ICTs for Government Transparency

In the Case Studies section

eTransparency Case Study No.14

Laying Foundations for Transparency of Development Project Finances in a South Asian Ministry of Planning

Case Study Authors

Anonymous

Application

A South Asian Ministry of Planning has introduced an information system to make financial information about its development projects more manageable, laying the foundations for later transparency. System design began in 2001 and the system became usable late in 2002.

Application Description

Like all developing countries, this South Asian nation has a large number of development programmes, each one consisting of many development projects funded partly from government revenue and partly from donor funds. Each year, the government must prepare a Yearly Development Plan (YDP). The YDP process begins with calls to the various parts of government for development project suggestions; then proceeds to central decisions about which projects are to be funded; then creates a budget for all projects; and finally has an ongoing process of monitoring progress on these projects. The whole process is now supported by the newly created Yearly Development Plan Information System (YDPIS).

This has two main decision-related functions:

YDPIS also helps in the preparation of the final budgets for Parliament, and provides a communication function that enables the sectoral arms of the Planning Ministry to submit their estimates and receive their allocations from the system electronically.

In the near future, the Ministry of Planning intends to make a summary of the YDP information available to citizens via the Web. They will not have access to any of the financial tools, but will be able to see which projects have been agreed in the budget; how much money has been allocated; and who the intended beneficiaries are. There are also plans to roll out connections to the Prime Minister's Office, enabling online input to the budgeting process from other senior politicians.

Role of ICT

The system makes use of a central database system that integrates a set of project databases via an intranet system to which several hundred PCs - spread around the various parts of the Ministry of Planning - are connected via a fibre-optic local area network.

Application Drivers/Purpose

YDPIS is one part of a larger project that seeks to improve the efficiency and effectiveness of the development planning process in the country. There was no stated aim of transparency, but the project can be seen as introducing some incidental transparency into budgeting, and as forming a necessary foundation for broader citizen transparency. Donor agencies were the main driving force behind the project, wishing to see greater rationality in the way their resources were allocated.

In addition, it must be recognised that there are driving forces behind all projects (YDPIS included) that may be tangential to their rational objectives. Public servants wish to promote and be associated with projects, regardless of project content, because projects mean more money for them and access to resources like vehicles and equipment. Donors have financial allocations that must be disbursed and they are driven to spend these.

Stakeholders

The officials and other staff of the Ministry of Planning are the main direct stakeholders. Other government ministries and departments are lesser stakeholders since YDPIS deals with their budgets. Within them, the Finance Ministry is a key player given its involvement with revenues and donor funds. One bilateral donor was a key stakeholder since it was the main funder for YDPIS. Citizens are indirect beneficiaries, and are intended to be more direct stakeholders when/if the Web element of the project proceeds.

Transparency and the Poor

There is no direct relationship between this application and the poor, since it is internal to the Ministry of Planning. As noted above, it is the intention that projects should indicate their beneficiaries and, further, that this can then be used to identify all projects that are targeted at the poor. However, the old pro-forma used to record project details did not contain this information, and the debate is still continuing about whether or not to include this on the new electronic version of the project pro-forma. In the interim, though, several hundred projects have had beneficiary information included thanks to additional data-gathering undertaken by the project team.

Impact: Costs and Benefits

The overall cost of the broader development planning reform project is around US$2 million, roughly 90% of which is donor-funded.

At present, YDPIS is only available via the government intranet. It has already highlighted some anomalies. At project level, it has identified projects that - dividing their stated financial requirements by the actual yearly financial allocation - will require hundreds or even thousands of years to be completed. At the macro-level, YDPIS has shown that - for the current financial year - the country's 1,000 projects require US$25 billion in funds, as against an actual allocation of roughly US$3.5 billion (half from foreign aid). It has also identified projects that have expenditure higher than budget. In a general sense, then, this is contributing to better financial transparency since a group of several hundred public servants can now see properly for the first time both the overall and the fine grain picture of development project finances. Whether they then use this information in decision-making is another matter. The system enables more rational decision-making about projects, and this would arguably be a contribution to changing the culture of decision-making in government about development projects, which to date has been infiltrated in places to a high level by threads of corruption. So far, though, there has been only very limited progress, reflected perhaps in a small reduction in the ratio of required:actual project funds from 8.25 in 2001/2 to 7 in 2003/4.

The greater contribution to transparency should occur if the Web-based interface for citizens proceeds. This could enable citizens to compare politician promises with development project realities; and to have some picture of what projects are supposed to spend and achieve, which can be compared with the situation on the ground.

At present, then, this project has only really laid the foundations for efficient, rational decision-making and for data-gathering that themselves are then foundations for transparency. Any direct transparency outcomes are still some way off and, as the evaluation shows, are not guaranteed.

Evaluation: Failure or Success?

The project overall has had a mixed outcome, verging on the largely unsuccessful. It has made some contribution to some elements of the budgeting process. However, Ministry staff have been very reluctant to make use of the computerised system in their decision-making. Nor has there been use of the newly-designed project pro-forma, used for capturing a consistent set of project data, since that pro-forma has yet be officially sanctioned. There is no link to the Ministry's Monitoring Department, so the MIS function is not operational - a function that would provide a stronger foundation for transparency and accountability than the DSS/budgeting function. All project proposals should have been stored in an electronic archive to enable subsequent interrogation, but the archive has not been developed.

Finally, one should step back to understand those parts of the project lifecycle that YDPIS does not touch. It makes no input to the process of project appraisal, so projects are still being selected on political grounds with little or no rational consideration of beneficiaries or socio-economic impacts.

Enablers/Critical Success Factors

  1. Leadership qualities . The project leader was familiar with ICTs, which helped avoid barriers that can arise in other e-transparency projects; and he also had a senior post of responsibility that facilitated the flow of resources to the YDPIS project.
  2. Hybrid project team . eTransparency projects require a mix of different areas of expertise to be brought together, so that the implementation team is an overall 'hybrid' of competencies from different backgrounds. This project had that hybrid mix since it combined staff with information systems expertise, staff with development finance expertise, and staff with administrative expertise.

Constraints/Challenges

  1. Changing cultures and procedures . There has been a substantial resistance to changing the existing approach to development project planning in the Ministry. Many, even most, staff are not interested in using the IT-based system. In part this relates to the technology, but it also relates to an unwillingness to change their existing relationships, procedures and mindset.
  2. Lack of effective training . Staff were provided with a training programme (around 400 have been trained in all with most attending around six different courses), but they brought their existing mindset to that training. Hence, they were not interested in the content of the training. Instead, they were interested in attending only in order to obtain the payment of about US$15 (equivalent to one or two days' wages) that each attendee was given after each course was completed. Few of those who attended the computer training courses began using IT afterwards.
  3. Design-reality gaps of foreign consultants . Foreign consultants were an important part of this project, consuming roughly two-thirds of the project funds. Yet the conceptions and assumptions they brought to the project design process were mismatched to project realities. The foreign consultants had no real insight into local culture or into the 'behind-the-scenes' corrupt and self-interested behaviours that characterised the actions of at least some Ministry staff within the planning/budgeting process. The foreign consultants spoke only English and focused on those staff who also spoke English, limiting their understanding of the situation still further. The design and implementation advice they gave was therefore based on a fiction - based on a mythical image of rationality and accountability that bore little relationship to reality, and which was therefore of limited real use. Local consultants were far cheaper and had a far better understanding of local realities. However, they were by no means a panacea. They tend to have limited reflective experience on how best to design and implement a project; they are often dividing their time between several projects at once; and many have links to local (often poor quality) IT vendors which distort their recommendations.

Recommendations

  1. Walk before you run . This project was not ambitious in terms of transparency. It set no transparency goals; it has had no direct impact on transparency. All one can say is that it forms a necessary building block for transparency of information about development projects - an area connected with significant corruption. Even this building block, though, has met many challenges. These challenges must be sorted out before the project can hope to move on to its later goals of supporting greater transparency to citizens.
  2. Find the incentive for government staff . eTransparency systems will only work if they can find a proper incentive - 'carrot', 'stick', or both - that will motivate government staff to change their attitudes and behaviour. YDPIS has yet to clearly identify that incentive. Incentives such as training course payments have been consumed within the framework of existing culture; requiring a temporary adjustment in behaviour (course attendance) but having no impact on underlying attitudes or, hence, on longer-term behaviour.
  3. Get hybrid consultants . Teams can bring together a valuable mix of expertise, but e-transparency projects work best where key individuals - such as the consultants - are themselves hybrids. For this particular type of project, the required hybrid would be someone combining information systems with development finance expertise.

Further Information

n/a.

Case Details

Case Editor : Richard Heeks.
Author Data Sources/Role : Direct Role.
Centrality of Transparency : Secondary. Type : Reporting (planned not actual). Audience : Mixed. Content : Financial. Sector : General Services. Outcome : Largely Unsuccessful.
Region : South Asia. Start Date : 2001. Submission Date : December 2003.

Last updated on 19 October, 2008.
Please contact richard.heeks@manchester.ac.uk with comments and suggestions.