67685 A New Data Tool to Public Spending Efficiency Igor Kheyfets, Massimo Mastruzzi, Dino Merotto and pinpoint where in the country (by sector, type of spending, Lars Sondergaard or by ministry or agency) resources can be saved. Key Messages Officials looking for inefficiencies in spending are not the only ones asking for more data. Governments are  The BOOST1 data tool makes it easy to analyze under increased pressure from civil society to be more how the allocation and use of public expenditure transparent about how they use scarce taxpayer resources. can be made more efficient. Despite the presence of comprehensive government data  BOOST makes detailed public spending data, systems in many Eastern Europe and Central Asian (ECA) including data on sub-national spending, more countries, little information is actually available publicly in open and accessible than ever before. a format useful enough to hold governments to account. Typically, aggregated budget and spending figures are made  BOOST facilitates more practical and insightful available on government websites in multiple files, which analytical work to inform policy can make it prohibitively costly and time consuming for recommendations to improve the quality and non-government groups to collect and make assessments of efficiency of public service delivery. spending data.  BOOSTs are being constructed in more than 17 countries around the world (as of August, 2011). On the international front, currently available public Two countries have already made BOOST expenditure databases suffer from three main problems. publicly available so that citizens can monitor First, available data is aggregated, usually at the national public spending more actively. level, providing little information on spending by sub- national entities. Second, data is available with a two or Introduction three year lag, making it less useful for informing policy decisions in a timely manner. Third, the data rarely contains The global financial crisis has prompted many governments information about initial and revised budgets in addition to to seek efficiency savings in order to reduce budget deficits actual spending. Existing databases may be useful for quick and restore medium-term structural balance without cross-country comparisons but are inadequate for the type harming long-term growth prospects or service quality. of detailed efficiency analyses that can identify specific inefficiencies. To reap savings from inefficiencies, governments must be able to identify such inefficiencies and examine their root causes. One way of doing so is through analytical Enhancing Analytical Work and Giving a BOOST work that sheds light on where in the budget more can be to Public Sector Transparency done with less.2 The quality and usefulness of such analytical work depends, in part, on whether available data A new World Bank tool called BOOST seeks to address is sufficiently detailed to allow public sector analysts to the problems described above. BOOST collects and compiles detailed data on public expenditures from national treasury systems and presents it in a simple user-friendly 1 BOOST is not an acronym. It is the name of a new data tool developed format. BOOST can then be used by researchers, at the World Bank to help enhance public sector performance. government officials and ordinary citizens to examine 2 Within the World Bank, such work is carried out in Public Expenditure trends in allocations of public resources, analyze potential Reviews (PERs). ECA Knowledge Brief sources of inefficiencies, and become better informed about and/or spending out of own-source revenues obtained from how governments finance the delivery of public services. student tuition payments. The tool comes with a user manual and World Bank teams are also providing training How does BOOST work? The process starts by gathering in its usage to counterparts and civil society (in the detailed government expenditure data directly from a countries where governments have already made the tool country‟s treasury system. By requesting raw data at the publicly available). most disaggregated level available, the resulting BOOST database takes advantage of the full breadth and depth of the Since 2009, BOOST databases have been developed (or country‟s budget classification system. The data on are currently under construction) for 17 countries expenditures, organized using all of the country‟s budget around the world. As of August 2011, BOOSTs are classification codes, is then compiled in one database that available for the following countries in the ECA region: covers all sectors, all spending units, and all types of Armenia, Azerbaijan, Bulgaria, Latvia, Moldova, Poland, expenditures recorded in the treasury system. and Romania. Databases for Belarus, the Kyrgyz Republic, Serbia, and Ukraine are under construction.3 Moreover, two The content of each BOOST is country-specific. For governments, Moldova and Kenya, have worked with the instance, some Ministries of Finance have IT systems that BOOST team to increase the transparency of public record detailed expenditure data for every provider of public spending by making the full set of public expenditure data services (for example, schools, health clinics, police available on the web through their respective Open Data stations, etc.), while others may only have data aggregated portals.4 at the district levels. Nonetheless, all BOOSTs have some common features. Each database typically contains Using BOOST to Improve the Quality and information on the approved budget, revised budget, and actual expenditure amounts broken down by: Efficiency of Service Delivery How are public resources being spent and who is  government level (central or local); spending them? BOOST can provide information on how  administrative unit (typically a ministry, department, money is spent and by whom it is spent. Standard tables agency, university, hospital, or school); showing trends in spending - broken down by the economic, functional, or administrative classification of the budget (or  sub-national spending unit (such as districts, any combination of each) - can be generated in a matter of municipalities, towns and villages); hours instead of weeks or months. Most usefully, where a  economic classification (wages, goods and services, country‟s budget classification allows, the user can track capital expenses, etc.); expenditures at the point of service delivery - districts, hospitals, schools, etc.  functional classification (sector and sub-sector);  program classification (if the country uses program- Is public money reaching those with the greatest need? based budgeting); and Most countries build equity into the provision of budgetary resources for municipalities and districts. BOOST can be  financing source (budget revenue, domestic or used to examine the extent to which resources have actually foreign borrowing, etc.). penetrated areas where the need is greatest. For instance, the BOOST tool was used to illustrate inequities in the To allow users to easily navigate these multiple financing of pre-university education in Romania. In Figure dimensions, the data is presented in Microsoft Excel 1, district level data was used to calculate per-student with a PivotTable front-end user interface. The expenditure across Romania‟s 41 districts. The graph PivotTable feature in Excel allows the user to aggregate showed that poorer districts, which would arguably require data using different combinations of budget classifications, more resources to raise the learning outcomes of their or to choose (using filters) individual items of spending by students, were spending less than richer districts. sector, region, or budget holder and drill down further to get a better understanding of how that spending has evolved. For instance, a user of Moldova‟s BOOST can filter the data to focus only on education expenditure; then break it down into spending by each district, mayorality, and down to each school. The data can be further broken down by economic use: salaries, textbooks, heating, etc. Similarly, the user can 3 For Belarus and Ukraine, BOOSTs cover only the education and health break down the total expenditure of one of Moldova‟s sectors. 4 universities by spending financed by budget revenues Kenya‟s and Moldova‟s BOOSTs are available, respectively, at http://www.opendata.go.ke/ and http://data.gov.md/data/?did=107 ECA Knowledge Brief Figure 1: Per-Student Spending and Poverty Levels in an analytical method called Data Envelopment Analysis Districts of Romania, 2009 (DEA). The relative efficiency scores thus derived were 6,000 compared with approximations of need (as measured by a general education (2009) Per student spending in national deprivation index) and what was received (amount 5,000 of per–student spending). The results were mapped to reveal 4,000 differences across the country (see Figure 2): green areas represent the high performing districts worth emulating 3,000 while red areas require corrective interventions because 2,000 R² = 0.40 they achieve little despite high spending and favorable 1,000 conditions. 0 Such analysis allows budget providers (for example, 0 10 20 30 40 50 Ministries of Finance) and budget implementers (for example, line ministries and local authorities) to start a Poor as a % of total population conversation on why similar combinations of spending and Source: Authors‟ calculations based on the Romania BOOST database and national data sources inputs result in different outcomes, and how better or similar outcomes can occur for budget centers that receive How well are public resources being spent? One way to lower spending and lower inputs. BOOST was used, for answer this question is to examine the „technical efficiency‟ example, to start a debate on primary education spending of public spending, a task which the BOOST tool can efficiency in Poland. In particular, Figure 3 illustrates that facilitate. One particularly powerful way of examining this very similar rural municipalities (Rutka-Tartak and Tarlow) question is to link budget management centers, both within not only spent radically different amounts on a per-student a sector and across geographic areas, to the inputs they use basis, but low spending localities (in this case Rutka-Tartak) and the results (whether outputs or outcomes) they generate. frequently outperformed the high-spending localities in Such work provides policymakers with invaluable insights students‟ test score results. These results, then, provided the into which spending units or regions are performing well or starting point for further analysis of the underlying causes poorly with their available resources (and outside of these outcomes. circumstances). While the BOOST tool does not automate the analysis of efficiency spending, it substantially lowers Figure 3: Per-Student Spending (Size of Bubble) and the cost of conducting such an analysis. In particular, Test Score Results (Vertical Axis) in Poland, 2009 without BOOST, analytical work comparing sub-national or 30 even provider-level performance tends to be prohibitively Sixth Grade Test Score Rutka- costly because of the data requirements and the time it 26 Tartak normally takes for outsiders to obtain such data. PLN 3,710 (max = 40) 22 Figure 2: Relative Efficiency of Public Education Tarłów 18 PLN 8,330 Spending in Districts of Moldova, 2009 14 18.0 19.0 20.0 21.0 22.0 % of Adults with Secondary Education or Higher Source: Authors‟ calculations based on the Poland BOOST database and national data sources Are budgets over- or under-spent? BOOST allows analysts to examine the deviation between planned and actual budget expenditures, thus providing economists and financial management and procurement specialists with an additional indicator of technical efficiency in implementing Source: Authors‟ calculations based on the Moldova BOOST database and a budget. Officials and analysts need to know the extent to national data sources which inefficiencies are the result of managerial problems in implementing planned spending, and not caused by the The World Bank team in Moldova used BOOST to combine allocation of resources or the choices made about how to per-pupil spending with other inputs and service delivery spend them. outputs in education to generate efficiency frontiers using ECA Knowledge Brief Figure 4: Web-Based BOOST Portal Source: Authors In the coming months and years, the BOOST team will continue to improve this tool, working along four In several countries, BOOST has helped identify the main dimensions: sectors and agencies responsible for systematic over- and under-spending.  Build BOOSTs in more countries;  Expand training in the use of BOOSTs to Open Data: Fostering Budget Transparency government officials and civil society; The BOOST tool presents an enormous opportunity for  Showcase that superior policy advice can be governments to provide easier access to budget data and to generated when detailed data is placed in the hands allow civil society the means to get involved in monitoring of policy analysts; and public spending. To this end, a web-based application has been developed (see Figure 4) that will allow citizens easy  Work with governments to make their BOOSTs access to public data. Of course, no data is disclosed publicly available. without government consent but the BOOST team continues About the Authors to emphasize that making such data publicly available To learn more about the BOOST initiative, please contact signals a government‟s strong commitment to transparency. the authors. The Path Ahead Igor Kheyfets (ikheyfets@worldbank.org) is a Consultant and Lars Sondergaard (lsondergaard@worldbank.org) a Obtaining more detailed data than what is commonly Senior Economist with the Human Development Sector available to researchers and making it readily available in Unit of the Europe and Central Asia Region of the World an easy-to-use format will facilitate the work of many Bank. different actors within and outside the World Bank. Any opportunity to conduct more insightful analytical work Dino Merotto (dmerotto@worldbank,org) is a Senior improves the quality of advice provided to policymakers. Economist with the Poverty Reduction and Economic Currently, since the BOOST initiative is still in its infancy, Management Unit of the Europe and Central Asia Region of most users are from the Ministries of Finance in various the World Bank. governments or from the World Bank. However, the tool will have far wider reach into civil society, academia and Massimo Mastruzzi (mmastruzzi@worldbank.org) is an other areas going forward. Economist with the Open Government Unit of the World Bank Institute. “ECA Knowledge Brief� is a regular series of notes highlighting recent analyses, good practices and lessons learned from the development work program of the World Bank‟s Europe and Central Asia Region http://www.worldbank.org/eca