Objectives of the Primer The primer aims at being practical and at simplifying complex matters and processes. It gives an overview of the main issues to consider when costing PRSPs, and builds on country experiences as well as information that already exists but is spread over large volumes of manuals or needs assessments. The simple Primer uses simple cost models that results in estimates that provides an order of magnitude, as they concentrate on the main and cost intensive parts of programs/interventions. Experience is often that these rough estimates do not differ much from estimates resulting from the use of more comprehensive and sophisticated models, even if there is a trade-off in accuracy. Simple models and guidelines have other advantages: They are more useful as they often come in earlier in the process of preparing PRS programs/interventions and can therefore guide decisions on prioritization. They are easier to understand and facilitate institutional memories in organizations with fast turn-over of staff, which is the case in many developing countries’ ministries. They are not too burdensome in time, while they still provide good cost estimates and are therefore useful in ministries’ budget work, giving a framework for budget negotiations within ministries and between line ministries and the Ministry of Finance. They have a better chance to succeed as capacity building instruments.
Target Audience This basic primer is written primarily for stakeholders in Ministries of Finance and Line Ministries in developing countries as a guide to costing poverty reduction strategies. It is targeting the lowest income countries, including conflict-affected countries. Methodological Considerations and Scope The Primer considers mainly a bottom-up approach to costing, even if it points out that top-down models and costing by analogy should be used as complements to the bottom-up approach. It describes the bottom-up costing method and provides practical examples of how different countries have adopted practical solutions for costing their development strategies and sectoral targets. Two main constraints are discussed – lack of capacity and financial resources – and practical examples are given how countries have sought to address these through capacity development and financial strategies. Main Limitations of the Primer The primer focuses on the links between costing and financial planning and budgeting as reflected in the government accounts. It is not concerned with estimating non-financial costs that may be important in a many countries such as environmental costs of program or more generally the cost of externalities. Since the aim of the Primer is to be simple, there are a few trade-offs with more sophisticated models: There is loss in detail since it concentrates on the big cost items. This regards detail in interventions as well as detail in budget classification codes. Trade-offs between sectors or within sectors do not come automatically. Rather the simple models build on complementing manual work, cooperation between sectoral costing teams, iterations, and a strong core costing team. Likewise, analysis of cross-cutting issues, synergies, complementarities and overlaps is mainly manual – done through close cooperation (workshops, training, etc) and strong core team.
Use of Examples Country cases have been used as a way to illuminate practical solutions or problems with costing in different settings. The Sudan country case illustrate how costing was done in a particular difficult situation, during a time when peace was not yet established and where the longest civil war in Africa had resulted in lack of statistics in some parts of the country, extreme uncertainties about population movements, etc. The costing undertaken within the Sudan Joint Assessment Mission (JAM) was more extensive than what has been the case in other Needs Assessments. The example from Ethiopia illustrates costing taking place within a framework of strong donor participation. The Rwanda case focuses on costing in a country where aid is rapidly being scaled up. The Tanzania case is used to characterize costing under strong PRSP ownership and participation. Back to Costing and Prioritization |
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