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PublicInvestmentManagement(PIM)

For

Investing

to

Capably

Invest

JayHyung Kim

WorldBank,

PRMPS

ICGFMWinterConference,WashingtonDC

December911,2013

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Outline

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WhyPublicInvestmentManagement(PIM)Matters?

EightMustHaveFeaturesforPIM:ADiagnosticTool

TheBanksPIMAgendaforInvestingtoCapablyInvest

FindingsfromPIMCountryDiagnoses

Tradeoffs

and

Sequence:

Strengthen

Appraisal

or

ImplementationFirst?

LessonsforPIMReforms

ComingSoon:ANewPIMIndicatorDrillDown(PIMforPPP)

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WhyPublicInvestmentManagement(PIM)Matters?

3

Publicinvestmentisjustifiedbyitsexpectedpositiveeffecton

economicgrowthandsocialwelfare.

Butthe

efficiency

of

public

investment

depends

on

the

effectivenessofPublicInvestmentManagement(PIM)which is

oftenweak.

PIMDiagnosticToolisaWBGproductthatanalyzesand

providesaplatform

for

country

dialogue

on

how

public

investmentmanagementcancontributetopolicyobjectives

anddevelopmentoutcomes.

OnceyoulearnthePIMDiagnosticTool,youwillbeableto:

Identifykey

aspects

of

eight

must

have

features

to

awell

functioningPIMsystem;

DescribekeyinitiativesandentrypointsforPIMreformin

developingcountries.

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EightMustHaveFeaturesforPIM:ADiagnosticTool

Source:

Rajaram,

Anand,

et

al.

(2010),

'Framework

for

Reviewing

Public

Investment

Efficiency',

WorldBankPolicyWorkingPaper,No.5397(August)),17.

Eightspecificfeaturesprovideadegreeofassurancethatthereareno

systemicloopholesthatwouldenablewastefulorcorruptdecisions.

Theyareconsideredtobemusthavefeatures,notwiththeintention

ofestablishingagoldstandardbuttoprovidealogicalandinternally

consistentsystem

that

even

alow

capacity

country

should

try

to

follow

toestablishbasicdisciplinesforprojectselectionandmanagement.

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TheBanksPIMAgendaforInvestingtoCapablyInvest

DiagnosticTool Policy Dialogue OperationalAssistanceQualitativeAssessmentTool:

PIMMust

Have

Features

QuantitativeAssessmentTool:

PIMIndicatorDrillDown

Identifyingneeds,

validation,peer to

peer

learning

Conferences

DiagnosticOperations

TechnicalAssistance

Operations

QualitativeAssessmentTool(PIMMustHaveFeatures):

Brazil/Chile/China/EastTimor/EquatorialGuinea/Korea/Latin

America/Lesotho/Mongolia/Nigeria/Peru/SierraLeone/Uganda/USA

/Vietnam/WestBalkans/Zambia/Zimbabwe(completed)

QuantitativeAssessmentTool(PIMIndicatorDrillDown):Cape

Verde/Ukraine(completed),Georgia/Jamaica/Thailand/Vietnam

(ongoing)

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Advanced PIM Countries

Strengthening appraisal

Establishing clearexpectations of newproject proposals

Building capacity across

government in thetechniques of projectappraisal

Independent reviews

Fully costed sector strategies

integrated with MTEF

Transparency

FindingsfromPIMCountryDiagnoses

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LessDevelopedPIMsystems

Strengtheningprojectplanning

Strategicguidance

Mediumtermorientation

Projectpreparation

Projectappraisal(costbenefitanalysis,otherappraisalanalyses)

Procurementreform

Internalandexternalaudit

AdvancedPIMCountries

Strengtheningappraisal

Establishingclearexpectations

ofnewprojectproposals

Buildingcapacityacross

governmentinthetechniques

of

project

appraisal Independentreviews

Demandsidestrengthening

Centerofexcellence

Transparency

FindingsfromPIMCountryDiagnoses

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AidDependentCountries

Strengtheningproject

implementation

Centralizedcapacityfor

procurementreform

Contractingoutof

capacity

Rationalizingand

reducingthenumberof

publicinvestmentunits

Improvingqualityof

nationalstrategic

plans

LessDevelopedPIMsystems

Strengtheningprojectplanning

Strategicguidance

Mediumtermorientation

Projectpreparation

Projectappraisal(costbenefitanalysis,otherappraisalanalyses)

Procurementreform

Internalandexternalaudit

AdvancedPIMCountries

Strengtheningappraisal

Establishingclearexpectations

ofnewprojectproposals

Buildingcapacityacross

governmentinthetechniques

of

project

appraisal Independentreviews

Demandsidestrengthening

Centerofexcellence

Transparency

FindingsfromPIMCountryDiagnoses

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Trade

offs

and

Sequence:

StrengthenAppraisalorImplementationFirst?

Reducingthenumberofpoorprojectsselectedforfunding

Improvingprojectexecutionmaygenerategreaterandfaster

benefits

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LessonsforPIMReforms

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Ownershipofassessmentisimportant.

Often,butnotalwaysMinistryofFinance(MoF)atthecenterofprocess

Developstheframeworkforinvestmentdecisionandhasoversightcontrolofpublicinvestment

Clarityof

roles

and

responsibilities

is

crucial

for

effective

PIM.

Coordinationacrosssectorsandlevelsofgovernment

TheroleofcentralguidelinesareaparticularlycriticalaspectofawellfunctioningPIM.

Monitoring

is

important

for

early

remedial

action. FinancialManagementInformationSystem(FMIS)

PublicTransparency&Accountability

PIMreformsareincentivecompatible.

Basedonasoundunderstandingofandtailoredtofitindividualcountrytrajectories,

circumstances

and

practices

Technicallyfeasible,relyingongoodenoughpractice

Carefullydesignedandsequenced

WellfunctioningPEMandbudgetingsystem,PPPandSOEgovernance,anddebt

managementsystem

are

also

important.

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ComingSoon:ANewPIMIndicatorDrillDown(PIMforPPP)

AnewPIMIndicatorDrillDown(PIMforPPP)isrecentlydevelopedby

PRMPStoprovideaunifiedframeworkforintegratingbothtraditional

governmentprojectimplementationandPPP.

Mostcountrieshavebeenmanagingpublicprivatepartnership(PPP)

projectsseparatelyfromtraditionalgovernmentprojects.

A principalkeytoinitiatingPPPprojectsistoestablishwhethera

governmentcanmaintainthesameleveloffiscalefficiencyand

sustainabilitythroughPPPsasthroughconventionalmeansof

implementation.

ThePIMforPPPtooldevelopsnewindicatorsandmeansofverificationto

assesstheeightmusthavefeaturesofPPPsystems,processes,and

institutions.

ThePIMforPPPtoolhelpsgovernmentsputinplacetheunifiedapproachfor

publicinvestmentthatenablesthemtoselectthepublicinvestmentoptionthat

deliversthebestvalueformoney,whetherbytraditionalbudgetfinancingor

PPP.

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ThankYou

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