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Achieving Results: Performance Budgeting in the Least Developed Countries

This book is designed to address the challenges of Performance Budgeting in support of the Millennium Development Goals and in particular, how it applies to development issues in the Least Developed Countries. The United Nations Capital Development Fund supports the work of local governments in LDCs to plan, prioritize, implement and finance socio-economic infrastructure investments. UNCDF’s approach emphasizes achieving sustainability in the local development process through requiring the local planning, budgeting, management, and monitoring of public expenditures. This local public expenditure management is closely aligned to and integrated with national planning and budgeting systems. Thus, appropriate capacity and funding mechanisms are developed at both levels. UNCDF has learned that local revenue mobilization and increased central government transfers do not determine how the internal system of a local government manages this revenue, plans for development, converts these plans into expenditure programmes or allocates funds to deliver them. Performance Budgeting seeks to convert budgets from an ‘input-based’ to an ‘output-based’ format. This requires the preparation of local development plans and the integration of these plans into local government budgets. The underlying theme of Performance Budgeting is two-fold: first, it seeks to introduce accountability into the performance review, implementation and planning process. Secondly, it seeks to construct measurability through economy, efficiency and effectiveness tests. The goal of all Performance Budgeting is for local governments to be able to prepare and implement local development plans within national development frameworks. These plans should result from inclusive, participatory, multi-stakeholder processes and should result in durable, sustainable planning, management, and financing structures. That durability should be seen through locally sustainable and targeted infrastructure and service provision that contributes directly to the achievement of the Millennium Development Goals.

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