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Policy Implementation: Budgeting and Financial Management Practices of District Health Directorates in Ghana

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Policy Implementation: Budgeting and Financial Management Practices of District Health Directorates in Ghana POLICY IMPLEMENTATION: BUDGETING AND FINANCIAL MANAGEMENT PRACTICES OF DISTRICT HEALTH DIRECTORATES IN GHANA Ben Smith Owusu Bempah A Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy (Development Administration) School of Public Administration National Institute of Development Administration 2012 ABSTRACT Title of Dissertation Policy Implementation: Budgeting and Financial Management Practices of District Health Directorates in Ghana Author Ben Smith Owusu Bempah Degree Doctor of Philosophy (Development Administration) Year 2012 _____________________________________________________________________ This study is an effort to fill the gap in knowledge and methodological limitations of current research on budgeting and financial management practices at the local level of public administration. The focus of most research on budgeting and financial management practices within the government sector has been at the sectoral level. The general notion has been that contextual factors surrounding budgeting and financial management practices developed at the central level are cascade down to implementers for their necessary compiance to achieve the needed change. This has led to much focus on the central level. A multi-theoretical conceptual model is therefore, proposed to establish the sequential network of factors affecting implementation of sound budgeting and financial management practices at the local level. The main arguement is that contextual factors, the disposition of management teams, characteristics of district health directorates and strategic planning at the local level all influence budgeting and financial management practices. Hypotheses were developed to test the direct and indirect causal effects of the antecdents of implementing sound budgeting and financial management practices. The path analytic technique was employed to elaborate on the causal relationships of the factors affecting the implementation of sound budgeting and financial management practices. The analysis shows that BMC characteristics have a strong direct causal effect on the implementation of sound budgeting and financial management practices whereas strategic planning exerts a strong indirect effect. Therefore, the strengethning the implementation of sound budget and financial management practices should consider all of the variables studied with strategic planning as its foundation. ACKNOWLEDGEMENTS To God be the glory, great things He has done in bringing me to a successful end of my PhD education; greater things He will continue to do in my life. The words of God never come to an end “Trust in the Lord with all your heart and lean not on your own understanding and in your ways submit to him and he will make your path straight.” Amen. Learning and knowledge acquisition cannot be done without the support of other people. My academic life and particularly this dissertation would never have been completed without the enormous support of several important personalities. In this vein, I would like to express my deepest gratitude to my supervisor, Professor, Sombat Thamrongthanyawong (President of NIDA). I have gained a lot of valuable academic and practical research experience under your supervision. My enormous thanks also go to the dissertation committee members Professor Chaiya Yimwilai and Professor Kasemsarn Chotchakornpant for their invaluable contributions to the research. My appreciation goes to all the professors at the Graduate School of Public Administration, for their experience and knowledge sharing. To my course mates the sharing of knowledge and skills with you cannot be downplayed, I therefore thank you all. My utmost gratitude goes to Mr. Carsamer Emmanuel, Mr. Anselm Komla Abotsi, Mr. Phuong Nguyen, Mrs. Lineo Ramabele-Smith, Mr. Ben Bingab, Mr. Joseph Ato Forson, Mr. Oscar Siema Mmbali and Mr. Misanur Rahman for their support in the data analysis and editing of this dissertation. To the support staff of the Ph.D. Program in Development Administration, I say good job done for the necessary help you rendered to me. To the staff of the Policy Planning Monitoring and Evaluation Division of Ghana Health Service, I appreciate your enviable support in the review of the research instruments, data collection and entry. Special thanks go to Dr. Frank Nyonator. Mr. Daniel Osei, Dr. Caroline Jehu-Appiah, Mr. Charles Acquah, Mrs. Sophia Kesewaa Ampofo Kusi and Mr. Solomom Kwasi Oppong for their motivation and encouragement throughout my academic career. The fervent prayers and support of my parents Mr and Mrs Owusu Bempah will never be forgotten; Mum and Dad, thank you. To my wife, Lucy Amponsah Marfo words cannot express my appreciation to you; God richly bless you for your enviable support. The last but not the least appreciation goes to my son Osei Owusu Bempah for staying calm at home and giving daddy the peace of mind to study abroad; you are not alone, thank you. Ben Smith Owus Bempah October, 2012 TABLE OF CONTENTS Page ABSTRACT iii ACKNOWLEDGEMENTS iv TABLE OF CONTENTS v LIST OF TABLES viii LIST OF FIGURES xi ABBREVIATIONS AND SYMBOLS xii CHAPTER 1 INTRODUCTION 1 1.1 Introduction 1 1.2 Background of Study 2 1.3 Statement and Significance of the Problem 3 1.4 Research Questions and Objectives 5 1.5 Specific Objectives 5 1.6 Scope of Study and Limitations 6 1.7 Summary of Expected Theoretical Contributions 7 1.8 Practical Contributions 8 1.9 Definitions of Critical Terms 9 1.10 Organisation of the Study 11 CHAPTER 2 REFORM OF PUBLIC FINANCIAL MANAGEMENT IN 13 THE HEALTH SECTOR OF GHANA 2.1 Introduction 13 2.2 The Structure and Function of the Ministry of Health 13 2.3 The Health Sector Performance Management and Measurement 16 2.4 The Health Sector Funding 17 2.5 Confronting Public Financial Management Issues 19 2.6 Chapter Summary 20 vi CHAPTER 3 LITERATURE REVIEW AND PROPOSED 21 MODEL FOR ANALYSIS 3.1 Introduction 21 3.2 Policy Implementation: Definition, Debate and Future Research 22 3.3 Review of Some Authoritative Policy Implementation Models 29 3.4 Related Organisational Theories to Policy Implementation 49 3.5 Theoretical Approaches to Public Sector Budgeting 71 3.6 Approaches to Public Budgeting 73 3.7 Models of Public Financial Management 83 3.8 Development of the Research Conceptual Framework 86 3.9 Stages of the Proposed Conceptual Framework 90 CHAPTER 4 RESEARCH METHODOLOGY 105 4.1 Introduction 105 4.2 Research Hypothesis 105 4.3 Research Design 107 4.4 Operational Definition of Variables and Measurement 112 Development 4.5 Independent Variables 114 4.6 Validity and Reliability Measurement 125 4.7 Ensuring Reliability 140 4.8 Data Analysis 142 4.9 Chapter Summary 144 CHAPTER 5 RESEARCH FINDINGS 145 5.1 Introduction 145 5.2 Descriptive Results 145 5.3 Correlation and Regression Results 171 5.4 Testing of Research Hypotheses 190 5.5 The Direct and Indirect Causal Effects on Sound Budgeting 195 and Financial Management Practices 5.6 Revised Models of Sound Budgeting and Financial 198 Management Practices 5.7 Chapter Summary 201 vii CHAPTER 6 DISCUSSION AND CONCLUSION 202 6.1 Introduction 202 6.2 Discussions 202 6.3 Highlights of the Discussions 205 6.4 Study Contributions 207 6.5 Study Limitations and Direction for Future Research 208 6.6 Conclusion 209 BIBLIOGRAPHY 210 APPENDIX 231 Questionnaire 231 BIOGRAPHY 238 LIST OF TABLES Tables Page 2.1 Trend of Resource Allocation to the Health Sector 18 2.2 MTEF Nominal Allocation to the Health Sector, 2006 -2009 19 (GH₵*000) 2.3 Expenditure Per item, 2005-2009, (GH₵ in millions) Expenditure 19 3.1 Top-down and Bottom-up Implementation Perspectives 26 3.2 The Three Pillars of Institutional Theory 60 3.3 Procedural Norms for Budgetary Processes 65 3.4 Theoretical Underpinnings of Variables in the Study 87 4.1 Determining Sample Size Selection for Given Population Size 109 and Nature of Variables 4.2 Health Directorates Surveyed 110 4.3 Summary of Model Measures and Variables 123 4.4 Factor Analysis of Sound Budget Practices 127 4.5 Factor Analysis of Sound Financial Management Practices 128 4.6 Factor Analysis of Stakeholders Participation 130 4.7 Factor Analysis of Policy Content 131 4.8 Factor Analysis of Resource Adequacy and Predictability 132 4.9 Factor Analysis of Normative Influence 133 4.10 Factor Analysis Regulative Influence 134 4.11 Factor Analysis of Cultural Cognitive Influence 135 4.12 Factor Analysis of Socio-Political and Economic Influence 136 4.13 Factor Analysis of Financial Management Information System 137 4.14 Factor Analysis of Staff Capacity 138 4.15 Factor Analysis of Functioning of Management Teams 139 4.16 Factor Analysis of Disposition of Management Teams 140 4.17 Reliability Analysis: Coefficient Alpha for Scales 141 ix 5.1 Profile of Respondents 146 5.2 Basic Financial Data (Ghana Cedis) 148 5.3 Descriptive Results of Sound Budget Practices 149 5.4 Descriptive Results of Sound Financial Management Practices 151 5.5 Descriptive Results of Stakeholders Participation 155 5.6 Descriptive Results of Policy Content 156 5.7 Descriptive Results of Resource Adequacy and Predictability 158 5.8 Descriptive Results of Normative Influence 159 5.9 Descriptive Results of Regulative Influence 161 5.10 Descriptive Results of Cultural Cognitive Influence 162 5.11 Descriptive Results of Socio-Political and Economic 164 5.12 Descriptive Results of Financial Management Information System 165 5.13 Descriptive Results of Staff Capacity 166 5.14 Descriptive Results of Functioning of Management Committees 167 5.15 Descriptive
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