Translating political objectives into sound policy proposals Case of South Africa – the perspective of a Senior Budget Official 3rd Annual Budget Reform Seminar, Addis Ababa, 28-30 November 2006

Issues to consider What informs policies? Who and what influences policy formulation? Are real problems on the ground addressed? Is there enough focus on the public needs? What are the cross-cutting policy issues? Is there a learning process that improves policy designs, e.g. impact studies ? Who is ultimately accountable?

Developmental objectives Policy environment Poverty Land Reform Economic growth HIV Jobs Civil society Development partners Parliament Global objectives Constitution Private sector Developmental objectives International media Technical experts Organised labour Electoral mandate Local media POLICY

Government priorities translated into policy “meeting basic needs, growing the economy and promoting social development” policy choices stake-holder consultation legislative process implementation plans Cabinet approval sustainable programmes that contribute to desired outcomes from here… …to here no-fee schools policy

Alternative policy-making approaches Policy mirrors developments already taking place in society. Dramatic developments in IT environment of the banking sector are not adequately reflected in law. Public support expressed through civil society / media The provision of anti-retrovirals Review of existing policies Changes to drivers license system due to lack of progress in bringing down road deaths Shift to nuclear alternate energy sources

Alternative policy-making approaches, cont. Lobbying by a sector / interest group Tax and regulation of plastic bags Informal advocacy by officials within government Examples of these remain the secret of senior budget officials

Expressed in various ways Reconstruction and Development Programme Outlines the key objectives that need to be addressed in the new democratic society. While GEAR and AsgiSA are not necessarily off-shots, they do represent a significant refinement Medium-term strategic framework (MTSF) and MTEF set out rolling strategic and expenditure plan State of the Nation Address sets out the overarching government priorities for the coming year. Provincial growth development strategies determines provincial strategies. Integrated Development Plan contains municipal priorities.

Critical institutions in the policy SA Constitution sets the broad context within which policy is made and is the first point of reference of all stakeholders. Cabinet, consisting of senior Ministers, makes the final decisions on policy and spending priorities. Parliament legislates policies. MinComBud reviews fiscal and budget proposals before submitted to Cabinet. Departmental clusters – there are 5 clusters grouping departments according to their functions. Cluster decisions are made in approving or dismissing a policy.

Intergovernmental fiscal dimension Three spheres of government: national, provincial and local National sets the policy agenda All programmes and plans of the 3 spheres should reflect the overall government priorities. Provincial and local policy processes Shared responsibilities with national sphere in certain functions imply shared policy formulation. Self-sustainable revenue collection (local government) implies less national policy influence. Limited transfers to local government to support national priorities. Some policies decided locally, e.g. tariff policy, rates policy, credit control and debt collection.

Role of national treasury Plays a financial oversight role over organs of state in all spheres of government Costing and appraising policies Guidelines to departments Ensuring an effective allocation of resources in order to achieve policy goals. Ministerial letters Budget Council, Budget Forum, Committee meetings

Role of national treasury, cont. Technical aspects How sound is the plan? Accuracy of the costing Capacity to spend Alternative ways to achieve the objectives Opportunity costs Indirect impact on economic participants

What does the policy making process mean for senior budget officials? Costing and analysing proposed policies Linking government policy agenda, proposed policies and financial implications Knowledge of department policy history and capacity Encouraging coordination of cross-sector policies Developing policies In some cases can be drivers of policy changes. Partaking in the policy debate Managing the balance between political interface and technical work.

The challenges that lie ahead Too many priorities…often means an inability to prioritise Improve the alignment of policy priorities across the government spheres Implementing new policies to receive additional funds Capacity to implement is often lacking Insufficient capacity to evaluate policies for funding purposes

The challenges that lie ahead, cont. Need better costing and planning of policies Change thinking to a longer-term view Not enough public consultation Very limited use of performance information and lack of an effective monitoring system No impact evaluations

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