Conceptual Framework of Costing Exercises

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  • 1. INCREASING EXIGIBILITY IN FINANCEMENT FOR GENDER EQUALITY Global Seminar on Costing Experiences and Methodologies for Gender Equality Santa Cruz de la Sierra, Bolivia, 10, 11 and 12 September, 2013 Conceptual Framework of Costing Exercises Raquel Coello-Cremades
  • 2. WHAT IS A COSTING EXERCISE? Costing: “Monetary evaluation of the amount of resources and efforts that must be invested for the production of a good or service. It represents the price and the expenses of a certain item without the consideration of any profit” (Maria Concepcion Martinez Medina, Budget Costing Guide with Gender Perspective. II Plan for Gender Equality in Honduras. UN Women 2012.) Costing equality policies “Monetary evaluation of added resources and financial and non- financial efforts that must be invested in order to implement a public policy aimed at achieving gender equality. These exercises also involve a technical and political process that aim to influence in public planning and budgeting processes that can contribute to close gender inequality gaps and women empowerment” (Costing of social and public policies for equality in Latin America and the Caribbean. Concept Note. PNUD. 2013.)
  • 3. STRATEGIC SENSE OF “COSTING EXERCISES” Cost of real need vs. effectively assigned resources  “financial gaps” To identify possible alternatives to cover these needs (redistribution of expense or the generation/redefinition on income or search of external resources). Identification of priorities, definition of interventions to address them and people accountable of their implementation  instruments to make programs and policies viable and promote their incorporation in public planning and budgeting systems. Instrument to initiate the discussion about the gender gaps in politic and economic policies and in particular fiscal policy.
  • 4. THE COSTING-BUDGET COUPLING GRB COSTING The priorities of the gender equality and women’s rights agenda are expressed in terms of the necessary financial resources to implement them in a way that they can be included in planning and budget processes. The planning and budget processes promote the incorporation of the gender based perspective and the allocation of resources for the priorities of the gender equality and women’s rights agenda.
  • 5. THE COSTING-BUDGET COUPLING What’s possible What’s desirable BUDGET: What we have managed to incorporate NEEDS, OBJECTIVES, GOALS: What is needed COSTING
  • 6. TYPES OF APPROACHES OF COSTING EXERCISES APPROACH OBJECTIVE PURPOSE Impact Costing To measure socio-economic impacts of an especific intervention or problem. - To show advere effects (of interviening or not intervining) - To justify the benefits of an especific investment Interventions Costing To estimate financial resources to carry out an intervention (good or service, or the achievement of a development goal). - To know how much is needed - To calcuate alcular la brecha de financiamiento Costing as a tool for the inclusionin public planning an budgeting processes To incorporate the financial resources needed to carry out an intervention in the planning and budgeting process. To know the budgeting processes in which the costed intervention must be included. THESE THREE APPROACHES COMPLEMENT EACH OTHER
  • 7. METHODOLOGICAL APPROACHES FOR COSTING Costing Estimations Based on the Incremental Capital Output Ratio (ICOR) Estimations based on elasticities imputs-results Estimations Based on the Average of Single Costs Estimations of the cost of interventions based on the evaluation of needs Estimations developed using instruments of public planning and budgeting
  • 8. METHODOLOGICAL APPROACHES OF COSTING (I) Name of the Approach Purposes Limitations Costing Estimates based on the Incremental Capital Ratio (ICOR ) Calculation of the rate of economic growth needed to reduce by half income poverty and define the amount of resources that must be invested to achieve this growth. * It doesn’t allow going further on thick estimations and, therefore, it is not useful to guide planning, budgeting and resources allocation processes * It doesn’t take into consideration the investments that don’t have a direct and measurable impact on economic growth (for example, the investment in the improvement of the quality of education and the investment on the prevention of diseases). Estimates based on economic elasticity inputs-results It allows the estimating of the level of aggregated investment required to achieve a development goal (for example a MDG). The methodology involves the establishing of a “productive function” of the specific goal. This means, the construction of a model that includes the inputs required to achieve this goals as variables and the elasticity parameters . * Calculate a global amount of resources needed but it doesn’t allow the analysis in detail and therefore it doesn't allow to generate detailed data for the budgeting and planning process. * It only allows the projection of a small number of sectors that have historic elasticity data to put together the productivity function. In the case of gender equality, this productivity function is very hard to build. * It is only possible to shape a small number of variables, leaving aside frequent investments that are important to achieve the goals that are being estimated. * These estimations don’t allow the guidance of planning; budgeting and resource allocation processes either.
  • 9. METHODOLOGICAL APPROACHES OF COSTING (II) Name of the Approach Purposes Limitations Estimates based on the average amount of single costs Calculating the investment needs required to close the gap in access or provision of public services taking into consideration the current expenses. * This approached is based on the current expenses. If there are any changes in the inputs required, the single costs are not useful to obtain the total costs. * Normally, the target population requires greater levels of investment in comparison with the ones already made. EXAMPLES Name of the experience Location Period Costed Policy or Action Evaluation of the cost of addressing domestic violence at a district level. Albania 2011 Gender-based Violence Costing of the National Plan of Action for Gender Based Violence for the Republic of Seychelles. Seychelles Ene.2010- Dic.2011 Gender-based Violence The price of protection: Costing the Implementation of the Domestic Violence Act in South Africa. South Africa 2005 Gender-based Violence Analysis of cots and possible impacts of different models of maternity and paternity leaves. Uruguay 2012-2013 Amplification of maternity and paternity leaves
  • 10. METHODOLOGICAL APPROACHES OF COSTING Estimates based on the average amount of single costs EXAMPLE: South Africa. Implementation of the Law Against Domestic Violence SOURCE: Lisa Vetten, Debbie Budlender and Vera Schneider (2005) Costing the Implementation of the Domestic Violence Act in South Africa
  • 11. METHODOLOGICAL APPROACHES OF COSTING (III) Name of the Approach Purposes Limitations Costs estimates of interventions based on the evaluation of needs It allows the calculation of the cost of carrying out certain interventions needed to reach the costing objective based on an evaluation of needs of the population regarding these interventions. These estimates provide detailed information on the resources necessary in terms of financing, infrastructure and human resources. Therefore, these estimates are useful in planning and budgeting processes. * Needs are estimated in a separated manner for each intervention, therefore, it is not possible to account for all synergies that have to be considered later on and build within the analysis of the sector. This makes of it a time and work consuming process. * The links with macroeconomic variables (such as inflation growth) have to be shaped in a separate manner because the model does not include them.
  • 12. METHODOLOGICAL APPROACHES OF COSTING Costs estimates of interventions based on the evaluation of needs EJEMPLOS: Costed Policy Name of the Experience Location Period Achievement of MDG 3 Costing of MDG 3 Belize 2010-2011 Costing of MDG 3 Ecuador 2007 Costing of MDG 3 Morocco 2005 Costing of MDG 3 Dominican Republic 2005 National Srategies for Gender Equality Costing of the Equal Opportunities National Plan of Bolivia Bolivia 2009 to date Costing analysis of the Jordanian National Strategy for Women Jordan Dic.2012 – Mar.2013 Assessment of financial resources for implementation of the National Action Plan (2012-2014) of the National Strategy of the Kyrgyz Republic for achieving of gender equality by 2020. Kyrgystan Sep.Oct. 2012 Costing the Agriculture Gender Strategy Costing the Agriculture Gender Strategy Rwanda 2011 EXAMPLES
  • 13. METHODOLOGICAL APPROACHES OF COSTING (IV) Name of the Approach Purposes Limitations Estimates developed using public planning and budgeting instruments It calculates the costs trough the definition of records of expenses associated with programmatic categories used in public planning and budgeting systems in each country. This makes it easier to directly incorporate interventions in annual operating plans and budgets of public institutions. * The definition of records of expenses associated with categories set by financial regulations in the countries limits the detail and the disaggregation that the information can have. * On the other hand, the amounts allocated that respond to budgeting criteria are often subject to rooftops of expenses established for public institutions and, therefore, they don’t necessarily reflect the necessary amounts but rather the “possible” amounts according to the macroeconomic environment of each country.
  • 14. METHODOLOGICAL APPROACHES OF COSTING Estimates developed using public planning and budgeting instruments Name of the Experience Location Period Costed Policy or Action Costing case studies of multidisciplinary packages of services to assist woman and girls victims of violence Asia Pacific 2012 Violence Budget costing of the Second National Plan of Gender Equality of Honduras (PIEGH) Honduras 2012 to date National Strategy for Gender Equality Costing National Plan of Prevention and Combat to Domestic Violence Mozambique 2008-2011 Violence EXAMPLES
  • 15. METHODOLOGICAL APPROACHES FOR COSTING Costs Estimates Based on ICOR Estimates based on inputs-results elasticity Estimates based on the Average of Single Costs Estimates of the cost of interventions based in the evalauation of needs. Estimates developed using instruments of publuc planning and budgeting Incorporation of interventions in public planning and budgeting
  • 16. COSTING METHODOLOGIES AND TOOLS Name of the Methodology or Tool Type of sectoral policy costed Methodological Approach Experiences where the methodology or tool has been applied MDG Gender Needs Assessment Tool MDG 3 and 7 strategic prioritary policies Estimates of costing on interventions based on the evaluation of needs. Belize, Bolivia and Dominican Republic (adapted) Gender Equality Costing Tool / Equal Opportunities National Plan of Bolivia Equal Opportunities National Plan of Bolivia Use of public budgeting and planning instruments Bolivia Methodology for the Second National Plan of Gender Equality of Honduras (II PIEGH) Equal Opportunities National Plan Use of public budgeting and planning instruments Honduras Methodology for costing of multidisciplinary packages of services to assist woman and girls victims of violence. Violence against women and girls Use of public budgeting and planning instruments Indonesia and Cambodia
  • 17. COSTING EXPERIENCES STAGES OF COSTING EXPERIENCES STAGE 1: Design of the costing exercise Definition of the policy or intervention to be costed (pertinence and social and political opportunity) Establishment of objectives to be achieved with costing and expected results (what do we want do do with the results obtained from the costing process). Mapping of available information. Establishment of strategic alliances with actors that participate of the process.
  • 18. COSTING EXPERIENCES STAGES OF COSTING EXPERIENCES STAGE 1: Design of the costing exercise STAGE 2: Development or adaptation of a costing tool or methodology Revision of methodologies and tools available. Analysis of its pertinence, adaptability, etc. Decision: Adaptation vs. Elaboration of new tool/methodology (Depending on the objectives, expected use of results, available information and alliances established as defined in Stage 1). Adaptation of the tool/methodology or elaboration of a new one.
  • 19. COSTING EXPERIENCES STAGES OF COSTING EXPERIENCES STAGE 1: Design of the costing exercise STAGE 2: Development or adaptation of a costing tool or methodology STAGE 3: The costing tool or methodology is applied Selection of inputs/actions that are necessary to carry out the policy or intervention that we want to cost. Application of the tool/methodology. Possibility of calculating cost but also benefit. Socialization and validation of results.
  • 20. COSTING EXPERIENCES STAGES OF COSTING EXPERIENCES STAGE 1: Design of the costing exercise STAGE 2: Development or adaptation of a costing tool or methodology STAGE 3: The costing tool or methodology is applied STAGE 4: Systematization of the process and dissemination of results Elaboration of report of results. Socialization and dissemination of the report. Systematization of the process and the tool/methodology.
  • 21. COSTING EXPERIENCES STAGES OF COSTING EXPERIENCES STAGE 1: Design of the costing exercise STAGE 2: Development or adaptation of a costing tool or methodology STAGE 3: The costing tool or methodology is applied STAGE 4: Systematization of the process and dissemination of results STAGE 5: Use of results •Incidence in laws, •Accountability in resources allocation •Incorporation in budgets •Mobilization of external support...
  • 22. FINAL CONCLUSIONS Costing exercises are processes that require of multiple elements to be completed: •Articulation with the context: Motivation •Straight definition of objectives and purposes. • Adequate strategic alliances. • Good knowledge of available information. • Technical handling of existing tools, capacity for their adaptation or for the formulation of new tools. • Have a validation process. • Systematization of results, process, methodology and diffusion. • Impact strategies for the use of results.
  • 23. THANK YOU!!! Raquel Coello Cremades raquelcoellocremades@hotmail.com Costing of policies and interventions for Gender equality Concepts, methodologies and practical experiences MORE INFORMATION…