“New Public Management” Principles in Fighting Corruption and Improving Government Services (ENG)

“New Public Management” Principles in Fighting Corruption and Improving Government Services

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(Cases of Russia and Kazakhstan)

Batumi, September 2011

Galina Kurlyandskaya (Russia)

20/1 Tverskaya Str. Moscow 125009 Russia Tel. +7(495) 775-5100, Fax +7(495) 775-5180 [email protected] www.fpcenter.ru

Government Expenditures as a Source of Corruption

Expenditure procedures are the major source of government corruption and leakage of public funds.

This happens when government officials:

• procure private goods and services

• allocate funds across government agencies (ministries)

• allocate funds across government spending institutions

• allocate intergovernmental transfers across sub-national governments


“New Public Management”: Major Principles in Public Spending

Russia Kazakhstan

Formula-based intergovernmental fiscal transfers

Introduced Introduced

Open competition for contracts in public procurement

Introduced Introduced

Performance budgeting of spending institutions

In progress

In progress

Program budgeting of government agencies

In progress

In progress

Autonomy of government spending institutions

In progress

In progress


Performance Budgeting of Spending Institutions

Opportunities Challenges

• Budgeting for quantity and quality of public services and not for keeping spending institutions afloat

• Provision of fair access to guaranteed social services

• Clear distinction between guaranteed “free” and optional “paid” services

• Disclosure of information on peoples’ rights to free public services (their quantity and quality)

• Disclosure of information on government spending institutions

• Competition for government funding on the side of government institutions

• How to involve citizens in monitoring performance of government institutions?

• How to secure unified standards of public goods across the entire country?

• How to cost public services?

• How to choose proper performance indicators (both quantitative and qualitative)?

• How to overcome the resistance of public entities that would prefer not to disclose information and not to compete for government funding?


Program Budgeting


• Budget planning is based on strategic development plans of the government

• The goals for government spending programs are transparent and measurable

• The results of government spending programs are transparent and measurable

• How to make government agencies interested in program budgeting?

• How to make programs’ administrators accountable not so before the prime-minister as before citizens?

• How to make citizens being involved into the monitoring of government programs?

• How to cost government programs?


Autonomy of Government Spending Institutions


• Quasi-contracts with spending institutions for service delivery

• Lump-sum and per service funding of spending institutions

• Responsibility of spending institutions for performance indicators

• Increased efficiency and effectiveness of public spending

• Competition for clients

• Revenues from paid services stay with the institution for development purposes

• How to set general funding norms for similar institutions?

• How to guarantee that government funding is sufficient for the institution to follow the prescribed standards?

• How to introduce competition for government funding between government and private institutions?


Formula-based Intergovernmental Fiscal Transfers


• Streamlined allocation of intergovernmental transfers

• Reduced corruptive “intergovernmental negotiations”

• Guaranteed minimal funding of sub-national government services

• How to simplify and render transparent the transfer allocation formula?

• How to keep the transfer allocation formula unchanged over time?

• How to formalize the allocation of all the different kinds of transfers?


Tender Mechanisms in Government Procurement


• Transparent procurement procedures

• Higher efficiency of government spending

• Prevention of fraud, waste, corruption and local protectionism

• Fair opportunities for suppliers

• Non-discrimination against the goods, services or suppliers

• How to avoid dumping?

• How to receive the real value for money?

• How to deal with preferences to local producers?

• How to combine transparency and flexibility to meet government ‘s urgent (unplanned for) needs?


Thank you

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“New Public Management” Principles in Fighting Corruption and Improving Government Services (ENG)