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Affica Region  Number 43 August 1999
Findings Infobriefs reports on Good Practice in ongoing operational, economic and sector work carried out by the World Bank and its member
governments in the Africa Region. It is published monthly by the Knowledge and Learning Center on behalf of the Region.
The views expressed in Findings are those of the author/s and should not be attributed to the World Bank Group.
Progress in Public Expenditure Management
in Afica: Evidence from World Bank Surveys
One of the World Bank's key advisory roles is to assist its partner countries to make strategic
decisions about the use of their public funds. Governments and the Bank together assess the public
sector's potential role as a provider, financier, or regulator of services, or simply as a catalyst for
private sector activity. Governments have the primary role, and the Bank can advise, on prioritizing
expenditures given the availability of domestic resources and a country's capacity to borrow externally
(and repay in the future). Governments are also responsible for the efficient use of resources at their
disposal. The Bank's traditional vehicle for contributing to this kind of analytical work is the Public
Expenditure Review (PER).
Survey Findings
The Africa Region undertook a survey of 20 task managers of PERs in 1997/98. The main survey findings and key
recommendation are the following:
*  Public Expenditure Reviews (PERs) vary widely in costs, output form, and frequency throughout the Region. To
date, they have most often been initiated by the Bank, which holds primary responsibility for the main mission
and report drafting, but shares responsibility with the concerned government for dissemination. PERs often feed
into adjustment-related work.
Implication: Thefindings suggest that Borrowers need to fitrther build their capacity to undertake PER-type work
and to make public expenditure and public management analysis an integral part of their assessment and
evaluation processes. The Bank will continue to be a partner and work with countries until their own capacities are
sufficiently developed.
* Most countries have some data breakdown for public expenditures by financing source, government level, and
sector, but have little consistency in breakdowns.
For more information on thi sppecific study or copies, contact P.C. Mohan, Rm. J5 171, Knwkdge andLearnlg Center, World Bank 818  -
Street NW, Washington D.C., 20433. Tel. f202) 473-4114 or e-mail at' pmohan worldbank.org



Implication. Poor data quality prevents an even-handed assessment of program and project performance in any
sector and prevents necessary policy corrections from being implemented and from improving outcomes. It is
advisable to develop performance indicators, while explicitly considering the availability of data sources, during the
design phase of projects and programs.
Only about 5 percent of survey respondents rated public expenditure management as 'good' in the countries they
workwith, while 21 percent rated it as "moderate" and 74 percent as fair to poor'. Nevertheless, survey respondents
observed that over the last four years, public expenditure management has improved in 44 percent of the
countries, stayed the same in 31 percent, and become worse in 25 percent.
Explanation: Improving the management of public expenditures is a difficult and lengthy process requiring nothing
less than the establishment and smooth functioning of new or considerably modified sets of institutions within and
outside government -civil society has a large role toplay in itspartnership with govemment as the main stakeholder.
But the survey suggests that hard work and persistence pays offi
Key Recommendation
In order to irnprove the effectiveness of PERs, the working paper suggests the integration of PER and other sector
analytical work under the umbrella of a Public Expenditure Analysis Cycle (PEAC). The Cycle, defined over 3-5
years, would be designed by the country team in consultation with the Borrower, to encompass analytical work
required for country knowledge and for Bank-assisted operations. The PEAC would be initiated by a Concept Paper
outlining key analytical issues ranging from budgetary management to the role of parastatal entities in particular
sectors. The underlying premise of the PEAC is that a thorough review of public expenditures requires a
comprehensive assessment of government's expected role, capabilities, and resources, as well as a vision for the
private sector's immediate and longer term involvement in the provision of services. Each year's "new PER" would
consist of a progress report on the previous year's work, an update on macroeconomic developments and resource
availabilities, plus a new piece of analytical work. The Concept Paper and each year's PER could be reviewed by
operational and sector board management. The PEAC could become a vehicle for a new type of ongoing country
dialogue consistent with the Bank as a knowledge-generating and knowledge-sharing institution.
This Infobrief is a summary of Issue No. 1 of the Africa Region Working Paper Series. The paper was written by Christos
Kostopoulos. Additional information about the Series is available at the web site httr'://www.worldbank.orc/html/afr/
wps or by emailfrom AfricaRegionWPS@Worldbank.org
Armstrong, Ms. Evelyn
W8IRM
MC C2-130       (i)
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