Taking Stock of Performance Budgeting reforms in Malaysia
An informative overview of budget reforms in Malaysia.
Few ministries of finance have developed the procedures within the annual budget cycle to systematically evaluate performance across government and to take action on it. Lessons from more than two decades of PBB worldwide suggest that senior decision-makers can only act on a limited number of performance related issues and that such interventions need to be strategic. Finance ministries are constantly challenged to manage the volume and quality of information that comprehensive, government-wide PBB can generate each year. For the line ministries that must generate the reports, the incentives to take such reporting seriously diminishes over time if there are few consequences to non-compliance. International experience suggests that performance management may be more impactful when it goes beyond the tight deadlines of the annual budget cycle and targets a selective number of policy areas. The actual number should be consistent with the absorptive and technical capacity of the administration to manage.
For Discussion: See the accompanying blog post and comment on the lessons of other countries that can be drawn from the Malaysian experience.
In Malaysia, some first steps to improve performance-based budgeting have already been taken. The National Budget Office hosted a roundtable discussion with line ministries, think tanks, academic institutions, and international experts in August. This offered an opportunity for officials from across the public administration to consider some of the lessons and challenges to assessing performance.
While one meeting is insufficient to agree on a new direction, participants did agree that improving the quality of spending should be a priority and that by working together it is possible to develop a more performance-oriented culture for national budgeting.
The new year provides an opportunity to think strategically about the 2020 budget process so that it contributes to transformations in public services for the benefit of all citizens. For Malaysia and other countries, this is an important first step to a better future.
Related from the Report:
