Subthemes:

• How to do a good PER? The Process
• What is a good PER? The Substance
• Examples and Summaries of PERs
• PERs delivered from FY00-FY02
  

How to do a Good PER? The Process

Undertaking a public expenditure review in the Bank requires substantial administrative resources. While the cost of PERs has begun to come down in recent years, a survey of all PERs carried out in 1992 revealed that the average cost of each report was 88 staff weeks which translated into $250,000. It is therefore important to address the following questions before deciding to carry out a public expenditure review:

Why should the PER be undertaken? What will the report accomplish? A PER could be needed to provide the necessary input to the Bank’s country assistance strategy (CAS). It could also serve as the necessary background economic and sector work (ESW) for future adjustment operations and/or investment loans. Another justification of a PER could be fulfilling the request of the donor group. (Last but not the least, it could provide valuable input to the country’s budget process.) The bottom line is that there has to be a convincing reason that such a report needs to be done. Such an evaluation would ensure that precious administrative resources in the Bank are put to good use.

What should be the coverage of the PER? There are at least three elements that should be looked at in determining the coverage of the report: (1) The most pressing public sector issues in the client country at the time; (2) Amount of resources--own and from other donors--available to the Bank’s country team, and (3) Coverage in past reports.

Is the PER likely to have domestic ownership in the client country? What steps need to be taken in this endeavor? Domestic ownership of public expenditure reform proposals made in a PER, is necessary for their success. Those who wield power in politics and in the civil service, must be committed to the recommendations and proposals if the reform is to succeed. More generally, a participatory approach--in which a wide range of stakeholder groups are consulted on their perspectives on the country’s development--should be adopted throughout the public expenditure review process.

What to do with the PER after it has gone through the Bank’s management clearance process? Mostly, the report cycle ends when it attains the "grey cover" status in the Bank. While the report is discussed with the client country’s government at the green cover stage and its clearance is sought, very few task managers plan for an effective dissemination strategy in the client country after the grey cover stage. It is important to share the findings of the report with a wider group of stakeholders in the client country. (All grey cover reports in the Bank are in public domain now). A university and/or a think-tank institution would be a good place to disseminate the findings and share the information with a broad group.

What is a Good PER: The Substance

The primary function of a PER is to assist the client country in reforming public expenditures. A good quality comprehensive macro PER is often a very useful document for the government in general, and the ministry of finance in particular. In many developing countries such a review is perhaps the only mechanism for a systematic (and often comprehensive) analysis of public sector issues.

A quality review needs to be structured around an appropriate analytical framework. The building blocks of one such framework include:

Analysis of an appropriate public-private mix of goods and service provision in the economy after the rationale for public intervention--market failure (efficiency) and redistribution (equity)--has been identified;

The country is generating adequate revenue in a reasonably non-distortionary, equitable and sustainable manner, and fiscal deficits, if any, are sustainable and consistent with economic growth, inflation and other macro objectives;

Evaluation of public expenditure priorities--across and within functions--given the resource constraint and distributional objectives;

Examination of the link between expenditure inputs and outcomes (such an analysis does not necessarily have to be based on fancy statistical techniques; good anecdotes could work well as supplements in case data are poor and/or insufficient);

Focus on the public sector institutional arrangements (including the political incentives) with suggestions to reform incentives and institutions that are needed to improve the efficacy of public spending.

An important thing to keep in mind is that there is no unique prescription for the level or the composition of public spending. The above framework outlines some broad principles, but the design and implementation of public spending programs are complex matters requiring detailed assessment and careful tailoring country by country.

Examples and Summaries of Public Expenditure Reviews

(Disclaimer: The reports listed below may only be available to World Bank staff. To find out if you can obtain copies of these reports, please search this table.)

Examples:

Summaries of Public Expenditure Reviews

These summaries provide standard information on the coverage of all PERs delivered in FY02 (July 1 - June 30). This review was conducted by the Human Development Network of The World Bank. If you have any questions regarding the information presented, please e-mail publicexpenditure@worldbank.org.

• PER Summaries by Date of Completion
• PER Summaries by Country
• PER Summaries by Region

PERs Delivered from FY00-FY02

*In the "Category" column, the acronyms refer to the following: PER (public expenditure review), SUPER (supplemental public expenditure review), SPER (sectoral public expenditure review), PEM (public expenditure management work), PPER (provincial public expenditure review), IPER (integrated public expenditure review), and PEIR (public expenditure and institutional review).