Framework for Analyzing Public Investment Management
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Framework for Analyzing Public Investment Management

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Tuan Minh Le

Tuan Minh Le

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Framework for Analyzing Public Investment Management Framework for Analyzing Public Investment Management Presentation Transcript

  • Framework for Analyzing Public Investment Management Tuan Minh Le Presented at ICGFM Winter Conference Washington D.C. December 6, 2011 1
  • Performance benchmarking Source: CoST (2011b:3) 2
  • Pinpointing PIM problems Well Executed Poorly ExecutedGood Projects A CPoor Projects B D 3
  • A Framework for assessing PIM• Two pillars of the approach – Desirable features of well-functioning system in 8 cycles – Diagnostic Indicators to assess actual system• Focus on how to inform reform design to enhance efficiency by Gap-Analysis Desirable Institutional Gap Actual Functioning Features Analysis Diagnostic Indicators 4
  • The eight “must-have” core PIM features Project Detailed project development design 1 2 3 4 5 6 7 8 - Guidance Formal Appraisal Project Implement Project Service Project & Project Review Selection ation Changes Delivery Evaluation Screening Appraisal & Budgeting Basic completion review Pre-feasibility Evaluation Feasibility CE CBA Regulatory requirements 5
  • 1. Investment guidance & preliminary screening6 • Existence of credible strategic guidance to PI – National Plan, PRSP, Long-term Vision document – Supplemented by a sector or sub-sector level strategy  Realism of strategy relative to available resources? • Established process of first-level screening – Basic consistency with government policy and strategic guidance – Centralized or delegated approval justification  What portion of projects screened are rejected?
  • 2. Formal Project Appraisal7 • Existence of well publicized and transparent appraisal guideline – Larger projects requiring more rigorous tests of financial and economic feasibility and sustainability  Quality of guidance? Rate of rejection? • Capacity of staff with project evaluation skills – An established process for training staff in project evaluation technique  Number of staff with evaluation skills?
  • 3. Independent Review of Appraisal8 • Independent peer review might be necessary to check any subjective, self-serving bias • Clarity of specific responsibilities – A multiplicity of players with unclear accountabilities can overburden the appraisal system  A formal delegation allowing central appraisal system to review appraisal of relatively important projects
  • 4. Project Selection and Budgeting9 • Transparent criteria for selecting projects • Appraisal process is linked to the budget cycle – Maintaining an inventory of appraised projects – Clear requirements for consideration of O&M • Ensuring adequate financing for selected projects – Multi-year budget allocation system  Evidence of under-funding, large stock of uncompleted projects? • Effective gate-keeping – Only appraised and approved projects are selected for budget financing, except for emergency reason  Percentage of projects evaded established process?
  • 5. Project Implementation10 • Published guideline for project implementation • Clear organizational arrangements and a realistic timetable to ensure the capacity to implement  Sample of project delays in implementation? • Cost-effective procurement and contracting  Portion of competitive project tendering? • A system to prevent imprudent cost-increase in implementation  Estimates of cost overruns on major projects by specific sector? Percentage of cost overrun on major projects?
  • 6. Project Adjustment11 • Flexibility to allow changes in disbursement plan according to changed circumstances • Active monitoring and periodic progress reporting – Updated cost and benefit  Requirement for updating project documents during construction? • Mechanisms to stop projects with negative marginal benefits  Example of projects cancelled or closed on the account of changed net benefits?
  • 12 7,8. Facility Operation & Ex-post Evaluation • Asset registers need to be maintained, and asset values recorded  Evidence that complete asset registers maintained? • Ex-post Evaluation of completed projects – Focus on the comparison of the outputs and outcomes with the established objectives in project design – Feedback to improve future project design and implementation  Evidence of response to the evaluation findings?
  • Selected ReferencesRajaram, Anand, Tuan Minh Le, Nataliya Biletska, and JamesBrumby. 2010, A Diagnostic Framework for Assessing PublicInvestment Management, World Bank Working Paper 5397,August 2010.Construction Sector Transparency Initiative. 2011. Reporton baseline studies: International comparison. January2011. 13