PIA 2000 Introduction to Public Affairs Managing Budgets and Money

PIA 2000 Focus Bureaucracies, Budgets and Decision-Making

Decision-Making Models and Spending: An Overview 1. Rational- Comprehensive 2. Standard Operating Procedures (SOPs) 3. Bureaucratic Politics 4. Group Think 5. Satisficing/Incrementalism 6. Cybernetic Theories (chaos theory)

SOPs

Decision-Making and Budgets Themes and Definitions

How Purposeful?

Themes a. Budget: Recurrent vs. Capital (Development) Budgets b. Financial Management- Incrementalism and Satisficing vs. Zero Based Budgeting (Planning Systems) c. Accounting- Cost and Benefit vs. profit and loss

Zero Based Budgets

Themes d. Auditing vs. Accountability- Quantitative vs. Qualitative e. Evaluating- Assessment vs. Judgement f. Budgeting: Two themes- Reforming and Decision-making

Decision-Making and Financial Management A Review of Themes

1. Savas- Privatization and Contracting Out- Commercialization and intra- governmental competition 2. Johnson- Economic Bureaucracy, Public Sector Management: A Japanese Model? 3. Harris- End of the Third World? End of Development Budgets Decision-Making and Financial Management (Review of Issues)

The Asian Model Issue

Decision-Making and Financial Management 4. Heady- Imbalance- Political vs. Bureaucratic Development in the role of financial management (The Corruption Problem) 5. Armstrong-Values, money and Development Management 6. Nelson- International Organizations, NGOs and Development (Contracts vs. Grants)

The Nelson View

Decision-Making and Financial Management 8. Turner and Hulme- Private Sector Development vs. Development Management: The role of public sector financial management (Oversight) 9. Peters and Barzelay-Public Sector Reform 10. Caiden and Wildavsky- Planning vs. Budgeting 11. Janis-Is Budgeting and financial management impacted by Group Think?

Group Think?

Planning, Financial and Budgetary Management Systems in Poor Counties  Five historical periods- From a development perspective  Read Caiden and Wildavsky  Best Book on realities of Public Budgeting and Development

Historical Periods: Famous Five i. Until the 1950s- recurrent budgets- law and order. ii. 1950s-1960s- growth. Domestic development Funds with bilateral technical assistance =Recurrent vs. Development budgets iii. 1960s-1970s: Distribution and basic needs. World Bank and Poorest of the poor

iv. Mid-1970s to mid-1980s: Planning vs. Budgets  Planning demanded by technical assistance  Technical assistance- both grants and loans (no private loans to Africa)  Project planning "wins" over national planning and budgeting systems

v. The Current State of Financial Management: Structural Adjustment  (Since 2001)- Structural Adjustment vs. Social Crisis

The Current State of Financial Management 1. IMF Stabilization- currency reform, auctions and trade liberalization 2. Decentralized Budgeting- Part of Governance Debate 3. World Bank and UNDP "Management" - Opposing views to SAPs

Decentralized Budgets Bottom Up Model for Health Service Delivery

The Current State of Financial Management 4. Continued Absence of recurrent budgets and loss of control in Crisis: especially re. “Terror Prone,” Collapsed and Fragile States 5. Activity (economy) driven by technical assistance projects - the only game in town 6. Bridging and sectoral loans and grants- major source of international involvement

Somalia- 2008

Conditionality- What is the future? 1. Privatization of the economy a. divestiture b. contracting out c. liquidation d. sell off public private partnership shares

INDEPTH: ECONOMY Outsourcing: Contracting out becomes big business CBC News Online | March 7, 2006 Canadian Broadcasting System Image

What is the Future? 2. Privatization (Commercialization) of the bureaucracy IN-SOURCING- Reinventing Government

Privatization Debates

Commercialization- Negatives a. Individuals work with investments and the service/commercial sector b. Departments sell their services- eg. statistics in Zaire/DRC  c. Sub-economic salaries- offices and telephones- buying soap and selling chickens

Corruption Patterns

Commercialization- Negatives d. International conditions for "good" bureaucrats, eg. World Bank in Uganda- special salaries for those on contract with the project e. Goal: Return to the recurrent budgeting process of the 1950s?

Back to the Future? New Framework: Subsidiarity and decentralized budgeting?

How Important is Budgeting? Comments, Questions, Discussion.

Presentations: Next Week’s Discussion  MPA Group- Daniel Okrent, The Last Call  MPIA Group-Dina Rasor and Robert Bauman, Betraying Our Troops  MID Group- Louis A. Picard, A Fragile Balance

Daniel Okrent- New York Times Born 1948

Dina Rasor and Robert Bauman  Dina Rasor is the Chief Investigator of the Follow the Money Project  Robert Bauman was Criminal Investigator for the Department of Defense

Terry Buss (2010) and Louis A. Picard (and Colleagues, 1966)