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Development, Governance and the Future of Public Financial Management

To make real progress towards achieving the Millennium Development Goals, the international community needs to empower leaders to deliver, not just hold them to account.

This was the conclusion of a presentation that AGI’s Director of Strategy Paul Skidmore gave to a plenary session on good governance at the CIPFA international conference ‘Shaping the Future of Public Financial Management’ on 16 March 2011. The session was co-hosted with Alison Evans, the Director of the Overseas Development Institute (ODI)

Alison presented the findings of an ODI report which argues that progress on the MDGs - in Africa and elsewhere - is happening and that, if assessed in absolute as well as relative terms, more progress has been made than is commonly recognised.  

Speaking to an audience of over 150 people at the conference in London, Paul then explained what we at AGI think we have learned about the role of good governance in achieving the MDGs from our work in three post-conflict states over the last three years in Rwanda, Sierra Leone and Liberia. 

AGI and the 3Ps

In his presentation, Paul talked about the ambition of the MDGs. Because of this, and because around the world the public rightly want to see real results for aid, we need to make every penny of development spending count. He argued that we need effective governance to hold leaders to account for the way they spend scarce resources, but it is not enough to focus on keeping leaders honest - the international community also needs to empower them to deliver:

“Some of Africa’s most inspirational leaders struggle to translate their vision into results. When resources are tight and the needs are great, it’s absolutely right that we should invest in the systems and processes to ensure that money is spent wisely and properly accounted for. But by itself that is not enough to deliver the improvements in healthcare and schooling and jobs and support for farmers that the MDGs call for. For that, we also need to help leaders drive change on the ground, and that means helping them with what I’ve called the 3Ps of prioritisation, planning and performance management.”

Through the work of our projects in Africa, AGI has found developing capacity in these three areas to be absolutely critical in enabling leaders to drive change:

• PRIORITISATION. The capacity to prioritise, to ruthlessly target a small number of priorities, is crucial. When we first started working with the Government of Rwanda, like most governments they had over 170 priorities. Too many. Last year, there were 11. This year there are 6. This isn’t a cosmetic change: it makes a big difference. For example, one of the 11 priorities last year was classroom construction. Because the Ministry of Education could really focus on it, and knew that it was going to be held to account for it, Rwanda built almost 3000 new classrooms in one year.
• PLANNING. Once you have your priorities, the second P is the capacity to plan – to develop detailed implementation plans to deliver those priorities. Governments often need plans not strategies. Practical documents that say what needs to be done when and, importantly, what the  minister and her top officials need to do on Monday morning to make it happen.
• PERFORMANCE MANAGEMENT. Once you have your priorities and you have a plan for delivering them, the final P is about performance management–monitoring delivery and intervening when things are off track. Some of this is about formal systems of accountability and monitoring and making these robust. But it’s also about helping leaders to intervene effectively to keep things on track. That’s about effective Cabinet government, about systems to monitor progress, and very often about the seemingly mundane issue of how leaders manage their time.

Slides for Paul’s presentation can be found here. You can watch the video of Paul and Alison’s presentations on good governance and the audience Q&A which followed here.

Next Wednesday(6^th April), Andy Ratcliffe, who leads AGI’s Lessons Learned project, will be participating in an ODI event Governance for Development in Africa: Building on What Works.