UNICEFS Role in Upstream Policy: Social Budgeting for Children Presented at the Live Webcast Knowledge Sharing Event on Evaluation and Policy Advocacy: The Strategic Role of Evaluation in Policy Advocacy, and How to Evaluate Policy Advocacy Interventions R.U. Mendoza Economist, DPP-SPEA 27 January SOCIAL POLICY AND ECONOMIC ANALYSIS UNIT (DPP-SPEA)

2 Outline of Presentation Why work upstream? Why focus on social budgeting? How does UNICEF help ensure stronger social budgets? What is the impact?

3 One rationale behind upstream policy work is to try and address over-arching policy strategies and leverage more resources for children… Upstream policy work Broader Development Strategy Small projects and programs are ultimately undermined if broader policies and development strategies do not prioritize children…

4 Evidence of inefficiency in public spending Expenditure tracking in Uganda revealed that only 24 percent of the capitation grant from the central government actually reached schools in Expenditure tracking in Peru showed that in 2002 merely 29 percent of resources for its Vaso de Leche (Glass of milk) program reached the intended beneficiaries. Expenditure tracking in Rwanda in the late 1990s revealed a leakage of about 25 percent for the transfer from the central government to the regional health offices. Empirical analysis of over 90 developing countries by Rajkumar and Swaroop (2008) revealed evidence that the positive link between health spending and child health outcomes is strong only in countries with better governance.

5 Evidence of pro-cyclical public spending/budgets During the Asian crisis, the 1998 Thai public health and education budgets declined by 9 and 6 percent respectively. Indonesian public health expenditures fell by 7 percent during the first year of the Asian crisis, and another 12 percent the year after. Government health spending per capita in US dollar terms declined during the Argentine debt crisis from $399 in 1999 to $121 in During the Mexican Tequila crisis, the 4.9% fall in GDP per capita between 1994 and 1996 was mirrored by a 23.7% fall in targeted spending per poor person. During the current crisis, Nigeria and Zambia anticipate significant cuts in overall social sector allocations.

6 Evidence of inequity in budget allocations Benefit incidence studies commonly find evidence that public spending/programs are not necessarily pro-poor and often the main benefit incidence is on non-poor households (e.g. Coudouel, Dani and Paternostro, 2006; Rozada and Menendez, 2002; Gomez-Lobo and Contreras, 2003). Ravallion (2000) examined Argentinas budgets during economic upturns and downturns and found that not only did social spending decline the most during downturns -- that part of social spending that was most pro- poor suffered the highest cuts.

7 SOCIAL POLICY AND ECONOMIC ANALYSIS UNIT (DPP-SPEA) PUBLIC FINANCE BRANCH COMMON AREAS OF SOCIAL BUDGET WORK INTERIM INDICATORS OF SUCCESS Efficiency Observatories and monitoring initiatives Scorecards and reports Expenditure tracking Capacity building workshops for governments Less leakage and more effective channelling of resources Stronger synergies in central- and local-government investments Capacity building workshops and other initiatives to strengthen citizen engagement Equity Reforms that ensure more transparent and accountable budgeting processes Stronger and more equitable investments Inclusion of marginalized groups in policy discussions and analyses Research and advocacy for child programs and policies Stabilization Research and advocacy for countercyclical social spending, investments and financial instruments Research and advocacy on child-sensitive social protection Development of social protection systems Governments increasing social budgets as a response to crises/aggregate shocks

8 UNICEF Work in the Budget Cycle Budget preparation and formulation Budget allocation and sector analyses Costing (e.g. Marginal Budgeting for Bottlenecks) Gender sensitive budget analysis Engaging/supporting the planning and budget preparation process Examples: Azerbaijan, Brazil, China, Ecuador, Egypt, Ghana, Honduras, India, Indonesia, Jamaica, Kazakhstan, Kenya, Lao PDR, Madagascar, Mauritania, Mongolia, Morocco, Mozambique, Nepal, Pakistan, Philippines, Republic of Congo Approval by legislature Advocacy/partnership with the Legislature (Parliament) on budget analysis, including capacity building Examples: Azerbaijan, China, India, Lao PDR Execution and tracking Public Expenditure Tracking Survey (PETS) Expenditure Analysis Examples: South Africa, Madagascar Performance evaluation Impact assessments / analyses of expenditure in relation to social indicators Examples: Azerbaijan, Bolivia, China, Paraguay, Philippines, Uganda Source: Gore (2009).

9 SOCIAL POLICY AND ECONOMIC ANALYSIS UNIT (DPP-SPEA) What is the impact of UNICEFs social budget work? Marginal Budgeting for Bottlenecks (MBB) Costing tool used by UNICEF and its partners in over 50 countries. MMB analysis helped support a 40 percent increase in Mauritanias health budget. Mali MBB analysis used to justify increased investments to help prevent maternal and child mortality. Budget Monitoring and Social Policy Observatories Collaborative efforts to monitor and disseminate information on budgets. Observatory of Fiscal Policy contributed to a quadrupling of the social budget of Ecuador since UNDP-UNICEF-UNFPA joint project to help monitor social expenditures helped double national allocations in Paraguay.