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Key Text Something Funny Happened on the Way to Reform Success: The Case of Budget Reform Implementation in Ghana

Author: J Roberts and M Andrews
Date: 2005
Size: 23 pages (105 KB)

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Summary

Why did budget and management reforms in Ghana eventually falter after an initial period of progress? This article from the International Journal of Public Administration examines the development of the Medium Term Expenditure Framework (MTEF) in Ghana between 1998 and 2002. A number of factors may explain why reform implementation was derailed, including reform ownership and political will, organisational integration and organisational incentives, and strategic capacity. All of these factors are commonly presented as influences on reform implementation. The Ghanaian experience provides detail as to how such influences could work.

In the late 1990s Ghana embarked upon a path of budget reform. The MTEF was intended to improve the Government’s contribution to development outcomes and to facilitate greater stability in fiscal policy, improved resource allocation, and more efficient service delivery. The country had a legacy of unsuccessful reform but early indications suggested that the MTEF adopted in 1997/1998 would be different. The international community heralded this reform a qualified success after its initial year, but things changed dramatically thereafter. It became apparent that the reform had many weaknesses and that reform implementation was far from complete.

Several factors may help explain why reform implementation progress faltered:

Ghana launched its first MTEF at a time of mounting macroeconomic instability and growing claims of debt-service payments. It also coincided with a pre-electoral period when Ministers were attending to immediate electoral advantage rather than earlier plans for public expenditure reform.
As reform ownership and political will stagnated, so did reform. Reform ownership failed to go beyond the central agencies to line entities responsible for implementation.
As reforms were rapidly developed and implemented, it was difficult to ensure real short-term gains or effective planning of the reform process. This could have been important in ensuring ongoing political support and managerial buy-in.
The 1992 constitution created the National Development Planning Commission (NDPC) and separated the planning function from budgeting, which was the responsibility of the Ministry of Finance (MoF). This set the tone for institutional rivalry between the entities and a lack of cooperation.
In many line departments, the move towards a more strategic business model and the adoption of results targets and service indicators has not worked well because of the poor connection between actual budgets and budget processes, and services provided.

A number of lessons can be drawn from the Ghanaian experience:

Political support and ownership matter to reform success. Both need to be established in a recognised form, extending beyond the painless parts of the reform or the initial motivation to garner support and interest from the development community.
Budget reforms will only be sustainable if they demonstrate early benefits to key players in the process. It is particularly important that the introduction of any form of MTEF brings improvements in the predictability of organisational funding.
When agencies failed to work together, the Ghanaian reform fell apart. Interagency rivalry appears to be a major impediment to effective reform implementation in complex systems that involve many different entities and professions.

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Source: Roberts, J. and Andrews, M., 2005, 'Something Funny Happened on the Way to Reform Success: The Case of Budget Reform Implementation in Ghana', International Journal of Public Administration, vol. 28, p. 291-311
Author: John Roberts , j.roberts@odi.org.uk