State Programs Could not Become an Effective Tool in Achieving Strategic Priorities

8 december 2017 |

Marina Paladich, the expert of the Analytical Center, told the Budget Journal about the consistent problems of budgeting the programs.

Marina Paladich
Marina Paladich
Department for State-Run Programs and Budgeting

Program-based budgeting system has been launched in the Subjects of the Russian Federation a few years ago, but it is obvious that state programs have not yet turned into an effective tool for making budgeting decisions and achieving strategic priorities.

Despite the variety of regional approaches to preparation and management of the state programs, a number of system-wide problems can be identified that are more or less typical in most Subjects. A fairly common problem in the regions is a weak interdepartmental interaction and, as a consequence, the use of a departmental approach in the development of state programs. Today, the number of state programs adopted in the regions is amazing. Some Subjects have more than 40. Regions develop separate state programs on veterinary medicine, relations with religious organizations, and other narrow areas of activity. Such state programs consist mainly of several main activities exercised by one public treasurer in the course of his or her daily operations.

By ignoring the need of interdepartmental interaction within the framework of state programs, regions deprive themselves of the advantages of a systematic approach to this tool including coordination and cooperation of resources in achieving common strategic goals, among other things. In addition, even a part of the state programs developed on a departmental basis completely blocks the possibility of using the assessment of efficiency of adopted state programs as a tool for making informed decisions when redistributing budget appropriations.

At the same time, compulsory consolidation of executive authorities horizontally is not a cure-all solution and threatens with many new complications and disagreements in the course of implementing state programs. In this regard, the practice of Moscow and the Moscow region is of interest, where the coordinator of the state program responsible for its development and implementation is appointed from amongst the deputies of the mayor (governor). As a rule, escalation of issues to the level of the top management of the region greatly contributes to the prompt elimination of the arising disagreements.

Unfortunately, the poor quality of preparation of state programs still remains a pressing problem. That is the lack of interrelation between the main parameters: goals, objectives, indicators, and system of activities implemented under the state programs.

The following example gives a vivid illustration of the situation at hand. Sub-program of the state program to promote employment in one of the Subjects with the only indicator specified as "Ratio of employed citizens in the total number of citizens applying for the outplacement" has three main activities.

However, the only one of those is directly related to meeting the goals and indicators of the state program. The other two activities are aimed at payment of remunerations to those included in the Roll of Honor in the Subject, and payments to citizens who voluntarily handed over weapons, ammunition, and explosives. Obviously, there is no relation between the increase in the number of employed persons and the implementation of the two above-mentioned activities. Such cases make it impossible to make a reliable assessment of the effectiveness of the key activities, and as a result it is impossible to integrate such an assessment into the budgeting process. Such inconsistencies are largely due not so much to the misunderstanding of the Management by Objectives principle or the gaps in the regulatory system by regions, but rather to the general formal approaches to development of state programs and the weak link of the due diligence.

It is not uncommon for the activities under state programs to be implemented with a socially significant effect and be consistent with the target indicators, but neither of them correlate with the goals and objectives of state programs established in accordance with the regional strategic planning documents. Moreover, such inconsistencies are found in those Subjects, which can be called successful in developing and implementing the state programs. These cases point to the weakness of the regional strategic planning in general and mistaken choice of priorities.

Priorities in development of Subjects reflected in social and economic regional strategies are often determined based on the courses of development engineered on a federal level. At the same time, the objective situation in the region itself is close to neglected. A clear and comprehensive understanding of the real problems is possible only after establishing a constructive dialog between the public and the government by transforming the institution of a public debate from bureaucratic formality into an efficient tool of prioritizing.

A number of Subjects have a positive experience of including the public opinion in development of strategic planning documents. Indeed, the Strategy of Social and Economic Development of the Leningrad Region until 2030 was developed by engaging of a wide range of economic entities as well as the results of a large-scale survey of the regional population.

Read more in the Budget Journal.