent evidence on education outcomes. It will also discuss innovative mechanisms for analyzing education expenditures.
Chair: Vinaya Swaroop.
Speaker: Elizabeth King, Lead Economist, DECRG.
10:30 – 10:45 a.m..Break
10:45 – 12:00 p.m.Session 6: Health Sector Expenditures.
This session applies the principles of public expenditure analysis to the health sector. It identifies the characteristic market failures of the sector, the relative degree to which the poor benefit from health expenditures and the systemic problems in the public delivery of health services. The use of data and other analytic techniques in the context of public expenditure reviews are also discussed.
Chair: Vinaya Swaroop.
Speaker: Jeffery Hammer, Lead Economist, DECRG.
12:00 – 2:00 .p.m.Lunch
2:00 – 3:30 p.mSession 7: Issues in Rural Development and Agriculture.
This session will provide an overview of public policy issues in the rural development and agricultural sector, drawing on the recently developed World Bank strategy for Rural Development. The presentation will also discuss typical problems of expenditure policy and resource allocation in the rural sector and highlight recent analytical and operational work that illustrates good practice in addressing them.
Chair: Vinaya Swaroop.
Speaker: Csaba Csaki, Senior Advisor, RDV.
3:30 – 3:45 p.m.Break
3:45 – 5:00 p.m.Session 8: Targeting of Government Expenditures for Poverty Reduction.
This session will discuss the role of targeting in social policy, tools available to target public programs, pros and cons of them, and the outcomes that can be reasonably expected. Examples are drawn principally from transfer programs.
Chair: Vinaya Swaroop.
Speaker: Margaret Grosh, Lead Economist, HDNSP.
Day 3: Thursday, May 23
IV. Cross-cutting issues in public expenditure
9:15 – 10:45 a.m.Session 9: Wages and Employment.
The first half of the session will discuss how out-of-control wage bills drive public employment concerns, and the options for governments that are told to do more with less. Towards assessing whether or not a civil service is affordable, the session will examine the ‘real’ wage bill, public employment conditions that compound rightsizing difficulties, and links between pay and performance.
In the second part of the session benchmarks to assess pay and benefits in the public sector will be discussed. The session will review some of the approaches used in practice to evaluate the compensation gap between the public and the private sector. It will outline practical alternatives based on the use of household survey data. A practical way of assessing the value of intangible benefits, such as job security or low effort will be discussed. The implications for the desing of separation packages will be drawn.
Speakers: Martin Rama, Lead Economist, DECRGand Ranjana Mukherjee, Consultant, PRMPS.
10:45 – 11:00 a.m.Break
11:00 – 12:30 p.m.Session 10: Issues in Inter-governmental Fiscal Relations.
The public sector in most countries is organized into multiple tiers of governments with varying roles and responsibilities for these tiers. Analysis of public expenditure policies cannot be carried out without a deeper understanding of the roles of these tiers. This session will highlight issues and relevant frameworks to examine the implications of synergies and conflicts among different tiers of government for economic management and public service provision.
Chair: Vinaya Swaroop.
Speaker: Dana Weist, Senior Public Sector Specialist, PRMPS.
12:30 – 2:00 p.m.Lunch
V. Public Expenditure and Bank Instruments
2:00 – 3:30 p.m.Session 11: The Changing Nature of Public Expenditure Work.
Over the past few years, Public Expenditure work has become central to the Bank’s country assistance strategy and to its policy dialogue. The scope and content of PE work has been correspondingly expanded to include a broader institutional assessment of resource management and accountability, a greater focus on outputs and service delivery, and initiatives to ensure a pro-poor impact of public spending. Various country cases(Brazil, Honduras, Turkey, etc.) will be used to illustrate good practices in PE work and its impact on strategic policy dialogue and country assistance strategies.
Speakers: Anand Rajaram, Senior Economist, PRMPS and
Yasuhiko Matsuda, Senior Public Sector Specialist, LCSPS.
3:30 – 3:45Break
3:45 – 5:00 p.m.Session 12: Linking Public Expenditure Work with Bank instruments.
This session will discuss: (i) public expenditure issues in the context of the Poverty Reduction Strategy Paper (PRSP) approach; and (ii) public service delivery and new survey tools to assess it. The first part of the session will examine the linkage between public expenditure analysis and management and the PRSP framework, focusing particularly on experience to date and on the operational implications for the Bank's work. The second part of the session will go beyond public finance and examine key issues in basic service delivery. It highlights new diagnostic survey tools that can shed light on actual public spending and frontline service providers.
Speakers: Sudhir Shetty, Sector Manager, PRMPR and Ritva Reinikka, Research Manager, DECRG.