Posted by Pasquale Lucio Scandizzo and Mauro Napodano
Public Investment Management has become a cornerstone in the budget reform of many developing and transition countries. The emphasis on management is a consequence of the recent importance of fiscal space earmarked for public investments as engine of growth.
A new book ‘Public Investment Management: Linking Global Trends to National Experiences', by Pasquale Scandizzo and Mauro Napodano (*), analyzes general methodologies and best practices in this field both at the macro and the project level. The book originates from a study performed for the Ministry of Finance of the Government of Brazil, on behalf of the International Bank for Reconstruction and Development. The study, which lasted two years, was conducted both for Brazil and for a sample of advanced countries.
The main underlying theme of the study is the attempt of most countries to “put the management in charge” in order to pursue efficiency by rendering as flexible as possible public investment responses to the unforeseen changes in the environment, in a world where uncertainty and irreversibility dominate. The study looks at this attempt, by focusing on the following intermediate goals:- Empower managers by moving away from ex-ante controls, while increasing accountability through continuous monitoring and evaluation of performance.
- Make project design more flexible through modularity and sequencing
- Assess projects not as a product but as a process of value creation, and as a part of an overall national policy strategy, and
- Introduce a medium term expenditure framework to lengthen the public financial commitments and ensure financial predictability in the budget process.
The book is structured in three sections. Section A presents an essay on the global trends on public investment management. It includes a review of past and present evaluation techniques and the evolution of the legal framework in public-private partnership as alternative to public capital expenditures. Public investment management in the European Union and five countries is also analyzed. Section B compares the different approaches adopted by a few countries to implement the indications of PIM global trends in their national context. It suggests that upgrading PIM functions towards improved performance management should be a priority for those countries which either can claim or want to pursue a sound planning system. Section C presents a checklist of issues that Government in upper middle-income emerging countries could consider in their reform process to strengthen the management of public investment both at the macro and the micro level. The issues discussed in this section are based on international best practices, which in turn are reviewed on the basis of the analysis of the Brazilian PIM system and its perceived strengthening needs.
(*) About the authors: Pasquale Lucio Scandizzo is Professor of Economic Policy and Director of the Center for Economic International Studies (CEIS) at the University of Rome ‘Tor Vergata’. Mauro Napodano is an international consultant on Public Expenditure Management and the founder of the PFM Board, an online community of practice on Public Financial Management (www.PFMBoard.com ).
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