Public Expenditure Tracking and Service Delivery Surveys Jordan Public Expenditure Review June 15, 2003 Ritva Reinikka Development Research Group, The World Bank

Public Expenditure Tracking and Service Delivery Surveys First Public Expenditure Tracking Survey (PETS) carried out in Uganda in 1996 Since then, a large number of PETS and related surveys have been implemented Scope and nature of surveys are differed, but common theme is link between public spending and outputs and development outcomes Surveys to date Completed Uganda (5) Tanzania (2) Ghana Rwanda Mozambique Zambia PNG Honduras Peru Bangladesh and more… Ongoing Ethiopia Nigeria Brazil Laos

From policies and spending to benefits We generally believe that providing financing and flexibility to countries with well-designed policies allows us to leverage good outcomes. Benefits Government Outcomes

Breakdowns on the way to achieving outcomes are due to gaps in… Government Leakage of Funds Policy Institutional Incentives Sub-optimal spending: High teacher salaries; Insufficient supply of textbooks Financing Capacity Information & Transparency Low quality instruction Capacity & Incentives Curriculum & Technology Lack of demand Household Behaviors Community Norms Policy Information/M&E Capacity Household Behaviors Institutional Incentives Financing Other Sectors Local Gov. Providers Individuals Outcomes Benefits

The (missing) link between public spending and outcomes Broad allocation of resources Delays and lack of predictability (e.g. salaries, medicine stock-outs) Problems in budget execution CORRUPTION Discretionary reallocation of resources (favoritism, lack of criteria or information, etc.) Leakage of financial or material resources PUBLIC EXPENDITURE TRACKING AND SERVICE DELIVERY SURVEYS Misappropriation of resources (e.g. theft of medicines) Evidence shows limited impact of public spending on growth and human development indicators Demand for evidence on efficiency of spending and quality in service delivery Lack of reliable data in many developing countries New approaches to aid delivery Move towards budget support (e.g., PRSC) Focus on poverty-focused strategic framework (PRSP) Related fiduciary and accountability concerns Are budget allocations pro-poor? Are budget outturns consistent with established allocations? Quantitative measurement of corruption Do expenditures result in intended outputs and outcomes? Problems in service delivery Absenteeism Overcharging Inefficiency, high cost, low quality Lack of demand for services

A framework for service delivery World Development Report 2004 This is a problem for two reasons: The provider may not have incentives to provide the service. His pay is unaffected by whether or not he provides the service. Absenteeism rates in schools and clinics is an example of this. One way to improve upon this is to make the provider’s pay depend on the service—as in a contract. A good example is from Cambodia.

The Survey Approach Approach has varied considerably depending on context and focus Multilevel focus, but frontline providers (schools or health facilities) as main unit of observation Representative sample Data collected through interviews and record reviews (financial records, stock cards for medicines, etc.) Multi-angular approach for validation of data Some surveys include detailed surveys of frontline provider, including availability/adequacy of inputs, quality, staff and user interviews, etc.

What have we learnt? Leakage Education sector in Uganda 1996 Data from 250 schools and administrative units Only 13 percent of intended capitation grant actually reached schools (1991-95). Mass information campaign by Ministry of Finance (the press, posters) Follow-up PETS to evaluate impact of the information campaign: 2/3 of reduction in leakage thanks to the campaign High leakage has also been found in other countries (Tanzania, Ghana, Zambia, Peru) Many improvements since 1992 macroeconomic stability and growth shift of public resources from defense to roads and social sectors decentralization Poverty Eradication Action Plan (PEAP) Poverty reduced from 56% in 1992/93 to 35 % in 2000 Strong budget management MTEF, Poverty Action Fund (PAF) Sector level performance did not keep up SYSTEMATIC PATTERNS IN LEAKAGE: Large schools with wealthier parents and qualified teachers were able to obtain more of their budget allocation.

What have we learnt? Ghost workers and absenteeism Salary payments “leak” differently Different measurement approaches: PETS with data collection on payroll and staffing data (Honduras 2000, Peru 2002, Zambia 2002, Mozambique 2002, etc.) Unannounced visits to schools and health facilities (Bangladesh 2002, India 2002, Uganda 2002)   Health Educ. Ghost workers Honduras 5.0% 8.3% Absenteeism Bangladesh 35.0% - 27.0% 14.0% India 43.0% 23.0% Peru 26.0% 13.0% Uganda

What have we learnt? Allocation and budget execution Leakage sometimes difficult to assess due to lack of explicit allocations or entitlements But surveys can shed light on other important allocation and budget execution issues Primary health care in Mozambique: Very large variation across districts and facilities in non-wage recurrent spending, staffing, and distribution of medicines Severe problems in budget execution, with late first transfers and slow processing of accounts, resulting in low predictability Weak record keeping at provincial, district, and facility levels, often with large discrepancies between levels Why this variation? – Corruption may be one factor

The strengths of the approach Useful tool for diagnosing and understanding problems in budget execution and service delivery, including corruption Multilevel perspective important and not achieved from simple school or facility surveys District and frontline provider perspective often forgotten at central level Representative sample provides credibility not achieved through small-sample studies or institutional reviews Validation of administrative data (financial and output) Can provide basis for monitoring of changes over time Surveys provide data for research that can improve our understanding of the determinants of corruption or poor service delivery Process of designing and implementing survey is useful for understanding institutional and procedural arrangements for budget execution and service delivery

Survey Design: Surveying what? Why? What are the problems? Are there important gaps in our understanding of the nature, extent, and source of problems? Is a survey the appropriate tool? Stand-alone or as a complement? Worth the cost? Is it feasible? How is the budget structured and implemented? Who is the audience and is there a likely impact? Is there a political demand? Will the information be used? By whom?

Implementation issues: Who? How? Requires skills like any other micro survey Steps in implementation Concept Buy-in across the board Questionnaire design Identify (and contract) implementing agency Pilot Enumerator training Field work (including quality control and data entry) Analysis and dissemination

Some limitations Surveys only provide part of the answer What about inter- and intra-sectoral allocations? Link with outcomes? => Budget analysis and social impact analysis (with household data or through participatory approaches) are still important Surveys should supplement rather than supplant routine information, control, and integrity systems Surveys provide information but don’t necessarily result in change A lack of information about the scope and nature of problems is not always the primary constraint to improving PEM and service delivery Continuity and link with efforts at strengthening institutions and routine PEM systems important Link with community and other local stakeholders can be difficult to achieve – important to use findings to strengthen local transparency and accountability mechanisms

Finding out more… Survey reports, instruments, and documentation on: www.publicspending.org http://www1.worldbank.org/publicsector/pe/trackingsurveys.htm Some references: Dehn, Reinikka, and Svensson. 2003. “Survey Tools for Assessing Performance in Service Delivery.” In Bourguignon and Pereira da Silva, eds. Evaluating the Poverty and Distributional Impact of Economic Policies. Oxford University Press and the World Bank. Forthcoming Reinikka and Svensson. 2002. Measuring and understanding corruption at the micro level. In Della Porta and Rose-Ackerman, eds. Corrupt Exchanges: Empirical Themes in the Politics and Political Economy of Corruption. Nomos Verlagsgesellshaft. Lindelow and Wagstaff. 2002. “Health Facility Surveys: An Introduction.” Policy Research Working Paper 2953. The World Bank. Email: rreinikka@worldbank.org