|Planning and Financing Sustainable Education Systems in Sub-Saharan Africa - Education research paper No. 07 (DFID, 1993, 32 p.)|
|Part II: Approaches to reform|
Phased Implementation. While revenue classification can be improved in a fairly short time, the reclassification of expenditures is more complex, as is the strengthening of capital and foreign aid budgeting. In the first part of this paper I emphasised that a necessary condition for the implementation of the reforms which have been proposed for education systems in Africa was the setting in place of appropriate management and planning mechanisms, and that this alone could take many years. Expansion policies such as Schooling For All and Universal Primary Education not only depend on resource availability but also on management capacity. I have also noted the constraints on domestic resources and the possible decrease in the levels of foreign aid available to Africa.
'The Receding Managerial Limit'. 'Planning implies on the one hand a purpose, and on the other, the organization of resources to accomplish this purpose in some desired manner.'75 A key resource of any organisation is its management, and at any given time the capacities of the existing management staff set a limit to the expansion of the organisation. This paper has set out approaches to overcoming the problem of the 'receding managerial limit',76 through improving the tools available for managers and the structures in which they work, but also by suggesting a different approach to marshalling the resources they have to hand. The constraints which apply to all other reform initiatives also apply to those suggested here. They must be phased in slowly.
Sustainable Development. The concern with sustainable development has been brought to the fore by environmental concerns, where they relate to the impact of projects on, for example, national income, human welfare, depletion of physical resources and technological change. The criteria in these cases relate to irreversible effects of projects, how to foresee them, measure them, and accommodate or avoid theme In many respects the economics of the environment is similar to the economics of human resources, most particularly in their long term horizons, and the associated problems of valuing externalities. The essence of environmental economics has been the elaboration of techniques to value what was previously thought to be unevaluable. This may well be mirrored in educational analysis, as many of the current approaches encourage short-term viewpoints, as I have noted in Part I. While poor decisions in educational policy may well lead to irreversible damage, in the sense of opportunities lost, sustainability in a practical sense must mean the ability of countries to maintain education provision of reasonable quality with domestically generated resources: the ability to borrow and repay loans, and to maintain asset stocks is part of domestic capacity.
Affordability. The title of this paper suggests that education is an unaffordable commodity. In relation to the total educational wants of a population this is probably by definition true. However, by concentrating on reforms and improvements which will result in a better fit between available resources, local management and professional capacity, and the scope and size of educational systems, African countries can afford better quality. These reforms and improvements cannot be restricted to the education sector alone, but must be undertaken parallel to improvements and reforms in Ministries of Finance and in civil services in general. Such an approach contrasts with expansionary approaches such as those of the Jomtien Conference which commit countries to build their education systems up further on weak foundations, and to follow this more cautious approach would be to heed the lessons of the last two decades,
Policy Implications for Donors
In this paper I have argued that most countries are likely to experience considerable difficulty in implementing simultaneously the triple initiatives of expenditure reallocation, improved budget management and system expansion. The main implication for donors of the types of policy I have proposed is the need to recognise that the pace of change is almost certain to be slow, in contrast with the aspirations of many donor initiatives, particularly those within the context of the social dimensions of structural adjustment.
In particular, it is important that the availability of foreign aid does not encourage the unsustainable expansion of education systems, resulting in a serious deterioration of quality. The growing importance of programme aid and counterpart funding via balance of payments support has heightened awareness of the need for governments to improve policy as well as policy implementation processes, but donors should take care to avoid unrealistic prescriptions. At the same time, donors should reflect the introduction of rolling plan budgeting in aid policies, with longer term commitments of aid to be passed through budgets in order to give governments a better idea of what resources are likely to be available, of course within an acceptable and feasible planning framework. This would require a much better match of projects and educational policy than has hitherto been observable.
At the level of programme design for the strengthening of planning and budgeting in the education sector a key lesson of the past is the need for coordination between sectoral ministries and ministries of finance. I have suggested that in most countries there is a need to improve overall public sector budgeting and that failing to do so will dilute the effect of improvements at the sectoral levels. Sectoral donors should take a wider view of their interventions. Many may consider this to be a daunting task, but I argue that a gradual process of reclassification of budget heads is possible and that there need be no conflict between the budget formats used by ministries of finance and education. When the mechanisms by which change may be effected are in place countries will be able to take effective steps to initiate affordable and sustainable improvements in their education services.
1. See Sahn, D.E. Public Expenditures in Sub-Saharan Africa During a Period of Economic Reform. World Development, Vol 20, nr 5, 1992, pp 673-693.
2. 'Inflation des effectifs et des costagnation des duchet stabilisation des perspectives d'emploi, telles vent les caractstiques de la stagflation scolaire' ('The inflation of enrolments and costs, the stagnation of job opportunities and the levelling off of employment prospects, are the characteristics of educational stagflation'). Hallak, J. A Qui Profite L'Ecole? Presses Universitaires de France, 1974, p 149.
3. Eg Coombs, P.H. What is Educational Planning. IIEP, 1971.
4. Eicher, J.C. Educational Costing and Financing in Developing Countries, World Bank Staff Working Papers Nr 655, 1984, is one of the best analyses of finance issues. Also see World Bank, Financing Education in Developing Countries: An Exploration of Policy Options, 1986; Haddad, W.D. et al, Education and Development: Evidence for New Priorities, World Bank Discussion Papers Nr 95, 1990; Stromquist, N. A Review of Educational Innovations to Reduce Costs in Financing Educational Development: Proceedings of an International Seminar held in Mont Saint Marie, Canada, 19-21 May 1982, IDRC and CIDA, pp 69-94; Colclough C. with K. Lewin, Educating All the Children, Oxford, 1993. Other references are given throughout this paper.
5. Markets, it has been said, work incrementally. All required changes - in price signals, in people's response to incentives, in shifts of resources - take time... The likelihood of market failure is a function of the degree of urgency - or impatience - attached to a particular change. The prima facie case for government action to promote development in underdeveloped countries rests largely on the belief that what is needed is rapid economic development, the compression into a few decades of a process that in the West took centuries' (Arndt, H.W. 'Market Failure' and Underdevelopment. World Development, Vol 16 Nr 2, Feb 1988, quoted in Killick, T. A Reaction too Far: Economic Theory and the Role of the State in Developing Countries, ODI London, 1989, pp 62-63). A key condition for improvement, which Killick analyses, is the improvement of government and civil service administration: 'What matters more than its absolute size is how the state goes about its tasks and what relationship it establishes with the private sector'.
6. See Dougherty, C. Education and Skill Development Asian Development Bank/World Bank Seminar on Vocational and Technical Education and Training, Manila, January 1990, p 22 et passim.
7. This paper does not elaborate on the relationship between education and economic growth. It is more likely that determinants of South East Asian growth are more to be found in industrialisation strategies and their relation to education strategies than in education alone. The World Bank World Development Report of 1991 (mainly Chapter 3) proposes that education is a sufficient condition for economic growth. However, the assumption behind growth models underpinned by human capital theories that output is determined solely by supply factors, all resources being fully employed, cannot be easily defended in the case of Africa. For an excellent summary analysis of this issue see Fanelli, J.M., R. Frenkel & L. Taylor, The World Development Report 1991: A Critical Assessment. Feb 1992, available from the economics department of the Massachusetts Institute of Technology. For an interesting account of the education strategy in one South East Asian country, see Woo, J.H. Education and Economic Growth in Taiwan: A Case of Successful Planning. World Development, Vol 19, Nr 8, 1991, pp 1029-1044. There is much to recommend the study of East Asian education development experience to provide fresh perspectives on education in Africa.
8. See Blaug, M. Education and the Employment Problem in Developing Countries, ILO, 1973, pp 79 ff. This classic paper, written twenty years ago, is as applicable today as it was then, and its prescience is sobering. For a fascinating, and instructive, historical discussion of the same issue, see West, E.G. Education and the Industrial Revolution Batsford, 1975, pp 245 ff.
9. See Tilak, J.B.G. Education and Its Relation to Economic Growth, Poverty, and Income Distribution: Past Evidence and Further Analysis, World Bank Discussion Paper Nr 46, 1989, for a summary of these influences.
10. See footnote 32.
11. See also Lall, S. Human Resources Development and Industrialization with Special Reference to Sub-Saharan Africa in Griffin K. and J. Knight (ed), Human Development and the International Development Strategy for the 1990s, Macmillan, 1989, Chap 6.
12. All the same, many countries have managed to increase levels of total public spending although there were declines in the period around 1982-84. See Sahn, op cit. for evidence for this and other statements in these paragraphs. Although his data are mainly from secondary sources, and may include budget data rather than verified actual expenditure, they do seem to support the claim that public expenditures have been robust. He does not, however, make distinctions between unilateral external assistance and loans, and it is therefore not always easy to decide how far growth is a function of large inflows of foreign grant aid. For the 1970s, see Zymelman, M. The Burden of Education Expenditures and its Forecast, World Bank, Washington, 1978.
13. A contemporary case is Tanzania, with a ratio of Official Development Assistance (ODA) to GNP of nearly 50 per cent - a high figure when considering the likely understatement of aid flows. It should be noted that the denominator of the ratio is in many ways most important: Tanzania does not by any means have the highest per capita level of external aid. For example, neighbouring Malawi has a higher per capita ODA, but the ratio to GNP is about half that of Tanzania. Considerable care is needed, as always, in interpreting this type of data because of the potentially serious inaccuracies of national income accounting and different economic structures. See also footnote 26.
14. For example, World Bank, Sub-Saharan Africa: From Crisis to Sustainable Growth, 1989: 'Total expenditure on human resource development should be steadily expanded until it reaches 8 to 10 percent of GDP annually, about double present spending (with donors meeting about half the total). Infrastructure spending should rise to around 6 percent of GDP. This would cover capital and recurrent expenditure and ensure adequate resources for maintenance and running costs' (p 12). This last was to be financed through higher taxation and lower public wage bills. Aid was to provide recurrent as well as investment finance. How all this is to be financed is not addressed at all: see, for example, the weak discussion of 'sustained financial support for human resource development' on pp 87-88.
15. US$ 30 billion for the world by the year 2005. Minimum aid flows to Africa are given as US$ 15 billions, (Colclough and Lewin op cit. p 239). Another UNICEF report, The State of the World's Children, OUP, 1993, gives a figure of US$ 25 billion per year to provide basic health and education services.
16. For a dissident voice, see Hallak, J. Education for All: High Expectations or False Hopes?. presented to the Oxford Conference, September 1991. Hallak also writes that financial factors 'become vital issues only if the economy is in bad condition'.
17. Sahn, op cit. calculated elastiaties of social sector spending with respect to GDP (greater than unity) and to total government expenditure (less than unity). The variations from unity are slight, and the time series is short. It is reasonable to conclude that they are both around unity and that therefore economic growth and decline (at least as measured by total GDP, which may be misleading) are not associated with significantly more than proportionate growth or decline in social sector spending. Sahn emphasises the need for detailed country studies, however.
18. Reducing the current external cash flow obligations and payments on debt account will thus probably be the most cost effective form of official external resource transfer to Africa in the 1990s.' Helleiner, G.K. Africa's Adjustment and External Debt. World Development, Vol 20, Nr 6, 1992, pp 779-792. An issue which is often overlooked is the rising domestic debt costs resulting from financial liberalisation policies.
19. See Beeby, C.E. The Quality of Education in Developing Countries, Harvard University Press, 1966, for an analysis of 'stages' of educational development.
20. Berg E, Rethinking Technical Cooperation: Reforms for Capacity Building in Africa, UNDP, 1993. A feature of foreign consultants and aid agency staff has been a certain lack of accountability. Whereas engineers require professional indemnity insurance against design negligence and error, I know of no case of an agency or individual being sued by a country for bad advice. Timothy Curtin (Curtin, T. The Economics of Public Investment in Education in Papua New Guinea, University of Papua New Guinea Press, 1991, p 4) makes the somewhat extreme point that those who make up what he calls the 'consensus school' of educational cost-benefit analysis could be locked up under regulations governing the provision of financial services for misleading analysis!
21. Dore, R. The Diploma Disease, Allen and Unwin, 1976, pp 72 ff. 'In the Third World today the importance of qualifications is greater than in the advanced industrial countries. Education systems are more likely to be geared to qualification-getting, and the consequences for society and its patterns of development are likely to be even more deplorable than in our society.' (p 83)
22. eg Devon, R.F. Foster's Paradigm Surrogate and the Wealth of Underdeveloped Nations. Comparative Education Review, October 1975, p 403, in relation to Papua New Guinea. This piece is a rejoinder to Foster, P. Dilemmas of Educational Development: What We Might Learn from the Past. in the same issue, p 375, and is not altogether fair to Foster who, inter alia, suggests shorter education cycles (p 384)
23. This is not confined to developing countries: in the UK there is now a lag of about one year before local government education expenditures are consolidated and reported.
24. But see page 24.
25. 'Society' should not be confused with 'government' (see, for example, Psacharopoulos, G. and M Woodhall, Education for Development: An Analysis of Investment Choices, OUP, 1985, pp 35-37).
26. The literature on national income accounting is immense. See also the technical notes on the quality of data in Accelerated Development in Sub-Saharan Africa, pp 187-188, and in the World Bank's Development Reports. More recent IMF, of purchasing power parity (PPP) national incomes show startling new international rankings. Similarly, the custom of expressing national financial data in US dollars at current exchange rates has resulted in re-workings of national income series in some countries to make them appear consistent over time.
27. There are usually also other items of non-discretionary expenditures such as those relating to pensions and upkeep of key state institutions, and, in some countries significant 'special' items relating, for example, to costs of restructuring: these are often labelled 'discretionary' but in reality should probably be considered as nondiscretionary.
28. For example, in Tanzania the Ministry of Education budget only accounts for about 25 per cent of the total public education budget, with local government budgets taking the largest share: there is a separate ministry for higher education. Other ministries' expenditures on education add about 3 per cent to total government expenditure on education. In Nigeria the Federal allocation to the states' accounts for the largest share of budgeted expenditure at state level, but separate reference must be made to state budgets for the full picture. For sources see Penrose, P. Review of Public Expenditures in the Education Sector in Tanzania, July 1992, available from the European Commission in Brussels; World Bank, Nigerian Secondary Education Sector Report: A Study in Contrasts, West Africa Department, August 1991; Penrose, P. Issues in Education Finance and Planning in Nigerian Secondary Education World Bank West Africa Department, April 1992; Hinchliffe, K. Federation and Education Finance: Primary Schooling in Nigeria.
International Journal of Education Development, Vol 9, Nr 3, 1990, pp 157-162. Many African governments have significant local government involvement in primary education, with concomitant fragmented budgetary reporting.
29. Education cost-benefit analytical techniques are concerned with years at school rather than what is learnt within school. The confusion of schooling with education results in a misspecification of the earnings function which will lead to overestimation of the returns to expansion of low quality schooling, which has indeed occurred in many countries, and neglect of alternative quality improving investments which will have relatively higher rates of return. See also P. Glewwe, Schooling Skills and the Returns to Investment in Education. LSMS Working Paper N176, World Bank, 1991.
30. For example, the failure to take into account benefits to society from indirect taxation (see Curtin, op cit) and costs to society of public services financed from inequitable tax systems.
31. Externalities occur when all the benefits and costs of transactions are not fully incorporated in their market prices. They can be positive or negative. Evidence on externalities is difficult to collect, particularly in manipulated labour markets. See, for example, Knight, J.B. and R.H. Sabot, Education, Productivity, and Equality: The East African Natural Experiment. OUP, 1990, pp 23 ff. The extent to which social benefits accrue from increased labour productivity may also be exaggerated. However, the importance of externalities to the various levels of education should not be underestimated. For example, externalities to higher education may be significant, but, of course, are hard to measure. It may well be that externalities to primary education, being easier to measure, are more seductive in their policy implications. Consider, for example, Psacharopoulos, G. Priorities in the Financing of Education. International Journal of Educational Development Vol 10 Nrs 2/3 1990, pp 157-162: 'Why should the limited educational budget of a country × finance the production of a microchip specialist who will be employed in the local branch of a multinational firm?'. The author subsequently asserts that because externalities to higher education are hard to measure, and because the existence of greater externalities to primary education is 'intuitively' more likely, fiscal resources should not be used to pay for higher education. One man's intuition... There may well be a much better case for public investment in post-secondary education than is commonly admitted at present, particularly in terms of 'dynamic externalities' (how they relate to innovation and growth) (see Stewart F. E. Ghani, How Significant are Externalities for Development?. World Development, Vol 19, Nr 6, 1992, pp 569-594 for an overview of this issue, but not on education). Leslie, I.L. Rates of Return as Informer of Public Policy. Higher Education Vol 20, 1990, gives a comprehensive description of externalities to higher education. Also, for example, Knight Sabot show how educational expansion can reduce inequalities in pay, a very important externality not normally taken into account in cost-benefit analyses. The presence of 'negative externalities' should not be neglected: for example, unemployed school leavers can be a source of political instability. Another negative externality not unknown in some developed countries is to private schooling, where the private schools prove to produce rulers, politicians and civil servants rather than entrepreneurs and industrialists...
32. See Knight Sabot, op cit. pp 41-42, for evidence of this in Kenya. Where the returns to schooling are measured by wage differences associated with differences in length of schooling (assumed to be the marginal product of education), they usually assume that the average wage of standardized labour measures the wage received by the marginal (ie new entrant) worker. Because school leavers with more schooling take jobs previously taken by those with less schooling, the average wage for any given cohort may fall over time. Average and marginal wages would therefore not be equal, leading to overestimation of returns, particularly to primary schooling. Indeed, compression of wages is another externality to take into account. In reference to their own estimates of returns to schooling, which are among the most sophisticated yet published, the authors write: 'We do not wish to perpetuate the illusion of precision created by oversimplification' (p51).
33. Snower, D.J., The Future of the Welfare State. Economic Journal, vol 103, nr 418, May 1993, pp 700-717.
34. See, for example, Colclough, C Who Should Learn to Pay? An Assessment of Neo-liberal Approaches to Education Policy. in Colclough C. and J Manor, States or Markets?, Clarendon Press, 1991. Also Watson, K. Alternative Funding of Education Systems. Oxford Studies in Comparative Education Vol 1, 1991, pp 113-146.
35. For a cogent description and analysis of this view, see Camoy M. and C Torres, Educational Change and Structural Adjustment: A Case Study of Costa Rica, Operational Policy and Sector Analysis Division Working Document, UNESCO, Paris, September 1992, passim and p 60.
36. World Bank, Financing Education in Developing Countries. See Lockheed, M.E., A.M. Verspoor and Associates, Improving Primary Education in Developing Countries, Oxford, 1991, pp 173 ff for the case against fees for primary schooling, as well as a review of issues of local finance. Curtin op cit presents a case for higher education subsidies. Also, V. Lavy, Investment in Human Capital: Schooling Supply Constraints in Rural Ghana. LSMS Working Paper Nr 93, World Bank, 1992.
37. See Jimenez, E, Pricing Policies in the Social Sectors: Cost Recovery for Education and Health in Developing Countries, Johns Hopkins, 1987, Chap 5.
38. There is considerable hostility to the idea of publicly funded higher education in the donor literature, while in reality it is likely that bilateral donors provide considerable support to African universities. Without making judgements on the scope and nature of externalities to higher education, the ability of 'better off' university students to pay fees, or the distribution of underfunding between levels of education, it is not in general realistic to expect many African governments to be seen to attack the university sector. A more selective approach would be to encourage more efficient institutional management and to give less support to social science faculties and poor quality 'research'. Stronger efforts to develop university-enterprise links are also much needed. Neglecting these issues on the grounds that universities are 'elitist' only raises the opportunity cost of public subsidies to higher education. See Penrose, P. Evaluation of Linkages in the Field of Higher Education and Training: Botswana, Lesotho and Swaziland report by DHV Consulting for the Dutch Ministry of Foreign Affairs, June 1992, Chap 5, for a summary of some of the issues. Also Coombe, T. A Consultation on Higher Education in Africa, Ford Foundation, Jan 1991, for a voice sympathetic to higher education but accepting the low performance in research as well as poor management. Evidence for strong bias towards social sciences and arts can be found in Association of African Universities, Study on Cost Effectiveness and Efficiency in African Universities, A Synthesis Report, AAU, May 1991, pp 74-81. For the failure of African universities to develop linkages with enterprises (public or private), which is related to the relatively low importance attached to physical sciences, itself related to lack of finance, see AAU, University Productive Sector Linkages: Review of the State of the Art in Africa, November, 1990. For a review of the issues see Saint, W. S. Universities in Africa: Strategies for Stabilization and Revitalization World Bank Technical Paper 194, 1992: the orientation and conclusions of this paper raise interesting questions.
39. Thobani, M. 'Charging User Fees for Social Services: 'The Case of Education in Malawi', World Bank Staff Working Paper Nr 572, 1983. For the argument that fees should substitute for public resources, see Bertrand, T.J. and R. Griffin, The Economics of Financing Education: A Case Study of Kenya, World Bank, 1984.
40. Earmarked taxation is in the demonology of Treasuries, which invariably disapprove of it, though its time may come. See Lockheed et al, op. cit. pp 189 ff for some case studies of earmarking, though some of the examples given may not be all they seem. There is a growing literature on the subject.
41. Regressive taxation occurs when the less well off pay a greater proportion of their marginal income than the better off. The opposite is progressive taxation. Indirect taxes can be regressive: they are considered progressive when levied on 'luxury' goods. The extent to which education should be considered a luxury will vary according to type and level, and would determine the scale of regression. Many countries have moved towards regressive taxation in the last decade or so.
42. Colclough, C. Resources for Education in Developing Countries. International Journal of Education Vol 10, Nrs 2/3,1990, pp 115-119.
43. See also Jimenez, op cit, pp 82 ff and Table 7.5.
44. See Brown, B.W. Why Governments Run Schools. Economics of Education Review, Vol 11, Nr 4, 1992, pp 287-300, for a discussion of this issue in the United States. The author suggests that regulation costs are very high and that private for-profit school owners engage in 'opportunistic behaviour' which leads to a low quality of service.
45. There is relatively little contemporary work on this subject. One study in Latin America shows that while average expenditure by households for each child on primary education have increased, total expenditures on education have not increased because the profits are retained by school owners and not reinvested in education. See Schiefelbein, E. Restructuring Education through Economic Competition: The Case of Chile. Journal of Educational Administration Vol 29, Nr 4, 1991, pp 17-29. E G West, op cit, in writing about the 'public/private displacement mechanism' suggests the reverse process took place in Britain from 1833 to 1945, as public schools took over from private schools and average expenditures on education declined (chap 15). Schiefelbein previously recorded some evidence of better examination performance in private schools in Chile (Schiefelbein, E. Education Costs and Financing Policies in Latin America. Education and Training Department Discussion Paper, World Bank, 1985).
46. See Knight, J. Education Policy Issues in a Period of Stabilization and Structural Adjustment in Griffin & Knight, op cit. chap 3, especially p 66 ff. 'The hope that meritocratic selection criteria would prove sufficient to ensure that the various income groups were represented in secondary schools in proportion to their numbers was disappointed in the United Republic of Tanzania... '; and '... those with the greatest ability to bear the cost of their children's education are the most likely to receive large subsidies. These results for Kenya probably have general application'.
47. Also in many countries private or semi-private schools have been directly supported from foreign aid, which is in many cases being withdrawn.
48. See, for example, Haddad et al, for a review of some evidence. For an earlier study, see Husen, T et al, Teacher Training and Student Achievement in Less Developed Countries, World Bank Staff Working Paper Nr 310, Dec 1978, p 42 et passim.
49. Coombs, op cit.
50. The concept of 'development' budgeting in principal incorporates, the investment nature of much 'recurrent' expenditure. Unfortunately 'development' budgeting, as with capital budgeting, has too often become exclusively concerned with capturing more foreign aid.
51. 'Rational' in the sense that reasoned justification for proposed expenditures is required. In another sense, the rationality of politicians would tend to resist reasoned technical justifications. Budgets always express tensions between different type of rationality. See, for example, Wildavsky, A. The Politics of the Budgetary Process. Little, Brown Co, 1984 (4th edition), pp 198 ff.
52. This phenomenon is not new. It has long been recognised that the elasticity of primary school teachers' salaries to national income is less than unity (although there have been short-run exceptions). See, for an early study, Blott, D. and M Debeauvais, Education Expenditure in Developing Countries: Some Statistical Aspects. in Financing Education for Economic Growth, OECD, Paris, 1960, pp 73-88. The authors used a form of purchasing power parity in place of official; exchange rates, which made their findings particularly valid.
53. Such as adult education, which in many countries is provided in different ministerial sectors.
54. Wildavsky, op cit. pp 135-138, and p 216: 'The tension between analysis, which seeks out error and promotes change, and organisation, which seeks stability and promotes its existing activities, is inevitable'.
55. Wildavsky, op cit; Dean, P.N. Government Budgeting in Developing Countries, Routledge, 1989; Babunakis, M. Budget Reform for Government: A Comprehensive Allocation and Management System (CAMS), Quorum Books, 1892, p 5 et passim. Nozick, D. (ed, Current Practice in Programme Budgeting, London 1973). The reasons for the failure of the US budget reforms in the 70s were complex, but related to the political resistance to rational budgeting combined with the development of excessively complex techniques. Observers such as Wildavsky who in the end argued for the retention of incremental budgeting recognised that their criticisms were less relevant to developing countries (Caiden, N. and A. Wildavsky, Planning and Budgeting in Poor Countries, Wiley, 1974)
56. Sometimes referred to as performance budgeting, or programme and performance budgeting, as in the UN Manual for Programme and Performance Budgeting, Department of Economic and Social Affairs, UN, 1968. See Dean, op cit, for a review of the UN manual.
57. Or, as Wildavsky wittily puts it, 'the affair with resources has been replaced by the romance with objectives', op cit, 1984, p 181.
58. See Babunakis and Nozick op cit respectively for summaries of US and UK experiences.
59. It should, of course, always be emphasised that enrolment does not equal attendance, and in countries with poorly resourced systems attendance rates will predictably fall, often seasonally. Indeed, attendance rates may be viewed as 'real enrolment rates'. Where the ratio of attendance to enrolment is significantly less than unity many base planning data become meaningless, and considerable waste ensues.
60. See Hirsch, W.Z., M J Marcus R M Gray, Program Budgeting for Primary and Secondary Public Education: Current Status and Prospects in Los Angeles, Praeger, 1972, for some approaches to fiscal modeling, as well as a somewhat complex example of PB from Los Angeles.
61. This paper does not set out to review past and current PB experiences. Some countries, such as Malaysia, Sri Lanka, India, Philippines, Singapore, attempted to introduce full-scale programme budgets, with indifferent success, reviewed in Dean, op cit. Also the small island of Grenada in the Caribbean has programmed its budget within slightly modified budget categories: this simply allows objectives to be specified within the budget document, which would probably not be useful for a restructuring exercise in a bigger country. Some countries, such as Uganda, have converted budget votes to 'programmes'. Ghana also began to introduce elements of programming to the education sector, but it did not persist. Benin and The Gambia are currently embarking on budgeting reforms in the education sectors. Relatively few have attempted an overall reform involving three year rolling budgets linked with plans, in which the Ministry of Finance is involved in supporting sectoral reforms. Kenya introduced a three year rolling system, but its credibility may have been somewhat tarnished by inaccurate revenue forecasting and therefore a failure to allow institutions and managers to prepare for substantial contraction. Tanzania is introducing interesting reforms in social sector budgeting. Other countries which have introduced forward budgeting include Botswana.
62. Examples of the types of suitable training materials are found in IIEP, Educational Cost Analysis and Budgeting Report of a Training Programme, Saltpond, Ghana, UNESCO, 1989; and UNESCO, Report on Trainers' Training Programme in Educational Cost Analysis and Budgeting at the District Level, Ghana Ministry of Education/UNESCO/UNDP, August 1991, available from UNDP.
63. Dean, op. cit., pp 138-139.
64. UNESCO Manual on the Application of URC Norms to Programme Linked Budgeting, Republic of Ghana Ministry of Education, UNESCO/UNDP Document Nr 20, October 1989.
65. See CIPFA, Capital Accounting in Local Authorities: The Way Forward, Chartered Institute of Public Finance and Accounting, Feb 1989.
66. Capital expenditure in the education sector is sometimes difficult to define. In some cases, such as textbooks, expenditure on depreciating assets is treated as recurrent expenditure. In fact, textbooks may be also considered as capital expenditure with a two or three year straight line depreciation, though of course in reality books deteriorate most rapidly at the end of their lives. See MacGregor, C., K. Mortimer T. Lisher, Study on Book Provision in Kenyan Education ODA/World Bank, November 1990, East Africa Dept of the World Bank.
67. Penrose, P., T.C. Gardrler B. Shone, Budgeting for Higher Education in Ethiopia, Commission for Higher Education, Ethiopia, 1987.
68. Such as earmarking by donors for specific purposes and the problem of aid fungibility. See Maxwell, S. (editor), Counterpart Funds and Development. IDS Bulletin, Vol 23, Nr 2, April 1992.
69. General reviews include Riddell, R.C. Foreign Aid Reconsidered, Currey, 1987, and Cassen, R. and Associates, Does Aid Work?, Clarendon Press, 1986.
70. See Doriye, J. M. Wuyts, Aid. Adjustment and Sustainable Recovery - The Case of Tanzania. Working Paper for the Department of Economics, School of Oriental and African Studies, London University, March 1992.
71. Berg, op cit. p 14.
72. Having said all this, there is a disturbing tendency for aid donors and lenders to be fixated on the issue of reporting external assistance at the expense of supporting recurrent budget reform and improvement. Terms of Reference for some World Bank Public Expenditure Reviews, for example, arguably lay excessive emphasis on aid budgeting and expenditures and result in insufficient analysis of recurrent budgeting issues.
73. Such techniques would not, of course, overcome problems of aid fungibility, but all of the proposals in this paper presuppose the improvement of the public sector planning and administration culture so that deliberate subversions of the system are reduced.
74. To achieve total success in passing aid funds through consolidated revenue accounts is probably not possible. Donors will always have grounds to suspect that government policies are not in harmony with aid policies. For example, the European Commission is currently in dispute with the UK government over regional funds: normal UK leasury practice is that all funds go through the Treasury, while the EC does not accept that the Treasury will pass them in full to the regions (Financial Times, Feb 25, 1993).
75. Penrose, E. The Theory of the Growth of the Firm, Basil Blackwell, 1959, p 44.
76. Ibid, chapter 4.
77. Pearce, D., E Barbier A Markyanda, Sustainable Development, Economics and Environment in the Third World, Earthscan, 1990, ch 1; Redclift, M. Sustainable Development, Exploring the Contradictions, Routledge, 1987, chs 2 & 3.
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