and agreements with donors for financial and technical support. Table 2 summarizes along various dimensions the main differences between the currently dominant and proposed new approach to public expenditure work. It would be important to ensure that the use of modules does not fragment assessment work and thus run directly counter to the basic idea of integration.

Table 2: Alternative approaches to public expenditure diagnostics and reform

Table 2: (continued)

Current approach

New approach

Reform strategy Donor determined; feasibility externally assessed, frequently ignoring limits of political economy. Client may object to some recommendations on feasibility grounds, but donors may counter with pressure for tough measures.

Follow-up Technical advice through loans,

grants, trust funds, or staff time; frequently stand-alone operations. Loan conditionality, including triggers for release of aid funds.

Participation Disconnected participation of

power ministries, line ministries, as report scope dictates; may involve civil society. Frequently focuses on technical staff, and Ministry of Finance as primary counterpart; frequently leaves out policy officials, or cabinet as collective decision-making body.

Donor Through participation in report

coordination production, or commenting on

report; or separate donor

coordination group.

Country specified; feasibility inherent in government priority and strategy setting.

Country determined; donor support provided where country requests; donors can evaluate success or progress through annual process. May feed into investment loan conditionality or trust-fund financed support, but as requested by government.

Government-wide through budget process (e.g., core ministries and sector ministries); encompassing policy officials (via cabinet or equivalent as a collective entity), and line staff. May involve civil society dialogue.

Through participation in process; ascribing to outcome of government-led process.

Note: The authors are grateful to Bill Dorotinsky, World Bank, for suggesting and preparing this table.

The goal of integrated assessments could be achieved by using the modules to prepare a standardized overview of public expenditure management issues-one that brings together relevant technical analysis and is seen by donors as a comprehensive assessment of the environment in which they are providing budget support. Standardized assessment overviews would be equally valuable to recipient countries, providing authoritative information on strengths and weaknesses in public expenditure management and a foundation on which to develop and implement action plans for reforming

legal and institutional structures and building capacity. Standardized assessments could be updated periodically and could also include performance indicators, like those in HIPC AAPs, that could be monitored.

Under such an approach existing fiduciary assessments (through PERs, CFAAs, CPAR, and Fiscal ROSCs) would be replaced by streams of work- part diagnostic, part capacity building-tailored to country requirements, sequenced over time, and satisfying donors fiduciary requirements. To illustrate: a countrys five-year strategy for public expenditure management might include, in addition to preparing and regularly updating a standardized assessment, assistance from the Bank, IMF, or other donors in conducting a detailed assessment of accounting and audit in the first year of the strategy and of procurement practices in the second, advice on establishing a modern treasury and financial management information system and a review of institutional and governance issues in the first or second year, assistance in strengthening the management of government financial and personnel records in the first to third years, and assistance in training finance officials in the second to fifth years.

In developing this new programmatic approach, many important issues will need to be addressed, including:

The scope and nature of the approach and of the standardized assessment overview, and their relationship with existing instruments and approaches.

The extent to which the scope and content of the data collected and analyzed would be standardized or tailored to country circumstances and requirements, and the frequency of data collection.

The agreements under which donors would collaborate in providing information and analysis-for example, the relationship between the Banks work on budget execution (through CFAAs and CPARs) and EC compliance tests.

How the transition to the programmatic and modular approach would be designed and managed.

The operational, budget, and staffing implications of the approach for the Bank and other development agencies, and how these should be managed.

The strategy and modalities for disseminating information on the new instruments, operational procedures, and assessment reports to governments, donors, and other stakeholders.