Something Funny Happened on the Way to Reform Success: The Case of Budget Reform Implementation in Ghana

Abstract

The current article discusses experience with budgeting and financial management reforms in Ghana and is particularly focused on the development of the Medium Term Expenditure Framework (MTEF) between 1998 and 2002. Evidence shows that this reform began well but faltered after an initial period of progress. A number of factors are referenced in trying to explain why reform implementation was derailed, including reform ownership and political will, organizational integration and organizational incentives, and strategic capacity. All of these factors are commonly presented as influences on reform implementation. The Ghanaian experience provides detail as to how such influences could work.

The opinions expressed in this paper are those of the authors and do not necessarily reflect the positions or perspectives of the Overseas Development Institute or the World Bank.

Notes

The opinions expressed in this paper are those of the authors and do not necessarily reflect the positions or perspectives of the Overseas Development Institute or the World Bank.

1. Anipa, S.; Kaluma, F; Muggeridge, E. DFID Seminar on Best Practice in Public Expenditure Management Case Study MTEF in Malawi and Ghana, June 1999, 4.

2. Ibid, 4.

3. Beardon, H.; Yawson, D. Report of the advocacy workshop: Basic rights, equity and the public budget, held in Sunyani, Ghana from 14^th – 18^thAugust 2000, 6.

4. Armah, B. 2001. The Medium Term Expenditure Framework. A Case Study of Ghana. IEA Legislative Alert, October 2001, 3.

5. Armah, B., Medium Term Expenditure Framework, 5.

6. Anipa, S.; Kaluma, F; Muggeridge, E., Seminar on Best Practice, 14.

7. Anipa, S.; Kaluma, F; Muggeridge, E., Seminar on Best Practice, 19.

8. Nduom, P. K. Is the Ghana Poverty Reduction Strategy a Pro-Poor Strategy? Ghanaian Chronicle (Accra), October 8, 2002.

9. United Nations Development Programme. Participatory PRSP Takes Roots in Ghana. Wealth Creation and Equitable Development. UNDP: New York, 2002. Available at: www.undp-gha.org/pages/p_overview/ projects/porverty.htm.

10. Ghanaian Ministry of Finance. Budget Statement, Ministry of Finance: Accra, 1998; Available at: http://www.finance.gov.gh/sec6.html

11. Anipa, S.; Kaluma, F; Muggeridge, E., Seminar on Best Practice, 17.

12. See Holmes, M. Ghana Issues in MTEF. World Bank: Washington, D.C., 2000.

13. Oduro, K. N. Results-Based Oriented Public Expenditure System ofGhana, Unpublished Report. Overseas Development Institute: London, 2002.

14. See Holmes, Ghana Issues in MTEF.

15. Mini-CG Secretariat. Economic Aspects of Good Governance: Public Financial Management System. Paper prepared for the eleventh meeting of the Consultative Group for Ghana. Accra, April 8–10, 2002, 2.

16. Foster, M.; Zormelo, D. How, When and Why does Poverty get Budget Priority: Poverty Reduction Strategy and Public Expenditure in Ghana. Overseas Development Institute Working Paper 164, Overseas Development Institute: London, 2002, 9.

17. The Oxford Policy Management Group states that “little predictability seems to have been achieved in Ghana.” Oxford Policy Management Group. Medium Term Expenditure Frameworks—Panacea or Dangerous Distraction. OPM Review Paper 2, Oxford Policy Management Unit: Oxford, May 2000, 2.

18. Foster & Zormelo, How, When and Why, 9.

19. Armah, Medium Term Expenditure Framework, 3.

20. Armah, Medium Term Expenditure Framework, 5; Foster & Zormelo, How, when and why, 4.

21. Armah, Medium Term Expenditure Framework, 6.

22. Armah, Medium Term Expenditure Framework, 6.

23. This is one of the reasons that budget outcomes continued to be “significantly” out of line with the MTEF, even during the first year of implementation. Oxford Policy Management Group, op cit.

24. Foster & Zormelo How, When and Why, 4.

25. Oduro, Results-Based Oriented…

26. Ibid, 34.

27. Holmes, Ghana Issues in MTEF.

28. Anipa, S.; Kaluma, F; Muggeridge, E., Seminar on Best Practice, 23.

29. Ibid, 24.

30. Ibid, 25.

31. Ibid, 25.

32. Foster & Zormelo, How, When and Why, 25.

33. Ibid, 15.

34. Oduro, Results-Based Oriented…, 22.

35. Ibid, 41.

36. Ibid, 45.

37. The rapid dissipation could be related to the increased attention paid to the impending election process in 2001. The election had an impact on the budget and shows how political interest was subverted from reform: “Whatever the precise political dynamics, the picture which emerges and is supported by the evidence on actual spending patterns is one in which major shifts in prioritization did not occur, and macro-economic stability was periodically threatened by the growth of unaffordable commitments in the run up to elections” (Foster & Zormelo, How, When and Why, 25.)

38. Armah, Medium Term Expenditure Framework, 9.

39. Oxford Policy Management Group, OPM Review Paper, 3.

40. Anipa, S.; Kaluma, F; Muggeridge, E., Seminar on Best Practice, 25.

41. Oduro, Results-Based Oriented…, 44.

42. Foster & Zormelo, How, When and Why, 4.

43. Oduro, Results-Based Oriented…, 13. As a lesson from Ghanaian experience, Armah states that “institutions responsible for the formulation and articulation of national plans must work closely with the institution charged with budgetary allocations.” (Armah, Medium Term Expenditure Framework, 9).

44. Foster & Zormelo, How, When and Why, 5–6.

45. Oduro, Results-Based Oriented….

46. Foster & Zormelo, How, When and Why, 13.

47. Ibid.

48. Armah, Medium Term Expenditure Framework, 6.

49. Shah, A. Balance, accountability, and responsiveness: Lessons about decentralization. The World Bank Policy Research Working Paper Series, Paper 2021, Washington, D.C.: World Bank, December 1998, 7.

50. Beardon & Yawson, Basic Rights, 9.

51. Oduro, Results-Based Oriented….

52. Armah, Medium Term Expenditure Framework, 10.

53. Ghanaian Ministry of Finance. Budget Statement, Ministry of Finance: Accra, 2002, 2.

54. Oduro, Results-Based Oriented…, 42.

55. Ibid.

56. Foster & Zormelo, How, When and Why, 34.

57. Government of Ghana and Department for International Development. Joint Review of UK Support to PUFMARP, Final Report, London, February 2002, D2.

58. Armah, Medium Term Expenditure Framework, 4.

59. Ibid.

60. Foster & Zormelo, How, When and Why, x.

61. Ibid.

62. Ibid.

63. Artyeetey, Ernest, Jane Harrigan and Machiko Nissanke. Economic Reforms in Ghana: The Miracle and the Mirage. Africa World Press, Accra. 2000.