tracking public expenditure: a guide
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Tracking Public Expenditure: A Guide. Waly Wane Development Research Group The World Bank Are You Being Served? June 2009. Presentation Overview. Why PETS PETS Key Features PETS and Resources Allocation Rules An Example: Tracking in Chad Lessons to date PETS Next Steps…. Why PETS. - PowerPoint PPT PresentationTRANSCRIPT
Tracking Public Expenditure:A Guide
Waly WaneDevelopment Research Group
The World Bank
Are You Being Served?
June 2009
Presentation Overview
Why PETS PETS Key Features PETS and Resources Allocation RulesAn Example: Tracking in ChadLessons to datePETS Next Steps…
Why PETS
Weak correlation between public spending and outcomes
Poor information systems and need for accountability mechanism
Need for better understanding of service delivery performance
Improve transparency and budget executionImprove efficiency and poverty reduction
impact of public expenditure
PETS - Key Features
Diagnostic tool for flow of resources through the system Delays Leakage
Data collected at all involved administrative levels and at the frontline provider
Quantitative versus perceptions
PETS - Key Features
No “standard” approachSurvey methods are complex and context
specific Design is difficult Data collection based on records
Poor record keeping practices Multiple sources of financing
Allocation rules are defining characteristic Hard vs. soft allocation rules environments
Hard Allocation Rules
MoF
Sub-nationalLevel 1
SDU
SectorMinistry
Capitation grant
MoF
Sub-nationalLevel 1
Sub-nationalLevel 2
SDU
SectorMinistry
Budget allocation
Contracting of staff
Procurement of materials
Procurement of other inputs
Donor contributions
Soft Allocation Rules Donor
contributionsMoF
Sub-nationalLevel 1
Sub-nationalLevel 2
SDU
SectorMinistry
Budget allocation
Procurement & distribution of materials
and other inputs
Contracting & allocation of
staff
Tracking & Hard Allocation Rules
First PETS – Uganda 1996 Zambia 2002 & Mali 2005 Hard Allocation Rules make
Tracking easier & more reliable Results more reliable, though… Sampling issues still remain
Do Hard Allocation Rules reduce leakage? Zambia’s leakage of rule-based resources is scant Capitation grant leakage in Uganda (1996) is 87% Leakage of books in Mali (2005) is 60%
In Uganda, information helped reduce leakage
Tracking & Soft Allocation Rules
Soft Allocation rules change the game Leakage is not always defined
No denominator because what provider should receive does not exist
Need to broaden the conceptSerious sampling issues
Broadening the Concept of Leakage
Lack of allocation rules and no allocation on the budget for providers makes leakage in the traditional sense hard to come by
Leakage is here defined as the share of earmarked regional resources that effectively reaches them
Need to account for all public resources that 1) should and 2) do reach the regions
Administrative Data is Crucial
Primary Data collected from Regional and District Health Administrations Regional and District Pharmacies Frontline Provider, Staff & Patients
Is important to address problems at the facility level such as staff morale, stock-outs of drugs, efficient use of resources, etc.
Secondary data is crucial to estimate “leakage” and hence effective public spending
Administrative Data is Crucial
Record keeping practices are often poor even within the administration, data rarely on magnetic support
Collect as much admin. data as possible, carry them, xerox them if necessary
Recall period over one fiscal year are riskyNecessary to triangulate the dataTracking the “petty” helps build confidence
in the data but it also has a cost
An Example: Tracking in Chad
Decentralized administrations, and Providers receive public resources under three channels: Decentralized credits Procured goods from the MoH centralized Ad hoc allocations
“Leakage” Rates in the Health Sector
Health Sector Ressources Distribution
0
10
20
30
40
50
60
70
80
90
100
Non-Wage Recurrent Total Recurrent
% B
ud
get
MoPH
Initial DRH Allocation
Effective DRHS Alloc.
Provider Ressources
Figure 1: Official vs. Effective Expenditures by Regional Health Delegations
• On average, RHDs received only 26,7% of their official non-wage budgetary expenditures from the MoH
0
100
200
300
400
500
600
700
800
900
1000
Mil
lio
ns o
f C
FA
Fra
ncs
0
5
10
15
20
25
30
35
40
45
Perc
en
tag
e R
eceiv
ed
Initial Allocation
Resources Received
Percentage
Average
An Example: Tracking in Chad
Public Resources Reaching Health Centers
We estimate from reports of heads of facilities that they received about 50 million CFAF of medical materials accounting for 17.8% of materials received by all RHDs
Only 4 centers (2%) report receiving financial resources from the health administration in 2003.
Total value of drugs received by HC is estimated at 3% of the MOH official budget for drugs which has been fully executed.
Impacts of Public Resources
Do public expenditures have an
impact on output in the health sector? Public expenditures do have an impact
…when leakage is controlled for. Official vs. effective health
expenditures in a regional delegation and utilization of health centers in Chad
Transmission Channels
How does the receipt of public resources improve outcomes?
Only one channel explored here is reduction in drugs costs which increase financial accessibility to health care
Transmission Channels
Drugs costs account for 65% of total costs Mark-ups decrease with the receipt of public
resources Why would monopolistic providers that receive
public resources reduce prices?
01,
000
2,00
03,
000
4,00
05,
000
Public
Privat
e fo
r pro
fit
Not-fo
r-pro
fit
NGO
Visit Tests
Drugs
020
4060
8010
0pe
rcen
t
Public
Privat
e fo
r pro
fit
Not-fo
r-pro
fit
NGO
Visit Tests
Drugs
Patients' Payments at the FacilityMkup Mkup Mkup Mkup Comp
Rec. Pub. Res -27.9** -23.3** -15.9** -19.0*
Private 30.9** 20.6* 14.7* 25.6 0.3*
Competition 9.7*** 13.4** -16.1
Other Controls NO NO YES YES YES
R-squared 0.03 0.04 0.06 0.16 0.5
Lessons to date
Large discrepancies between budget allocations and actual spending Uganda: 13 percent of intended funds arrived
Resource flows are endogenous to facility characteristics (rural vs. urban) Tanzania: rural schools and health centers can expect
longer delays and receive smaller proportions of funds Resource flows are endogenous to resource type
Zambia: rule-based versus discretionary Salaries less prone to leakage and delays than material
Lessons to date…
Decentralization matters Senegal: central level responsible for delays Senegal: leakages happen mostly at the local
levelInformation matters
Uganda: empowerment of users through newspaper campaign effective in reducing capture
Information System matters
PETS – Next steps…
Expenditure tracking only part of the story Need to strengthen the facility component -
QSDS
Understanding impact on households Linking facility and household surveys