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Paradigm Shift in Public Expenditure Management Reform

Explore the politics influencing Public Expenditure Management (PEM) reform, comparing old centralized processes with new decentralized, transparent approaches. Investigate failures, propose alternative paradigms, and discuss research agenda for developing countries.

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Paradigm Shift in Public Expenditure Management Reform

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  1. The Politics of Public Expenditure Management Reform Politics of PEM Reform Tim Williamson t.williamson@odi.org.uk Centre for Aid & Public Expenditure

  2. Old Paradigm “Conventional Budgeting” Budget Process Rules Inputs Compliance Centralised Control Bureaucratic opaqueness New Paradigm “Public Expenditure Management” Budget Policies & Institutions Incentives Performance Decentralised Responsibility Transparency & Accountability Paradigm Shift in Budgeting Politics of PEM Reform Centre for Aid & Public Expenditure

  3. Paradigm Shift in Budgeting Old Paradigm • Unrealism • Short termism • Revisions • Cashbox • Arrears • Distorted priorities • Informal systems • Corruption New Paradigm • Comprehensive • Disciplined • Legitimate • Flexible • Predictable • Contestible • Honesty • Information • Tranparent & Accountable Politics of PEM Reform Centre for Aid & Public Expenditure

  4. Past CAPE Research • Political Commitment Crucial • But difficult to define • PEM seen as a technical process • But intrinsically political • Hi tech solutions proposed • But simple solutions may add more value • Reforms need differing commitment levels • But a standard package always proposed Politics of PEM Reform Centre for Aid & Public Expenditure

  5. Are the failures in PEM reform due to the naïve way in which a one size fist all package of reform tens to be promoted regardless of the political and institutional environment? Is there an alternative paradigm? Politics of PEM Reform Centre for Aid & Public Expenditure

  6. Research Agenda Deepen understanding of the political and institutional factors and actors behind success and failures of different PEM reforms in developing countries. • Is the current PEM paradigm applicable to developing countries? • What are the factors which should influence the choice and sequencing of PEM reforms? Politics of PEM Reform Centre for Aid & Public Expenditure

  7. Some Hypotheses • Reforms should engage Political & Institutional Reality • How to identify and build on the demand & opportunity for reform • How to Identify the losers and address their losses • Donor should support not “do” reform Politics of PEM Reform Centre for Aid & Public Expenditure

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