Public Financial Management Reform in South African Provincial Basic Education Departments

Since the transition to democracy in 1994, the South African government has engaged in a sustained programme of public financial management (PFM) reform across the national, provincial and local spheres of government. This study evaluates the progress of the nine provincial education departments (PEDs) in implementing the Public Finance Management Act of 1999 and explores the factors that facilitated or impeded reform. A PFM progress (PFMP) index is constructed to track each PED's performance from 1997/1998 to 2013/2014 and then used to benchmark its progress over time and relative to the education sector as a whole. The indicators comprising the PFMP index assess key PFM functions (budgeting, accounting, financial auditing and audits of performance information), financial leadership and the effectiveness of governance institutions such as audit committees. While there has been considerable progress in PFM, distinct differences in the quality and effectiveness of PFM practices across the nine PEDs remain. Stable top administrative leadership, availability of PFM skills, varying degrees of accountability and departmental capacity to establish PFM systems that conform to new accounting standards drive variances in reform outcomes. Copyright © 2016 John Wiley & Sons, Ltd.     

Public Debt,Economic Growth,and Public Sector Management in Developing Countries: Is There a Link?

The article investigates whether differences in public sector management quality affect the link between public debt and economic growth in developing countries. For this purpose, we primarily use the World Bank's institutional indices of public sector management (PSM). Using PSM thresholds, we split our panel into country clusters and make comparisons. Our linear baseline regressions reveal a significant negative relationship between public debt and growth. The various robustness exercises that we perform also confirm these results. When we dissect our data set into “weak” and “strong” county clusters using public sector management scores, however, we find different results. While public debt still displayed a negative relationship with growth in countries with “weak” public sector management quality, it generally displayed a positive relationship in the latter group. The tests for non‐linearity shows evidence of an “inverse‐U”‐shape relationship between public debt and economic growth. However, we fail to see a similar significant relationship on country clusters that account for PSM quality. Yet, countries with well‐managed public sectors demonstrate a higher public debt sustainability threshold. Copyright © 2015 John Wiley & Sons, Ltd.     

Public sector capacity reform in Ethiopia: a tale of success in two ministries?

To enhance the capacity of public institutions in Ethiopia and to create an ideal environment for investment and economic growth, the public sector has gone through a series of reform processes including the civil service. This article attempts to assess the outcomes of the Public Sector Capacity reform, based on a small‐scale survey conducted in two ministries. The survey, which was conducted between March and May in 2005, reveals a notable transformation of service delivery in each organisation. Very high levels of user satisfaction and spectacular improvements in performance were also recorded as a result of the introduction of business process reengineering (BPR). Although the change process in both organisations tended to be sluggish, these improvements appear to be outstanding within the context of Ethiopia's system of public administration. However, one challenge will be for the government to maintain the momentum of reform and to cascade BPR and other elements of the reform to other divisions, departments and work units in the government. Putting in place incentive schemes and an appropriate monitoring system should protect the reform from backsliding. Despite the pessimistic accounts of public sector reform in African countries, this article reveals that there are positive findings of interest to the field of development administration. Copyright © 2007 John Wiley & Sons, Ltd.     

Organization and Reporting of Public Financial Accounts: Insights and Policy Implications from the Singapore Budget

This paper analyses the Singapore government budget's organization and reporting structure, and draws lessons and policy implications for improving public financial management practices. The paper finds that Singapore's fiscal marksmanship record has been poor with consistent underestimates of revenue and overestimates of expenditure. Second, subtle divergences from international reporting standards limit the information available and constrain the budget's analytical usefulness in international comparisons. Third, current reporting conventions of the budget fail to provide an adequate representation of the government's fiscal position. Fourth, revised estimates of budgetary balances in line with international reporting standards show a considerable increase in the fiscal space available. The policy implications of these findings are discussed, as well as some reporting changes which can help improve the fiscal marksmanship record, increase public sector transparency and accountability, and facilitate better quality discourse among all stakeholders on public financial management.     

Rents from in-kind subsidy: “Charity” in the public sector

Public choice analysis usually focuses attention on the behaviour of self-interested individuals but this paper considers rent seeking when some taxpayers are motivated by altruism. Redistribution policies initiated by self-interested rent seekers require taxpayer approval. Even if taxpayers are fully informed, their resistance to inefficient schemes is reduced when public sector schemes are the only means available to pursue altruistic goals. Altruism serves to broaden the scope within which rent seekers may operate. A discussion of international “tied” aid illustrates the impact which rent seeking can exert on public sector “charity.”     

Latin–American public financial reporting: recent and future development

In recent years, numerous Latin–American countries have carried out reforms in their public accounting systems, with technical cooperation provided by the U.S. Agency for International Development (USAID). Taking into account the lack of international accounting standards for the public sector, USAID has designed a model termed Integrated Financial Management System for Latin America and the Caribbean (IFMS or SIMAFAL). This model is intended to provide better financial information for governmental decision‐taking as regards the allocation of resources; a further goal is to achieve greater transparency and for a higher degree of responsibility to be accepted for the commitments made and the results of activities undertaken. Important changes are currently taking place on the international public accounting scene and the International Federation of Accountants (IFAC) is pressing for the adoption of a set of international public accounting standards by Latin–American countries. In this article, we compare the level of information included in the year‐end governmental public report in Latin–American countries which have carried out their reforms outside SIMAFAL with that of others which have followed this model. Second, we examine the extent to which the public financial reporting practices recommended by IFAC coincide with those adopted by the above countries. Copyright © 2007 John Wiley & Sons, Ltd.     

Communicative Diplomacy for the 3rd Millennium

Abstract

In today's world of revolution in communications and information as well as of global interdependency, a medialised politics became a general reality. One can observe such a trend specifically in the field of international and foreign affairs where state and other actors use communication channels and public relations to a large extent to improve on the content and in particular, on the image of their policies. Here one can also argue that a major share of bilateral and multilateral relations among states is shaped by the international media, or vice versa, that all major “wars” are “fought” through the media.

This article explores the increasing inter-relation between state foreign affairs on one side, and media and public relations, on the other. The article starts off with basic concepts of a “new/democratic diplomacy” (Nicholson, 1988) and a “public diplomacy” (Signitzer in Combs, 1992), and compares them with definitions of “international public relations” (Kunczik, 1997). It attempts to build the general analytical framework on the basis of comparative case studies of developed countries with an established diplomatic tradition and of new democracies still proving themselves on the international fora. In this context, particular attention is given to communication in relation to international organisations like NATO and the EU.     

Managing Public Finance and Procurement in Fragile and Conflicted Settings

ABSTRACT

Successful transition from conflict and fragility hinges on the quality and legitimacy of public financial management (PFM) systems. This article shows that such systems develop asymmetrically in these settings. Formal aspects of modern systems are adopted, but a layered series of informal arrangements govern resource management. Analysis of data from Public Expenditure and Financial Accountability assessments of 101 countries explores aspects of this asymmetry and different explanations are considered for why elites seem to choose not to invest trust, resources, and capacity in making mainstream PFM systems functional. These explanations focus on the incentives created by three “public” resources: illicit flows, domestic revenues, and strategic or aid flows. Mainstream PFM systems are applied to a small part of these flows. The illustrative case of Cambodia shows how a layered system has emerged to govern such flows, undermining the influence of formal public finance management systems. The article offers suggestions to address these issues.     

Critical success factors for modernising public financial management information systems in Bosnia and Herzegovina

This article identifies a number of critical factors that have contributed to the successful implementation of a public financial management information system in the Republic of Bosnia and Herzegovina (BiH). The information system, funded by USAID and implemented by Emerging Markets Group from 1999 to 2004, has revolutionised accounting practices and has contributed to a more transparent and effective public sector. This article describes the project's context and purpose, its main features, challenges and obstacles. It continues by outlining the critical success factors that have contributed to the success of the project in a challenging environment. The project was implemented in a rather unique environment since it was initiated not long after the end of the civil war and the creation of the Republic of BiH. The Republic of BiH inherited the former socialist Yugoslavian payment systems. There were no adequate public financial management systems in place, and the project team could essentially start from scratch. The project team designed and implemented an accrual accounting system, and unlike the situation in many countries, relieved the government from having to transform their financial management system from cash‐based accounting to accrual accounting. Copyright © 2005 John Wiley & Sons, Ltd.     

Introduction

ABSTRACT

Many externally motivated public sector reforms produce less change than expected. This article argues that we should expect limited reform results in respect of certain organizational attributes. Applying institutional theory on isomorphism, the argument is simply that reforms are harder where they influence organizational characteristics that (i) are difficult to observe externally, (ii) are core to the organization, and (iii) involve actors with whom the externally defined change agenda is unlikely to resonate normatively. These arguments are tested in an analysis of Public Financial Management (PFM) reform in Africa, where evidence is supportive. The article contributes to public management literature, and comparative studies in particular, by applying a well-suited theory to the study of public sector change. The approach and findings should be of particular interest to the development community, shedding light on why reforms routinely underperform—in PFM and beyond, extending to topics like externally driven nation building.     

Alternative South–South development collaboration? The role of China in the Coega Special Economic Zone in South Africa

Aid, in the form of financial aid and investment, has become increasingly prevalent in both bilateral and multilateral partnerships in the BRICS. In Africa, the Forum on China–Africa Cooperation provides the official framings for forms of development assistance to the continent, with financial forms of aid available through the New Development Bank and the China–Africa Development Bank (CADFund). This article explores how Chinese international development assistance has influenced South Africa's economic growth and development strategies and is reshaping South Africa as “gateway” to Africa and continental leader. Special economic zones (SEZs) have become a prioritised form of BRICS development collaboration particularly in terms of Chinese trade and investment expansionism into Africa through South Africa. Chinese international development assistance and foreign direct investment in South Africa in particular are very notable and have been strengthened during the Chinese official state visit prior to the Johannesburg BRICS Summit in 2018. The article critically analyses the development policy discourse on BRICS spearheading an alternative model of South–South international cooperation by examining the Coega SEZ in South Africa, hailed as the most SEZ in Africa. The article critically examines the development alternative potential of the Coega SEZ.     

Enhancing organizational effectiveness in developing countries: The training and visit system revisited

Improving the effectiveness of public sector organizations in developing countries has become a major focus for national governments and foreign aid agencies. This study reviews the experience of a major organizational reform strategy, the training and visit system of extension, that has operated for more than 20 years. Several lessons drawn from this experience are that aid donors must: (i) eschew their preference for organizational blueprints and recognize the contingent nature of reforms; (ii) recognize that many public sector organizations have only a small ‘controlled’ decision-making space and thus pay more attention to ‘influenceable’ decision-making opportunities; (iii) acknowledge that machine model approaches are likely to reinforce the negative aspects of hierarchical control in bureaucracies, and; (iv) pay much more attention to organizational sustainability in terms of finance and strategic management capacity.     

Livelihood strategies and performance of Ghana's health and education sectors: exploring the connections

The public sector in Africa is riddled with widespread ineffectiveness. Although some countries have implemented various reform programmes with the support of international development agencies, the results so far have been disappointing. One reason for the failure is that the policies have focussed more on achieving macroeconomic stability than making the organisations effective. This article explores a fundamental problem of the policies—the need to focus on the human component of organisational performance. Using education and health organisations in Ghana as examples, the article advances a hypothesis that the livelihood strategies of public sector employees and the performance of their organisations are interconnected. Specifically, it is argued that as public sector employees have become more dependent on multiple sources of income, they have developed multiple social identities, which influence the culture of their organisations. The organisational culture may have encouraged employee effectiveness in some cases, but for most organisations, it has resulted in practices that perpetuate inefficiency and poor performance. To be successful, public sector reform policies must therefore involve deliberate efforts to change organisational cultures. Copyright © 2005 John Wiley & Sons, Ltd.     

Adaptive governance as a reform strategy

This article expands research on adaptive governance in natural resource and climate change policy into other policy areas and the larger context of reform. The purpose is to clarify adaptive governance as a reform strategy, one that builds on experience in a variety of emergent responses to the growing failures of scientific management, the established pattern of governance. Emergent responses in information technology, national security, development aid, and health care policy are reviewed here. In these cases, factoring a large national or international problem into many smaller problems, each more tractable scientifically and politically, opened additional opportunities for advancing common interests on the ground. The opportunities include simplification of research through intensive inquiry, participation in policy decisions by otherwise neglected groups, and selecting what works on the basis of practical experience rather than theory. What works can be improved incrementally in the context at hand, diffused through networks for voluntary adaptation elsewhere, and used to inform higher-level decisions from the bottom up. Adaptive governance is a promising strategy of reform. The open question is whether it will be used well enough to sustain a once-progressive evolution toward fuller realization of human dignity for all.     

Parallel Systems and Human Resource Management in India's Public Health Services: A View from the Front Lines

There is building evidence in India that the delivery of health services suffers both from an actual shortfall in trained health professionals and from unsatisfactory results of existing service providers working in the public and private sectors. This study focuses on the public sector and examines de facto institutional and governance arrangements that may give rise to well‐documented provider behaviors such as absenteeism that can adversely affect service delivery processes and outcomes. We analyze four human resource management (HRM) subsystems: postings, transfers, promotions and disciplinary practices from the perspective of front‐line workers—physicians working in rural healthcare facilities operated by two state governments. We sampled physicians in one “post‐reform” state that has instituted HRM reforms and one “pre‐reform” state that has not. The findings are based on both quantitative and qualitative measurements. The results show that formal rules are undermined by a parallel modus operandi in which desirable posts are often determined by political connections and side payments. The evidence suggests an institutional environment in which formal rules of accountability are trumped by a parallel set of accountabilities. These systems appear so entrenched that reforms have borne no significant effect. Copyright © 2015 John Wiley & Sons, Ltd.     

Public sector reform in Sub‐Saharan Africa: what can be learnt from the civil service performance improvement programme in Ghana?

This paper focuses on public sector management reform ‘best‐practice’ case experience from Sub‐Sahara African (SSA). Given that ‘best‐practice’ is a relative concept and often debatable, the paper uses the Ghana Civil Service Performance Improvement Programme (GCSPIP) experience as rather a ‘good‐practice’ case with the view to sharing the outcome and lessons to encourage collaborative‐learning. It seeks to share the outcome and lessons learnt by the Ghana civil service reform with future public service reformers and to contribute to the literature. The paper concludes with an adaptable three‐dimensional framework. The framework argues that successful future public service reform (PSR) should consider three broad issues: first, are the ‘critical success factors’, including wholehearted political leadership commitment; wholehearted bureaucratic leadership commitment; thoughtful synergistic planning/preparation; patience for implementation and evaluation; capacity to convince; neutralise and accommodate reform‐phobias and critics; sustainable financial and technical resource availability and conscious nurturing of general public support. Second, is the need for reformers to appreciate the concerns of the public and the civil society scepticism of public ‘institutions’ and its ‘operatives’ and finally placing any reform programme in a country‐specific context, including understanding its history, culture, politics, economy, sociology, ideology and values. Copyright © 2008 John Wiley & Sons, Ltd.     

Capital united? Business unity in regulatory politics and the special place of finance

While organized business is a key actor in regulatory politics, its influence is often conditional on the level of unity or conflict occurring within the business community at any given time. Most contemporary regulatory policy interventions put pressure on the normal mechanisms of business unity, as they are highly targeted and sector‐specific. This raises the question of how business unity operates across a highly variegated economic terrain in which costs are asymmetric and free‐riding incentives are high. In this paper, we empirically assess patterns of business unity within regulatory policymaking across different regulated sectors. Our analysis utilizes data from hundreds of regulatory policy proposals and business community reactions to them in the telecommunications, energy, agriculture, pharmaceutical, and financial sectors over a variety of institutional contexts. We find considerable empirical support for the “finance capital unity” hypothesis – the notion that the financial sector enjoys more business unity than other regulated sectors of the economy. When the financial sector is faced with new regulations, business groups from other sectors frequently come to its aid.     

Public finance management reforms in Somalia: a case study on Somalia's finance professionals

There is an unprecedented and pressing need for a major legislative public financial management reform in Somalia to bolster the technical and professional efforts of implementing a modern system of public financial management across the country. Currently, there is no independent auditing authority to enable citizens to access information on the use of public resources. However, the success of any reform depends on establishing strong public budgeting systems as well as developing strong public finance training programs and policy linkage on financial management policies and procedures.     

Agricultural extension in transition worldwide: structural,financial and managerial strategies for improving agricultural extension

Agricultural extension is in transition worldwide. Governments and international agencies are advancing structural, financial and managerial strategies to reform extension. This article reviews and analyses these reform measures, concluding with a conceptual framework that is intended to underscore at once the diversity and interconnectedness of these structural, financial and managerial strategies for decentralizing public sector agricultural extension.     

Enhancing Public Accountability for Developing Countries: Major Constraints and Strategies

Many Asian countries are attempting to promote public accountability as a part of public-sector reform, but their situation remains unsatisfactory compared to advanced countries. Except for a few, many Asian developing countries are still struggling with political and socioeconomic weaknesses. Indeed, the nature of public sector reform in many Asian developing countries differs substantially from that of advanced countries. Furthermore, the concept of accountability is not interpreted equally throughout the world. Accordingly, the purpose of this article is to review the major constraints to enhancing public accountability in Asian developing countries and to discuss major strategies to promote such accountability from the perspective of developing countries. This article first reviews the concept of accountability and its development, followed by discussion of constraints in enhancing public accountability and public sector reform, key measures to enhance public accountability, and implications and conclusions.