Legislative oversight in public financial management

This Rapid Evidence Assessment examines the quality of the available evidence on the effectiveness of reforms aimed at improving legislative oversight to attain improved development outcomes, and summarises the available lessons from the literature. The specific research questions considered are:

  • What is the effectiveness of the different public finance legislative oversight interventions in improving government transparency and accountability?
  •  What are the critical barriers to success, including an assessment of demand side and supply side contextual factors?
  • What are the conditions that improve the success of implementation, including an assessment of single interventions v combined/coordinated approaches amongst several stakeholders in the accountability ecosystem?

In approaching these research questions we found three prominent areas of intervention and reform: Supreme Audit Institutions (SAIs) and Public Accounts Committees (PACs) as important top-down oversight institutions, and social audit as a form of conducting oversight from the bottom up.

A rigorous review process identified 35 studies published since 2005 and related to countries in sub-Saharan Africa, the Middle East and North Africa and South Asia, including fragile states, reflecting DFID’s interests. We examined the quality of these studies and assessed 24 of them as high and medium quality, to be included in the analysis. However, these studies are spread thinly across the research questions and oversight institutions, providing only a small body of evidence for each one. The majority of the studies used case study approaches, sometimes drawing on evaluations of individual projects or groups of projects. A significant limitation is that a number of the studies considered the effectiveness of SAIs, PACs, or social audit in general rather than looking at the effectiveness of interventions aimed at introducing or reforming these institutions.

The literature on legislative oversight institutions is generally optimistic that the potential benefits are significant when long-term reform can be implemented and sustained. However, many authors also comment on the difficulty of achieving rapid change, and the hard evidence that exists tends to be limited to intermediate issues such as accountability and transparency, with virtually no evidence of longer-term impacts such as improvements to service delivery.

The roles of donors in contributing to effective legislative oversight is a theme that cuts across the different literatures. It points to the need for donors to be coordinated in their support of legislative oversight institutions and to use dialogue and conditionalities to help set the discourse and define the policy space. The importance of thinking and working politically is another cross-cutting theme. It emphasises that reforming legislative oversight institutions is a fundamentally political, not technical process, which depends on political will and local ownership of reform. The literature points to the need to induce the demand for effective financial oversight across stakeholders.

The size of the body of evidence with 24 high or medium quality studies is disappointing. Reasons for the relatively small evidence base include the difficulty of researching individual intervention types when PFM reforms are frequently undertaken more holistically, the time lag in reforms producing observable impacts, and the challenges of attempting experimental studies in a national governance context.

There is considerable scope for more research on the subject of legislative oversight and its impact.

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Suggested citation

Mills, L. & de Lay, S. (2016) Legislative Oversight in Public Financial Management. London and Birmingham: Department for International Development and University of Birmingham.