May 19, 2014Doug Hadden
Doug Hadden, VP Products
We hope to learn more about the new reality of Public Financial Management (PFM) innovation this week at the 28th. Annual International Consortium on Governmental Financial Management (ICGFM) conference in Miami. It has been many years since I spoke about the convergence of performance and transparency in government at an ICGFM conference. Much of this presentation, and the one I gave at the Financial Management Institute (FMI) conference in 2010, focused on futures. (Embedded below.) And, some of it seemed far-fetched.
The future is now
Transparency in government has accelerated. Aid, budget, procurement, and revenue data is available on line. New international transparency standards and proposed standards have been developed: Construction Sector Transparency(CoST), Extractive Industries Transparency Initiative (EITI), International Aid Transparency Initiation (IATI) and Open Contracting. The global transparency march has been helped by the Open Government Partnership (OGP). NGOs have developed transparency and governance indexes and tools: International Budget Partnership, PEFA Secretariat and Revenue Watch.
The most valuable aspect of government transparency is closing the performance loop. Performance management in the private sector is difficult. But, private companies have a bottom line: profit. Businesses managing by using improper performance measures are quickly out of business.
Government has no objective bottom line measurement. Public servants derive output and outcome measurements. These measurements can be wrong – far wrong – because there has been no objective validation method. Even elections are poor indications of government performance because it’s an evaluation of all programs in aggregate.
This is where transparency comes to the rescue. Citizen and civil society feedback creates a cadre of citizen auditors. This helps eliminate false positives and false negatives in government performance evaluation.
Governments harness the power of citizen crowds across the performance cycle, from participatory budgeting to government results. (Timor)
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