Costing PRSPs Based on Human Rights How much will it cost and who is going to pay

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Costing PRSPs Based on Human RightsHow much will
it cost and who is going to pay?
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Budgets as Strategy

• PRSP concerned with the reprioritisation of
  budgets
• Budgets are instruments by which governments
  (and other agencies) raise and allocate financial
  resources
• The means by which governments provide for (or
  neglect) basic necessities relating to ESC rights
• A political statement of priorities and
  trade-offs
• MTEF are a record of planning and sequencing
  decisions
• Issue-based budgets include Childrens Budgets
  and Womens Budgets

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Steps in Formulating a Human Rights PRSP

• Determine which ESC rights constitute extreme
  poverty when not protected, respected or
  fulfilled, and quantify the extent to which this
  occurs
• Determine an inventory of interventions required
  to ensure that ESC rights are protected,
  respected or fulfilled
• Determine the resources required for these
  interventions and assess the resources available
  in the short, medium and long terms from national
  and international sources
• Determine the steps that are possible to move
  progressively toward this given the resource base
• Cost these steps and assess their implications
  against economic principles
• Develop remedial actions

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Steps in Resourcing a Human Rights PRSP

• Identify the duty-bearers and claim-holders
  involved
• Allocate responsibilities to the duty-bearers
• Negotiate adherence to these obligations
• Identify competing uses for resources
• Negotiate reassignment of resources to
  claim-holders
• Develop and agree to a time-based budget (MTEF)
• Transfer of resources to implementing agencies
• Implementation
• Monitoring, evaluation and redesign

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Implications

• Progressive realization a methodic, irreversible
  movement forward toward the fulfillment of those
  rights
• Might there be an optimal sequencing?
• Governments may not take deliberate steps
  backwards in the provision of these rights
• Does this mean that government are compelled to
  disregard advice that might hinder ESC rights?
• Governments must make full use of the maximum
  resources available
• Can ESC rights be displaced in the short run by
  policies that increase the resource base in the
  longer term?
• Can governments discriminate on the basis of
  ability to pay?
• Do these obligations also apply to IFI and the
  international community?

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Economic, Social Cultural Human Rights

• Governments obliged to use available resources to
  achieve ESC rights objectives
• Even if this means redistribution?
• PRSPs represent a global partnership to reduce
  poverty
• International agencies, as PRSP partners, thus
  obliged to assist governments in this regard
• Even if this means providing more resources?
• And choosing between sound social justice and
  sound economics?

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HRP- PRSP Budgeting Options
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Option 1 Medium Term Expenditure Framework (MTEF)

• ? MTEF operation involves two steps
• A top-down estimate of the resources
  available for public expenditure.
• 2. The second step comprises bottom-up
  estimations of the cost of carrying out the
  existing and desired policies of the government.
  

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• ? Positive Aspects of MTEF
• To provide planning and budgeting information as
  a prospective basis.
• MTEF can link Governments priorities, the
  budgetary process and the expectations of a human
  right approach to make the choices of decision
  makers in the budget process more apparent and to
  make the desired outcomes more visible.
• being a rolling process that is repeated every
  year.
• ? Negative aspects of MTEF

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Option 2 Micro-Simulation Models

• Micro-simulation models The models may be static
  or dynamic
• 1) Static model only looks at the
  instant effects of a change in circumstances
  while dynamic models consider how variables may
  change and compound trends over time.
• 2) Dynamic models are more
  complicated and rely on more variables and of
  course more data if they are to be effective.

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• ? Positive aspects
• To assist decision making by predicting the
  implications of alternative policy options.
• To evaluate changes in virtual system that
  simulates the behaviour of the real world.
• ? Negative aspects
• Dynamic micro-simulation models, that consider
  how variables may change and compound trends over
  time, are very complicated and rely on more
  variables and of course more data if they are to
  be effective.

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Political Constraints on Resources

• Treaties not ratified
• Governments disinclined to accept duties
• International community disinclined to accept
  duties
• Governments disinclined to involve civil society
  in budget process
• Political will and capacity to engage with
  internal and external distributional struggles
• Relative political power of the direct and
  indirect tax base
• Anti-democratic nature of budget decisions
  decided by external institutions
• Underlying political and economic stability
• Elite capture, rent seeking and corruption
• The involvement of the excluded and adversely
  included

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Technical Constraints on Resources

• Existing complexity of PRSP costing
• Complexity of the budget
• Different definitions and allocation procedures
• Unreliable, inappropriate and inaccurate
  indictors of the status of ESC rights
• Unobserved conditionalities
• Intra-country inequalities
• Indivisibility vs. prioritisation and sequencing
• Temporal trade-offs
• Assessing compensation for structural adjustment
• Unintended consequences when litigation drives
  policy and strategy formulation
• Capacity to spend

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PRSP Constraints on Resources

• Progress has been slow in most countries
• Only a marginal increase in the openness to civil
  society participation in public policy making
• Only modest improvements in pro-poor policy
  formulation
• Donors not much more likely to harmonise aid with
  national priorities, or with one another
• Donors and the IFIs impose the conditions of
  structural adjustment with scant regard for
  national ownership
• The lack of resources for achieving the goals set
  out in the PRSP
• Erosion of developing country good-will

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Some Ideas for Developing Countries

• Use the MDGs for advocacy though not as a panacea
• Support for the analysis of budgets and public
  expenditure, especially the use of Medium Term
  Expenditure Frameworks (MTEF)
• Support for participatory budget processes
• Support for the analysis of monetary policy
• Apply methodologies developed for issue-based
  budgeting to ESC rights budgeting
• Use of costing models and micro-simulations to
  test the impact of alternative policies and
  assess the their consequences from a human rights
  perspective

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Some More Ideas for Developed Countries

• Involve national and international civil budgets
  movements
• Examine obligations and culpabilities of national
  agents
• Preparation of an ESC rights report card for
  developing country governments (Peer Review
  Mechanism)
• Develop an international data bank on the
  economic costs of PRSP
• Involve national and international civil budgets
  movements
• Examine the consequences of economic policies in
  developed countries for developing countries
  (including China and India)
• Examine obligations and culpabilities of
  international agents?
• Preparation of an ESC rights report card for
  developed country governments and international
  agencies

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Thank YouMerci
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• How convenient to wed the rediscovery of poverty
  to mal governance! This blame-the-victim approach
  shifted attention away from the economic model
  which in fact produces poverty and facilitates
  corruption. What is more, assuming a hypocritical
  defense of civil society demands for
  participation, the Bretton Woods institutions
  devised the Poverty Reduction processes which in
  effect increased the power of the multilateral
  institutions over national governments and
  national economies.
• Bendana (2002)

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COSTING THE PRSP

• Lessons from Country Case-Studies
• Kasirim Nwuke, ECA

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Some Lessons

• Countries are struggling with the problem of
  costing their PRSP. Some (e.g. Kenya) have not
  done so the PRSP
• Those (Zambia, Ethiopia) that have attempted to
  cost the program have done so iteratively
• It appears that this was not done systematically
  the emergence of a large resource gap appears to
  be the impetus for downward revisions in
  estimated financing needs
• The domestic resource mobilization assumptions
  are weak and the goals of increased domestic
  revenue mobilization unlikely to be met

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Some (Tentative) Conclusions

• The weak domestic resource base implies enhanced
  scope for donor support and perhaps for donor
  conditionalities
• Progress towards poverty reduction is unlikely as
  a consequence to be fairly rapid
• If PRSs are to be indeed country-driven and
  country-owned, they must be realistically costed,
  projects must be duely ranked and the ranking
  then should influence the content of the PRSP
  itself
• The costing problems arise either as an incentive
  problem (the amount of debt relief) or a capacity
  problem (countries lack costing capacity) or
  both.