Delivering Value for Money Case of Slovakia Ľudovít Ódor

„Economic institutions matter for economic growth because they shape the incentives of key economic actors in society, in particular, they influence investments in physical and human capital and technology, and the organization of production“. Acemoglu et al. (2004) “Much more important than the size of government is its quality … There is a very powerful correlation between the quality of government and good economic and social outcomes”. Francis Fukuyama

Trust is important Eurobarometer 85

Political economy considerations Ministry of Finance first Program budgeting and top-down fiscal constraints had no significant impact Big bang strategy: „You cannot cross the chasm in two small steps“ Value for money package: institutional reforms (analytical teams), broad coverage of actvities, new methods, outcome indicators, data requirements Testing phase Timing is important

Ex-ante evaluation Agenda Ex-post evaluation MoF, MoI, PPO Operational expenses NAO MoF Investment NAO ministries, MoF, CBR Policies NAO, (MoF, CBR) GO Regulations NAO, regulators

Potential problems Political capture Risk of irrelevance Limited capacities/capabilities Risk of slow decision making Risk of losing public support

Where are we now? Strong public support (president, CEA, SEA, think tanks) Institutional anchor (value for money team at the MoF) Pilot projects + three spending reviews + three more in the pipeline Involvement of IMF, OECD and EC Some budgetary impact It is a nice achievement after 6 months

Four scenarios „Business as usual“: good analytical work, but only politically acceptable results will be published. Weak links to the budget. „Only a formality“: weak institutions, low- quality analyses, de facto end of the project „Miracle“: strong political support, direct links to the budget, high-quality outputs „Slow progress“ – gradual institutional changes Political leadership, public support and high transparency will be key

„If people don't know what you're doing, they don't know what you're doing wrong.“ „Ministers do not believe they exist unless they are reading about themselves in the newspapers.“ “Opposition aren't really the opposition. They are just called the Opposition. But, in fact, they are the opposition in exile. The Civil Service are the opposition in residence.” Sir Humphrey (Yes, Minister)

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