Posted by Bryn Welham[1]
The Public Expenditure and Financial Accountability (PEFA) framework is the most frequently used diagnostic tool for assessing the effectiveness of public expenditure processes in developing countries. The PEFA Secretariat is holding public consultations on a gender module that would add up to 22 new indicators to assess whether public financial management (PFM) systems take sufficient account of gender issues.
Sustainable Development Goal #5 commits governments across the world to “achieve gender equality and empower all women and girls.” Public expenditure systems are critical for those same governments. We should therefore assess whether public expenditure systems are supporting gender equality. Right? Probably not. Overall, the proposed indicators put too much focus on narrow and technical public expenditure processes, rather than on the impact of broader public policy decisions.
Public policy goals, public policy making and PFM
Public policy goals related to gender are clear. As noted, governments have committed to delivering gender equality. Public policy making means considering how taxes, public expenditure, public services, laws and regulations, and institutional arrangements of government determine who gets what, when and how from the public sector. Together, public policy goals (what countries are trying to achieve) and public policy making (how government uses its range of tools to achieve these goals) are excellent candidates for strong and robust gender assessments.
Government PFM systems, by contrast, relate to a much narrower set of issues, namely how finance is raised, allocated, and accounted for in support of public policy making. These systems also focus on issues such as integrity and value for money in the use of public funds. They have little to say, however, about whether the government is aiming at the right ambition (public policy goal) or effectively coordinating its actions to achieve this goal (public policy making). As a result, the gender module in PEFA risks confusing PFM (something quite narrow and technical) with public policy and its outcomes (something much broader and – rightly – more political).
Conceptual and definitional challenges
Several indicators proposed by the PEFA Secretariat are particularly problematic. One asks whether all expenditure in the budget is classified as ‘gender-related’ or not. Another asks for government financial reports to (somehow) disaggregate all public revenue and expenditure by gender. These risk similar problems found in attempts in the early 2000s to try and track spending on ‘poverty-reducing’ expenditure. Such exercises can result in spurious figures leading to poor policy decisions.
The most useful proposed indicators relate to the disclosure of information. For example, does the government require its agencies to collect and analyse gender-disaggregated data; and does it use this kind of analysis to inform public policy decisions. This is where governments could usefully be held to account. Such information is certainly needed to inform good public policy. However, data gathering systems of this kind are not a core PFM process; they are instead a vital part of the public policy process.
The realities of PEFA assessments
The real-world politics of donor diagnostics raises another problem. A bad overall score on a PEFA assessment can cost a government a lot of money. This encourages governments to focus on doing what it takes to get a good score, rather than prioritizing measures that will significantly improve the management of public finances. There is already a risk of governments focusing on the ‘isomorphic mimicry’ of changing form rather than function in adopting new public finance systems. Many of the proposed indicators would further incentivise low-cost and low-value presentational changes, rather than deeper consideration of how public policy affects gender inequalities.
Mission creep is also a real risk. If gender budgeting assessments are a good idea, why not extend the concept to include other donor priorities (e.g., budgeting for poverty reduction, the mitigation of climate change, environmental improvements)? All of these issues are reflected in at least one SDG and no doubt PEFA could include modules for them as well. However, adding new areas that focus on the latest donor priorities will only dilute a country’s focus on PEFA’s core PFM functions.
Following the leaders?
Could developed country governments behaviour be a realistic guide to action? Recent publications from the OECD and the IMF on gender budgeting have noted similar findings – OECD/G7 countries use numerous tools to effectively consider gender in the public policy process, but they have done little to systematically develop specific gender PFM institutions. The IMF paper notes three areas where a gender focus has been used in PFM institutions: adding gender elements to performance-based budgeting indicators; gathering information on the impact of gender-related policies and expenditure, and (straying outside the scope of PFM institutions) encouraging finance ministries to play a leading role in coordinating gender issues across government policy-making.
A limited approach that adds a basic gender dimension to a small number of existing PFM institutions would reflect this global practice. In fact, PEFA already does this: the detailed scoring dimensions of the indicator on service delivery already asks whether gender information is taken into account. Amending existing indicators along these lines is the right approach. Adding an entire new module would misleadingly suggest that specific gender responsive PFM institutions are the ‘correct’ way to manage public money; and risk taking the emphasis away from what really matters: gender responsive public policy.
[1] Research Associate, Overseas Development Institute, London.
Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.
