The 6th annual meeting of the OECD network on performance and results took place on 1-2 December 2009 at the OECD Conference Centre in Paris.
The meeting was chaired by Dr Gerhard Steger, Director General of the Budget Directorate, Federal Ministry of Finance, Austria.
Tuesday, 1 December 2009
Session 1: Discussion of approaches for restoring fiscal sustainability:
As the world economy begins to recover, the world's political and financial leaders have begun to emphasise the importance of fiscal consolidation in promoting sustainable global growth. Record debt levels have already impacted the borrowing costs of several countries, including some G20 countries. Gross general government debt for advanced economies is projected to rise from 75% to 115% of GDP between 2008 and 2014. By 2014, debt ratios will be close to or exceed 90% in all G7 countries except Canada. It is thus critical to avoid a surge in interest rates that might be prompted by concerns about high debt ratios. High deficits and debt can all too easily trigger such a surge if markets perceive a more relaxed attitude toward fiscal solvency. An exit strategy to plan the transition from the current levels of fiscal imbalances to more sustainable levels is clearly needed.
The OECD has a long history of analysing the fiscal positions of countries – in both good times and bad – and in helping countries plan and implement fiscal consolidation. The size, duration and composition of such plans have varied enormously, depending on a country's particular situation. Although there have been many plans that have involved small adjustments, there have been more than 300 episodes of fiscal adjustments of above 5% of GDP in both developed and developing countries over the past 30 years, as each country grapples with its own often unsustainable fiscal position.
This session was opened by a presentation from the OECD Secretariat on lessons learned from countries’ previous experiences of fiscal consolidation, followed by an open discussion of these lessons.
Session 2: Country presentations: fiscal stimulus packages and public spending: The role of performance systems in monitoring and measuring results:
In this session, countries described the composition of the public spending and investment dimension of their stimulus packages. The session addressed: what roles, if any, performance information (evaluations, output, and outcome measures) and systems play or will play in the design, implementation, monitoring, and evaluation of the stimulus packages? What types of actions have been or will be taken to improve expenditure procedures to ensure that this increased public spending is well directed and produces results? How are existing performance and evaluation processes and systems adjusting to this influx of new public spending? How will new spending plans presented by line ministries be reviewed? If and how has performance information been applied (or will be applied) in the process of decision making on the prioritisation and allocation of funding and in selection of programmes and projects? Have any goals or targets been attached to increase funding?
What challenges has this new spending posed in practice for countries and their existing budgeting and performance systems? How are countries seeking to balance the need to get money out the door quickly with ensuring that money is well spent? How will programmes and projects that are part of these packages be monitored, reviewed and evaluated in the future? What, if any, are the plans to assess and evaluate the stimulus packages themselves? What lessons have been learned from these experiences?
Wednesday 2nd December 2009
Session 3: Beyond the crisis: normalising public finances and improving public sector efficiency and effectiveness:
The session discussed countries’ past and current approaches to, and experiences with, normalising public finances. It focused on how countries have used or propose to use performance budgeting systems to help promote sustainable fiscal policies in the medium term. What processes and institutions have they put in place to promote this? What role has been played (or can be played) by outcome and output-based performance budgeting and management systems in providing information to help with prioritisation and reallocation of expenditures? What role can reviews and evaluations play? What types of mechanisms and approaches have countries adopted for reviewing their public sector’s role and performance? Examples include independent evaluations and commissions, departmental and programme evaluations and reviews, strategic reviews, spending reviews, value-for-money studies, and policy reviews. How have countries implemented these reforms? What has worked with these approaches in both the short and long term? What factors are important for success? What have been the challenges?
Based on previous experiences, what can be learned about the trade-offs and the short-term versus long-term benefits and consequences of linear and/or across-the- board approaches to reducing expenditure and more targeted differentiated reductions based on reviews and information about performance? How can the negative effects be mitigated in future exercises? How can this crisis be used to promote greater use of performance information and institutionalisation of a focus on results in the budget process? Focusing on performance information and results can help promote greater transparency and accountability in the use of public funds. How can this information be used to help explain or communicate essential reforms to the public and politicians?
Session 4: Beyond the crisis: general lessons learned from country experiences:
Based on country presentations and discussions during the meeting, this session addressed the key lessons and challenges in adopting the different approaches to developing and using performance information in promoting sustainable fiscal policies in the medium term. A tour de table of country views and experiences began this session, followed by an open discussion.