Linkage Master Programmes Double Degree FIA-UNIBRAW and Japanese Universities Universitas Brawijaya 2006

1. THE THEORY OF PUBLIC
ADMINISTRATION
Linkage Master Programmes
g g
Double Degree FIA-UNIBRAW and Japanese Universities
Universitas Brawijaya
Lecturer : Prof. Dr. Ir. Ginandjar Kartasasmita
jgkar@cbn.net.id
www.ginandjar.com
g j
Assistant Professor : Dr.Ir. Deddy S. Bratakusumah, BE, MURP, M.Sc.
deddys@bappenas.go.id

2. PLANNING AND BUDGETING

3. DEVELOPMENT THEORIES
1. THE LINEAR-STAGES THEORY
2. STRUCTURAL-CHANE
2 STRUCTURAL CHANE MODELS
3. THE INTERNATIONAL-DEPENDENCE
REVOLUTION
4. THE NEOCLASSICAL
COUNTERREVOLUTION
5. THE NEW GROWTH THEORY
(TODARO,
(TODARO 2000)
3

4. THE LINEAR-STAGES THEORY
LINEAR STAGES
1. ROSTOW’S STAGES OF GROWTH
1.
1 THE TRADITIONAL SOCIETY
2. THE PRE-CONDITION FOR TAKE OFF INTO SELF-
SUS
SUSTAINING GROWTH
GG O
3. THE TAKE OFF
4. THE DRIVE TO MATURITY
5. THE AGE OF HIGH MASS CONSUMPTION
2. THE HARROD-DOMAR GROWTH
MODEL
Y/Y = s/k
4

5. STRUCTURAL-CHANGE MODELS
1. THE LEWIS THEORY OF
DEVELOPMENT
LEWIS TWO SECTOR MODEL (TRADITIONAL AND
MODERN)
2. STRUCTURAL CHANGE AND
PATTERNS OF DEVELOPMENT
SO O
AGRICULTURE – INDUSTRY – CONSTRUCTION &
SERVICES
5

6. THE INTERNATIONAL-
DEPENDENCE REVOLUTION
1. THE NEOCOLONIAL DEPENDENCE MODEL
UNDERDEVELOPMENT IS SEEN AS AN EXTERNALLY
INDUCED PHENOMENON
2.
2 THE FALSE-PARADIGM MODEL
FALSE PARADIGM
UNDERDEVELOPMENT IS CAUSED BY FAULTY AND
INAPPROPRIATE ADVICE FROM INTERNATIONAL “EXPERT”
3. THE DUALISTIC-DEVELOPMENT THESIS
THE EXISTENCE AND PERSISTENCE OF INCREASING
DIVERGENCES BETWEEN RICH AND POOR NATIONS
AND RICH AND POOR PEOPLES ON VARIOUS LEVEL
6

7. THE NEOCLASSICAL
COUNTERREVOLUTION
1. FREE MARKETS, PUBLIC CHOICE, &
MARKET FRIENDLY APPROACHES
PRIVATIZATIONS, GOVERNMENTS CAN DO NOTHING
RIGHT, “NONSELECTIVE” INTERVENTIONS
,
2. TRADITIONAL NEOCLASSICAL
GROWTH THEORY
OUTPUT GROWTH RESULTS FROM ONE OR MORE OF
THREE FACTORS: INCREASES IN LABOR QUANTITY
AND QUALITY, INCREASES IN CAPITAL, AND
QUALITY CAPITAL
IMPROVEMENTS IN TECHNOLOGY
Y = AeµtKαL1-α
7

8. THE NEW GROWTH THEORY
ENDOGENOUS GROWTH
SEEK TO EXPLAIN THE FACTORS THAT
DETERMINE THE SIZE OF µ (THE RATE OF
GROWTH OF GDP), THAT IS LEFT
GDP)
UNEXPLAINED AND EXOGENOUSLY
DETERMINED IN THE SOLOW NEOCLASSICAL
GROWTH EQUATION
Y = AeµtKαL1-α Y = AeµtK
8

9. DEVELOPMENT AS
TRANSFORMATION OF SOCIETY
A MOVEMENMT FROM TRADITIONAL
RELATIONS, TRADITIONAL WAYS OF
THINKING, TRADITIONAL WAYS OF
,
DEALING WITH HEALTH AND
EDUCATION, TRADITIONAL
METHODS OF PRODUCTION TO MORE
“MODERN” WAYS
(STIGLITZ,1998)
9

10. THE SUCCESSFUL
TRANSFORMATION OF SOCIETY
1. RAISE THE GDP PER CAPITA
2. RAISE STANDARD OF HEALTH AND
LITERACY
3. REDUCE POVERTY
4.
4 SUSTAINING THE ENVIRONMENT
(STIGLITZ,1998)
10

11. THE STRATEGY INCLUDING
1. PRIVATE SECTOR DEVELOPMENT
2. PUBLIC SECTOR DEVELOPMENT
3.
3 COMMUNITY DEVELOPMENT
4. FAMILY DEVELOPMENT
5. INDIVIDUAL DEVELOPMENT
(STIGLITZ,1998)
11

12. THE PRIORITY
1. EDUCATION
2. INFRASTRUCTURE
3.
3 HEALTH
4. KNOWLEDGE
5. CAPACITY BUILDING
(STIGLITZ,1998)
12

13. THE UN MILLENNIUM
DEVELOPMENT GOALS
1. ERADICATE EXTREME POVERTY AND HUNGER
2. ACHIEVE UNIVERSAL PRIMARY EDUCATION
3. PROMOTE GENDER EQUALITY AND EMPOWER
WOMAN
4
4. REDUCE CHILD MORTALITY
5. IMPROVE MATERNAL HEALTH
6. COMBAT HIV/AIDS, MALARIA AND OTHER
DISEASES
7. ENSURE ENVIRONMENTAL SUSTAINABILITY
8.
8 DEVELOP A GLOBAL PARTNERSHIP FOR
DEVELOPMENT
13

14. SOME DEFINITIONS OF PLANNING
PLANNING IS THE APPLICATION OF
SCIENTIFIC METHODS TO POLICY MAKING
(FALUDI, 1983)
PLANNING IS A PROCESS FOR
DETERMINING APPROPRIATE FUTURE
ACTION THROUGH A SEQUENCE OF
CHOICES
(
(DAVIDOFF AND REINER, 1983)
O , 983)
14

15. PLANNING
A DELIBERATE AND CONCIOUS ATTEMPT TO
FORMULATE DECISIONS FROM SOME
ALTERNATIVES TO ACHIEVE THE GOALS
THE ELEMENTS OF PLANNING:
1. GOALS
2. PRIORITY AND TARGETS
3. TIME FRAME
4. CONSTRAINTS
5. CAPITAL AND RESOURCES, AND ITS ALLOCATIONS
6.
6 IMPLEMENTATION POLICIES AND STRATEGIES
7. IMPLEMENTING AGENCIES AND HUMAN RESOURCES
8. MONITORING, EVALUATION AND CONTROL MECHANISM
,
15

16. PLANNING CRITERIA
1. COMPREHENSIVE AND INDICATIVE
2. CONTROL AND DIRECTING GOVERNMENT
SPENDING IN ORDER TO STIMULATE THE
PRIVATE INVESTMENT
3. STIMULATE MARKET MECHANISM
4. PEOPLE PARTICIPATION PROCESS
5. AFFIRMATIVE ACTION TO WHOM CAN’T
SUIT THE MARKET MECHANISM
16

17. THE SHIFT OF DEVELOPMNET
PLANNING
IN USA AND UK THE DEVELOPMENT
PLANNING BEEN ABANDONED
ABANDONED,
THE NEW FOCUS ON:
1. DEREGULATION
2. PRIVATISATION
3.
3 URBAN ECONOMIC ZONE
17

18. OTHER REASON
DEVELOPMENT PLANNING AND PUBLIC
REGULATION, NO MORE APPROPRIATE,
BECAUSE IT HINDERS CREATIVITY,,
PRIVATE INITIATIVE, BURDEN TO
INOVATION, AND CREATE A HIGH
COST ECONOMY
CLASSICAL LIBERAL
18

19. THE ROLE OF GOVERNMENT
THROUGH PLANNING
IRVING SVERDLOW (1963):
OPERATION (PROVIDING PUBLIC GOODS)
DIRECT CONTROL (TARIFF)
INDIRECT CONTROL (STANDARDIZATION)
DIRECT INFLUENCE (INCENTIVE)
INDIRECT INFLUENCE (EXPORT MARKET
INFORMATION)
19

20. WHY WE DO PLANNING?
DECREASING UNCERTAINTY
INTEGRATING SOME RATIONAL
METHODS AND TECHNOLOGIES INTO
PROBLEM SOLVING PROCESS AND
DECISION MAKING PROCESS
20

21. WHY WE DO PLANNING ?
PROVIDING THE CHANCE ANG BLUE
PRINT TO CONTROL AND MONITOR THE
PUBLIC EFFORTS FROM TIME TO TIME
INCREASING PARTICIPATION FROM THE
PEOPLE ON DECISION MAKING AT LEAST
MAKING,
WIDENING THE HORIZON OF THE PUBLIC
EXPONENT
21

22. OTHER REASONS
IF WE COULD FIRST KNOW WHERE WE ARE,
AND WHITHER WE ARE TENDING, WE COULD
BETTER JUDGE WHAT TO DO AND HOW TO
DO,
DO IT
(ABRAHAM LINCOLN)
THE ROLE OF THE STATE IN THE ECONOMIC
LIFE OF DEVELOPING COUNTRIES NEEDS TO
BE REAPPRAISED…. NOT BY STRONG
IDEOLOGICAL OVERTURES, BUT BY
PRAGMATIC CONSIDERATIONS OF FEASIBLE
ALTERNATIVES
(M. SINGH)
22

23. OTHER REASONS
MARKET FAILURE
RESOURCE MOBILIZATION AND
ALLOCATION
ATTITUDINAL OR PSYCHOLOGICAL
IMPACT
FOREIGN AID ?
(TODARO, 2000)
23

24. THE ROLE OF PLANNERS
WHAT IS OR SHOULD BE THE TOPIC OR FOCUS
OF PLANNING?
WHO DOES THE PLANNER WORK FOR?
WHAT IS THE GOAL OF PLANNING?
(IS EQUITABLE DISTRIBUTION OF RESOURCES POSSIBLE?)
HOW DO WE ACHIEVE OUR GOALS?
(IS RATIONAL DECISION MAKING POSSIBLE?)
WHAT IS PRACTICAL EXPECTATIONS?
(LEW, 1996)
24

25. PLANNING APPROACH
(1) POLITICAL
(2) TECNOCRATIC
(3) PARTICIPATIVE
(4) TOP-DOWN
(5) BOTTOM-UP
25

26. THE PLANNING APPROACH
1. RATIONAL PLANNING
SYNOPTIC PLANNING, COMPREHENSIVE
PLANNING
BASIS FOR MOST PUBLIC PLANNING
2. INCREMENTAL PLANNING
3. ADVOCACY PLANNING
4. TRANSACTIVE PLANNING
26

27. RATIONAL PLANNING
THE STEPS:
1. IDENTIFY A PROBLEM
2. IDENTIFY A GOAL
3. COLLECT BACKGROUND DATA
4. IDENTIFY A MEANS OF ASSESSING
ALTERNATIVE PLAN SCENARIOS
5. IDENTIFY ALTERNATIVE PLAN SCENARIOS
CONSISTING OF POLICIES AND GUIDELINES TO
ACHIEVE THE GOAL
27

28. RATIONAL PLANNING
6. ASSESS ALTERNATIVE PLAN SCENARIOS
7. SELECT THE PREFERRED ALTERNATIVE
8. IMPLEMENT THE PLAN
9. MONITOR, EVALUATE AND REVISE THE
IMPLEMENTATION
10. IDENTIFY NEW PROBLEMS AND BEGIN
THE PROCESS AGAIN
28

29. RATIONAL PLANNING PRACTICE
TYPICALLY MORE COMPLEX THAN THE STEPS
A. COMPLETE AGENCY PRE-PLANNING
ACTIVITIES
1.
1 CLARIFY AGENCY MISSION, ROLE,
MISSION ROLE
RESPONSIBILITIES
2. DELINEATE INTENDED PURPOSE AND USE OF
THE PLAN
3. DETERMINE PLAN FRAMEWORK AND FORMAT
29

30. RATIONAL PLANNING PRACTICE
B. ESTABLISH GOALS, GUIDELINES, AND
STANDARDS
4. DEVELOP A PLANNING PROCESS TO DO
THIS:
- METHODOLOGIES DATA REQUIREMENTS
- PARTICIPANTS ORIENTATION/EDUCATION
- COORDINATION ORGANIZATIONAL STRUCTURE
- EVALUATION PROCEDURE
5.
5 DEVELOP A WORK PROGRAM TO DO THIS
6. ESTABLISH GOALS
7. ESTABLISH GUIDELINES AND STANDARDS
30

31. RATIONAL PLANNING PRACTICE
C. IDENTIFY NEEDS & PRIORITIES, ESTABLISH
OBJECTIVES, AND DEVELOP PLAN
IMPLEMENTATION STRATEGY
8.
8 DEVELOP THE PLANNING PROCESS
9. DEVELOP THE WORK PROGRAM AND TIME
SCHEDULE
10. IDENTIFY NEEDS
11. DETERMINE PRIORITIES
12. ESTABLISH OBJECTIVES
13. DEVELOP THE PLAN IMPLEMENTATION
STRATEGY
31

32. RATIONAL PLANNING PRACTICE
D. PUBLISH AND IMPLEMENT THE PLAN
E. EVALUATE RESULTS & REVIEW,
REVISE AND UPDATE THE PLAN
32

33. CRITICS ON RATIONAL
PLANNING
RATIONAL PLANNING IS OFTEN CRITICIZED BUT
IT STILL REMAINS THE MOST COMMON
APPROACH TO PLANNING
BECAUSE IT IS:
RATIONAL AND THEREFORE EASIER TO JUSTIFY
(LEW, 1996)
33

34. ASSUMPTIONS
1. ASSUMES THAT PEOPLE BEHAVE
RATIONALLY
- THAT RATIONALITY IS A PART OF EVERYDAY LIFE
- THAT PEOPLE AND EVENTS ARE PREDICTABILITY
2. ASSUMES UNLIMITED PROBLEM SOLVING
CAPABILITIES AND PERFECT INFORMATION
- COST OF INFORMATION COLLECTION IS
AFFORDABLE
- ABILITY TO IDENTIFY ALL ALTERNATIVES
(‘SYNOPTIC’)
34

35. ASSUMPTIONS
3. ASSUMES THAT ONLY FACTS EXIST
- NO VALUES (SUBJECTIVE BELIEF SYSTEMS)
( )
- ALL VARIABLES EXIST WITHIN AN
INTERCONNECTED AND CLOSED SYSTEM (NO
UNFORESEEABLE VARIABLES)
4. ASSUMES A RATIONAL-DEDUCTIVE SEQUENCE
OF EVENTS
- IF ‘A’ HAPPENS, THE ‘B’ WILL FOLLOW
- NO NEED FOR POLITICAL STRATEGIES
- NOT SUITED FOR CRISIS OR UNFORESEEN EVENTS
35

36. INCREMENTAL PLANNING
AN ALTERNATIVE THEORY THAT ACCEPTS MOST
OBVIOUS SHORTCOMINGS OF RATIONAL
PLANNING
DEVELOPED FROM THE PEACE CORPS IN THE
1960S
1. LIMITED TIME PERIODS/HORIZONS
2. POLITICAL DECISION MAKING
3. LIMITED AND IMPERFECT INFORMATION
36

37. INCREMENTAL PLANNING
4. LIMITED TIME AND MONEY FOR DATA
COLLECTION
5. SOCIETAL VALUES ARE AS IMPORTANT AS
FACTS
6. OPEN, RAPIDLY CHANGING SYSTEM;
UNFORESEEABLE EVENTS
7. PLANNING IS DISJOINTED, INCREMENTAL
AND SERIAL (SERIAL = ONE EVENT
AFTER ANOTHER WITH NO GIANT STEPS)
37

38. ADVOCACY PLANNING
CAME OUT OF 1960S, CONSIDER AS AN
ADVERSARIAL APPROACH IN THE LEGAL
PROFESSION
1. DEFENDING THE WEAK AGAINST THE
STRONG
WEAK MEANS: THE POOR; DISENFRANCHISED;
ENVIRONMENTAL CAUSES
2.
2 SUCCESSFUL IN BLOCKING INSENSITIVE
PLANNING
ESPECIALLY ‘URBAN RENEWAL’
URBAN RENEWAL
38

39. ADVOCACY PLANNING
3. MAJOR TOOL: DEVELOPMENT OF ‘PLURAL
PLANS
PLANS’
DIFFERENT PLANS FOR DIFFERENT SECTORS OF THE
COMMUNITY
4. CRITICIZED FOR BLOCKING EFFICIENT
PLANNING
5. SOCIAL POLICY & ENVIRONMENTAL
JUSTICE BECAME IMPORTANT PLANNING
ISSUES
6. SUSTAINABLE DEVELOPMENT
IS THE ‘MAINSTREAMING’ OF ADVOCACY ISSUES
MAINSTREAMING
39

40. TRANSACTIVE PLANNING
ALSO CALLED ‘POST RATIONAL PLANNING’
A RESPONSE TO THE FAILURES OF
ADVOCACY PLANNING
BASED ON:
1. SOCIAL LEARNING THEORY
HOW DO SOCIETIES LEARN (AND CHANGE)
2. INTERPERSONAL INTERACTION
DIALOGUE AND MUTUAL LEARNING
40

41. TRANSACTIVE PLANNING
PLANNERS JOB:
1.
1 FACILITATE SHARED UNDERSTANDING
AMONG PEOPLE
2.
2 ENGAGE IN MUTUAL LEARNING WITH
CLIENTS/PEOPLE
BOTH REQUIRE ‘DIALOGUE’
Q
MAJOR CRITICISMS:
- VERY TIME CONSUMING AND DIFFICULT
- VERY PERSONAL & SUBJECTIVE
41

42. MUTUAL LEARNING PROCESS
PLANNER CONTRIBUTES quot;PROCESSquot;
KNOWLEDGE
1. THEORY AND SCIENTIFIC METHODOLOGY
2. LARGER SOCIETAL PERSPECTIVE & CONCERNS
CLIENT CONTRIBUTES quot;PERSONALquot;
KNOWLEDGE
1. DIRECT PERSONAL EXPERIENCE
2. KNOWLEDGE OF LOCAL CONDITIONS AND NEEDS
BOTH ARE OF EQUAL VALUE AND
IMPORTANCE
42

43. KNOWLEDGE SHARED
PROCESS & PERSONAL KNOWLEDGE
BECOME FUSED THRU:
1. PERSONAL AND VERBAL INTERACTION
(DIALOGUE)
PUBLIC GOOD IS ACHIEVED
2. EFFORTS TO CREATE INTELLIGENT
INSTITUTIONS
INSTITUTIONS WHICH ARE SELF LEARNING /
SELF-LEARNING
EDUCATING / ADAPTING
43

44. COMPARISON OF APPROACHES
Rational Planning Advocacy Planning Transactive Planning
Audience
decision maker / power holder a community group society / quot;the people”
View held by client
goal oriented / rational goal oriented / rational experiential
View of self (planner)
rational analyst & technician rational analyst catalyst / inventor & change
agent
Methodology
science science & politics dialogue & politics
Techniques
analytical analytical process / synthesis
Data
objective & processed objective & processed objective / processed &
subjective/personal
Goal
one best solution solution perceived best a working solution &
by client continuing process
44

45. COMPARISON OF APPROACHES
View of change process
controlled / stability controlled / stability guided / responsive to change
View of future
comprehensive / time-driven partial / short term evolutionary / long-term
Worldview
elitist / structural efficiency benevolent / functional participatory / structural &
efficiency functional efficiency
Problem environment
isolated (closed system) isolated (closed system) open system
Implementation
not planner's problem not planner's problem part of solution process
Focus
th problem
the bl the bl
th problem & potential actors
t ti l t the
th problem & potential actors
bl t ti l t
(LEW, 1996)
45

46. ECONOMIC DEVELOPMENT PLAN
A SPECIFIC SET OF QUANTITATIVE
ECONOMIC TARGETS TO BE
REACHED IN A GIVEN PERIOD OF
TIME,
TIME WITH A STATED STRATEGY
FOR ACHIEVING THOSE TARGETS
46

47. ECONOMIC DEVELOPMENT PLAN
A COMPREHENSIVE PLAN SET ITS
TARGETS INCLUDING ALL ASPECTS OF
THE NATIONAL ECONOMY
A SECTORAL AND PARTIAL PLAN
ELABORATING ONLY A SPECIFIC
SECTOR, FOR EXAMPLE, AGRICULTURE,
INDUSTRIAL OR TRADE SECTOR
47

48. MODELS FOR PLANNING
1. AGGREGATE GROWTH MODELS:
INVOLVING MACROECONOMIC ESTIMATES OF PLANNED
OR REQUIRED CHANGES IN PRINCIPAL ECONOMIC
VARIABLES
2. MULTISECTOR INPUT-OUTPUT MODELS:
WHICH ASCERTAIN THE PRODUCTION, RESOURCES,
PRODUCTION RESOURCES
EMPLOYMENT, AND FOREIGN-EXCHANGE
IMPLICATIONS OF A GIVEN SET OF FINAL DEMAND
TARGETS WITHIN INTERINDUSTRY PRODUCT FLOWS
3. DETAILED SELECTION OF SPECIFIC
INVESTMENT WITHIN SECTOR:
THROUGH THE TECHNIQUE OF PROJECT APPRAISAL
AND SOCIAL COST-BENEFIT ANALYSIS
(TODARO, 2000)
48

49. PLANNING STAGING
1. AGGREGATE
2. SECTORAL
3. PROJECT
49

50. THE PLAN
1. WARTIME PLANNING
2.
2 TOWN AND COUNTRY PLANNING
3. ANTICYCLICAL PLANNING
4. DEVELOPMENT PLANNING
- NATIONAL
- REGIONAL
(WATERSTON, 1982)
50

51. DECISION MAKING PROCESS
PLANNING PLANNING
FROM FROM
TECNOCRATIC POLITIC
POINT OF VIEW
POINT OF VIEW
DISTORTION ACCORDANCE
PLAN
51

52. GOOD PLAN
* ECONOMICALLY EFFICIENT
* POLITICALLY ACCEPTED
* ADMINISTRATIVELY WORKABLE
* IN ACCORDANCE WITH SOCIO
CULTURAL AND ETHICS
52

53. THE FAILURE
AN EXAMINATION OF POSTWAR PLANNING
HISTORY REVEALS THAT THERE HAVE
BEEN MANY MORE FAILURES THAN
SUCCESSES IN THE IMPLEMENTATION OF
DEVELOPMENT PLANS
(WATERSTON, 1989)
53

54. THE CAUSES
GAP BETWEEN THEORY AND PRACTICE
PLANNING PROCESS FAILURE
- INSUFFICIENT AND UNRELIABLE DATA
- UNANTICIPATED ECONOMIC TURMOIL
- INSTITUTIONAL WEAKNESSES
- POLITICAL ASPECT
- NO IMPLEMENTATION MANUAL
54

55. PUBLIC SECTOR MANAGEMENT
Decision making Policies for Planning Budgets
Nat. Planningg for programs
(Seek to achieve) (Defines) (Finance)
Implementation Outcomes Outputs Inputs
(effectiveness)
( ff ti ) (efficiency)
Control indicators Impacts Production Costs
indicators
Monitoring Evaluation Value-for-money Cost accounting
tools Audits & financial audits

56. LINKING POLICY, PLANNING AND BUDGETING
IN THE ANNUAL PLANNING AND RESOURCE MANAGEMENT
CYCLE
(1)
REVIEW POLICY
R i h i
Review the previous planning and
l i d
implementation period
(2)
(6) SET POLICY AND UNDERTAKE
EVALUATE AND AUDIT PLANNING ACTIVITY
Policy activities, effectiveness and Establish resource frame work, set out
feed the results into future plans objectives, policies, strategies and
expenditure priorities
(3)
(5)
MOBILIZE AND ALLOCATE
MONITOR activities and
RESOURCES
ACCOUNT for expenditures
Prepare Budget
(4)
IMPLEMENTATION PLANNED
ACTIVITIES
Collect revenues, release funds,
deploy personnel, undertake
personnel
activities
Source : World Bank, “Public Expenditure Management Handbook”, 1998

57. BUDGET AND BUDGETING
BUDGET IS AN ESTIMATION OF THE
REVENUES AND EXPENSES OVER A SPECIFIED
FUTURE PERIOD OF TIME
THE PURPOSE OF BUDGETING: TO CONTROL
OVER PUBLIC MONEY AND ACCOUNTABILITY
TO PUBLIC AUTHORITY
57

58. BUDGET’S ROLE
BUDGETS DIRECT EVERYTHING A
GOVERNMENT DOES THEIR PROCESSES
DOES.
ARBITRATE OVER THE ALLOCATION OF
SCARCE RESOURCES AMONG THE
COMPETING DEMANDS OF AGENCIES
WHOSE BUSINESS IT IS TO SEE PUBLIC
NEEDS FULFILLED
(XAVIER, 2001)
58

59. BUDGET
BUDGET IS A PLAN THAT SETS OUT:
1.
1 THE OBJECTIVES AND STRATEGIES OF THE
GOVERNMENT IN A BUDGET YEAR,
2.
2 THE PROGRAMMES AND ACTIVITIES THAT
WOULD BE CARRIED OUT TO EXECUTE THE
STRATEGIES TO ACHIEVE THE OVERALL
OBJECTIVES,
3. THE RESPECTIVE OBJECTIVES OF THESE
PROGRAMMES AND ACTIVITIES THAT
REFLECT THE DISAGGREGATION OF THE
OVERALL OBJECTIVES OF GOVERNMENT
59

60. BUDGET
4. THE RESOURCES ALLOCATED ACROSS THESE
PROGRAMMES AND ACTIVITIES,
5.
5 THE REVENUES PROJECTED TO BE COLLECTED TO
FINANCE THE EXPENDITURE IN CARRYING OUT
THE PROGRAMMES AND ACTIVITIES
ACTIVITIES,
6. PERFORMANCE TARGETS – IN TERM OF THE
DELIVERY OF SERVICES IN THE RIGHT QUANTITY,
QUALITY AND IN A TIMELY AND COST-EFFECTIVE
FASHION – THAT WOULD NEED TO BE ACHIEVED
TO MEETING THE SUB-OBJECTIVES AND, THEREBY,
THE OVERALL OBJECTIVES OF THE GOVERNMENT
(XAVIER,
(XAVIER 2001)
60

61. BUDGETING PRINCIPLES
TRANSPARENCY AND
ACCOUNTABILITY
COMPREHENSIVENESS OF BUDGET
PREDICTABILITY OF RESOURCES &
POLICIES
FLEXIBILITY
CONTESTABILITY
EXISTENCE AND SHARING OF
INFORMATION
61

62. BUDGETING THEORIES
PPBS
PLANNING, PROGRAMMING
PLANNING PROGRAMMING, AND
BUDGETING SYSTEMS
DEVELOPED IN 1960s BY US DEPT OF
DEFENSE
BUDGETING BASED ON LONG-TERM
PLANNING NEEDS
62

63. BUDGETING THEORIES
MBO
MANAGEMENT BY OBJECTIVE
DETERMINING OBJECTIVES BASED
ON OVERALL GOALS
CLOSE COOPERATION BETWEEN A
MANAGER AND HIS/HER
SUBORDINATES
63

64. BUDGETING THEORIES
ZBB
ZERO BASED BUDGETING
LARGER BUDGET BROKEN INTO
SMALLER “DECISION PACKAGES”
MANAGERS OF EACH DECISION
PACKAGE JUSTIFIES ENTIRE BUDGET
FROM SCRATCH EACH YEAR (ZERO-
(ZERO
BASE)
64

65. BUDGETING THEORIES
BUDGETING FOR PERFORMANCE
LINKING:
INPUTS,
OUTPUTS, AND
OUTCOMES
65

66. BUDGETING THEORIES
BUDGETING FOR PERFORMANCE
INPUT
CASH/ACCRUAL
OUTPUT
PERFORMANCE DATA/INDICATORS/STANDARDS
AUTHORITY
ACCOUNTABILITY
OUTCOME
CLEAR OBJECTIVES
INDICATORS
EVALUATION
66

67. BUDGETING THEORIES
BUDGETING FOR PERFORMANCE
CLASSIFICATION
FUNCTIONAL
PROGRAM
ORGANIZATIONAL
MULTI-YEAR
67

68. BUDGETING THEORIES
MTEF
MEDIUM TERM EXPENDITURE FRAMEWORK
FISCAL TARGETS (WHAT IS AFFORDABLE)
FORWARD ESTIMATES OF EXISTING POLICY
INSTITUTIONAL MECHANISMS FOR MAKING THE
TRADE-OFFS
A FOCUS ON PERFORMANCE
ENHANCED PREDICTABILITY
68

69. STAGES OF A MTEF
Top-Down
T D
Stage 1 Stage 4 Stage 5 Stage 7
Macroeconomic Detailed Approval Review of
f
framework k dit
expenditure f
of ti
estimates i
t in
availability of framework & ceilings by MOF and
resources sector/ministry Cabinet presentation
ceiling for 3 yrs to Cabinet
and
Parliament
Stage 2 Stage 3 Stage 6
Step 1
St Step 3
Sector review Costing Hearings to Preparation of 3-year
of ministry (recurrent & agree on estimates by
objectives, capital) of objectives & ministries within
outputs &
p programs/ priority
p y Cabinet approved
pp
activities
i ii sub-programs programs ceilings
ili
for 3 years
Step 2
Agreement on
sectoral/ministry
programs & sub-
programs
Bottom-up
(ADAPTED FROM GERVAIS, 1999)

70. BUDGET CYCLE AND FISCAL
POLICY

71. BUDGET CYCLE
THE BUDGET CYCLE IS MADE UP OF THE
MAJOR EVENTS OR STAGES IN MAKING
DECISIONS ABOUT THE BUDGET, AND
BUDGET
IMPLEMENTING AND ASSESSING THOSE
DECISIONS
DECISIONS.
THE SPECIFIC CHARACTERISTICS OF THE
BUDGET CYCLE DIFFER FROM COUNTRY TO
COUNTRY. NONETHELESS, IN MOST
,
COUNTRIES, THE BUDGET CYCLE IS LIKELY
TO HAVE FOUR STAGES
71

72. BUDGET CYCLE
STAGE 1
BUDGET FORMULATION
THE BUDGET PLAN IS PUT TOGETHER BY
THE EXECUTIVE BRANCH OF GOVERNMENT
STAGE 2
BUDGET ENACTMENT
THE BUDGET PLAN MAY BE DEBATED
DEBATED,
ALTERED, AND APPROVED BY THE
LEGISLATIVE BRANCH OF GOVERNMENT
72

73. BUDGET CYCLE
STAGE 3
BUDGET EXECUTION
THE POLICIES OF THE BUDGET ARE
CARRIED OUT BY THE GOVERNMENT
STAGE 4
BUDGET AUDITING AND ASSESSMENT
THE ACTUAL EXPENDITURES OF THE
BUDGET ARE ACCOUNTED FOR AND
ASSESSED FOR EFFECTIVENESS
73

74. PUBLIC FINANCE
GOVERNMENTAL FINANCES TODAY
ARE “IN THE PUBLIC EYE” AS NEVER
BEFORE
(ROSENBLOOM AND KRAVCHUCK, 2005)
74

75. FISCAL FUNCTIONS
THE MAJOR FUNCTION OF FISCAL
FUNCTIONS ARE:
1. ALLOCATION
2. DISTRIBUTION
3. STABILIZATION
75

76. ALLOCATION FUNCTION
THE PROVISION FOR SOCIAL GOODS, OR
THE PROCESS BY WHICH TOTAL
RESOURCE USE IS DIVIDED BETWEEN
PRIVATE AND SOCIAL GOODS AND BY
WHICH THE MIX OF SOCIAL GOODS IS
CHOSEN
THIS PROVISION MAY BE TERMED THE
ALLOCATION OF BUDGET POLICY
(MUSGRAVE AND MUSGRAVE 1989)
MUSGRAVE,
76

77. DISTRIBUTION FUNCTION
ADJUSTMENT OF THE DISTRIBUTION OF
INCOME AND WEALTH TO ENSURE
CONFORMANCE WITH WHAT SOCIETY
CONSIDERS A “FAIR” OR “JUST” STATE
OF DISTRIBUTION, HERE REFERRED TO
AS THE DISTRIBUTION FUNCTION
(MUSGRAVE AND MUSGRAVE, 1989)
77

78. STABILIZATION FUNCTION
THE USE OF BUDGET POLICY AS A
MEANS OF MAINTAINING HIGH
EMPLOYMENT, A REASONABLE DEGREE
OF PRICE LEVEL STABILITY, AND AN
APPROPRIATE RATE OF ECONOMIC
GROWTH, WITH ALLOWANCES FOR
EFFECTS ON TRADE AND ON THE
BALANCE OF PAYMENTS. WE REFER TO
ALL THESE OBJECTIVES AS THE
STABILIZATION FUNCTION
(MUSGRAVE AND MUSGRAVE, 1989)
78

79. INSTRUMENTS OF
STABILIZATION FUNCTION
1. MONETARY INSTRUMENTS
- CONTROL OVER MONEY
- INTEREST RATE
- CREDIT CONDITIONS
2. FISCAL INSTRUMENTS
- GOVERNMENT SPENDING
- THE AMOUNT AND TYPE OF TAXES
79

80. FISCAL-MONETARY MIX POLICY
TO INFLUENCE MACROECONOMIC ACTIVITY
1. TIGHT-MONETARY AND LOOSE-FISCAL
POLICY WILL TEND TO ENCOURAGE
CONSUMPTION AND RETARD INVESTMENT
2. EASY-MONETARY AND TIGH-FISCAL POLICY
WILL TEND TO DISCOURAGE CONSUMPTION
AND ACCELERATE INVESTMENT
80

81. PUBLIC SECTOR IN ECONOMY
HOUSEHOLDS
INCOME
SAVING
INCOME
TAXES CAPITAL MARKET
FACTOR SPEND
MARKET
PRODUCT PUBLIC SERVICE
MARKET AND GOODS
FIRMS
TRANSFER
BORROWING
PURCHASE
GOVERNMENT BUDGET
(ADAPTED FROM MUSGRAVE AND MUSGRAVE, 1989)
81

82. BUDGET DECISION MAKING

83. PLAYING THE BUDGET GAME
SOMETIMES BUDGETING TAKES ON
THE AURA OF A GAME, WITH THE
GAME
VARIOUS AGENCY PLAYERS TRYING
TO INCREASE THEIR SHARES AND
ELECTED OFFICIALS TRYING, AT
LEAST OSTENSIBLY, TO KEEP TAXES
DOWN AND PROMOTE
ADMINISTRATIVE ECONOMY
(ROSENBLOOM AND KRAVCHUCK, 2005)
83

84. A RATIONAL COMPREHENSIVE
MODEL OF DECISION MAKING
1. VALUES OR OBJECTIVES ARE DETERMINED
AND CLARIFIED SEPARATELY, USUALLY
BEFORE CONSIDERING ALTERNATIVE
POLICIES
2. POLICY FORMATION IS APPROACHED
THROUGH ENDS-MEANS ANALYSIS, WITH
ANALYSIS
AGREED-UPON ENDS GENERATING A
SEARCH FOR WAYS OF ATTAINING THEM
84

85. A RATIONAL COMPREHENSIVE MODEL OF DECISION MAKING
4. A “GOOD” POLICY IS, THEREFORE, ONE
GOOD
THAT PROVIDES THE MOST APPROPRIATE
MEANS TO SOME DESIRED END
5. EVERY IMPORTANT RELEVANT FACTOR IS
TAKEN INTO ACCOUNT
6.
6 THEORY OFTEN IS HEAVILY RELIED UPON
(MILLER,
(MILLER 1991)
85

86. OBSTACLE TO DECISIONS
1.
1 LACK OF GOAL CLARITY
2. CONFUSION OF THE PUBLIC INTEREST
WITH THAT OF A CUSTOMER CLIENTELE
CUSTOMER,
GROUP, OR CONSTITUENCY
3. RIGID CONSERVATISM (IN THE SENSE OF
STRICT ADHERENCE TO RULES,
PROCEDURES, AND PAST PRACTICES
86

87. OBSTACLE TO DECISIONS
4. THE TENDENCY TO OVERSIMPLIFY
REALITY
5. “OVERQUANTIFICATION” AND TENDENCY
TO DEEMPHASIZE OR IGNORE
QUALITATIVE FACTORS
6. RELUCTANCE TO ENGAGE IN POLICY
AND PROGRAM EVALUATION
(ROSENBLOOM AND KRAVCHUCK, 2005)
87

88. BUDGET DECISION MAKING
PROCESS
BUDGET BUDGET
FROM FROM
TECNOCRATIC POLITIC
POINT OF VIEW
POINT OF VIEW
DISTORTION ACCORDANCE
BUDGET
88

89. INDONESIA NATIONAL BUDGET
SCHEME (SINCE 2005)
20 YEARLY 5 YEARLY YEARLY
PRESIDENT’S
VISION
LTDP MTDP GWP
STRA-PLAN
OF DEPT DEPT AP
DEPT ABP
STATE BUDGET
89

90. THANK YOU
90