Principles and Methodological Approaches of Efficiency Evaluation of Programs in the State Controlling System

Ministry of education and science of the Republic of Kazakhstan

S. Toraighyrov Pavlodar State University

G. S. Dyussembekova

PRINCIPLES AND METHODOLOGICAL APPROACHES OF EFFICIENCY EVALUATION OF PROGRAMS IN THE STATE CONTROLLING SYSTEM

Monography

Pavlodar Toraighyrov University 2020 UDC 332.14 LBC 65.04 А98

Recommended for publication by the Academic Council of Pavlodar state University S. Toraighyrov

Reviewers: T. P. Pritvorova – doctor of Economic Sciences, professor of E. A. Buketov Karaganda State University; D. S. Bekniyazova – doctor of PhD, associate Professor of Innovative Eurasian University; D. Z. Aiguzhinova – candidate of Economic Sciences, associate Professor of Pavlodar state University S. Toraighyrov.

Dyussembekova G. S. А98 Рrinciples and methodological approaches of efficiency evaluation of programs in the state controlling system: monography / G. S. Dyussembekova. – Pavlodar : Toraighyrov University, 2020. – 188 p.

ISBN 978-601-345-035-3

The thesis presents theoretical aspects of the evaluation institute in the state controlling system. Based on the study of general and specific characteristics of the controlling system in business and in the public sector, the author determines the content of different evaluation types and its principles in the state controlling system. The performed study of the results of the state programs implementation in the Republic of Kazakhstan (as exemplified in “Employment roadmap – 2020” program), including in the Karaganda region, demonstrates that evaluation of the economic and social efficiency of the “Employment roadmap – 2020” program from the position of the best world practice methodology is not performed.

UDC 332.14 LBC 65.04

The authors and compilers are responsible for the accuracy of the materials, grammatical and spelling errors

Introduction

Topicality Modern understanding of the country’s competitiveness is inseparably associated with the well-being of its citizens which falls under the responsibility of social states. The need to take measures to stimulate the economic development and to maintain the well-being of the citizens at the achieved level of social equity requires an effective regulation of public sector resources. Strict accounting and control of spending budgetary funds upon achievement of the strategic economic and social results has become the main characteristic of modern regional, state regulation in all countries. Despite the national differences in technologies and organization, the theoretical and methodological basis of the state regulation of social and economic processes in the regions of the country is based on the principles and logic of the controlling system that has emerged in the business sector. In general, controlling is a system aimed at increasing the efficiency of using resources and based on an integrated subsystem of information and analytical and methodological support to the managers in the process of planning, implementation, analysis, evaluation and monitoring of decisions made. Controlling within the framework of public sector has obtained new characteristics and features, has performed a certain adjustment of methods, initially developed for the use by businesses in regulation of their activities. Within this, the efficiency evaluation of the processes within the state plans and programs, products manufactured by them and their ability to meet the needs of the citizens has become significant. Thus, development of methodological approaches to efficiency evaluation of the state regional development programs (as exemplified in “Employment roadmap – 2020” program of the Republic of Kazakhstan) is an actual task for theory and practice of regional development.

Frameworks of Categories and Concepts within the Research

Generally, the “program” is defined as direction or preliminary description of the upcoming activities which are performed in order to achieve the established goal. The program implementation is connected with the use of selected action plan. The program is the set of planned interconnected activities aimed at resolving some identified problem. In accordance with such understanding, the methodology for the program development and implementation in accordance with traditions of the

modern economic science is provided by the program-oriented and goal- oriented approach. Systematization of the initial views about the program makes it possible to determine the following. The program is a strategic document, the content of which is aimed at achieving the goal through planned and time-coordinated activities/projects. The program evaluation is based on the content of the program itself, monitoring data, specially collected data, expert process evaluations and is intended to provide conclusion on the interim results, the final results and the achievement of the program goal. If we consider the evaluation stages in the controlling system, the evaluation actually accompanies the process of the program creation and implementation at all its levels: 1) at the stage of the program creation (writing), formation of its activities and projects; 2) at the stage of the program implementation (from the standpoint of resource use efficiency, compliance with regulations and service quality standards, direct results of the program productivity); 3) at the stage of evaluation of interim results for the program adjustment; 4) evaluation of final program results and making decision on its closing or extension should be performed at the stage of the program completion. In order to evaluate the efficiency of the state programs monitoring data providing information base for evaluation are required. Monitoring is a continuous and systematic collection of information on the values of preliminarily selected indicators in order to provide managers, executors and other interested parties with information on the following: how the program is implemented, how its tasks are resolved, how the services provided by the program comply with the standards and regulations, to what extent the obtained results comply with selected target indicators, how the resources allocated for this program are used. State controlling should be considered as one of controlling types (along with controlling at the enterprise), aimed to perform the function of the complex provision of state government authorities with economic evaluations of all types (net evaluations, efficiency evaluations, information and analytical evaluations). In addition, the state controlling should function as a subsystem of the state economic development. By the content, it should comply with the function of the state economic development, supported and accompanied by it.

The efficiency of regional programs is the economic efficiency (profitability) of resolution of the tasks based on the implementation of assignments within the program; in other words, it is necessary to determine whether the proposed variant of achieving the goal is more economically advantageous than the available alternatives. In addition, it is useful and practically possible to assess the economic efficiency of the special mechanisms proposed in the program (incentives, benefits). It would also be useful to assess the effect (or cost savings) of the costs for solving the established problem in the program variant compared to the case where such a program will not be developed and implemented (i.e., to assess the consequences of the development of the regional situation without using the proposed program). Goal and objectives of the research The goal of the research is studying the features and regularities of the use of methodological basis of state controlling system in order to develop methodological approach in efficiency evaluation of implementation of the regional state programs of the Republic of Kazakhstan in the field of the population employment. In order to achieve this aim, the following objectives were established and resolved: - analysis of the content of controlling in the sphere of state socio- economic regulation, as well as the systematization of the basic provisions of the methodology of efficiency evaluation of state programs as a key element of controlling; - identification of the features of the evaluation component in state controlling system based on materials of developed and emerging countries and their comparative characteristics with the Republic of Kazakhstan; - analysis and evaluation of the realization of state programs on the materials of the “Employment roadmap – 2020” program of the Republic of Kazakhstan to identify objectivity in the efficiency evaluation of implemented state program; - development of the methodology of economic efficiency evaluation of state programs using the example of the “Employment roadmap – 2020” program of the Republic of Kazakhstan; - development of methodology of social efficiency evaluation of state programs (using the example of the “Employment roadmap – 2020” program of the Republic of Kazakhstan) to identify the important role of the state program in solving problems in the field of employment of the population, confirmed by the evaluation of influence of business development on the reduction of unemployment in the country on the basis

of linear pair regression analysis (Pearson correlation coefficient) in the conditions of “Employment roadmap – 2020” program realization. - development of methodology of evaluation of the influence of the “Employment roadmap – 2020” program of the Republic of Kazakhstan on society in the field of employment of the population. Object of Research Research object is “Employment roadmap – 2020” industrial program of the Republic of Kazakhstan. Subject of Research Research subject includes methodological approaches to efficiency evaluation as the state controlling system element. Research Methods Research methodology provides the system approach to resolving problems ensuring the unity of quality and quantity methods: - Quality content analysis, monographic method providing the possibility of detailed study of the research object based on the broad review of the scientific literature and legislation base. - Economic and statistic research method. The author of the research applies correlation-regression analysis (linear pair regression analysis (Pearson correlation coefficient)), index method to identify the role of the “Employment roadmap – 2020” program of the Republic of Kazakhstan in the field of employment of the population. - Sociological research method. Expert telephone interviews of focus groups in order to evaluate the social efficiency of “Employment roadmap – 2020” state program of regional development of the Republic of Kazakhstan. Restrictions and Limitations of the Research The author studies the Republic of Kazakhstan as a region of Central Asia and one of the member countries of the Commonwealth of Independent States (CIS). To study methodological approaches to evaluation of state programs efficiency in the population employment field, the author has processed the data of the Republic of Kazakhstan and Karaganda region as the largest territorial and industrial region of Kazakhstan for 2013-2015 according to the data provided by the Statistics Committee of the Ministry of National Economy of the Republic of Kazakhstan, Ministry of Health and Social Development of the Republic of Kazakhstan, Office of Coordination and Social Programs of Karaganda region for the recent years. Research within this thesis work was implemented on the basis of temporal series data, starting from the year of implementation of the

current version of “Employment roadmap – 2020” industrial program of the Republic of Kazakhstan which started in 2013. Analysis of official data of the program results in the Republic of Kazakhstan and Karaganda region for 2013-2015 was performed in the work. “Youth practice” project was evaluated by data of 2015, as in the previous periods, official information bases do not contain individual contacts of the program participants. Novelty The scientific novelty of the results is determined by the fact that the thesis provides: - General and special characteristics of controlling system in business and in public sector are identified (as exemplified in employment sector of the population); - Comparative characteristics of the elements of regulation of socio- economic processes in developed and emerging countries and in the Republic of Kazakhstan, having a similar period of the state controlling institution establishment is performed; - Program evaluation principles are defined as the rules for forming its content and the rules for its implementation in the state controlling system. - Proposals to extend the methods for analysis of the program economic efficiency are developed in order to define the factors of its increase; - Methodological support of social efficiency evaluation of state programs (using the example of “Youth practice” project of the “Employment roadmap – 2020” program of the Republic of Kazakhstan) is proposed and approbated to identify the important role of the state program in solving problems in the field of employment of the population, confirmed by the evaluation of influence of business development on the reduction of unemployment in the country on the basis of linear pair regression analysis (Pearson correlation coefficient) in the conditions of “Employment roadmap – 2020” program realization. - Methodological support of evaluation of the public effect of state programs (using the example of the “Employment roadmap – 2020” program of the Republic of Kazakhstan) to identify the impact of the state program on the labor market in the Republic of Kazakhstan. Practical Value Practical value of received recommendations consists in improving the quality of state programs efficiency evaluation based on quality, quantity and quality and quantity methods which allow to evaluate the program results in a complex in order to adjust its content and to increase

its effectiveness. Methodological tools developed by the author will improve the efficiency of the state regulation of the economic and social processes of the country’s regions the population employment sector. Research Results - The lack of a real evaluation of the economic and social effectiveness of the “Employment roadmap – 2020” program of the Republic of Kazakhstan is identified in the state controlling practice from the position of administration methodology by the results and the best world practice in program evaluation. The assumption on the lack of the objective official evaluation of efficiency of implemented state programs (as exemplified in “Employment roadmap – 2020” state program of the Republic of Kazakhstan) is confirmed. - Evaluation of official results of “Employment roadmap – 2020” state program implementation in the Republic of Kazakhstan, including in Karaganda region is performed. Growth trends of the economic efficiency (efficiency or cost-benefit evaluation) of the third program direction at the country level, but the trends in the country regions are multidirectional. - Evaluation of “Youth practice” project social efficiency or evaluation of satisfaction of beneficiaries with the program results (effectiveness evaluation) in Karaganda region was identified. In general, the share of the employed was more than 62%, which testifies to the significant impact of the “Employment roadmap – 2020” program of the Republic of Kazakhstan on the growth of employment in the regions of the country. - Evaluation of the influence of business development on the reduction of unemployment in the country was identified on the basis of linear pair regression analysis (Pearson correlation coefficient), which confirms the important role of the “Employment roadmap – 2020” state sectoral program of the Republic of Kazakhstan in solving problems in the field of employment of the population, helping to create new jobs at enterprises of the country. - Evaluation of the influence of the “Employment roadmap – 2020” program on the whole society (impact evaluation) according to the ratio of temporary and permanent employment in the labor market taken into account in the program was identified. Based on the results of the calculations, when obtaining its final results (at the end of the program), the ratio between temporary and permanent employment is 35,6 % / 64,3 %, which indicates the dominance of permanent employment and, accordingly the positive influence of the program on the labor market. Propositions for Defense

- General and specific characteristics of the controlling system in business and in the public sector, which allows to determine the content of different evaluation types and its principles in the state controlling system; - Results of economic efficiency evaluation of implementation of “Employment roadmap – 2020” state program in Kazakhstan and Karaganda region that allows to define common trends and regional specific features; - Improvement of the evaluation methods for “Employment roadmap – 2020” program economic efficiency provides an opportunity to identify the factors for its increased effectiveness; - Development of methodology of social efficiency evaluation of “Youth practice” project of state programs in Karaganda region which identifies the important role of the program in solving problems in the field of employment of the population, confirmed by the evaluation of influence of business development on the reduction of unemployment in the country on the basis of linear pair regression analysis (Pearson correlation coefficient) in the conditions of “Employment roadmap – 2020” program realization. - Development of methodology of evaluation of public effect of “Employment roadmap – 2020” program (due to its lack in implementing) allows to identify positive impact of the program on labor market according to the ratio of temporary and permanent employment taken into account in the program.

1 Theoretical aspects of evaluation institute in the state conrolling system

1.1 Controlling in the field of state social and economic regulation: .principles, contents and functions In the 21st century, multiple-aspect efficiency evaluations of the activities of the state and quasi-state structures based on the principles of the economic analysis, the experience of which was obtained within the private sector, has become an integral part of control evaluation in the public sector. State regulation of economic processes introduced the complex of qualitative changes to the system of public finances regulation (including control of their distribution and performance quality evaluation), organization of the state service, provision of goods and services of the public sector for the population, efficiency evaluation of the use of public resources from the perspective of satisfaction of the citizen customers with the services provided to them. At the same time, the citizens of the country in this system has become to be recognized as active agents, who on the principles of addressness, joint responsibility, partnership and social equity has become the state clients and partners in performing its functions. Controlling in the state regulation helps to resolve the following tasks of the state: - development of mutually agreed strategic target social and economic programs at the regional and local levels, as well as formation of the common system of multiple social functions of the state taking into account the degree of their priority; - establishing the rights and authorities of many implementation subjects of social and economic programs, methods for control of their functions implementation, agreement of their interaction and vertical and horizontal hierarchy mechanisms [1] [2]. Controlling in the state regulation of economy is a single coordination and consultancy and information and analytical center of the state, organizational prototype of which is controlling used in regulation of the activities of enterprises. The term “controlling” translated from English means management, regulation, administration, control [3]. In general controlling as a tool for coordination of the activities of state structures has appeared for the first time in the first half of XХ century in the USA, Germany and other countries and performed the following functions [4]: - information and consulting support for making managerial decisions;

- formation of the information system for regulation of the country’s economy and for ensuring rationality of administrative and managerial process within the state authoritie [5]. The process of formation and modernization of the controlling system passed its various periods: from understanding it as a function and concept of state regulation in the late XX century, to perception as a system of state regulation of social and economic processes for a given period of time. This state regulation system allows you to fully use the entire controlling toolkit to improve the efficiency of the state activities. The stages of controlling development are provided in table 1.1.

Table 1.1 – Controlling concepts evolution Controlling concepts 1960-s End of Beginning Mid 1990s End of 2000 – present 1980-s of 1990-s 1990-s time State regulation function State regulation concept State regulation system Managem Information Planning Coordinatio “Administ Coordination, ent system and control n ration by agreement, accounting manageme integration, nt control

Controllin Controlling Controlling Controlling Controllin Controlling as g as the as collection as planning as state g as meta- meta-function costs of and control regulation system of ensuring regulation information function manageme coordination, system to be used in ensuring nt agreement and based on planning, planning, control of the informatio management, implementati process of n support evaluation on and making management managerial by feedback decisions R. Mann, T. Reichman, D. Khan, J. Kim, H.Steinman, G. Peach, E. Mayer, P. Priceler, H. Jung, X-Yu. J. Shrayog, E. Sherm, H.Y. H. Berr, P. Horvath Knipper, A. E.Ananyin, H. Steinman Folmut, A. and others. Zund, N.G.Danilo A. Becker, Ch. Karminsky, A. Schmidt, -chkina, A. Deile, Khongren, N. Olenev, J. Weber et S. Falco I. Borodushko I. S. Falco and al. and others and others Glushenko others. , P. Friedman, and others Note – compiled by the author according to the sources [6] [7] [8] [9] [10] [11].

Thus, currently we can talk about the existence of the following controlling concepts: - controlling concept, focused on the accounting system; - controlling concept, focused on the information system; - concept focused on the regulation and control system; - classical concept, according to which the planning and control systems are allocated, as well as the system of information support, coordinated by controlling; - practical controlling concept where controlling is considered as the tool for targeted regulation of organization’s activities. In opinion of the author, state controlling is a special tool of the state providing forecasting, planning, control and monitoring of regulation of social and economic processes for their development as a separate mechanism (toolkit) for indirect regulation of the economy of regions within the country [12] [13] [14] [15]. By the modern interpretation, state controlling is a functionally self- standing area of economic work in the state economic development authorities, aimed at information and analytical support of making state decisions providing an efficient state regulation of economic systems in the short-term and long-term. When comparing the author's notion of the state controlling with the results of the authors of different controlling concepts at different time periods presented in Table 1.1, the following conclusions can be drawn: - D. Khan, one of the founders of controlling concept, considers such elements of controlling as planning and control in regulation of the social and economic phenomena as the state regulation phases. This confirms the legitimacy of considering controlling as the structural element of the institute of state regulation of social and economic processes in the regions of the country. D. Khan also specifies that when working with the planned and control information within controlling, system analysis shall be performed and system approach shall be used [16]. Effective measures of D. Khan in the UK were aimed at social and economic situation in the country. Such economic measures as 1% annual state loan system and creation of new jobs is direct stimulation of the state and regional economy [17]. D.Khan in the developed concept covers only certain economic aspects described above, and in view of the author, this does not characterize the broad concept of "state controlling". - D. Khan’s successor, Hans Jung, discloses the controlling concept as an invisible tool of indirect state regulation influence on all the population segments on the social and economic situation in the state. His works also contain economic development models jointly with the strategies and

planning [18]. Hans Jung’s controlling concept is aimed at development of tax and budget funds in order to re-distribute the load on budget and economic planning. In this case, it differs from the author’s controlling concept by ignoring social and economic aspects paying attention only to the state economy, that in opinion of the author is not correct – controlling in its first edition (by Dietger Khan) defined control measures for improvement of the social and economic situation in the state (or region); - Jim Kim defines the controlling concept as a possibility of cyclical stimulation of economy by the model “knowledge-intensive production” → “export growth” → “strengthening of the national currency” → “release of public funds (emission) without the risk of devaluation” → support of the cost of the basket of products. This approach provides global changes of social and economic situation in the country (region), at the same time it ignores other economic aspects (budgetary funds, taxes, expenditure part etc.) [19]. - Among all researchers of state controlling, I. Borodushko approached the concept of economic implementation of controlling in the former Soviet Union. In this case, it is supposed to develop transparent system of expenditure, evaluation and control of the results of state funds spending for subsequent adjustment of the separate directions of inefficient use of the public sector resources for their reorganization [20]. Following the world practice of spreading a number of market mechanisms into the state regulation of the economy, it is reasonable to include controlling in the number of market instruments that can be used by the state to regulate economic systems [21]. Provided the appropriate adaptation, traditional controlling can be transformed into state controlling. In order to disclose the essence of the state controlling model proposed by the author, the initial provisions shall be the provisions on the ratio of the state control and state controlling. State control is one of the obligatory functions of state regulation of social and economic processes in the country without which it is impossible to provide observance of the legacy and implementation of resolutions made by the government authorities. Currently, differentiation of two variants of state control is clearly observed in the state control field. Firstly, the authority performing control functions performs direct evaluation of results of the certain activity by comparing these results with the officially approved standards and regulations and in case of any violations it applies sanctions in accordance with the legal standards. This group includes tax control, customs control, currency control etc. Secondly, there are such types of state control when the authority performing control functions is not authorized to undertake any sanctions in case of detecting any violations

and should only inform other subjects of government authority on the results of own control activities. The second group includes parliament control, presidential control, control activities carried out by the ombudsman administration etc. [22] [23] 24] [25] [26] [27]. In order to formalize the separation of these two types of state control, the author uses the following terms to identify them. First group control types are united under the name “administrative control”. Second group control types are conventionally united under the name “information control”. Within this, in the presence of these differences there is the main common sign consisting in the fact that the main content of administrative and information control is obtaining evaluations of the situation by comparing the actual parameters with their regulatory values fixed in the regulatory legal acts. Taking into account this common feature, all such evaluations are called “net evaluations” in the promotion work. The author used the term “net evaluations” in the meaning that by its content, control does not include any other procedures except for the comparative evaluations. The main feature of “net evaluations” consists in the fact that the regulations and standards used for comparisons are officially recorded in the regulatory legal acts. Obtaining “net evaluations” corresponds to the first basic controlling function, which is control (see chapter 2). In addition to “net evaluations”, in individual cases, state control uses other evaluations focused on measuring the efficiency and getting information and analytical data (evaluations) which may be referred to the basic controlling functions. These two evaluation groups are formed during the control operations and during other economic procedures such as economic monitoring, processing and analysis of materials of state statistics, social and economic forecast, development and implementation of indicative plans of social and economic development. The entire diversity of economic evaluations not referring to “net evaluations” is presented by the following two evaluation groups: Evaluations of social and economic activities, functioning of controlled economic objects (for instance, the efficiency of budget funds contributions to the innovative projects is evaluated); [28] [29] Information and analytical and social and economic evaluations of the results of any activity, any process, any interconnections etc. (for instance, dependence of the tax collection rate in the regions on the structure of business units by the ownership form and economic sectors). Further we need to consider the extent and forms of these three evaluation types presented in the state regulation practice.

The USSR had strictly centralized single state control system which provided only net social and economic evaluations and which by its content and organization principles met the needs of administrative-command system of the country. Government authority did not need any additional forms of evaluating the results of economic activities during that period. At the current stage of development of the former Soviet states (including Kazakhstan), the following situation in the field of evaluations of the country’s economic state and the results of economic activities has been established: а) government authorities need complex detailed scientifically grounded information on the current state, prospects of development, factors, terms and efficiency of functioning of different areas of public life, economic industries and sectors. This is required for the development of state social and economic policy, formation and implementation of federal and regional target programs, improvement of state measures to regulate the economic systems development, to regulate budget process; b) all information diverse by its content, sources and methods of using, required for the state economic regulation may be divided into three evaluation groups (corresponding to the basic control functions): “net evaluations”, efficiency evaluations, information and analytical evaluations; [30] c) in terms when there is the need to improve information and analytical support of the functions of government authorities, Russian science and practice reached the prospect of development and implementation of the special system which would be able to perform this task. State controlling, the concept of which is developed in the promotion work, could be such a system. Leading economists and scientists studying economic theory in Kazakhstan and in the Russian Federation disclose the notion of the state controlling strictly in own research field: - G.Sh. Kaliakparova proposes controlling as a tool of efficient regulation of the enterprise’s activities with the elements of applying methodology of common economic systems. The researcher provides the controlling concept as “the system of planning, management, economic analysis and managerial accounting at the enterprise”. Within this, it should be noted, that there is intersection with the author’s concept of state controlling in social and economic processes specifically in planning and economic analysis – the basics of the notion “controlling” [31]. - S. Ya. Yussupova offers the controlling concept in the universal type – with the possibility to apply and to introduce it within any economic system, model or process. The essence of the concept consists in the

controlling mechanism structure, the components of which include not only planning and control system, based on the continuous flow of internal and external information, but also introduction of the system monitoring creating conditions for efficient search of reserves, identification and timely elimination of existing deficiencies and for continuous clarification of the strategic and tactical plans of the economic system (object) in real time [32]. - M.A. Miroshnichenko, while studying instrumental controlling mechanisms, pays attention to its service function. Studying controlling at the enterprise, and namely – strategic functions, the researcher discloses controlling concept as the “methodology targeted at building the system of management, functioning in stress situations (anti-crisis evaluation) with the focus on decrease of production and operational expenses. The author’s concept of state controlling also intersects with the concept of M.A. Miroshnichenko in the field of reducing the cost part of the state budget, as the controlling is firstly the tool for planning in state economy with forecasting lobbying and investing to the sectors of innovative economy [33]. Implementation of the system approach principles in the mechanisms of the state evaluation of social and economic situation is not less relevant than in direct aspects of evaluation mechanism control. In this connection, it is eligible to consider the issue on the rationale of controlling principles adaptation to the public evaluation of the social and economic situation in the country. Controlling in the field of the state social and economic regulation as a system analysis tool except for resolution of special tasks should provide monitoring and analysis of social and economic situation by the following main directions in accordance with its functions (figure 1.1) [34]. Provided list of tasks is the scheme of analysis which is specified in each individual case applied to the aims of research of social and economic field and depending on the types of studied subsystems. Efficient state evaluation of social and economic field by its complexity cannot be compared with the regulation of the enterprise’s activities. But at the same time as compared with the regulation of the enterprise’s activities, the significance of controlling as a special tool ensuring adoption of optimal resolutions and achievement of established aims is increasing in the system of state evaluation in the social and economic field. The issue of improvement of the state control in evaluation of social and economic situation in the country may be radically resolved only with the coverage of all its types and in the scale of the entire country. Within this, the need of the comprehensive project of reforming the state

control and forming the main provisions in order to establish new model of the state control institute based on the use of the controlling method were the grounds for the developments and proposals contained in the work [35].

Functions of controlling as a system analysis tool in the field of state social economic regulation

Studying distinctive Studying integral system system features and their factors dynamics

Analysis of establishment, Evaluation of resource trends and prospects of potential of the state development of social and economic programs

Quality and Analysis of Studying quantity Analysis of the activity, methods communications characteristics of structure of social of functioning, between the the social and and economic conduct of social subjects and economic development, and economic objects of social processes research of policy subjects and economic interrelations policy

Figure 1.1 – Functions of controlling as a system analysis tool in the field of state social economic regulation

Note – compiled by the author on the basis of studies[36] [37] [38]. Since the subject of this research is controlling in the state evaluation, we need to define the ratio and interconnections of the state control and controlling in the state evaluation. Defining the entire interconnection of such categories as state control in the field of economy and controlling in the state evaluation, we need to argue the provision that controlling in the state evaluation is an extended interpretation of the state control. In order to clarify this provision, we should define the similar moments, identity of these categories and the differences between them. Firstly, controlling and control have the range of common features and signs, such as: - the common goal – support of the state evaluation function; - the unity of objects of control and controlling activities. Secondly, controlling is focused on the wider range of providing functions, on the wider range of end products of activities than in control.

The main principal difference between the state control in economy and controlling in the state evaluation consists in the fact that control in the economic field is based on comparison of the actual parameters with the regulations and standards recorded in the regulatory legal documents. All such evaluations will be called “net evaluations” in the thesis. The author used the term “net evaluations” with the meaning that by its content control does not include any other procedures except for the comparative evaluations. Controlling in the state evaluation operates significantly wider complex of methods. Controlling evaluates the situation from the positions of the economic theory, political feasibility, social and economic situation in the country. Controlling uses modern methods of economic and mathematical modeling, attracts information from the adjacent fields of knowledge – sociology, social psychology etc. Currently, the range of measures to improve the state control in social and economic field is already implemented in Kazakhstan. Thus, mechanisms designed to ensure the state evaluation system effectiveness are formed, proposals to improve the state regulation methods are introduced at the high state level. For instance, the Council under the President of Kazakhstan on implementation of priority national projects is the advisory authority created in order to ensure interaction between the state authorities, government authorities, public, scientific and other organizations in consideration of the issues connected with implementation of priority national projects. The Council creates interagency working groups by its activities involving organizations, scientists, specialists. The Council considers priority national projects, analyzes the progress of their implementation, prepares offers for the President on improving national programs. Orders and instructions of the President of Kazakhstan may be published for implementation of the Council’s resolutions. Moreover control administration of the President of the Republic of Kazakhstan as the state structure supervising the activities of control and supervising authorities under the state executive authorities, considers complaints and appeals of the citizens and legal entities. Control administration of the President of Kazakhstan made resolution on the rationale of establishing the sole organization responsible for development and use of information and communication technologies om the country, by providing it with coordinating functions and powers. In order to implement them, the range of proposals on the control activities improvement areas was formed, namely:  control system in Kazakhstan should be effective by the results and profitable for the state and society by “expenses-quality” ratio;

 it is necessary to improve the concept of information activities of control authorities;  new technologies should be introduced to the control process, single information space of the state financial control should be created;  it is necessary to strengthen planning components in order to achieve effectiveness;  the powers of different control authorities, reasonable “specification” of which will allow to obtain complex result from their joint work, should be clearly defined at the state level;  it is important to activate cooperation of the control authorities of different subordination;  it is necessary to create a unified information system of state control, that will help to perform operative monitoring of the process of the program implementation within the national projects;  control authorities should reinforce information interaction with the law enforcement authorities and publicity;  it is necessary to transit from informing the publicity on adverse facts to providing positive examples, creating the background for trust and support from the publicity;  form the following cooperation areas between the Accounts Committee of the Republic of Kazakhstan and Control administration of the President of Kazakhstan: a) agreement of the action plan; b) conducting joint audits; c) systematic information interaction; d) exchange of results of performed audits.  Allocation of all public servants working for the control authorities to the special category of public service;  it is necessary to facilitate the completion of the process of formation of three “verticals” of financial control in Kazakhstan – parliamentary (Accounts Committee of the Republic of Kazakhstan), presidential (Control administration of the President of Kazakhstan) and internal (Ministry of Finance of the Republic of Kazakhstan). The specified list of tasks combined with establishment of the Board for implementation of priority projects and other initiatives in the field of state control and information and analytical activities represents the range of implications for ensuring the state control efficiency based on controlling principles. They also define the way to integration of control and other methods for the service function implementation in the field of making managerial resolutions by the state authorities. Within this, in the modern form these activities and proposals are not provided within the

strict unified system, they do not ensure overcoming of segregation and incompleteness of coverage of all elements and directions of state control [39]. At the same time, controlling in the state regulation of social and economic processes in the country, as we have mentioned before, extends the notion of “state control” and has direct connection with economic planning, and the planning itself is one of the most important stages in controlling process. Within this, development and implementation of the state social and economic programs should be based on the system and institution analysis, ensuring making of scientifically grounded resolutions. In particular, within the methodology of new institution theory, the representatives of which are P. Haul, R. Tailor, P.J. Dimajio, W. Powell, state regulation should be based on deeper research of the problem of effectiveness of economic and political organization of the society, issues of interaction between the state and society [40]. One of the methods of such analysis could be controlling. Thus, we can make the following conclusions on methodological bases of new state economic development. The system of original views of the state and its role in regulation of the public sector as well as on the private sector in the economy historically based on the view of the principal differences between business sector and state sector. Business sector performs its activities in terms of restricted resources based on the principles of efficiency and competitiveness, which is understood as the ability to produce goods and services and sell them in the market even with the minimal profitability. Accuracy and transparency, automatic performance of market mechanisms, evaluating the quality of regulation of the firm’s activities in terms of fair competition, without any specific efforts for business evaluate it. The state which also is acting in terms of restricted resources has another nature, but also it has several features (for instance, different costs and incomes sources, difficulties in defining the range of public goods etc.) and is burden with social obligations. In terms of the lack of such tool as price and the need to co-measure costs and results, the state regulation does not co-measure the results and costs if specially introduced methods of control do not induce it to this. Individual social and economic evaluations undertaken from time to time or which are the results of the regulatory legal base of the state control, do not exhaust the needs of the state authority in evaluation of the state, trends and mechanisms of development of the national economy as a whole and its structural components. As a rule, they evaluate the flow of

costs and target expenditure of funds, but more complicated issues are left beyond these control procedures. These issues include, for instance: - What are the products and the end results of state expenses? - Could the service provision process be restructured? - If there is any difference in well-being of people before and after the state expenditures for the service? - What are the public costs for the service and could they be reduced without worsening of the end result etc. In order to implement functions to regulate the country’s economy development needs information and analytical evaluations of social and economic systems. Current need of these evaluations stimulates development of the appropriate functions and procedures in the government authorities (for example, economic monitoring system is being developed), but the obtained result does not comply with the needs by its volume and by quality. The main reasons of the fact that the government authorities are not provided with appropriate evaluations of economic efficiency and information and analytical economic evaluations include [41]: a) formation of the relevant functions and methods in the government authorities has impulsive intuitive nature; b) there is the lack of regulatory legal basis that would regulate this process; c) there is the lack of scientific developments of the theory on this issue; d) there are no any unified methodologies in this field; e) possible organizational forms of doing these works are not clear. The optimal method for resolving the current contradiction between the objective needs of the government authorities in evaluation economic information and real situation is introduction of the state controlling system as adopted to the specifics of the state sector of the social and economic regulation system. It should also be noted that it is difficult to systematically and objectively analyze the effectiveness of the control activity itself, due to the lack of published methods for calculating the effectiveness and comprehensive assessment of the effectiveness of the work of the control authorities. The practice of using monitoring of the results of the control process is underdeveloped. Occasionally published in the media individual figures on effectiveness only confirm the lack of a stable system for analyzing the effectiveness of control activities [42]. State controlling should be considered as one of the types of controlling (along with the controlling at the enterprise), that is aimed to

perform the function of the complex provision of the government authorities with the economical evaluations of all types (net evaluations, efficiency evaluations, information and analytical evaluations). State controlling should function as the sub-system of state economic development, by its content it should correspond to the function of the state economic development the support and accompaniment of which it ensures. In accordance with the proposed state controlling concept, its significance is defined not only by forming evaluation economic information required for regulation, but also by ensuring the feedback between the government authorities and regulated economic systems. Principles, content and functions of the state controlling are based on its main goal – to provide the state economic development authorities with the materials of the complex evaluation of the state and prospects of national economy development and to provide the feedback channels. State controlling cannot be an independent government institute, but, being the structures component of the system of state economic development and government authorities, it will have an institutional nature [43]. In this connection, scientific elaboration of issues of methodological bases of controlling in the state regulation is relevant, development of the principal controlling schemes and evaluation methods is required.

1.2 Evaluation of state programs efficiency as the main controlling .tool In the broadest interpretation, controlling is a system for supporting the regulation of the organization’s activities, aimed at coordinating the interaction of different organization subsystems and monitoring their effectiveness. Controlling can provide information and analytical support to decision-making processes in the regulation of the organization’s activities (enterprise, corporation, government authority) and can be a structure that prescribes the adoption of certain decisions by the management of an organization [44]. Controlling as a complex tool of modern regulation of economic processes is considered from two positions, each of which finds confirmation in the business practice and thus allows to speak about two sides of this process: 1) The system of strategic planning, aimed at increasing the efficiency of resource use and creating competitive advantages of the firm in a specific market environment.

2) Integrated system of information-analytical and methodological support of managers in the process of planning, monitoring, analyzing and making decisions in all functional activities of the enterprise. In fact, the second vision of the content of controlling is essentially an applied section of the first one, because ultimately, the information and analytical and methodological support is subject to the same goal - to increase the firm's competitiveness in the market in the medium and long term. Content of the controlling system from the position of the main tasks of the strategic regulation of economic processes resolved by it may be schematically presented as follows (figure 1.2). According to this model, based on the established aims and tasks developed for them, “entries” to business process or “inputs” (resources) – staff, equipment, raw materials, financial resources etc. are defined. Resources in the production process are transformed into “outputs” – results in the form of a product or service. Products (or services) after their sale allow recoding of the end results to be evaluated from the perspective of the established tasks and achievement of goals.

Planning Monitoring: Aims : Economic efficiency - profitability, Budgeting: in using resources - increase of Entry to the competitiveness production system: Tasks : Production factors - productivity growth etc.

Implementation: Evaluation of results Business process at the primary Monitoring: (production) and effectiveness secondary (implementation) levels Exit from the Identification of the production system: Monitoring: Compliance with the degreeFigure of achieving1.2 – Scheme the of controllingProducts elements (services) at the business sector and their sales quality management goals or result enterprise standards

Note – Compiled by the author with the use of materials from the sources [45] [46] [47].

Actually the following points should be defined: 1) Aims and tasks of the firm, quantified indicators for goals and indicators for tasks. At this stage, the task is to reflect the goals in a balanced system of indicators, which will subsequently be monitored, measured, and evaluated. 2) Required production factors should be defined and launched in the business process which should be observed and evaluated by the system of indicators of business process meeting the requirements of economic efficiency, effectiveness and compliance with other quality management standards. In exit from the production system and undergoing further stages of promotion to the market till its sale, indicators of this stage should be monitored from the position of cost effectiveness. 3) Monitoring of indicators at production stage (first level indicators) and products sales stage (second level indicators) allows making decisions in the field of operating and tactical planning. 4) Analysis and identification of the reasons for deviation of the actual indicators from the planned and making administrative decisions based on them will allow reducing deviations and timely resolving the tasks and achieving goals. By the scheme, controlling organization in the corporate sector is based on the techniques of: - dividing primary (production) and secondary/end (production + sales) of results; - monitoring and evaluation at each stage of business process; - using reliable information sources and defining more accurate data on any process stage. Monitoring and evaluation in this case are designed to perform controlling functions. Monitoring and evaluation objects are such processes and direct results corresponding to the competitiveness principles (or rules) as: - Economic efficiency in using resources, - Effectiveness of manufacturing of products (services), - Compliance with the quality management standards, - Efficiency of the sales of products (services), - Evaluation of achieving the results of the primary and secondary levels and adjustment of the aims and tasks, if needed.

As the author noted above, controlling is always based on information and analytical support which should also comply with the following requirements. Information support should ensure monitoring of all controlled processes and should comply with such requirements as: - Correctness of the essence of the parameter (indicator corresponds to the requested); - Correctness of the form of the parameter (indicator corresponds by the time series, frequency of measurements etc.); - Authenticity of the indicator value (information corresponds to the real fact); - Error is observed (indicated in the message); - Information timeliness (compliance with the terms of information submission); - Confidential access to the transferred information is provided; - Guarantees of the lack of the message transformation. Requirements to accuracy and timeliness of information submitted for analysis define its collection in production, warehouse, accounting and other accounting types. Observes and evaluated indicators should cover not only direct results (manufacturing of products, cost, quality etc.), but also the second range indicators (HR development services, risks, tax planning etc.). And however, basic indicators which are the core of controlling work are economic indicators based on the notions of efficiency, profitability, productivity and some other. As the strategy of state economic development consists in introduction of controlling methods to the public sector, then it is reasonable to note that economic content of controlling stimulates adaptation of notions and categories as well as principles and methods from the corporate sector. Framework notions of the new state economic development are: - Customer-centric model (customerization, customercentred model); - accountability for results; - performance results; - effectiveness and economic efficiency. In opinion of the author, transformation of controlling mechanisms in its transfer to the public sector may be performed as follows (figure 1.3). Use of controlling tool as the system of methods for the public sector regulation, certainly, increases the economic focus of the budget resources regulation.

Classical scholars, for example, G.J.Friedrickson points out “analysis and evaluation of the ratio of expenses and profits” as one of the key principles (rules) of new theory of state economic development [48]. Special significance of controlling in regulation of the social and economic processes is connected with evaluation of efficiency of implemented state programs, identification of the reasons for deviations from the specified parameters and definition of the ways to overcome them [49]. On this background, evaluation is an obligatory and the most important element of the state controlling system. Development of state regulation practice for the economic development in accordance with the principles of public sector costs feasibility, responsibility for intermediate and end results, evaluation by end results has become the main direction for the state economic development in the second half of 20th century.

Planning: Budgeting and Monitoring: Possible aims: entering the system Economic efficiency - Increase of the level of of the service in the use of permanent employment of provision: resources (block 2) the population, Evaluation of Tasks: compliance with - Growth of the level of the resource professional training etc. support quality Sale or transfer to outsourcing Business process Evaluation of effect Monitoring (standard and at all level of Of productivity regulation of and professional training benefits acquisition effectiveness service provision) (individual, group, (block 3) society)

Exit from production Monitoring system: Of compliance with Evaluation of the result Products (services) the standard and of the service provision, and their sales regulation of service, incl. satisfaction with the incl. by its service quality availability (block 1)

Figure 1.3 – Controlling elements scheme in the public sector of economy (as exemplified in the employment field)

Note – Compiled by the author with the use of materials from the sources[50] [51] [52].

Within this, there are three clear stages reflecting the quality evolution of methodology and practical program evaluation methods (by the figure 1.3): - evaluation of the process of the service provision and obtaining direct, primary result (output): block 1 on figure 1.3; - evaluation of the economic efficiency of selected variants of the service provision: block 2 on figure 1.3; - evaluation of obtained end results from the perspective of their quality and effectiveness (outcomes): block 3 on figure 1.3. If on the first stage, evaluation referred mainly to the process of the service provision and direct results quality, then on the second stage, economic effectiveness evaluation methods were added to assessment and on the third stage – evaluation has become adverse and was considered from the position of the system results and integral outcome. During the first stage, the USA introduced principally new as compared with the previous periods system of budget process establishment – (Performance Budget – PB) [53]. The key approach in this system was the system approach where the analysis of the program aims from the perspective of the system development, obligatory search for appropriate alternatives for the service provision process and defining the best way (a sort of re-engineering), selection of the best solution based on comparative analysis were combined. The so-called benchmarking method where the analysis of uniform products, services or processes is performed and the best is identified from the perspective of the end result, will get the best implementation in this coordinates system. Search of the methods of the best outcome in provision of services (standard and regulation) is still an important part of the process of achieving the end results of the service provision [54]. Transfer of emphasis from the process of spending the public sector resources for fulfillment of the state functions, performing activities aimed at achievement of results is the essence of the first stage. The second stage of development of the state economic development efficiency evaluation is connected with the crisis of the state well-being and with recognition of unreasonable social obligations undertake by the public sector in terms of the deficit of budgets and orientation on alignment of the citizens wellbeing. In the USA, this model was called PPBS (Planning, Programming, Budgeting System).

Shortage of resources in state budgets and a drop in trust to the state as an operator of public interests and needs brought to life the need for a strict separation of the functions of ministries (agencies). Each ministry (agency) should: 1) conduct an analysis of all activities performed (functional analysis); 2) group them into programs or blocks of homogeneous tasks aimed at achieving certain socially significant goals; 3) build an hierarchy of tasks or activities leading to the achievement of the goal; 4) bring this hierarchy to the basic elements and estimate the costs of implementing each element of the program to evaluate the cost of implementing the program [55]. Thus, in the UK, as a result of the reforms, along with ministries responsible for the overall policy in the supervised sphere of activity, there appeared the specialized agencies (Next step agencies), which started practical implementation of the plans. This practice was accompanied by further measures to standardize and unify services and regulate the activities of government agencies in order to increase openness to the needs of citizens [56]. The essence of this stage was the construction of a new state economic development on the principles of commercialization, that is, the crystallization of entrepreneurial principles, the reflection of which in business was and remains the controlling system [57] [58] [59]. The managerial revolution, which took place with varying degrees of intensity in all developed countries, differed in the institutional arrangements and mechanisms of their provision, as a result of which modern developed countries differ significantly in specific practices and evaluation procedures. Nevertheless, the general idea that unites all these countries and state regulation in them is an emphasis on saving budget funds. At the center of state economic development was an assessment from an audit standpoint with its identification of inefficiently spent budget funds, a reduction in the state apparatus after restructuring of departments and reengineering of services, a reduction in spending for maintaining the state apparatus on the basis of transferring a number of government functions to suppliers from other sectors of the economy [60] [61]. The state created or stimulated the development of many alternative suppliers that compete with each other and operate in the same institutional framework. The emergence of a competitive market in state-controlled areas of activity allows for diversification of supply for citizens, and the

mechanism for this is outsourcing contracts or the monetization of public services. The use of this or that mechanism is connected with the peculiarities of the public well-being and the level of competition in the respective markets. Assigning the status of a consumer to a citizen in its market sense does not mean substitution of market relations for the ideology of relations between the state and the citizen, since society is the customer of public goods and their consumer. Borrowing of controlling instruments and their use in the public sector fulfills the task of addressing the economic feasibility of state costs, but does not replace the very idea of a democratic state [62] [63]. The third stage is associated with a wide and regular evaluation in terms of both the effectiveness and productivity of the result, as well as an evaluation of the social effect. In contrast to the second stage, in addition to the external evaluation based on the results, an internal evaluation appears, which is a source of information for thinking about the operational regulation of internal processes. The new fourth stage is being implemented in modern developed countries and reflects a new approach to regulation of the public sector, which relies on an expanded circle of decision-makers. Multi-subjective decision-making and orientation to a wide range of stakeholders in the development of mechanisms and their implementation is the main content of the fourth stage. In modern conditions, “to obtain real, concrete and measurable results, there is a union of various departments, state levels, the academic environment and society”, which requires new approaches both to the formation of goals and objectives, and to the methods for assessing effectiveness. All four stages were characterized by different methods of evaluation of the efficiency of social and economic processes regulation in the country. At the first stage, which follows directly from the classical organization theory according to M. Weber and F. Taylor, the estimate was largely technocratic in nature, i.e. the task of rationalizing of organization from the position of social systems was considered [64] [65]. In this approach, the evaluation was related to: - a clear division of functions between state structures, units, specialists;

- scientific organization of labor, i.e. minimization of time for the performance of functions, the organization of preparatory processes for their implementation, etc; - the coherence of the work of public services, - professionalism and quality of performance of functions at the workplace by each employee of the state body (table 1.2). Indeed, scientific labor organization helped to increase the efficiency of performing the tasks of the state authority, i.e. to fulfill the tasks faster without unnecessary spending of time and resources, to build the rational action sequence chart etc. In order to search and identify the problems in organization of labor of state structures, methods of strategic analysis (SWOT-analysis), brainstorm, Delphi method were used. We can say that the evaluation methods complied with the technocratic understanding of the state regulation efficiency: saving of time and resources for performance of works and obtaining direct results.

Table 1.2 – Stages of development of new state regulation of social and economic processes and efficiency evaluation methods Stage name Content of controlling element transformation Evaluation types Evaluation methods Performance Budget 1)System analysis of goals and rationalization of Evaluation of the process of the service SWOT-analysis the service provision process provision and obtaining direct primary Brainstorming 2) Search of alternatives for the best output Delphi method implementation of processes and obtaining direct results PPBS (Planning, 1) Economical-centered approach to the state Evaluation of economically selected cost-benefit analysis: Programming, regulation variants of the service provision based economic- Budgeting System) 2) Focus on the economy of public sector not only on accounting but also on lost mathematical, resources, audit, identification of inefficiently benefits from non-implemented econometric methods 31 spent budget funds alternatives

Management by 1) Complication of state regulation due to the Combined evaluations taking into cost-effectiveness, Objectives system need to take into account quality and quantity account saving of resources and social cost-utility analysis efficiency criteria in a single system efficiency of results. Life quality component may be taken into account through the common indices of health and human development

Performance-Base 1) Focus on end results and taking into account Combined evaluations: expert, audit, Combination of Budgeting – PBB the interests of all the stakeholders adjustment of state programs by their quality and quantity 2) Combined approaches to evaluation results analysis methods

On the second stage, this rationalized approach of organization from the position of social systems with an emphasis on reducing costs in the performance of rationally adjusted functions, was gradually supplemented with new methods of cost-benefit analysis. “Strong positions of economic approaches in forming state policy in different areas led to broad distribution of these evaluation methods”, - one of researchers of this period E.R. House wrote [69]. Development of “costs-benefits” methods was aimed at comparison of not only the variants of resolving the task in the form of selection of one of alternative variants of achieving the goal with the least costs, but also lost benefits from non-implemented tasks due to the use of resources. Benefits are connected with the national priorities, and the costs are the resources used in order to implement the projects plus lost benefits from non-implemented alternatives [70]. Further it was understood that focus on quantity methods of measuring benefits actually by the budget resources saving has several deficiencies including the lost quality of released product of the program or service. Thus, selection of minimum costs for training of unemployed by the principle of maximization of the training groups or maximization of load for one trainer in hours will lead to reduction of the end product quality – professional training. Similarly, reduction of time for the service provision, for example, the accompanying services for persons with hearing disabilities leads to the fact that the service is provided at minimum costs but the client is not satisfied as his life issue remains unresolved, and accompanying time has already finished. Losing the sight of quality results in the pursuit of unification of the service provision and minimization of costs for it led to adverse social results of this method development. The third stage of result-based evaluation was aimed to overcome these shortcomings. The amendment of economic calculations with evaluation of opinions of beneficiaries, “stakeholders”, a qualitative assessment of the benefits received led to the development of new “cost-effectiveness” or “cost-benefit” methods. At this stage, there were two basic concepts that are still quite simple in the execution of calculations, and reflect the essence of the evaluation: 1) Efficiency is the effectiveness understood as economic efficiency, specific costs, performance, productivity. Actually this evaluation is the analogue of financial and material efficiency that is formed in the industrial production. 2) Effectiveness is social efficiency, quality result. This is more complex, different quality evaluation which depending on the specifics of

the public well-being may reflect its specifics. This evaluation requires special interpretation and own approaches in each specific case. Covering this problem, G.J. Frederikson in own grounds uses the notion “social fairness which he understood as the ability of the public sector to improve the living standard of all citizens [71]. Thus, for instance, social fairness in state systems on longitudinal care for aged and senior citizens may be understood as the equal volume of care in equal insurance payments, equal access to the system in compliance with the criteria of entrance in the volume of hours of satisfaction of the consumers required for normal life conditions [72]. Any funding mechanism should facilitate strengthening of horizontal and vertical fairness, i.e. provide such position in which the citizens with equal needs and equal ability to pay (horizontal aspect) would obtain equal levels of support, and the citizen who are more needed (vertical aspect) would obtain more support [73]. In the modern more practical interpretation, social efficiency may be defined as the “degree of achieving socially important effect regarding the quality and volume of service provided to the citizen”. In this context, social efficiency is perceived as the ability of state to meet the requirements of certain social groups and layers [74]. This means that social efficiency may have: - more abstract, rather political result measured on the macro-level, as an attitude to the system of providing public benefits as a whole. This may be identified as the result of acquisition on the secondary level. If we consider, for example, the said system of longitudinal care, then all the members of society should evaluate the regulations and rules operating in the system as fair. - specific result obtained by each citizen within the system as the result of getting the specific volume of benefits and services, sometimes from the concrete person. This may be identified as the result of obtaining on the primary level or the primary effect. In this case, the majority of the program clients should evaluate it positively and feel the effect in the form of improving the quality of life, health, general well-being. The complexity and certain costly characteristic of “effectiveness” evaluation (social effectiveness), leads to the fact that experts evaluating the programs or the activities of the state authority are focused on direct results of “efficiency evaluation”. It is easier to control, operationalize and evaluate the quantity of direct results. Therefore it is easier for many practitioners of state regulation to consider the effectiveness exclusively in the aspect of specific costs or the program productivity. Summarizing the research provided in this paragraph we may note the following. Controlling system applied in the private sector is the ready

regulation scheme, economic logics of which allowed to take it as a basis in the state regulation of social and economic processes in the country. State regulation on the certain stage of its development, started in 60s of the 20th century, recognized the need to reform in connection with occurred constant deficit of public funds, unprofitability of many social programs of the state and impossibility to resolve the social problems with their use. In this sense, controlling and procedures of evaluation were perceived as the tools capable to improve state regulation, to reduce the load on public expenses, but gradually they have become the key elements of state regulation. Work of E.Shuman “Studying of evaluation” appeared in 1967 году has become the first work considering evaluation as a new field of studies having the possibility to become the state regulation tool [75]. By H. Volman, the evaluation tool was first tried to be applied in the practice of state regulation as improvement of direct results of the concrete policy or program, then as evaluation of the economic expenses, and only on the third stage, evaluation has become an integral comprehensive part of state regulation [76]. The evaluation value was recognized at all social levels: political, economic and social. Evaluation as co-measuring of the results and costs and filling with this content the category of efficiency appropriate for business and controlling tools, currently it has been introduced to state regulation. Transition from understanding of effectiveness as an optimal bureaucratic model of organization of work of state authorities according to M. Weber to placement of financial costs and its external results to the evaluation center, as it occurs in the market, may be considered as the established fact. Currently, evaluating is understood as political result, i.e. the “systematic review of the information on activities within the program, its characteristics and results, which is performed in order to provide the judgment on the program, increase its efficiency and/or develop the plans for the future” [77]. Integral character of evaluation, accounting of not only economic (еfficiency), but also social results (effectiveness) may be compared with “total quality management” system, including apart from economic, also psychological, social, professional components and the range of other process characteristics [78] [79]. The risk management inherent in business regulation and controlling, resulting from an assessment of the external and internal environment, has also been reflected in the state regulation of social and economic processes in the country. The multiplicity of the types of procedures undertaken to

assess the results of actions of the public sector entities is shown in figure 1.4. Evaluation of the standard and service regulations (including within the program) External and internal risk evaluation

Evaluation of indicators Internal and (efficiency) external audit

Monitoring of direct and end results

Evaluation of social results (effectiveness)

Figure 1.4 – Evaluation types within the controlling system

Note – Compiled by the author on the basis of studies [80] [81].

Complexity of controlling in the public sector consists in the fact that it is rather difficult to select evaluation indicators in terms of the lack of transparent market tools (profit, profitability), i.e. it is impossible to achieve complete adequacy of the assessed phenomenon indicator [82]. Evaluation indicators are connected with temporary and resource expenses and therefore evaluation of the state program efficiency is often replaced with simple and easy to assemble data at the expense of adequacy principle. The plurality of evaluation types is designed to implement an analogue of those market mechanisms that cannot be directly applied to the results of the public sector. Especially it concerns the evaluation of “effectiveness” and its correlation with the “efficiency” evaluation, which requires special procedures, expert and field assessments.

1.3 Peculiarities of evaluation in the state regulation system of developed and emerging countries Despite the fact that the idea of introducing controlling system into state regulation emerged and fixed first in Anglo-Saxon countries (Great Britain, the USA, Australia, New Zealand), and then in the mainland Europe, institutional basis of the state administration significantly differentiate in the current models. Variety of applied forms and methods is defined first of all by high decentralization of state regulation in developed countries, reliance on the regional and local uniqueness. Despite the high

level of diversity, countries of the Organization for Economic Cooperation and Development (OECD) are the leaders in development of the state regulation methods. The results management system in the UK within the regulation of the social and economic processes in the country is considered to be one of the most developed in the world. Its basic characteristics are the following: 1. Evaluation of the effectiveness of budgetary expenditures is carried out on the basis of 130 performance indicators common for all municipalities; Uniformity of evaluations allows you to compare performance and state regulation effectiveness in different regions; 2. Uniform minimum standards for the quality of public services are developed and approved; 3. Evaluation of the effectiveness of authority’s activities is carried out within the framework of external and internal audit; 4. There are common methods for ranking and reporting on results, evaluation of the quality of services provided. The results management system in the UK is based on the key principles of assessing the efficiency, performance and effectiveness of the provision of services. Municipalities that showed better results than others receive additional funds from the federal budget for the implementation of new programs, and a decrease in the number of inspections by the Chamber of Accounts is observed. The evaluation of the quality of the services provided is carried out annually on the one hand by taking into account the national quality standards of the services provided to the population, and on the other hand, taking into account the opinion of the population about the quality of the provision of these services. Summarizing the experience of these two leaders of state regulation and other developed countries allows us to formulate the methodological foundations of regulation of economic and political processes on which the modern results-based budgeting system stands, with the five components of the regulation process system that are system-forming and follow, as the author said above, from the business controlling concept. Based on these five elements, you can define the following framework in the regulation: 1) Planning of the results. National priorities are defined as goals with indicators for each level of results. Results-based planning involves determining the expected results, cascading down from macro-level impacts, such as increasing employment in general, to specific sector outcomes, such as increasing youth employment. These results should be clearly defined within the

budgetary resources, have goals and indicators, assume appropriate monitoring and analysis and evaluation structure. 2) Budget for results achievement. The budget supports the planned objectives of national priorities. Budgeting ensures that the budget is formed to achieve the results indicated in the strategic plan. 3) Organization of activities aimed at achieving results. People, policies and processes must be economically and socially effective in carrying out the planned activities and provided services. At this stage, policies, personnel, systems of measures, programs and processes are developed that are oriented towards obtaining expected results. 4) Monitoring of intermediate and final results. Results-based monitoring means that specific parties are responsible for checking the performance of the achieved level on the indicators specified in the planning using certain methods for data processing, analysis and reporting. Selected specific indicators are used to monitor achievement of agreed outcomes. 5) Analysis and evaluation of results. The analysis methodology allows you to make an assessment of the results and make informed decisions on adjusting strategic plans and programs or stopping them [92]. The principles inherent in the model of state regulation are also singled out, which can be estimated as going back to controlling: 1) Focus on overall results. The planned results (intermediate, final) should be the same results, the expenditures for which are outlined in the budget. The results should be obtained as a result of the implementation of the system of measures, monitored and evaluated. Otherwise, the planning of results can simply become a document that ignores budget parameters. In turn, the budget system can allocate resources for the purposes not related to the National Plan. In addition, the monitoring process can monitor indicators that do not provide any information about how the set national goals have been achieved. 2) Interdependence of components. Components must also be interdependent. For example, planning from the top down sets parameters for budgeting, but in turn depends on budget constraints. Practice shows that in the course of activities to achieve the targets, they are often revised taking into account the results of monitoring, which can lead to changes in the budget and so on.

All components must work in close integration, the result of which is the achievement of national goals. When there is close integration, the adoption of future decisions is based on reliable information, a cycle of five elements of regulation is constantly functioning, there is a continuous enrichment of both individual components and their connections. From the point of view of the systemic nature of regulation, it is undoubtedly pointless to emphasize one component and leave others that do not work on the basis of complementarity. In addition, the cyclical platform allows to enter any component as an entry point for reform and this will negatively affect the entire chain if cyclic communications are not supported. 3) Horizontal and vertical links. Plans, budgets and results-based systems at the national level should be linked to the subnational level of executive power (regions, cities, districts), which also play a significant role in achieving the country's results. Subnational executive bodies should develop and implement their own strategic plans within the framework of the overall national policy, and this responsibility should be consistent with clear accountability, resource security and sufficient funding for the plan or program. Horizontal and vertical links allow better definition of results at all levels of responsibility and provide additional initiatives by different institutions and at different levels. 4) Orientation to the needs of citizens and society as a whole. For this, evaluations of economic and social efficiency based on the principles of internal and external expertise are applied. Features of the evaluation are that it uses planning indicators and information on monitoring results. Institutional features are defined by its status of internal or external evaluation. Thus, with external evaluation, the interests of all interested parties and stakeholders are taken into account. They also participate in the development of the methodology and can participate in monitoring and evaluation. Of particular interest to Kazakhstan are not only models for regulating the public sector of developed countries, but also the experience in solving problems in the regulation of socio-economic processes within the framework of state controlling, for example, in the countries such as the Baltic States (for example, the Republic of Latvia), the countries of Asian- Pacific region, which began the development of these progressive methods of state regulation about 20-30 years ago. They certainly implement the methodological bases elaborated in developed countries, but with their own institutional characteristics. The period of development of the state regulation system within the state controlling in these countries coincides with the period of independence that Kazakhstan has passed, the

restructuring of the economy according to the market type of management and state regulation of the public sector. Among these countries there are highly developed, belonging to the OECD group, but there are those, the sustainable development of which began just over 20 years ago. Young countries in which regulation of social and economic processes within the state controlling is in the process of establishment, include, for example, Cambodia. Since 1993, the country has implemented the task of strengthening economic policy and establishing institutions for democratic governance. In Kazakhstan, the system of social and economic processes regulation has been consistently implemented since 2007, after the adoption of the "Concept for the Results-Based State Planning System". To implement the fundamental provisions of the Concept, in 2008 a new Budget Code was adopted, which laid the possibility of moving to results- oriented budgeting [107] [108]. Since that time, a system of hierarchically interrelated documents (the vertical of planning) has started functioning, the content of which contains the continuity of the provisions of higher plans for the lower ones. The documents of the state planning system are currently: 1) Kazakhstan development strategy until 2030 (measures are being developed for the Development Strategy of Kazakhstan until 2050); 2) The Strategic Development Plan of the Republic of Kazakhstan until 2020, for the implementation of which the following documents have been adopted and are being implemented: - At the central level: - The prognostic scheme of the territorial-spatial development of the country until 2020, adopted to determine the state's approaches to key areas of sectoral and regional development; - 5 state programs in the field of industrial and innovative development, health, education, information and communication infrastructure and the development of the state language; - National Security Strategy of the Republic of Kazakhstan; - 43 sectoral programs aimed at industrial-innovative and infrastructural development, support of entrepreneurship, development of regions, etc.; - Forecast of socio-economic development of the Republic of Kazakhstan, developed annually and determining the parameters for the economic development of the country, region and economic policy for the medium-term period, taking into account strategic objectives in conjunction with budget parameters for three years;

- 29 central government agencies develop and implement strategic plans; - 37 development strategies for 10 years and 37 development plans for 5 years of national managing holdings, national holdings and national companies. At the local level: Territory development programs; Forecasts of social and economic development of regions. In addition to the above listed, several more programs are being implemented. The introduction of the system made it possible to build a common logic of planning and, through decomposition, to link the goals, objectives, indicators and indicators of higher and lower state bodies. The system includes an institution for monitoring the implementation of plans based on monitoring and evaluation procedures, and the basis for state audit is being formed. The independence and responsibility of state bodies for achieving results has been strengthened. There is a system of annual assessment of the effectiveness of the central state and local executive bodies, which records the achievement or failure to achieve the previously declared values of indicators. At the end of 5 years after the official implementation of the system, in 2013 a critical evaluation of the current state planning system was carried out, which is presented in the above-mentioned "Concept for Improving the Results-Based Public Planning System". The problematic issues of the state planning system are: a large number of documents, which makes their effective implementation difficult; low quality of documents, duplication of goals, objectives and indicators; weak relationship between strategic, economic and budgetary planning; inefficient risk management; imperfection of the mechanisms for assessing the effectiveness and effectiveness of the implementation of the documents of the State Planning System and activities of the state authorities. A critical evaluation led to the diagnosis and identified problems in the functioning of the new system of state planning, and also set tasks for the medium-term improvement on the principles of controlling [109]. To strengthen the methodological support and mechanisms for assessing the effectiveness of the implementation of strategic planning documents, efforts were made to develop the necessary methodologies. In 2016, the Order of the Minister of National Economy of the Republic of Kazakhstan adopted the Techniques for the development, implementation, monitoring and evaluation of the Strategic Development Plan of the Republic of Kazakhstan, the Forecast Scheme of the territorial development of the country, state and government programs, strategic plans of state authorities and territory development programs.

The methodologies propose the procedure and methods for assessing the implementation of strategic documents, but author’s view contains some simplified approaches, in particular, to assessing the effectiveness of program implementation. In subsequent sections of the work, the author will develop proposals for strengthening the methodological support on the materials of a particular program. Summarizing the experience of Kazakhstan and the countries of the Asia-Pacific region of Baltic States, it is possible to identify generally stronger and developed features of regulation of social and economic processes within the state controlling and the weaker sides that are difficult to implement both methodologically and technically and financially (table 1.3). Among all the elements of regulation of social and economic processes by results, “planning” is mastered best of all: five countries out of 8 have a strong planning system, and in two the planning state can be estimated as sufficiently reasoned and systemic planning (figure 1.5 and table 1.4). Figure 1.5 shows the relationships between the elements, in Table 1.4 the activity steps for each element. In most countries, the link to the budget and the budgeting process is rather an average estimate: in five of the six countries, budgeting can be estimated as satisfactory, and in three as strong. The implementation of the state service is assessed as the availability of its standard and its implementation in practice, as well as other policy points related to the provision of public services. Implementation is more concerned with budgeting as a source of financial resources for the provision of services, since it is the budget that ultimately determines the amount of services rendered to citizens. Implementation in 5 of the 8 countries is carried out at a sufficient level, the standards are mainly developed and implemented. Monitoring is a sufficiently developed link in the state regulation and in half of the countries under consideration is a strong link. But its connection with the implementation (i.e. the provision of services) and the evaluation (efficiency and effectiveness) is insufficient. I.e. it does not capture the quality of the services provided, and therefore does not provide the necessary information for evaluation. The most complex elements of the system of regulation of social and economic processes, both methodically and in practice, include analysis and evaluation of intermediate and final results. The assessment is not only methodically complex and difficult to perform, but also depends on monitoring data and reflects its shortcomings. Half of the countries in

question have weak analysis and evaluation procedures and are working to strengthen this component of the state regulation cycle [110].

Table 1.3 – Characteristics of the elements of regulation of the social and economic processes within the state controlling by the development level in the Baltic States and the countries of the Asia-Pacific region Country Strongly expressed Moderately expressed Slightly expressed Cambodia Planning Budgeting, Analysis and Implementation evaluation, Monitoring Indonesia Budgeting Planning, Analysis and Implementation evaluation, Monitoring Republic of Analysis and Planning, Budgeting Korea evaluation, Monitoring, Implementation Malaysia Planning, Budgeting, Analysis and Monitoring evaluation, Implementation Philippines Planning Budgeting, Monitoring Analysis and evaluation, Implementation Sri Lanka Analysis and Budgeting, evaluation, Monitoring Implementation Baltic States Planning, Budgeting, Analysis and evaluation (Latvia) monitoring Implementation Kazakhstan Planning Budgeting Analysis and Monitoring Implementation evaluation Note – Compiled by the author on the basis of studies [111] [112] [113] [114] [115] [116] [117] [118].

Planning:  Indicators with targets for each  Plan establishes priorities for the budget level of outcomes  Budget is aligned with the plan targets  Indicators meet S.M.A.R.T. principles

Evaluation Budgeting  Uses planning indicators  Budgets have mid-term and monitoring data, horizontal links with the expert evaluations and plan and fiscal targets 43 other information Results

 Budget defines final results of the service provision Monitoring • Indicators by plan and budget are regularly Implementation controlled • Service provision  Service quality is standards are established evaluated

* S.M.A.R.T. indicators with the features: specificity, measurability, accessibility , representativeness and adherence to time Strong interrelation Moderate interrelation Weak interrelation Figure 1.5 - Comparison of state sector regulation cycles in developing countries

Note – Compiled by the author on the basis of studies [119] [120] [121].

Table 1.4 – Characteristics of the elements of social and economic processes regulation by results and content of activities by element Planning Budgeting Implementation Monitoring Evaluation Connections between levels The budget supports the Organizational Indicators or, Values are The evaluation metho and results from national to planned priorities. priorities are regularly monitored. dology uses indicators the operational level (agency, consistent with the from planning and sector or sub-national level) final results of the information from are defined budget. monitoring results Principles for indicators: The budget process makes Politics, people and Institutional responsibilities Institutional responsibi S.M.A.R.T. (Specific, it possible to establish the processes are for integrated monitoring lities are defined with Measurable, Achievable, expedient and effective oriented to the are defined at the ministerial an independent Relevant, and Time-bound) priority of resources expected results level and agencies evaluation. The planned goals are Budgets have a medium- The standards for Procedures are defined: data Methodologies for 44 consistent with the available term horizon associated the provision of processing, analysis, stakeholder budget. with the plan and fiscal services, including reporting and dissemination participation are objectives the conditions for of the methodology developed Tracking of financial its availability Information is used to Evaluation of results management, presentation improve policy, program, from the standpoint of and dissemination of project development and economic and social methodology for budget management. efficiency execution is determined. Planning results take into The budget is aligned to The provision of Monitoring systems Expertise evaluates the account information from the plan targets and services is consis- improve the provision of results achieved and is evaluation and set priorities determines the final tent with the budget services and provide data used to adjust or create for the budget. funding indicators and with measura- for evaluation long-term plans ble performance indicators to facilitate monitori ng of results Note – Compiled by the author on the basis of studies [122] [123].

Thus, on the basis of the conducted study of the evaluation of effectiveness in the system of state regulation, we can conclude the following. Results-based regulation of the state sector establishes common elements that are understood to be universal and can be applied flexibly in different countries, taking into account specific institutional and methodological content. The accumulated world experience provides an analytical tool on the basis of principles that countries can use to evaluate their state sector regulation (PSM – public sector management) systems, analyze and address gaps and develop the capacity of the system as a whole by developing its elements and the links between them. The main elements of the results-based system of regulation of social and economic processes are: planning, budgeting, implementation of the plan in practice, monitoring, analysis and evaluation of results. The content of each of these elements has signs of controlling as a methodology for regulation of the firm’s activities, but it also has its own characteristics. They reflect the specifics of the public sector and its complexity in modeling a transparent and efficient mechanism, in terms of its coordinating and evaluating functions close to the market one. The principles of this model are: focus on common end results, the relationship and interaction between the elements of regulation, horizontal and vertical integration of different levels of regulation of social and economic processes, targeting the needs of citizens and society as a whole. Each of the components of the cycle of regulation of social and economic processes has its own difficulties and problems. According to the world experience of countries not belonging to the OECD group (with the exception of South Korea), the planning process. Budgeting is also a strong link in the system, but in some countries it is necessary to strengthen its coordination with planning. Implementation is also in most countries provided with public service standards, which are being improved, but in general they are being implemented. Implementation in practice is connected with budgeting. Since In the final analysis, it is the budgetary resources that determine the volume of the services provided, their quality. Monitoring in about half of the countries is well and excellent, but its connection with the implementation also needs to be strengthened. Monitoring indicators do not always adequately reflect intermediate results and quality of services. Evaluation is the weakest element in the regulation of the social and economic processes and in half of the countries there are problems with the

methods, procedures, costs of the evaluation, which implies the need for its development and improvement. Thus, according to the world practice, controlling is included to the number of market tools used by the state to regulate economic systems. Within this, logic controlling schemes in the business and public sector of the economy are studied, on the basis of such studies the similarity of the main stages of modern business cycle and state regulation cycle are identified: planning, budgeting, implementation, monitoring and evaluation. The complexity of evaluation as a controlling stage is demonstrated, which in the public sector should evaluate not only the business process, but also its results by the methods specially developed for this, as there is no simple and transparent tool for regulating social and economic processes. Having considered the experience of developed countries, the author defined result-based budgeting principles dating back to controlling in the public sector, as organization supporting system: - focusing on a unified system of results provided in planning, secured by the budget and received in the current reality, which are monitored and evaluated; - cyclical links and close integration between the five elements of management (planning, budgeting, implementation, monitoring and evaluation); - horizontal and vertical links between the levels of management with the focus on additional initiatives and responsibility for results; - orientation to the needs of citizens and society as a whole. Currently, the fourth stage of reforming of the state regulation of social and economic processes is taking place in the regions of developed countries, which on the one hand borrows all the positive properties from the corporate area, and on the other hand tries to take into account the complexity and multisubject nature of modern society with its interests and needs. The thesis also presents the experience of developing countries and the Baltic States on the example of the Republic of Latvia, which is actively implementing a result-based management system that is of interest to the Republic of Kazakhstan in terms of identifying typical problems and difficulties in applying the controlling model in the state regulation and evaluation of the efficiency of budget funds allocation in order to increase the quality of regulation of social and economic processes in the country. At the same time, it is defined that the evaluation is the weakest element of state controlling, and in half of the countries under

consideration, including the Republic of Kazakhstan, there are problems with the methods, procedures, expenditures for evaluation of the budget allocation efficiency, which implies the need for its development and improvement. Thus, the analytical part of the Concept of the Republic of Kazakhstan “On improving of the state result-based planning” adopted in 2013, the problems associated with imperfect mechanisms for evaluation of the efficiency and effectiveness of the state programs implementation, in particular “Employment roadmap – 2020” industry program of the Republic of Kazakhstan.

2 Analysis and evaluation of state program implementation (as exemplified in “employment roadmap – 2020” program of the republic of Kazakhstan)

2.1 Methodology for evaluation of state regional development programs The significance of the methodology is to catch the appropriate quality and evaluates the quantity of these results, explains their value for the society and defines the directions to adjust the activities within the state strategic plans and programs. The basic methodological positions of the modern understandings on evaluation is the combination of the quality and quantity methods, the use of the institute of independent experts, application of the methods of audit and adjustment of plans and programs by the results of such complex evaluation. In the most general meaning the “program” is defined as prescription or preliminary description of the upcoming actions undertaken in order to achieve the established aim. The program implementation is connected with the application of the selected algorithm of actions [126]. The program is a set of planned interconnected actions aimed at the resolution of some identified problem. According to such understanding, the program development and implementation methodology in traditions of the modern economic science is represented by the program-oriented and goal-oriented approach [127] [128] [129] [130] [131] [132] [133]. The systematization of the initial views about the program makes it possible to determine the following. The program is a strategic document, the content of which is aimed at achieving the goal through planned and time-coordinated activities/projects. In order to implement the program, budget or financial resources shall be defined for its activities/projects. The term of the program implementation shall be controlled by its monitoring, which is aimed at collecting information on the course of the program and at recording the delays, resources, achieved by the interim and final results. The program evaluation is based on the content of the program itself, monitoring data, specially collected data, expert evaluations of the processes and is designed to provide conclusion on interim results and achievement of the program goal. International organization “World bank” shall define that evaluation is the expertise of programs and projects aimed at: their quality analysis, their effect, comparison of these results with certain criteria [134]. By the definition of the UN, evaluation is “as systematic and impartial as possible

studying of any activity, project, program, strategy, policy, theme, sector, field of activity, work of the organization, etc.” [135]. If we consider the evaluation stages in the controlling system, the evaluation accompanies the process of creating and implementing the program at almost all its levels: 1) at the stage of the program creation (writing), forming its activities and projects; 2) at the stage of the program implementation (from the position of effectiveness and use of resources, complying with the regulation and standards of the service quality, direct results of the program efficiency); 3) at the stage of the interim results evaluation itself for the program adjustment; 4) at the stage of the program termination, its final results shall be evaluated and the decision shall be made on the program cancellation or continuation. In connection with the need for a variety of such evaluations, each of them has its own methodology or a set of methods by which it is implemented, i.e. we can say that there are several different approaches to the evaluation. All types of estimates are presented in figure 2.1.

Evaluation, oriented to consensus of analytical opinions Implementation: Business process

evalua-

tive By the subject focus target

community

benefit) -

Program content Program management Program efficiency The economic program of the or evaluation (efficiency cost a or society on Impact certain evaluation) (Impact

Implementation of of Implementation and activities program of achievement and indicators values the of Satisfaction social or beneficiary the of effectiveness (effectiveness program evaluation)

An evaluation focused on the choice of one of the alternative points of view on the content and management of the program

50 Evaluation

types Sale or

transfer to formative assessment Intermediate at the summative evaluation

outsourcin By Exit from the implementation stage Evaluation of results at the g n stage production system: (intermediate evaluation) primary (production) and Business implementatio Products (services) and Identifying the degree of secondary (implementation) process their sale achievement of goals or levels (standard By the type of information outcome and bases of evaluationregulation Expert evaluation Statistical evaluation Evaluation of Data from government of economic indicators agencies professiona (efficiency) l training service provision) Figure 2.1 – Types of assessments in the system of state controlling Note – Compiled by the author

Classification of evaluations can be made by evaluation subjects for the object. 1) Program content. The program content is evaluated on the basis of the principles which will be disclosed below. Evaluation shall be made prom the position of system approach, system dynamism, the logic of interrelation of the purpose, target indicators, tasks, parameters, objectives etc. Within the framework of such evaluation, the following elements are defined: - target: examination of the quality of the program preparation (evaluation of socio-economic conditions that prove the need for the creation and implementation of the program, evaluation of the composition and competence of developers, analysis of methodological materials used in the development, program logic, expertise of the content and resource availability of the program). The logic and mutual adequacy of the goals, target indicators, tasks (taken to resolve them, actions), indicators of results. - results: diagnostics of the program from the viewpoint of the systemic nature of the programmed phenomenon and its integration into a higher level system, identification of various inconsistencies between the planned actions and tasks, tasks and task indicators, target indicators and tasks, goals and objectives, etc. - features: it is desirable to evaluate the programs prior to the implementation of the program or at intermediate stages in order to timely eliminate inconsistencies and timely refuse or reduce inefficient state expenditures. 2) Implementation of program activities and achievement of indicators and target indicators of the program. - the purpose of the evaluation is to find out to what extent the tasks of the program are fulfilled on the basis of establishing deviations of the achieved values from the planned ones. - evaluation results: measuring the achievement of direct and final results of the program, adjusting its tasks, if necessary, taking into account the pros and cons of the program when other programs are launched. - features: a key type of evaluation - evaluation of the effectiveness of program actions. 3) Program management. In this case, the quality of the programs is evaluated: - the purpose of the evaluation is to develop and propose options for the program management, that is, the institutional standards of the program (for example, the quality of the entrance barrier or its absence, etc.), its

organizational arrangements (the procedure for using the services of the program, the terms of decision-making in the program, etc.). - evaluation results: conclusions about the degree of the program success through the prism of management decisions, adjustment of procedures and management decisions. - features: an intermediate evaluation, implemented in the process of the program implementation; all sections of the evaluation report should contain recommendations for the adoption of further management decisions (for example, as the author will show later, adequate monitoring of the client's stay in the program for timely identification of its difficulties and making corrective decisions). - satisfaction of the user or beneficiary of the program, or the social effectiveness of the program (effectiveness evaluation). In this case, we have the following features: goal: to evaluate the program in terms of the opportunities and prospects that it offers to the beneficiary. It is also possible to measure the positive results and other benefits provided by the program, per recipient (the beneficiary of the program), which is called the program effectiveness. results: measuring the product of the program (the quality of the product or service), the impact or influence of the program on the beneficiary and comparing with the plan. features: the evaluation is carried out only after the beneficiary's participation in the program is completed and is aimed at identifying the medium and long-term results of the program. The main and the only information source is the beneficiaries of the program. The evaluation process reveals the effectiveness of participation in the program from the time of entering to the time of leave, including the subsequent period of 2-3 years. 4) The economic efficiency of the program, its cost side (efficiency evaluation or cost-benefit analysis). - goal: to compare the results of the program with the resources expended during its implementation. - results: determination of the most economy version of the program solution; identification of deviations from the planned indicators for costs, clarification of the reasons for such deviations. - features: the evaluation can be performed at the stage of program development (search for the most cost-effective problem solution), and at the stage of completion of a separate stage of the program or the program as a whole.

5) Effects for the public or the secondary effect of assigning the program results to the whole public or some community (impact evaluation). Impact evaluation, the purpose of which is the impact of the program on beneficiaries and society as a whole, is a kind of social effect of assigning the program results: - goal: to evaluate the program in terms of its effect for society and long-term consequences; - results: identification of the comparative effect of the program for the life path of those who took part in it or did not participate; - features: it is necessary to examine 2 groups (those who participated and did not participate in the program) for a sufficiently long period after the end of the program. These five types of evaluation are basic, and all other species are actually derived from them. For example, the need for evaluation can arise even during the development of the program content, and then the evaluation has a specific narrow purpose. If there is a need to choose between two or more points of view on the content, the further course of the program implementation, managerial decisions in the program, within this the points of view are incompatible with each other, it becomes necessary to choose one of the proposed alternatives. Such an assessment can be defined as an assessment focused on the choice of one of the alternative options. The main elements of evaluation in this case will be: - goal: choosing one of the points of view on the content of the program as having the best characteristics and as the greatest probability of the program success. - results: choosing one of the alternative points of view of the groups relevant to the program. These groups are the program managers, heads of individual program projects, beneficiaries of the program, program sponsors, residents of the city or region, and others. - features: the selection of the group of appraisers selected from independent, "neutral" experts. They should use information sources abstracted from interested parties, objective methods of analyzing the obtained data, justify the conclusions and, on the basis of this, prove the relevance and effectiveness of the proposed solution to the problem. If the program is rather complicated and involves taking into account the multitude of interests of different social groups, economic mechanisms, organizational structures, but the evaluation conclusions should be the result of consensus of all interested program participants, the evaluation will be aimed at finding not the only objective optimal solution, but

identifying the entire range of admissible solutions. Among these admissible solutions, a search will be made and a choice of a solution will be made that will be permissible for all [136] [137]. The peculiarities of such an assessment will be the organization of several alternative assessment groups and synthesis of their findings, as well as the involvement of independent experts with a "fresh" view of the program. M. Patton also considers an evaluation focused on a specific user, meaning that it is necessary to understand who and how will use the evaluation results [138]. There is also a classification of program evaluations by the time of their conduct: - preliminary evaluation performed prior to the start of the program. The purpose of this assessment is to determine the need for the program implementation for the country (region, city), analyze the quality of the program, the resources involved in the program and the projected evaluation of its results and effectiveness. - intermediate evaluation carried out at the stage of the program implementation and intended to analyze the program, to assess the quality of the results already obtained. In fact, at this stage, the process of implementing the program is checked, which in the business controlling system is identical to the process of producing goods or services. At this stage, the system of state controlling is evaluating the implementation of the standard and the service regulations for the provision of the resource service. In the mid-term evaluation, the goal is to identify weaknesses, and threats of not achieving the intended results, deviation from the set indicators and other discrepancies of the desired and valid during the program implementation. All these issues are identified for the adjustment and subsequent successful completion of the program, i.e. achievement of its target indicators and targets. - summary assessment is conducted after the program completion to obtain adequate conclusions about the achieved results, the reasons for not achieving or exceeding the planned indicators, economic and social efficiency, conclusions on administrative decisions. From controlling positions, all these three evaluation steps are necessary steps to control the process of service delivery, the result of this process for both the beneficiary and the society from the perspective of the costs of providing these services. At the same time, the correlation of control functions and the acquisition of new knowledge about the program, its methods, possibilities and limitations in using the evaluation institution

is the most approximate to the scientific results giving new knowledge [139] [140] [141]. For the program evaluation, monitoring data is needed, which provides an information base for assessing. Monitoring is the continuous and systematic collection of information on the values of pre-selected indicators to provide managers, implementers and other stakeholders with information on: - how the program is implemented, - how its tasks are resolved, - how much the services provided by the program correspond to the standards and regulations, - to what extent the obtained results correspond to the selected target indicators, - how the resources allocated to this program are used [142] [143] [144] [145]. Types of information base of the programs that appears as a result of monitoring are: the opinion of the pool of experts, surveys of respondents, analysis of the statistical base of processes (if there are indicators of official statistics), quantitative data of state authorities. If the monitoring system is imperfect (wrong indicators are chosen, the values of the indicators are not collected on time or collected using incorrect sources), then it is quite possible that it will be difficult subsequently or impossible to fill in the missing information. It should be noted that the monitoring system (including its indicators) and evaluation is developed for each program separately, as the specificity of the programs and the reliance on the system approach in the evaluation involves the separate development of evaluation methodology for each program or strategic plan. Summarizing the system of initial views on evaluation or the methodological positions of evaluation in the controlling system, it can be said that: 1) Evaluation considers expected and received results, results chains, processes, context and cause-effect relationships to understand what has been achieved and what is not. 2) Evaluation task is to determine how much the activities of the subjects implementing the program correspond to the situation, to what extent this activity is effective, efficient and sustainable, and what impact it has on beneficiaries and society as a whole. 3) Conclusions and recommendations of the program evaluation are based on reliable and true actual data. This allows you to quickly use the findings and recommendations of evaluation for decision-making.

4) There are empirically established rules for evaluating programs that need to be adhered to [146]. The evaluation principles are systematic, dynamic, objectivity, openness, efficiency, balance of client's interests and programs, professionalism of appraisers [147]. Systematic evaluation of programs involves considering the object of the program (for example, the region, the city or the employment phenomenon) as a system taking into account its characteristics: openness, autonomy, limitation, interconnectedness, emergence (systemic effect)[148] [149]. Systematicity involves the consideration of an object or an economic phenomenon as part of an open socio-economic system. The properties of an open system assume the consideration of cause-effect relationships and influencing factors not only within the system, but also within the framework of its contact with others. For example, when considering the phenomenon of employment of the population, this involves taking into account the influence of factors not only on the part of the economy, but also on the features of the functioning of the vocational education system. Dynamism involves the consideration of a phenomenon or object within a certain period of time, i.e. accounting not only direct, but also more remote results. So, for example, does the vocational training within the employment support program provide a long-term contract for work (minimum annual)? How sustainable is the knowledge and skills obtained through training? Will they be relevant for at least five years? The objectivity of the evaluation is considered in two options. The first option involves reliance on true and verifiable data obtained from independent sources (such as statistics) or their persistence in repetition, for example, questioning of target groups. The evaluation methods must be agreed before their implementation, and the impact that the methods used by the evaluators can have on the evaluation process, its results and conclusions can be justified. From another point of view, the principle of objectivity of the evaluation is also interpreted as the absence of a conflict of interests between the appraiser and the evaluated program or the organization that implements it [150]. The openness of the assessment implies the voluntary submission of information on the program and the awareness of the participants about what the consequences may be, and guarantees of anonymity, if the source of information insists on maintaining confidentiality. Each of the participants in the evaluation process must be guaranteed respect and impartial opinion. If, nevertheless, the appraisers believe that the "mysterious buyer" method is necessary, then the personnel providing the services within the program should be warned about this [151].

The evaluation promptness assumes its timely performance and submission by a certain period for the adoption of corrective measures. The principle of parity of the balance of interests is to give the interests of the client and the interests of the program equal importance in the evaluation process. In the event that the interests of the client contradict the principles of objectivity, disinterestedness, respect for other people, competence, these circumstances should be taken into account when deciding on the adequacy of the evaluation. Perhaps, in this case it is necessary to take into account this client as the client who has not determined his evaluation of the program services [152]. An important principle is the professionalism of appraisers, which is determined not only by their professional skills and competences, but also by professional responsibility, which is the priority of public interests and the public well-being[153]. From point of view of the author, it is necessary to divide the principles of evaluation as requirements to its content and principles of evaluation from the positions of controlling (figures 2.2 and 2.3).

Evaluation principles as the requirements to its content

•Consideration of the object as an Dynamism •Compliance with the open system •Consideration of technical standards •Account of the allowing to get an system features an object in dynamics accurate and true and its information on the interconnection •Account of Systemaci research subjectObjectivity with the externalty medium term and environment long term results

Figure 2.2 – Methodological basis of the evaluation content

Note – Compiled by the author

Principles of evaluation performance (as the procedure) from the controlling position

•Voluntariness of data submission Openness •Anonimity •Respect for each informer

•Absence of conflict of interests between the appraiser Objectivity and the program or organization that implements it

•Timely implementation for conducting corrective Promptness actions

Balance of •The interests of the client and the interests of the interests program have equal significance

•Professional worth Professionalism •Responsibility of appraisers

Figure 2.3 – Methodological basis for conducting evaluation in terms of controlling

Note – Compiled by the author

State programs evaluation methods are traditionally divided into the quantity and quality. Quality methods of research, as a rule, are presented by deep and expert interviews. As usual, they have small coverage and cannot qualify for statistic representativeness. But they are very important for elaboration of hypothesis, evaluation of procedures and results of the program “from the inside” (if this is the program participant) or “from the outside” (if this is the expert from the community). The first method provides “multistage analysis”, when the interviewer firstly identifies general issues and then transits to the personal experience of the questioned respondent. The program beneficiaries as well as its managers may be the respondents. Within the deep interview, the method of “identifying hidden problems” (personal emotions of respondent) and “symbolic analysis” method (opinion of the respondent on some alternative experience obtained outside the program) may be used. Expert analysis provides detection of evaluations and opinions existing in the professional community, allows getting hypothesis and explanations of causal relationships based on the long-term professional 58

experience in conducting scientific and applied scientific research in this field[154] [155]. Social effectiveness of the program or “effectiveness evaluation” may be evaluated only by this method. Within this, in getting sufficient selection of respondents, it is possible to use statistical processing by the methods applied in sociological studies (figure 2.2.). Thus, the evaluation of the program content, impact (social effect) is performed with the use of mainly quality methods. Quantity methods are applied in formation of the program indicators (specific weight, different indices) and in evaluating the economic effectiveness and program productivity. Even at the stage of determining the final results of the program, various indicators (statistical or calculated) are proposed, which can characterize the effectiveness of the program in the future. The direct indicators of the program include, for example, the number of participants in the program, the amount of benefits they receive etc., The productivity of the program is understood as its ability to pass through the beneficiaries per unit of costs, formula (2.1).

퐿푖 퐸푝푟표푑= ⁄ 2.1 푉푖

where Eprod – program productivity; Vi – costs for i direction in the program; Li – number of the program participants.

The economic efficiency of the program, as a rule, is understood as the specific costs for obtaining a unit of the final result, formula (2.2).

푉푖 퐸푐표푠푡−푏푒푛푒푓푖푡 = ⁄ (2.2) 퐾푖

where Ecost-benefit – economic efficiency of the program; Vi – costs for i direction in the program; 퐾푖 – number of the program beneficiaries, who obtained its final result.

Quantity methods are applied for evaluation of the program and its participants. If all monitoring data are collected, general set of the program participants may be evaluated with the traditional statistical methods (to find simple average, variation coefficient, to define social groups of the program participants and their ratio etc.). Defining the modal characteristics of the program participant will allow to get an objective

view of the factors influencing the final program results or to justify economic and social effectiveness of the program. In addition, when evaluating programs, it is possible to use more complex qualitative and quantitative methods that combine qualitative analysis of the phenomenon and use various scales for typing outcomes. And in the future, on this basis, quantitative characteristics of possible outcomes are made and modal (outcomes dominant in this sample), outsider (single outcomes) and intermediate variants of outcomes that have some probability of occurrence in the program are selected. In this case, the result of the program is determined separately for each of its participants and is identified as socially-effective and socially-inefficient. And also allows to identify the factors that influence the socially inefficient outcome. This version of the qualitative and quantitative method will be justified by us, tested and presented in paragraph 3.2 on the materials of the study of the direction of youth practice in “Employment roadmap – 2020” program. Thus, the methodological bases for evaluation of state programs in the controlling system are as follows:  Multiple types of evaluation to meet the different needs of the controlling process in the state regulation of social and economic processes: at the stage of program formation (similar to the development of a business plan); at the stage of the program implementation in terms of performance of task indicators, management of its projects, satisfaction of beneficiaries from participation in the program (business process analogue), after the end of the program (economic, social effectiveness and impact assessment). There are types of program evaluation that reflect the fourth stage in the development of state regulation of social and economic processes with its support for multi-subjectness and the need to take into account the interests of different social groups of civil society. This is an evaluation focused on the choice of one of the alternatives or an evaluation oriented on the search for agreement between the stakeholders of the program.  Each type of the program evaluation relies on its information base, determined depending on the features of the program and its business process. It is possible to use several alternative information bases simultaneously to confirm the hypotheses of the program evaluation.  The evaluation uses not only qualitative and quantitative methods of processing and interpreting the results of the program, but also joint qualitative and quantitative methods, if they allow to provide a multifaceted assessment of the implementation of the program and its results. 2.2 Evaluation of economic efficiency of "Employment roadmap - 2020" program of the Republic of Kazakhstan

Modern trends in the development of the world and domestic economy put forward certain requirements for the regulation of the labor market and the promotion of employment and the reduction of unemployment by the active implementation of the state programs in the field of the population employment in order to maintain the existing workplaces or to create new jobs, to train and to retrain the specialists in the labor market [156] [157]. One of the methods for adapting state regulation to meet these requirements in the Republic of Kazakhstan is the state program of the Republic of Kazakhstan "Employment roadmap - 2020" (hereinafter referred to as the Program), which is a logical continuation of the pilot Roadmaps of Kazakhstan of 2009 and 2010, the Employment Program 2020 and the Employment roadmap 2020 in the Republic of Kazakhstan implemented in 2013-2014. The aim of the program is to promote productive employment of the population through training, subsidizing jobs for target groups (youth and disabled people), providing jobs at infrastructure facilities, microcrediting for doing own business. From the point of view of forms of employment, it can be said that the program is aimed at creating the conditions for the acquisition of permanent employment by the program participants and conclusion of employment contracts for at least one year. Therefore, in the process of implementation of “Employment roadmap – 2020” Program for 2013-2015, it is planned to achieve the following expected results (by 2016): unemployment level will not exceed 5 %; poverty level will not exceed 6 %; the share of effectively employed in the total number of independently employed population will increase up to 64,5 %. At present, the Program is actualized taking into account the instructions of the Head of the State given at the expanded meeting of the Government of the Republic of Kazakhstan on February 11, 2015. To evaluate the efficiency of this program implementation, the author based on: 1) Methodological support of the activity of the Employment Centers, including the development of the key performance indicators [158]. 2) Reports on the implementation of the activities of the current year of the strategic plan of the central government body (Ministry of Health and Social Development) [159] [160]. 3) Methods for evaluation of efficiency of management of budgetary funds of the state body of the Republic of Kazakhstan [161]. It should be noted that the application of these techniques is difficult and in the final reports there are no indicators of effectiveness evaluation.

Thus, the methodological support of the activity of the Employment Centers, which should include the development of key performance indicators, is only mentioned in the Information and Methodological Provision of the “Employment roadmap 2020” program, but the effectiveness indicators themselves are not presented. When drawing up the reports on the implementation of the “Employment roadmap – 2020”, only absolute indicators are used, for example, indicators of the utilization of funds allocated for the implementation of a particular area of the “Employment roadmap - 2020”. Performance indicators are not calculated or analyzed. Also, the existing methodology for assessing the effectiveness of management of budgetary funds of the state body of the Republic of Kazakhstan does not allow to evaluate the effectiveness of the “Employment roadmap – 2020”. According to this methodology, the efficiency analysis of the central state/local executive body is carried out according to the following evaluation criteria: 1) Assimilation of allocated funds for the relevant fiscal year. 2) Absence of violations of budgetary and other legislation following the results of inspections of the bodies of state financial control. 3) Measures taken (implemented) to enforce the introduced acts of response of the state financial control authorities. 4) The activities of the internal control services of the state body for managing budget funds and measures to implement their recommendations. 5) The amount of redistributed funds of the administrator of budget programs to the approved amount of expenditures. 6) Organizational measures for budget execution. 7) Achievement of direct results of the budget program. 8) Dynamics of the direct result of budget programs. 9) Quality of planning of performance indicators of budget programs. 10) Efficiency of budget program execution. 11) Absence of accounts receivable. 12) Lack of accounts payable. The proposed criteria do not allow to evaluate the effectiveness of the work of such a body as an employment center, and, accordingly, the effectiveness of the “Employment roadmap - 2020” program. Criterion No. 10 – “Efficiency of budget program implementation” includes the ratio of the direct result of the budget program to the development of allocated funds for the relevant fiscal year. In this study, the evaluation of efficiency of “Employment roadmap – 2020” program (hereinafter “ERM-2020”) will include:

1) Evaluation of the dynamics of the main indicators of the labor market of the Republic of Kazakhstan, as a result of the implementation of the directions of the “Employment roadmap – 2020”. 2) Study of the dynamics of the program financing volume and coverage of the employment program of the population 3) Evaluation of the results of the program “Employment roadmap – 2020”, including comparative characteristics of specific costs per participant in the program areas. Evaluation of the dynamics of the main indicators of the labour market in Kazakhstan. The employment promotion measures implemented under the Roadmap 2020 had a positive impact on the overall labor market situation and a decrease in the number of the unemployed people in the country, as shown in table 2.1[162].

Table 2.1 – The main indicators of the labor market in the Republic of Kazakhstan in 2010–2015 Abs. deviation Indicators 2010 2011 2012 2013 2014 2015 2015/2010 Economically active population, 8610,7 8774,6 8981,9 9041,3 8962,0 9074,9 464,2 thousand people Employed population, 8114,2 8301,6 8507,1 8570,6 8510,1 8623,8 509,6 thousand people Employees, 5409,4 5581,4 5813,7 5949,7 6109,7 6294,9 885,5 thousand people Self-employed, 2704,8 2720,2 2693,4 2621,0 2400,4 2328,9 -375,9 thousand people Unemployed population, 496,5 473,0 474,8 470,7 451,9 451,1 -45,4 thousand people Unemployment 5,8 5,4 5,3 5,2 5,0 5,0 -0,8 rate,% The level of youth unemployment,% 5,2 4,6 3,9 3,9 3,8 4,1 -1,1 (aged 15-24 years)1) The level of youth unemployment,% 6,6 6,3 5,4 5,5 4,2 4,3 -2,3 (aged 15-28 years)2)

Continuation of the table 2.1

Abs. deviation 2010 2011 2012 2013 2014 2015 Indicators 2015/2010 Long-term unemployment 2,2 2,1 2,5 2,5 2,4 2,4 0,2 rate,% Employed under the program 151 142 ERM_2020 for 73 806 580 264 permanent jobs, people Ratio of the number of employed to a permanent job after participating in the - - - 15,6 33,54 31,53 - program ERM-2020 and the number of unemployed,%* Note: Compiled and calculated by the author by source 1 * The indicator is calculated as the ratio of values in line 10 and line 5, in percentage.

Thus, according to the Committee on Statistics of the Republic of Kazakhstan, the number of unemployed in 2015 was 451,1 thousand people, or 5,0 % of the economically active population. Compared with 2010, the number of unemployed decreased in absolute terms by 45,4 thousand people. And vice versa, the number of economically active population in comparison with 2010 increased by 464,2 thousand people, making 9074,9 thousand people in 2015. As for “Employment roadmap – 2020” program, the ratio of the number of people employed in a permanent job after participating in the program and the number of unemployed people shows that the number of unemployed could be more than 15,6 % in 2013, 33,54 % in 2014 And by 31,53 % in 2015 (the methodology for this calculation and other indicators are presented in paragraph 3.3). At the same time, a more accurate impact assessment requires the calculation of other economic indicators, including evaluating the effectiveness of the program. Dynamics of the program financing volume and coverage of the employment program. 197,45 billion KZT were allocated from the republican budget in 2013-2015 for implementation of “Employment roadmap – 2020” Program (table 2.2). Table 2.2 – Funding amount and coverage by “Employment roadmap – 2020” program in 2013–2015 Indicators Total for 2013 2014 2015 2013-2015

1st direction “Ensuring employment at the expense of 52,9 51,9 13,7 118,5 development of the infrastructure and housing and utilities sector”, bn. KZT/bn. EUR 0,26 0,22 0,05 0,53 2nd direction “Creation of the workplaces through the 24,3 20,89 10,4 55,59 development of entrepreneurship and supporting 0,12 0,09 0,04 0,25 villages”, bn. KZT/bn. EUR rd 3 direction “Assistance in employment through training 10,96 9,1 3,3 23,36 and resettlement within the needs of the employer”, bn. KZT/bn. EUR 0,05 0,04 0,01 0,10 88,16 81,89 27,4 197,45 0,43 0,35 0,1 0,88 Submitted application 107 566 195552 136009 439 127 Became participants 106 397 194417 136009 436 823 Costs for one participant of the program, thous. 828,6 421,2 201,4 452,01 KZT/thous. EUR 4,1 1,77 0,8 2,22 Total employed people, including 134 093* 167 217 155 746 457 056 - for permanent workplaces 73 806 151 580 142 264 367 650 - for infrastructure projects 12 430 12 721 4 490 29 641 - for social workplaces 24 334 18 719 10 431 53 484 - for youth practice 23 523 17 523 10 276 51 322 Received microcredit 11 181 9 607 4 385 25 173 Passed professional training, including 23 425 22 151 13 323 58 899 - Employment after training 18 661 17 152 10 422 46 235 Moved, people 4 579 3 456 1 020 9 055 - Including capable to work 2446 1 586 506 4 538

By the data provided in table 2.2, the number of the program participants increased from 2013–2015. Thus, if in 2013 the program participants amounted to 106397 people, then in 2014– 194417 people, that is by 82,73 % greater than the indicator of 2013, in 2015 – 136009 participants, that is by 27,8 % greater than the indicator of 2013. It is obvious that in 2015, the funding amounts for all directions were 3,8 times reduced due to the economic crisis by the first direction, by the second – 2,3 times, by the third – 3,3 times. Totally, during the specified period, 436823 people has become the program participants – 452,01 thous. KZT of the budget cost are allocated for each of them. According to the structure of costs for participants in the Program directions, the most part of the program costs falls on the 1st direction – 60 % of all costs (on average over the period). The shares of the participants in the second and third directions were 28 % and 12 %, respectively. Evaluation of the process and results of “Employment roadmap – 2020” Program implementation. In order to evaluate the process and results of implementation of “Employment roadmap – 2020” Program, the author performed separate analysis on each direction.

The first direction “Ensuring employment due to development of the infrastructure and housing and utility services” is focused on ensuring the population employment by implementing infrastructure projects in rural settlements, with the medium and high potential of socio-economic development in small cities. By this direction, 4258 projects on rural infrastructure development were implemented in 2013-2015, within this totally 55969 workplaces were created (table 2.3).

Table 2.3 – Economic indicators of implementing of the 1st direction “Ensuring employment due to development of the infrastructure and housing and utility services” within “Employment roadmap – 2020” program in the Republic of Kazakhstan for 2013-2015 Indicators 2013 2014 2015 Total Total projects (actl.), units 1714 1979 565 4258 Created workplaces, people 23568 23800 8601 55969 Employed from the number of the 12430 12721 4490 29641 program participants, people Specific weight of employed participants to all employed, in 52,7 53,4 52,2 52,9 percentage Number of employed program participants for 1 implemented 7 6 8 7 project, people Costs for construction of the infrastructure and housing and utility 52,9 51,9 13,7 118,5 facilities, bn. KZT/bn. EUR 0,26 0,22 0,05 0,53 Specific costs for one employed for the construction period, mln. KZT* 4,26 4,08 3,05 4,00

29641 program participants are employed to these positions, their specific weigh is 52,9 % of the total number of employees at the constructed facility. In average, 7 people are employed to none project. This direction is interdepartmental, as the initiative for implementing infrastructure projects comes from other ministries and allows creating workplaces on construction of infrastructural projects of healthcare, culture, education etc. Evaluation of these costs efficiency is difficult due to the fact that the effect from the construction and launch of these facilities is observed not only in the field of employment but also in other areas (culture, education etc.)

From another side, it is obvious that the employment effect is temporary, since after the completion of the construction period, employment of its employees is terminated. Actually all these employees have contract for a definite term or definite scope of works. From the view point of effect for employment, the average cost for the period per one employed person for the construction period is 4 mln. KZT (0,17 mln. EUR). During the period, dynamics of reduction of specific costs is observed. This indicator is not provided in the materials of the official report on this direction. The author believes that additional effectiveness indicator which would characterize the employment of the program participants at the facility after its launch for continuous functioning, would have allowed evaluating the effect of the continuous employment. The second direction “Creation of the workplaces through the development of entrepreneurship and supporting villages” is aimed at increase of the economic activity of the citizens through organization of own business. The Program participants may be the citizens, wishing and having opportunity to organize own business. The priority is given to those who wishes doing business in the village. Supporting measures by this direction include: provision of consulting services, studying the fundamentals of entrepreneurship; provision of microcredits; development and arrangement of missing engineering and communication infrastructure. The population microcrediting is an effective measure for reduction of non-productive independently employed persons and reduction of the number of unemployed people in the rural area. The credit is provided on return basis for the term of not more than 5 years in amount of up to 3 mln. KZT. Regulations and rules for provision of credits within the Program ensure their access to financial credits with the percentage for vulnerable social groups of the population from the village and it is a unique opportunity for such citizens to start own business. Via the Program credits have become available for the residents of remote villages, that generated interest of the population. For 2013–2015, more than 22408 people obtained free training on the basics of entrepreneurship at the expense of the funds provided by the program (table 2.4).

Table 2.4 – Economic indicators of implementing of the 2nd direction “Creation of workplaces through the development of entrepreneurship and

supporting villages” within “Employment roadmap – 2020” program in the Republic of Kazakhstan for 2013-2015 Indicators 2013 2014 2015 Total for 2013-2015 Costs for creation of workplaces 24,3 20,89 10,4 55,59 through the development of entrepreneurship and support 0,12 0,09 0,04 0,25 villages, bn. KZT/bn. EUR, including: - costs for microcrediting, bn. 23,9 20,6 10,3 54,8 KZT/bn. EUR 0,12 0,09 0,04 0,25 Number of people who undergone training on the basics of 10310 9288 2810 22408 entrepreneurship, people Number of people, who obtained 11182 9607 4385 25174 microcredits, people Employed for the additional created 9169 10700 6134 26003 workplaces, people In average for the period Specific costs for employment of one employees for created workplaces through the development of entrepreneurship and support villages, mln. KZT* 2,65 1,95 1,70 2,14

In 2015, microcredit beneficiaries created 6134 additional workplaces (without taking into account the microcredit beneficiary himself). Generally by the republic, the main areas of development of entrepreneurship of the Program are cattle breeding and crop growing (mainly production of meat, growing vegetables and melons), processing of the products of cattle breeding and crop growing, that is over 80% of all issued credits. About 20% of projects are own businesses in the field of services provision (opening of tailor and repair shops, baths, hairdressing salons) and processing (baking, meat and milk processing). In the context of the effect for employment, expenses for one employed workplace by direction are defined in amount of 2,14 mln. KZT. There is a positive trend of reduction of costs in dynamics for 2013-2015. Here it should be noted that in the materials of the official report on direction this indicator is not provided, as well as the information demonstrating the following is not provided:

- specific weight of the people who completed training from the number of those who started and successfully implemented the obtained training in the form of doing own business; - share of those who recovered and started planned recovery of credits of the number of end borrowers; - number of business projects, functioning for not less than 1 year. In other words, end results of performed activities and “expenses- benefits” evaluation are not evaluated on this direction. Third direction “Assistance in employment through training and movement within the employer’s needs” is aimed at ensuring sustainable and effective employment of citizens by assistance in employment at the place of residence and will cover self-employed, unemployed and financially disadvantaged citizens. Priority opportunities of participation in the Program are provided to the rural youth. Participants of the third direction “Assistance in employment through training and movement within the employer’s needs” are provided with such types of state support as (sub-direction types): 1) direction for free professional training, retraining and development courses – “Coverage by professional training”; 2) provision of subsidies for the transportation to the place of training and accommodation; search of appropriate vacancies and assistance in employment, including social workplaces – “Providing subsidies for the social workplaces (SWP)”; 3) passing youth practice (subsidizing the remuneration of educational organization graduates), subsidizing of movement, provision of standard accommodation for rental - “Subsidizing of the workplaces for youth practice (YP)”. Over 23,3 bn. KZT (0,1 bn. EUR) (table 2.5) are allocated for organization of professional training (1st sub-direction) from the republican budget in 2013-2015. The author calculated the range of indicators on this direction which are not available in the official statements, but should be applied as the program effectiveness and efficiency evaluation indicators.

Table 2.5 – Economic indicators of the 1st sub-direction “Coverage by professional training” within “Employment roadmap – 2020” program in the Republic of Kazakhstan, for 2013–2015 Indicators 2013 2014 2015 Total for 2013-2015 Expenses on direction, bn. KZT/bn. EUR 10,9 9,1 3,3 23,3 69

0,05 0,04 0,01 0,10 Covered by professional training, total, 48,6 35,7 14,1 98,4 thous. people, including: - Training, thous. people 37,6 27,3 12,5 77,4 - Retraining, thous. people 8,9 6,6 1,4 16,9 - Professional development, thous. people 2,1 1,8 0,06 3,96 Completed training, thous. people 23,4 22,1 13,3 58,8 Employed persons, thous. people 18,7 17,1 10,7 46,5 In average for the period Expenses for professional training per one 224,28 254,90 234,04 237,74 participant of the 1st sub-direction, thous. KZT*/thous. EUR* 1,11 1,07 0,95 1,04 Specific weight of those who completed 49,1 61,9 94,3 59,8 training, in percentage* Specific weight of employed people from the number of those who completed 79,9 77,4 80,5 79,1 training, in percentage* Specific weight of employed from the total number of people covered by the training, 38,48 47,9 75,9 47,3 in percentage* Expenses for professional training of one 587,6 532,2 308,4 476,1 employed person, thous. KZT/thous. 2,91 2,23 1,25 2,13 EUR*

By the data of the calculations, over 3 years of the program implementation 58,8 thous. people (59,8 %) completed training of the number of people covered by professional training, 79,1 % of them or 46,5 thous. people were employed and regarding the participants covered by the program, the employment percentage was 47,3 %. Characterizing the dynamics of the relative indicators by years, it can be noted that the indicators of completion of training and employment are improving and the indicator of specific expenses is decreasing. Certainly, these trends evidence the increase of effectiveness and efficiency of the program. For the period of from 2013–2015, the average indicator of employment of the number of participants covered by the training remains below 50 % and the specific weight of participants who completed the training is 59,8 %, i.e. 40,2% are dismissed from the program during the training. The reasons (which may be divided into objective and subjective) for exit of 40,2 % of participants from the program at the training stage are: а) Subjective reasons: - incompatibility of studies with self-employment and as a result – the loss of the habitual level of revenues from the self-employed participant;

- low basic level of knowledge of the program participants that restricts re-training. в) Objective reasons: - lack of selection of the educational institution by the program participants (as the selection is performed by the employer based on his interests, that sometimes provides the possibility of agreement between him and the educational institution). Concerning the expenses per one employed person after the professional training, they were 476,1 thous. KZT in average. It should be noted that after professional training the employment fact is not evaluated from the positions of the type concluded after preparation of the employment contract (temporary/continuous; full/part working time). Post program employment is not monitored. Additional opportunities of temporary employment were created at the expense of opening social workplaces (table 2.6).

Table 2.6 – Economic indicators of the 2nd sub-direction “Subsidizing of the social workplaces” (SWP) within the “Employment roadmap – 2020” program in the Republic of Kazakhstan for 2013-2015 Indicators 2013 2014 2015 Total for 2013-2015 Financing the organization of social workplaces, bn. 3,7 2,6 1,3 7,6 KZT/bn. EUR 0,02 0,01 0,01 0,04 Number of employed people from the number of 24,3 18,7 10,4 53,4 unemployed citizens referred to the target groups of the population, thous. people Number of employed people for permanent 18,5 13,5 7,8 39,8 workplaces, thous, people Average for the period Specific weight of employed for permanent 76 72 75 74,4 workplaces, in percentage* Specific expenses for employment of one participant 152,2 137,8 125,0 138,3 for SWP, thous. KZT* Specific costs per one employed for permanent 200,0 190,9 160,0 183,6 workplaces after SWP, thous. KZT* Note – Compiled and calculated by the author by the sources * Indicators calculated by the authors Official EUR exchange rate is calculated as average for the period according to the official data of the National Bank of the Republic of Kazakhstan for 2013-2015. - URL: http://www.nationalbank.kz/?docid=763&switch=russian (date of address: 30.03.2017). According to the table, the organization of social workplaces under the Program annually allocated funds decreased from KZT 3,7 billion in 2013 to KZT 1.3 billion in 2015. As for the costs per one employed person for permanent jobs after the CPM, in 2013 they amounted to 200 thousand KZT, in 2015 – 160,0 thous. KZT. If the participant has been trained before

the assignment to a social workplace, then finally the costs shall increase (table 2.7).

Table 2.7 – Costs for employment through SWP after training within “Employment roadmap – 2020” program in the Republic of Kazakhstan for 2013–2015, thous. KZT Indicators 2013 2014 2015 Average for the period Specific costs for the training of one 587,6 532,2 308,4 476,1 employed (1st sub-direction) Specific costs for one employed for 200,0 190,9 160,0 183,6 permanent jobs after SWP (2nd sub- direction) Total costs 787,6 723,1 468,4 684,7

Total costs on the 1st and the 2nd sub-directions of the Program decreased from 787,6 thous. KZT in 2013 to 468,4 thousand KZT per person in 2015. Despite the decrease in specific costs, the amount of funding for employment through vocational training and employment to a permanent workplace after SWP remains significant. Youth practice. To solve the problems of the graduates of educational organization in obtaining initial experience, the opportunities of youth practice were actively used. In its format, in the last three years 51,3 thous. people were actually employed (table 2.8).

Table 2.8 – Economic indicators of the 3rd sub-direction “Subsidizing of the workplaces for the youth practice” (YP) within the “Employment roadmap – 2020” program in the Republic of Kazakhstan for 2013-2015 Indicators 2013 2014 2015 Total for 2013-

2015 Financing of youth practice, 3,1 2,4 1,6 7,1 billion KZT/bn. EUR 0,02 0,01 0,01 0,04 Number of people employed according to the plan, 17,3 16,8 6,9 41 thousand people Actual number of employed 23,5 17,5 10,3 51,3 people, thousand people Employed for permanent work of the number of employees who completed their 6,4 8,8 6,5 21,7 participation in youth practice, thousand people Share of people employed for a permanent job after youth 27,2 50,3 63,1 42,3 practice (YP), in percentage* Average for the period Specific costs for one employed for the YP, 131,9 137,2 155,3 138,4 thousand KZT* Specific costs for one employed for permanent work 484,4 272,7 246,2 334,4 after the end of the YP, thousand KZT*

7,1 bn. KZT are allocated for youth practice organization in 2013- 2015 and 21,7 thous. people were employed. As the percent of the permanent employment after the youth practice is sufficiently low (42,3 %), then the specific costs in the actual employment for the permanent job by the program were 484,4 thousand for person in 2013, 246,2 thous. KZT – in 2015. Thus, the final result – the average costs for one employed young man by the program are 334,4 thous. KZT. As the option of crossing of the professional training and youth practice takes place, then the costs for the permanent employment by such combination are provided in table 2.9.

Table 2.9 – Costs for employment by the youth practice after professional training within “Employment roadmap – 2020” program in the Republic of Kazakhstan for 2013-2015, thous, KZT

Indicators 2013 2014 2015 Average for the period Specific costs for professional training of 587,6 308,4 476,1 one employed person 532,2 Specific costs for one employed person for the permanent job by the youth 484,4 272,7 246,2 334,4 practice Total costs 1072 804,9 554,6 810,5

Comparing the specific costs for employment for the permanent job in three variants, it can be noted that the major specific costs are created by the 1st and 3rd sub-directions of the Program - the professional training and youth practice program. And the most significant specific costs are caused by the combination of these two types of support, i.e. the combination of the professional training and the youth practice (810,5 thous. KZT). Thus, the analysis of implementation of “Employment roadmap 2020” program and its pervious similar programs allows to make the following conclusions. According to the terms accepted in the methodology of result-based management[194], the Program produced the following “products”: - employment for all types of jobs - about 457056 people, 367650 people of which were directed to the permanent jobs (table 2.2); - more than 20 thous. people were trained on the basics of entrepreneurship (table 2.4); - over 25 thous. people obtained microcredits and opened over 26,0 thous. additional new workplaces (table 2.4); - 4258 projects on rural infrastructure development were initiated, in this connection over 55,0 thous. workplaces were created (table 2.3); - 58899 people passed professional training (table 2.5); - 51322 people obtained opportunity to get work experience within the youth practice (table 2.8); - 53484 people obtained opportunity to work at the social workplace (table 2.6). In addition, within the 3rd direction “Assistance in employment through training and movement within the employer’s needs” of “ERM- 2020” Program, over 9 thous. people obtained opportunity to leave economically unfavourable villages, and were provided with accommodation at new location. Performance of the program directions. The ratio of the program directions by its performance, i.e. the ability to pass the participants is provided in the table 2.10.

Table 2.10 – Comparison of “Employment roadmap – 2020” program directions and sub-directions (projects) in the Republic of Kazakhstan by the specific costs per 1 participant for 2013–2015 № Indicators 2013 2014 2015 Average for the period The 1st direction “Ensuring of employment due to the development of infrastructure and housing and utilities” 1 Employment through construction of 4,26 4,08 3,05 4,00 infrastructure and housing and communal services, mln. KZT / mln. EUR per 1 participant 0,02 0,02 0,01 0,02 The 2nd direction “Creation of workplaces through the development of entrepreneurship and support villages” 2 Employment in the workplaces created by the recipients of 2,65 1,95 1,70 2,14 microcredits, mln. KZT / mln. EUR per 1 participant 0,01 0,01 0,01 0,01 The 3rd direction “Assistance in employment through the training and movement within the employer’s needs” 3.1 Coverage by vocational training, 587,6 532,2 308,4 476,1 thousand KZT / thousand EUR per 1 2,91 2,23 1,25 2,13 participant 3.2 Subsidizing of social work places, 200,0 190,9 160,0 183,6 thousand KZT / thousand EUR per 1 0,99 0,80 0,65 0,81 participant SWP plus vocational training, 787,6 723,1 468,4 684,7 thousand KZT / thousand EUR per 1 participant 3,90 3,04 1,90 2,95 3.3 Subsidizing of jobs for youth practice, 484,4 272,7 246,2 334,4 thousand KZT / thousand EUR per 1 2,40 1,14 1,00 1,51 participant Note – Compiled and calculated by the author based on the sources Official EUR exchange rate is calculated as average for the period according to the official data of the National Bank of the Republic of Kazakhstan for 2013-2015. - URL: http://www.nationalbank.kz/?docid=763&switch=russian (date of address: 30.03.2017).

High costs for the 1st direction of the Program, as the author specified above, is subject to the fact that the facilities construction is funded within this direction. The 2nd direction – microcrediting also has higher level of costs, as extension or start of own business is undoubtedly capital- intensive, than on the 1st and 2nd sub-directions (subsidizing the salary or professional training) of the 3rd direction.

Dynamics of specific costs for one participants by directions of “Employment roadmap – 2020” program in the Republic of Kazakhstan for 2013-2015 is provided in figure 2.4. 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2013 2014 2015 Employment due to the construction of infrastructure facilities and housing and utilities Employment for the workplaces created by the microcredit recipients Coverage by professional education Subsidizing of social workplaces + professional training Subsidizing of workplaces for the youth practice Note – Compiled by the author

Figure 2.4 – Dynamics of specific costs for one participant by directions of “Employment roadmap – 2020” program in the Republic of Kazakhstan for 2013-2015, thous. KZT

Efficiency evaluation (efficiency evaluation/cost-benefit analysis) of the program directions. The third direction projects (lines 3,4,5) are more efficient, but the range of problems are identified further in evaluation of their efficiency based on the specific costs. The problems of “Employment roadmap - 2020” program directions identified by the author based on its quantitative evaluations and expert opinions are its following characteristics [200]: 1) By the 3rd direction “Assistance in employment through the training and movement within the employer’s needs”:  Low specific weight of participants who completed professional training (the 1st sub-direction): in average for 2011-2015 is 59,8%, this decreases the level of employment towards the total number of participants involved in the 1st direction “Coverage by professional training”. Thus in 2015, the specific weight of employed persons of the total number of participants covered by the training was 75,9%, in average for the period - 47,3 %. As the result, the costs for professional training of one employed participant are 476,1 thousand KZT in in average for the period. The subjective reasons, which cause the exit of participant from the program during the training is low start level of knowledge, that makes it difficult to retrain the participant, and incompatibility of studies with self-employment

that defines the loss of the habitual level of revenues for the self-employed participant. - Specific costs for the social workplaces (2nd sub-direction) in average for the period are 183,6 thousand KZT, and for the youth practice (the 3rd sub-direction) – 334,4 thousand KZT. Within this, the average sum of these specific costs with the costs for professional training (with the 1st sub-direction) for the period will be 994,1 thous. KZT. The author has performed the specific costs analysis without taking into account the costs for functioning of the Employment Centers, as the required information is not available. Calculation of complete costs for provision of the state service and their comparison with the alternative costs (for instance, for education at university or college) is the significant part of the program evaluation. 2) By the 2nd direction “Creation of workplaces through the development of entrepreneurship and support villages” (microcrediting), the significant problem is the lack of entrepreneurship capacities at some participants who wish to take a loan, required for the project completion. Also, the information of the reports by this direction does not show: how many people completed the training on the fundamentals of entrepreneurship and successfully implemented the obtained education in the form of doing own business, as well as the share of participants who started to recover the loans of the number of end borrowers; number of projects functioning for at least 1 year. 3) By the 1st direction “Ensuring employment due to development of infrastructure and housing and utilities” (construction of infrastructure facilities), by the author, the problem is the lack of data on employment of participants to the permanent workplaces after the launch of facilities to the functional field, that does not allow to evaluate the sustainability of the results of this direction in the population employment field. In general, following the results of the implementation of “Employment roadmap – 2020” program for 2013-2015, one can note the effectiveness of the program due to the achievement of the following indicators (based on the results of 2015): - unemployment rate – 5 % (planned value - not more than 5 %); - poverty level – 2,5 % (planned value - not more than 6 %); - share of people employed in the total number of self-employed people reached 77,6 % (planned value – 64,5 %). However, it should be noted that the current evaluation of state programs does not objectively evaluate the effectiveness of the state program of the Republic of Kazakhstan “Employment roadmap – 2020”. Thus, according to the analysis of official reports on the implementation of

“Employment roadmap – 2020” Program of the Republic of Kazakhstan for the period under study, it was revealed that end results analysis in the relative form, specific costs (economic efficiency - efficiency evaluation/cost-benefit analysis) and satisfaction of beneficiaries (social efficiency - effectiveness evaluation) was not performed, in addition the obtained results are not provided in official reports. As for another one type of evaluation, that is also absent in the report of the social impact evaluation, then it may be performed based on the ration in the results of the temporary and permanent employment program, as the latter is the sustainable result of the program for society. One of the significant reasons for the lack of provided evaluation types in the official reporting is the lack of the official methodologies for monitoring of the post-program employment and evaluation of the program results. Due to this, there is the lack of the quality program results monitoring, including the monitoring of the contract type (permanent, temporary, part-time employment etc.), which is concluded with the program participant after its completion. Monitoring records only the fact of the employment contract conclusion after the completion of subsidizing the social workplace or the youth practice workplace. Within this, quality program evaluation should include not only the program process and products evaluation but also its economic and social efficiency (satisfaction of the beneficiaries – program participants with their personal results), social impact evaluation based on the end results. For this purpose, the corresponding evaluation methodology is presented in the following sections of the research.

2.3 Evaluation of “Employment roadmap – 2020” program implementation in Karaganda region 392,7 bn. KZT are allocated for implementation of the Employment roadmap since 2011. The specific weight of Karaganda region in the total amount of funding for 5 years of implementation is 5,6 % of this amount (table 2.11).

Table 2.11 – Costs for implementation of “Employment roadmap – 2020” in Kazakhstan and in Karaganda region, bn. KZT/bn. EUR Period Republic of Karaganda region Specific weight of Karaganda region Kazakhstan for the period, %

2011 40,2 6,0 14,9 0,20 0,01 5 2012 48,3 3,4 7,0 0,25 0,02 8 2013 104,9 4,6 4,3 0,52 0,02 3,8 2014 100,6 4,7 4,6 0,42 0,02 4,8 2015 98,7 3,1 3,1 0,40 0,01 2,5 Total 392,7 21,8 5,6 1,79 0,08 4,5 Note – Calculated by the author according to the datа. Official EUR exchange rate is calculated as average for the period according to the official data of the National Bank of the Republic of Kazakhstan for 2013-2015. - URL: http://www.nationalbank.kz/?docid=763&switch=russian (date of address: 30.03.2017).

The third direction “Assistance in employment through moving and training within the needs of employer” of three program directions dominates on the republican level. 16152,5 people that is 65% of the total number of participants who signed social contract passed through the third direction for the considered period. Considering the remaining directions, the number of their participants is equal: - The first direction “Ensuring employment at the expense of construction of the infrastructure and housing and utilities” – 4473 people or 18 %; - The second direction “Creation of workplaces through the development of entrepreneurship and support villages” – 4404,3 people or 17 %. The author considered the indicators for 2011–2015 (table 2.12). In 2015, 4242 people addressed to the employment centers on the issues of participation in the Program, 2758 people (or 65 %) of them are included within the number of the program participants and signed the social contract. As compared with 2011, circulation has reduced almost everywhere. Growth rates amounted to more than 100 % only in Shakhtinsk, Aktogai, Zahnaarka, Karkaraly and Shet districts. They are the lowest in the large cities: Karaganda - 28%, Temirtau – 26 %. The official reasons for reducing the circulation specified by the local government authorities are:

- employment for the permanent jobs of the main number of addressed people without participation in the program; - decrease of the total number of population in districts; - decrease of the need of the employers in staff in terms of reduced economic activity during crisis.

Table 2.12 – Dynamics of the number of persons who addressed to “Employment roadmap – 2020” Program, people Cities and Number of people who addressed on the Growth districts of issues of participation in the program, rate the region people 2015/2011, 2011 2012 2013 2014 2015 % Total in the 8331 6763 5755 4662 4242 51 region Incl. by cities: 6448 4226 3511 2844 2588 40 1 Shakhtinsk 131 489 314 314 286 218 2 Zhezkazgan 200 306 211 211 192 96 3 Saran 254 261 266 266 242 95 4 Balkhash 159 260 133 133 121 76 5 Karazhal 82 149 80 80 73 89 6 Priozersk 112 90 66 66 60 54 7 Satpayev 153 174 141 141 128 84 8 Karaganda 4859 2210 1490 1490 1356 28 9 Temirtau 498 287 143 143 130 26 incl. by districts: 1883 2537 2244 1818 1654 88 10 Aktogai 78 122 160 130 118 151 11 Zhanaarka 132 310 279 226 206 156 12 Karkaraly 204 281 355 288 262 128 13 Shet 127 200 225 182 166 131 14 Nurinskiy 232 277 294 238 217 93 15 Bukhar- 276 251 361 550 341 70 Zhyrau 16 Abai 270 312 273 221 201 75 17 Osakarovka 358 380 259 210 191 53 18 Ulytau 121 105 58 47 43 35 Note – Calculated by the author according to the source data.

By the percentage of coverage of the citizens with the program activities in 2015, the situation in the regional districts is better (87 %), than in the cities (64 %).

The lowest is the percent of coverage of the addressed persons by the program events in Shakhtinsk – 39 %, Saran – 38 %, Karaganda – 44 %, Satpayev – 47 %. The reasons of the low coverage of the citizens based on the research performed in the cities and districts of the region, may be divided into: - subjective (on the part of the potential program participants); - objective (on the part of the program). The most widespread subjective reasons include: - the lack of required documents at potential program participants (registration, degree certificate); - low coverage of the residents of remote settlements not wishing to participate in the Program (especially men) due to the presence of households; - refusal of the recipients of address social aid from the direction to temporary and permanent workplaces due to the fear of losing state payments. The objective reasons influencing on the reduction of demand on the separate program services are: - not all Program directions were implemented in some cities and districts for the specified period; - entrepreneurship training courses organized by “Damu Fund” JSC and other structures are conducted from time to time in some districts, that reduces the number of people wishing to undergo the entrepreneurship training courses; - there is the lack of postsecondary educational institutions in the territory of the city (Priozersk); On the employment program directions, the results of its implementation are as follows. The first direction is provided in table 2.13. By the results of 2015, in implementation of 48 infrastructure projects, 1710 workplaces are created, 693 Program participants or 40,5 % are employed. Concerning the regions, no infrastructure projects were planned in Temirtau, Shakhtinsk, Priozersk in 2014 and 2015. Effectiveness calculation on the first direction allows to conclude that 40,5–46,5 % program participants are employed for the workplaces created as the result of creation and launch of infrastructure facilities. Calculations for 2012-2013 approximately correspond to these figures and are specified in Appendix 1. Data on the number of people employed for one completed project vary from 5,5 to 11,4 people for one project.

In connection with the fact that the resources costs for implementation of the first direction are used not only for ensuring the population employment, but for construction of infrastructure facilities, that will be consequently used for different needs of the population, calculation of the specific costs for efficiency evaluation for this direction is incorrect. But in order to compare with the republican data specified in table 2.3 of paragraph 2.1, it can be noted that the specific costs per one participant in 2013 were 3,26 mln. KZT; in 2014 – 3,37 mln. KZT, in 2015 – 2,72 mln KZT. The average value of specific costs for the period is 3,12 mln. KZT, that is lower than the average value for the country. Within the second direction of the Employment roadmap-2020, stimulating the entrepreneurship is aimed at increase of the economic activity of the citizens through the own business organization (table 2.14). Calculations for 2012-2013 approximately correspond to these figures and are provided in Appendix 2. The direction is implemented in almost all cities and districts of the region excluding Karaganda and Temirtau. This is connected with the small loan amount and opportunity for the entrepreneurs of these cities to get loans under the Employment roadmap – 2020. From the start of the program implementation, the total number of participants who have obtained microcredits for opening or extension of own business was 1706 people, 303 of them obtained microcredits in 2015. In 2012-2015, the total amount of funding under the program was 3 169 mln. KZT. During the program implementation, 584 workplaces were created excluding the program participant himself – the recipient of the microcredit. At the same time, only insignificant part of employees is employed through the Employment centers – 21 %. Generally, by the regions the situation is irregular, but if in 2012, 7 administrative and territorial units have not created any workplaces, except the microcredit recipient, and in 2013 – 10, in 2014 – 8, in 2015 – 9. By the calculation of the specific costs for creation of one workplace by this direction, it can be seen that these costs for the considered period have grown almost two times. For the period of 2012–2015, the total amount of financing under the program was KZT 3 169 million. Over the years of the program implementation, 584 workplaces were created, without taking into account the participant of the program - the microcredit recipient himself. At the same time, only a small part of employees are employed through the Employment centers – 21 %.

In general, the situation is uneven across the regions, but if in 2012, 7 administrative-territorial units did not create any workplaces, except for the microcredit recipient, and 10 – in 2013, 8 - in 2014, 9 - in 2015. If we calculate the unit costs for the creation of one workplace in this direction, it can be seen that these expenses have almost doubled for the considered period.

Table 2.13 – Indicators of the 1st direction “Ensuring employment due to the development of the infrastructure and housing and utilities” within “Employment roadmap – 2020” program in Karaganda region for 2014 and 2015 No. Regions Develop Number Total Program Number of Percentage Develop Number Total Program Number of Percentage ed in of numbe participa employed of ed in of number of participa employed of 2014, comple- r of nts, participants employment 2015, completed employed nts, participants employment mln. ted emplo people for one for the mln. projects, for created people in for one for the KZT projects, yed for completed created KZT units in workplaces, 2015 completed created units in created project in workplaces 2015 people in project in workplaces 2014 workpl 2014 from the 2015 2015 from the aces, (people) number of (people) number of people the program the program participants participants in 2014 in 2015 А В 1 2 3 4 5 6 7 8 9 10 11 12 By the 1469,6 78 936 436 5,5 46,5% 1889,1 47 1710 693 11,4 40,5% region Including

84 1 Balkhash ------207,1 2 128 57 8,9 35,1

2 Zhezkazgan 118,4 4 35 23 5,8 66,3% - - - - - 3 Karaganda ------147,1 3 150 51 4,4 25% 4 Karazhal 84,9 2 37 21 5,9 37% 91 1 141 62 25 58% 5 Saran ------112,9 1 65 54 4 52% 6 Abai 125,4 7 102 52 8,3 55% 169,8 6 58 48 5,7 57% 7 Aktogai 108,6 4 49 12 2,6 19% 133,5 5 71 36 6,7 52% 8 Bukhar- 211,4 13 201 68 5,2 36% 169,3 5 94 66 9,3 71% Zhyrau 9 Zhanaarka 102,3 6 101 65 7,3 56% 96,2 3 135 79 9,4 30% 10 Karkaraly 97,8 12 59 38 4,1 52% 172,9 2 192 72 6,3 34% 11 Nurinskiy 112,1 8 97 46 3,5 43% 215,1 6 179 31 17,6 39% 12 Osakarovka 258,9 15 168 52 4,2 46% 66,6 2 186 59 3,9 41% 13 Ulytau 170,2 6 159 43 1,7 36% 14 Shetskiy 250,4 8 87 59 5,1 42% 137,4 5 152 35 2,2 32% Note – Calculated by the author based on the materials of Administration of employment and social programs coordination of Karaganda region SI, 2014-2015

Table 2.14 – Indicators of the 2nd direction “Creation of workplaces through the development of entrepreneurship and development of support villages” within “Employment roadmap – 2020” program in Karaganda region for 2014 and 2015 No. Regions Develo Number of Workplaces created (employed) Percentage Develo Number Workplaces created (employed) Percenta ped in partici- people of ped in of people ge of 2014, pants, who Without Incl. employed via employed 2015, participa Without Incl. Employed via employe mln. received taking into the employment by the EC mln. nts, who taking into the Employment d by the KZT micro- account the Centers (without in 2014 KZT received account Centers (without EC in credits micro- taking into account microcre the micro- taking into account 2015 (people) credit the microcredit dits credit the microcredit recipient recipient himself) (people) recipient recipient himself) himself himself А В 1 2 3 4 5 6 7 8 9 10 By the region 790,3 367 126 38 30,1 867,6 303 123 15 8,8% 1 Balkhash 15,9 5 1 100,0 24,1 7 7 1 14 2 Zhezkazgan 83,4 2 2 15,8 12 3 3 Karaganda

85 4 Karazhal

17,4 4 1 66,7 98,4 2 26 2 8 5 Priozersk 11,4 21 3 4 37,5 18,7 3 5 6 Saran 14,4 1 8 3 28,6 68,9 1 11 7 Satpayev 15,9 2 7 21,7 2 6 2 33 8 Temirtau 9 Shakhtinsk 30,9 11 2 42,6 12 12 10 Abaiskiy 157,3 65 32 1 3,1 54,4 25 12 11 Aktogaiskiy 42,4 12 3 1 33,3 45,1 25 21 1 5 12 Bukhar-Zhyrau 73,4 43 24 8 30,8 140,7 70 72 6 8 13 Zhanaarkinskiy 82,4 58 15 5 33,3 95,9 50 51 1 2 14 Karkaralinskiy 76,5 54 8 8 100,0 93,3 95 23 15 Nurinskiy 82,4 34 4 0 0,0 69,73 28 21 16 Osakarovskiy 86,6 55 16 6 37,5 78,3 43 33 2 6 17 Ulytauskiy 15,9 5 1 0 0 24,1 5 7 14 18 Shetskiy 83,4 2 2 0 0 15,8 53 3 Note – Calculated by the author based on the materials of Administration of employment and social programs coordination of Karaganda region SI, for 2012, 2013

Within this, the costs for creation of new workplaces for employed persons (as those who take a loan may be in the self-employed status) are the most significant – up to 7 mln. KZT in 2015 (table 2.15).

Table 2.15 – Specific costs for creation of the workplace by 2nd direction “Creation of workplaces through the development of entrepreneurship and support villages” within “Employment roadmap – 2020” program in Karaganda region for 2014 and 2015, mln. KZT for 1 workplace, mln. KZT Average Indicators 2013 2014 2015 for the period Specific costs for creation of the workplace without taking into account the loan recipient 6,56 6,27 7,00 6,61 himself Specific costs for creation of the workplace taking into account the workplace of the participant who 1,36 1,60 2,04 1,6 obtained loan Average amount of microcredit 1,71 2,15 2,86 2,24 Note – Compiled and calculated by the author based on the materials.

At the same time, in calculation of these costs it is necessary: 1) To take into account the return of funds on the loans in order to define net costs for creation of one workplace; 2) To monitor the maintenance of the workplace at least during the year after its creation. If the maximum interest rate of microlenders for the end borrower in 2012 was 7,75 %, then in 2013 – it was reduced by 1,75 % and amounted to 6 % per annum, and the average amount of issued microcredit was 1,27 and 1,71 mln. KZT. In the following years, in maintaining the rate, the microcredit amount was increased to 2,15 and 2,75 mln. KZT. Generally by the region, the priority directions of development of entrepreneurship are mainly cattle breeding, plant growing, procurement of agricultural equipment, services (car service stations, cafes, beauty salons). Comparison by the specific costs for one employed by this direction (except for the borrower himself) with the average republican indicators allows to make conclusion that they are less in the region. If, the cost in the republic in 2013-2015 were 2,14 mln. per participant (specified in table 2.4 of paragraph 2.2), then in the region for the same period they were 1,6 mln. KZT per participant (table 2.15). Within the third direction “Assistance in employment through training and movement within the needs of the employer”, employment measures for the existing and promising workplaces are proposed and if needed, free

training with payment of funds for training by return of the costs of the participants for meals, accommodation and travel. During the program, 3,8 % of participants who concluded the social contract have not competed professional training by different objective and subjective reasons. 173 participants or 79,3 % of those 218 who completed training in 2014 are employed. Employment at the expense of the Employment Centers of those who completed professional training in 2014 was 37,6% (table 2.16). By different reasons, professional training in Karazhal, Priozersk, Shakhtinsk and Aktogai, Ulytau, Shet districts was not performed. The level of activity of the employment centers in employment of the program participants after professional training courses by different regions is significantly different. In 2015, 208 of 239 participants who completed professional training are employed, that is 87% of all participants who completed the program. But the share of participants employed through the Employment Center has not increased, and even reduced to 25%. In general, by the regions the indicators are different, but this may reflect the specifics of the regional economy. Along with the professional training within the third direction, retraining of the program participants and their professional development are widespread. Data on employment for permanent workplaces by these directions are provided in table 2.16 [208]. If we calculate the costs for one employed for permanent work after professional training, we can see that for professional training there are 882,2 thousand KZT, retraining – 176,1 thousand KZT and for further training – 119,6 thousand KZT (table 2.17). In the regional cut, the costs for one employed participant are significantly different. Thus, for the professional training direction in the average value of 882,2 thous. KZT, the costs in Ulytau district were 4159,3 thousand KZT, in Zhezkazgan -117,4 thousand KZT. Author’s calculated variation coefficient characterizes this set as diversified, i.e. the regions are significantly different by the costs per 1 program participant. Within the retraining program the situation is similar. At the average expenses of 176 thousand KZT, the costs in Karazhal were 36,5 thousand KZT, and in Zhezkazgan - 424,4 thousand KZT. The variation coefficient in this case is equal to 45,2 %, that also diagnoses the statistic diversity of the set by this indicator. Professional development is characterized by the least average cost per one program participant - 119,6 thousand KZT. Within this, there is the dispersion, for instance in Priozersk, the costs were at the level of 32 thousand KZT, and in Zhezkazgan - 586 thousand KZT.

Concerning employment for the social workplaces with partial subsidizing of the salary at the expense of the state, it should be noted that there is significant difference in the percentage of employment for permanent jobs after completion of work at the social workplaces in 2013, 2014 and 2015 (table 2.18).

Table 2.16 – Permanent employment after professional training (the 1st sub-direction “Coverage by professional training”), within “Employment roadmap – 2020” program in Karaganda region, in % to all participants employed in 2014-2015 Regions Employed of Of them: Employed by Percentage Employed Of them: Employed by Percentage of the number Self- EC for of participants of Self- EC for participants of employed, permanent participants the number of employed permanent employed by participants people) jobs after employed participants (people) jobs after EC to all who professional by EC to all who completed professional employed in completed training employed in training for the training 2015 training in (people) 2014 permanent jobs (people) (gr.7/gr.5) 2014, people (gr.1-gr.2) (gr.3/gr.1) in 2015 (people) (gr.5-gr.6) A 1 2 3 4 5 6 7 8 Total by 173 108 65 37,6 208 156 52 25 the region 89 Including: Balkhash 19 12 7 36,8 8 7 1 12,5 Zhezkazgan 24 6 18 75,0 53 30 23 43,4 Karaganda 35 30 5 14,3 1 1 100,0 Karazhal 9 7 2 22,2 Priozersk 5 5 100,0 Saran 12 10 2 16,7 5 2 3 60,0 Satpayev 6 6 100,0 15 12 3 20,0 Temirtau 32 21 11 34,4 16 15 1 6,3 Shakhtinsk 13 9 4 30,8 Abaiskiy 11 8 3 27,3 10 9 1 10,0 Aktogaiskiy 11 8 3 27,3 Bukhar- 9 6 3 33,3 12 11 1 8,3 Zhyrau

Continuation of the table 2.16

A 1 2 3 4 5 6 7 8 Zhanaarkinskiy 6 5 1 16,7 14 14 0 Karkaralinskiy 8 3 5 62,5 9 7 2 22,2 Nurinskiy 4 2 2 50,0 3 2 1 33,3

90 Osakarovskiy 7 5 7 37,6 5 4 1 20,0

Ulytauskiy 3 3 0 Shetskiy 16 15 1 6,3 Note – Calculated by the author based on the materials of Administration of employment and social programs coordination of Karaganda region SI

Table 2.17 – Costs for one employed for the permanent job after professional training (the 1st sub-direction “Coverage by professional training”) within “Employment roadmap – 2020” program in Karaganda region in 2015 Professional training Retraining Professional development Regions Actual Employed Costs per 1 Actual Employed Costs per 1 Actual Employed Costs per 1 costs, for employed for costs, for employed for costs, for employed for mln. permanent the permanent mln. permanent the mln. KZT permanent the permanent KZT jobs, job, thous. KZT jobs, people permanent jobs, job, thous. people KZT job, thous. people KZT (gr.1/gr.2) KZT (gr.8/gr.9) (gr.4/gr.5) A 1 2 3 4 5 7 8 9 10 By the region 183,5 208 882,2 70,9 402 176,0 7,3 61 119,6

91 Balkhash 11,7 8 1468,0 1,9 20 93,8 0,893 11 81,0 Zhezkazgan 5,9 50 117,4 6,4 15 424,2 1,171 2 586,0 Karaganda 36,7 8 4587,5 8,4 30 280,2 - - - Karazhal 4,2 6 694,7 0,9 24 36,5 0,119 3 40,0 Priozersk 5,0 5 990,9 2,4 18 134,8 0,097 3 32,0 Saran 7,3 5 1469,8 1,9 28 67,0 0,102 2 51,0 Satpayev 5,7 15 379,2 5,2 34 152,9 0,164 2 82,0 Temirtau 6,1 16 383,9 10,9 52 209,1 1,073 18 60,0 Shakhtinsk 7,7 13 590,6 1,9 43 43,6 - - - Abaiskiy 7,2 9 795,2 6,1 19 320,4 1,559 4 390,0 Aktogaiskiy 8,4 11 767,4 1,5 5 304,3 - - -

Continuation of the table 2.17

A 1 2 3 4 5 7 8 9 10 Bukhar- 14,0 1,325 3 12 15 Zhyrau 1170,0 4,1 272,8 442,0 Zhanaarkinsk 8,1 0,119 2 14 16 iy 579,8 1,5 95,1 60,0

92 Karkaralinski 9,4 - - 9 10 y 1039,8 3,2 319,4 - Nurinskiy 6,4 3 2140,8 1,5 15 98,6 0,216 5 43,0 Osakarovskiy 14,9 5 2972,7 7,0 24 293,4 0,119 1 119,0 Ulytauskiy 12,5 3 4159,3 2,8 23 123,9 0,179 3 60,0 Shetskiy 12,3 16 768,4 3,3 11 304,3 0,189 2 95,0 variation coefficient 63,01 % variation coefficient 45,2% variation coefficient 52,38 % Note – Calculated by the author based on the materials of Administration of employment and social programs coordination of Karaganda region SI

Table 2.18 – Employment of the participants of “Employment roadmap – 2020” program participants for the permanent jobs after completion of participation at the social workplaces (2nd sub-direction “Subsidizing of social workplaces”) Karaganda region for 2013-2015 Complet Percentag Complet Percentag Complet Percentag Regions ed work e of ed work e of ed work e of at SWPs employme at SWPs employme at SWPs employme in 2013, nt for the in 2014, nt for the in 2015, nt for the people permanent people permanent people permanent workplace workplace workplace s after s after s after SWPs in SWPs in SWPs in 2013 2014 2015 By the 453 83 430 76 421 82 region Balkhash 15 100 17 100 14 92 Zhezkazgan 87 57 72 48 46 86 Karaganda 34 62 36 52 49 79 Karazhal 15 100 12 100 28 100 Priozersk 31 100 24 92 31 100 Saran 17 100 16 100 24 100 Satpayev 3 100 18 93 17 100 Temirtau 28 100 37 72 21 89 Shakhtinsk 12 100 32 100 22 84 Abaiskiy 28 89 25 74 21 91 Aktogaiskiy 15 87 13 79 18 92 Bukhar- 10 100 11 83 86 19 Zhyrau Zhanaarkins 35 100 26 90 87 23 kiy Karkaralinsk 10 100 9 91 86 21 iy Nurinskiy 45 55 34 55 31 100 Osakarovski 23 100 32 92 100 15 y Ulytauskiy 21 100 16 56 21 100 Shetskiy 24 87 27 87 13 100 Note – Calculated by the author based on the materials of Administration of employment and social programs coordination of Karaganda region SI for 2013-2015

According to the table 2.18, by the results of 2013, 375 people were employed for permanent jobs from the number of persons who completed their participation in social workplaces (453 people), that is 83 %, which is 39 % more than in 2012. In 2014, there was a decline in the level of employment – 76 %, and in 2015 - again increased up to 82 %.

It can be noted that in general, the level of employment in the region is 80 %, which is higher than the level of employment in the country as a whole – 74,7 %, as the author has shown in paragraph 2.2. Concerning the costs per one employed for the permanent job by the social workplaces in 2013-2015, the indicator in the region was 409,8 thousand KZT (table 2.19). Generally for the period, the direction was funded for 306,69 mln. KZT. For these funds, 1344 people were employed to the social workplaces, 1118 of them or 80% were further employed to the permanent job. Costs for employment of 1 program participant by direction of social workplaces were 273,3 thousand KZT, that is higher than in the country in general, despite the high level of employment, which influenced on reduction of the specific costs.

Table 2.19 – Costs per one employed participant for the permanent job by the social workplaces (2nd sub-direction “Subsidizing of the social workplaces”) in Karaganda region for 2013–2015, thous. KZT/thous. EUR Cities and Employe Employe Fundin Costs per Costs Full costs per 1 districts of the d for d for the g, mln. 1 per 1 employed for region created permane KZT employe employ the permanent SWPs nt job, d for the ee of job from the people permane the EC Thous. number nt job per EUR of the (thous, month, program KZT) thous, participa gr.3/gr.2 KZT nts, Thous. people KZT A 1 2 3 4 5 6 7 Zhanaarkinskiy 84 78 7,98 101,8 116,8 218,6 0,89 Karazhal 55 55 8,68 157,8 124,1 281,9 1,15 Osakarovskiy 70 67 10,92 161,9 114,2 316,1 1,29 Nurinskiy 110 74 13,58 182,4 128,6 331,0 1,35 Abailskiy 74 63 12,04 192,5 134,6 327,1 1,33 Balkhash 46 45 8,68 193,4 128,1 321,5 1,31 Saran 57 57 11,34 198,9 121,4 320,3 1,30 Shakhtinsk 66 62 13,02 208,4 106,5 314,9 1,28 Temirtau 86 73 16,24 221,5 113,8 335,3 1,36 Aktogaiskiy 46 40 10,22 256,3 104,2 360,5 1,47 Bukhar- 40 35 9,66 272,3 106,5 378,8 1,54 Zhyrauskiy Karaganda 1344 1118 306,69 273,3 126,5 409,8 1,67 region Karaganda 119 79 26,41 336,4 96,8 433,2 1,76

Continuation of the table 2.19 Satpayev 38 37 13,16 358,2 127,3 515,5 2,10 Ulytau 58 51 19,38 380,3 104,0 544,3 2,21 Zhezkazgan 205 124 49,51 400,2 107,1 570,3 2,32 Priozersk 86 84 34,68 412,5 118,4 592,9 2,41 Shetskiy 64 57 24,61 429,0 106,2 605,2 2,46 Karkaralinskiy 40 36 16,58 457,4 114,8 612,2 2,49 Variation coefficient 42,1% 26% 44,5% Note – Calculated by the author based on the materials of Administration of employment and social programs coordination of Karaganda region SI for 2013-2015 Official EUR exchange rate is calculated in average for the period according to the official data of the National Bank of the Republic of Kazakhstan for 2013-2015. - URL: http://www.nationalbank.kz/?docid=763&switch=russian (accessed date: 30.03.2017).

For deeper analytical research, the factors influencing on the costs should be identified. Maybe it is connected with the fact that in Karaganda region, the period of work at the social workplace is in average more continuous than in the country as a whole. But the relevant data are not available in the national reports. In the region, the costs are higher than the average value in Karaganda, Satpayev, Zhezkazgan, Priozersk and Shetskiy, Ulytau, Karkaralinskiy districts. The costs in the cities and districts are diverse, as the value of the variation coefficient is 42,1%, that evidences the statistical diversification of the provided set. In addition, the author has undertaken an attempt to calculate full costs for employment of 1 program participant by the direction SWPs. As in the region in average one employee of the employment center per month only one program participant, and the costs for one employee of the employment center per month in 2015 were 136,5 thousand KZT, then the total costs per one employed participant were 409,8 thous. KZT in average for the region. The variation coefficient was 44,5%, that evidences the diverse values within the set units. Concerning the youth practice, here there is the sufficiently low level of employment of the Program participants for the permanent workplace after completion of participation in the youth practice compared with the social workplace. In 2013-2015, it was only 49%, but as compared with the republican level – 42,3 % for the same period, the value for Karaganda region is higher (table 2.20). Table 2.20 – Employment of participants of “Employment roadmap – 2020” program for the permanent workplace after completion of participation in the youth practice (the 3rd sub-direction “Subsidizing of workplaces for the youth practice”) in Karaganda region

Complet Percentag Complet Percentag Complet Percentag Regions ed work e of ed work e of ed work e of by YP in employme by YP in employme by YP in employme 2013, nt for 2014, nt for 2015, nt for people permanent people permanent people permanent workplace workplace workplace s after YP s after YP s after YP in 2013 in 2014 in 2015 By the 535 49 730 51 732 48 region Balkhash 21 22 48 34 50 45 Zhezkazgan 32 7 56 12 56 62 Karaganda 57 52 112 19 79 50 Karazhal 27 84 26 21 34 43 Priozersk 19 75 27 64 32 41 Saran 32 100 39 65 46 26 Satpayev 35 23 42 35 35 31 Temirtau 50 62 62 68 74 49 Shakhtinsk 28 89 32 47 32 65 Abaiskiy 26 73 29 100 46 12 Aktogaiskiy 40 54 61 84 78 76 Bukhar- 16 48 31 74 40 64 Zhyrau Zhanaarkins 100 43 28 71 40 52 kiy Karkaralinsk 50 35 42 25 13 62 iy Nurinskiy 20 17 36 36 43 43 Osakarovski 35 27 54 46 18 31 y Ulytauskiy 21 10 19 34 42 41 Shetskiy 32 87 34 65 26 53 Note – Calculated by the author based on the materials of Administration of employment and social programs coordination of Karaganda region SI for 2013-2015

By the cities and districts of the region, significant dispersion of the number of the program participants and of the employment percentage is observed. The author calculated the expenses for one program participant employed by the Employment roadmap – 2020 program for 2013-2015 (table 2.21). Concerning the social workplaces, by the youth practice the costs for one employee of the employment center per month in 2013 were 126,5 thous. KZT, the total costs per one employed for the permanent job by the employment center was in average 427,7 thous. KZT.

Table 2.21 – Costs in 2013-2015 per one employed for the permanent job by YP in Karaganda region, thous. KZT Employed Fund Costs per 1 Costs per 1 Full costs per Cities and for the ing, employed for employee of 1 employed districts of the permanent mln. the perm. job EC per for the region job, KZT (thous. KZT) month, permanent job people gr.2/gr.1 thous, KZT (thous. KZT) A 1 2 3 4 5 Nurinskiy 117 13,2 112,4 128,6 241,0 Osakarovskiy 144 24,3 168,9 114,2 283,1 Zhezkazgan 281 65,8 234,1 107,1 341,2 Aktogaiskiy 79 19,6 248,1 104,2 352,3 Shakhtinsk 73 18,5 254,1 106,5 360,6 Abaiskiy 110 29,5 268,3 327,1 595,4 Bukhar- 119 33,8 284,1 106,5 390,6 Zhyrauskiy Balkhash 162 46,3 286,1 128,1 414,2 Karkaralinskiy 92 26,3 286,1 114,8 400,9 Zhanaarkinskiy 84 25,1 298,4 116,8 415,2 Temirtau 162 48,8 301,2 113,8 415,0 Karaganda 601, 1997 301,2 136,5 427,7 region 5 Karazhal 136 44,1 324,1 124,1 448,2 Satpayev 126 45,5 361,0 127,3 488,3 Saran 134 53,0 395,7 121,4 517,1 Karaganda 92 36,7 398,4 96,8 495,2 Priozersk 72 33,9 470,9 118,4 589,3 Variation 38,8% - 32% coefficient Note – Calculated by the author based on the materials of Administration of employment and social programs coordination of Karaganda region SI for 2013-2015

Cities and regions are diverse by the value of specific costs per one program participant, who completed the youth practice program, as the calculated variation coefficient was 38,8%. By the complete costs per one employed after participation in the program, the coefficient is also beyond the upper edge – 32%. Comparison of the program efficiency in the Republic of Kazakhstan and Karaganda region allows making conclusion that the region in general shows higher results, i.e. less costs per one employed on professional training and youth practice within the third direction (table 2.22). Only social workplaces have higher costs that may be connected with the greater employment duration on the workplace in the process of the program completion.

Thus, it should be noted that official program evaluation reports on implementation of “Employment roadmap – 2020” Program for the period under study do not provide objective Program evaluation, since the unit costs per the program participant are not calculated to achieve the final results - employment of participants for a permanent job. Official evaluation is provided only for the performed program products. At the same time, the calculation of the specific costs, in particular at the regional level, if compared with the average indicators in the country should demonstrate significant differences and should determine the further search for its reasons. In turn, this will be the basis for making managerial decisions aimed at costs reduction in the region.

Table 2.22 – Total specific costs on the 3rd direction “Assistance in employment through training and movement within the employer’s needs” of Employment roadmap – 2020 program, thous. KZT per 1 employed for the permanent job № Region Professional training SWPs Youth practice (all directions) 1 Kazakhstan 476,1 183,6 334,4 2 Karaganda region 392,5 273,3 301,2 3 Ratio of costs by line 1,27 0,66 1,08 1/line 2 Note – Developed and calculated by the author based on the materials. *All specific costs are specified without the costs for the employment centers

At the same time, information only by the specific costs is insufficient for considering the program as inefficient, quality evaluation of its social efficiency, i.e. the beneficiary evaluation of participation in the program is needed. It should be noted that currently, at the level of regions, cities and districts, social efficiency of the program is not evaluated, i.e. the participants are not questioned for satisfaction with participation in the program. In addition, the quality of the labor contract concluded by the program participant after passing through any Program direction, its duration and compliance with the professional training profile are not evaluated. Actually the program services quality is evaluated simply by one criterion: whether there is the permanent workplace after the program completion or not. In this regard, the author can conclude that the evaluation of the social effectiveness of the Program at the regional and national levels is not performed. In addition, in case of carrying out appropriate population surveys, the significance of the achieved results of the Program can be reduced.

In general, the author can conclude that objectivity in evaluation of the efficiency of “Employment roadmap – 2020” state program of the Republic of Kazakhstan, including at the regional level, is not achieved. In this regard, the author developed the methodology for evaluation of the efficiency of “Employment roadmap – 2020” state program of the Republic of Kazakhstan, which allows monitoring post-program results, evaluating its economic and social results, and evaluating the quality of services provided to achieve objectivity in evaluation of the efficiency of the implemented program and development of proposals for its improvement.

3 Efficiency evaluation methodology for the programs of the republic of kazakhstan in the population employment

3.1 Establishment of the evaluation institute in the state controlling system of the Republic of Kazakhstan Controlling scheme in the public sector of economy (§1.2, fig. 1.3) and classification of the types of evaluations of the state strategic documents and programs (§2.1, fig. 2.1) provides that different types of evaluation are performed at different stages of the program formation and implementation. Types of the program efficiency evaluation considered by us during the work are performed on the stage of the program implementation and completion (after the completion of one cycle or calendar year). Main characteristics of these evaluation types are provided by use in table 3.1.

Table 3.1 – Program efficiency evaluation types and their parameters Type Content Implementation Features stage Economic Economic Program Monitoring indicators efficiency of the efficiency is implementation collected by the state program (efficiency evaluated by process and its authorities are used for evaluation or cost- the ratio of completion calculations benefit) expenses and stage results Social efficiency or Effect of Survey data of respondents satisfaction of the assignment of – program participants and beneficiaries with the program expert evaluations are used the program results result is for defining. (effectiveness evaluated at evaluation) the individual Stage of level completion of at Social impact Effect of least one In order to define, survey (impact evaluation) assignment of program cycle data of respondent – the program (calendar year or participants, non- result at the the entire participating respondents level of the implementation with equal start positions. social group term) It is possible to provide or the society evaluation based on as a whole is statistical data and data of evaluated state authorities. Note – Compiled by the author

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Establishment of the evaluation institute in Kazakhstan is connected with the range of regulatory legal acts, regulating the procedure for evaluation of the state and field programs. As it has been noted in § 1.3, in February 2016, by the Order of the Minister of National Economy of the Republic of Kazakhstan, new methodologies were accepted for the Strategic plan of the Republic of Kazakhstan, the Forecast scheme of the territorial and spatial development of the country, state and government programs, field programs, strategic plans of the state authorities and programs of the areas development. Concerning the field programs including the Employment roadmap – 2020, the main regulatory legal acts for it are: 1) The rules for development, implementation, monitoring, evaluation and control of field programs. Approved by the Regulation of the Government of the Republic of Kazakhstan No.218 dated March 18, 2010 with the editing amendments for the current date (hereinafter – the Rules); 2) Regulation “On approval of the list of field programs”. Regulation of the Government of the Republic of Kazakhstan No.1136 dated December 30, 2015. (hereinafter – the Regulation). By the Regulation, “Employment roadmap – 2020” is the field program supervised by the Ministry of Health and Social Development of the Republic of Kazakhstan. According to Paragraph 7 of Section 1 “General provisions” of the Rules, methodological support of monitoring and evaluation of field programs is performed by the authorized body on the state planning. Section 5 of the Rules “Monitoring of field programs” defines that the monitoring is the collection, systematization, analysis and summarizing of the reports and other information on the process of the field programs implementation. Monitoring is performed once a year based on the report on the program implementation, provided by the state authority – the executor and co-executive authorities. The report should contain, including: - information on the extent of resolving the problems and tasks, which should be resolved according to the document, the impact of the document implementation for the social and economic development of the country; - information on the level of satisfaction of beneficiaries, including at the level of the actual volume of provided state services from the planned; Section 6 of the Rules “Field programs evaluation” in Paragraphs 36- 37 defines that evaluation is performed every three years (intermediate) and upon completion of the whole program period. Evaluation shall be

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performed by the state planning authorized body. Evaluation is performed based on the report for the whole evaluation period, results of control examinations, statistical data. In addition, materials of scientific research and non-government organizations, international experts may be involved. Paragraph 39 of Section 6 of the Rules, including other paragraphs to be developed, defines the need to analyze and to evaluate such program aspects as: - conclusions on the effectiveness and efficiency of its implementation; - conclusions on the degree of influence of the program implementation on the social and economic development of the country. As the official mass media provide only reports on the program implementation, containing monitoring data, the author has developed proposals on methodological bases of the “Employment roadmap – 2020” program evaluation based on the types of evaluation of the program, implementation efficiency, provided by us in details in table 3.1. - program economic efficiency evaluation; - program social efficiency evaluation; - evaluation of impact on society and its social groups. Program economic efficiency evaluation (efficiency evaluation or cost-benefit) This variant of evaluation, according to the controlling cycle, is designed to provide information on the program capabilities to accept the number of participants or the information on specific costs per the program participant (using mirror indicator). Since state budget resources are always limited like the entrepreneurship resources, information on the specific costs is the rationale for making managerial decisions, including on the public level. Information on specific costs may be used in dynamic comparisons (of different program directions), and in comparisons between different program directions. In some cases, based on such data, separate program directions may be temporarily terminated or cancelled. The author offers the algorithm of analysis and evaluation of the program directions efficiency within the following components (subsequent steps): 1) Calculation of the program efficiency (formula 2.1 in paragraph 2.1). 2) Calculation of effectiveness in the form of specific expenses per one participant, one who completed training, one of those who completed training and was employed (formula 2.2 in paragraph 2.1).

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Calculation of the program efficiency. The calculation of efficiency and specific costs itself does not provide any technical difficulty and formulas 2.1 and 2.2 for the calculation of these indicators are provided in paragraph 2.1. Earlier these indicators were calculated in the work of A. Mussatayeva and T. Pritvorova. Testing of formulas 2.1 and 2.2 based on the specific figures of Employment roadmap program for 2013-2015 is provided in paragraphs 2.2 and 2.3. Despite the simplicity of these indicators and their reciprocity, for calculation they use the same data on expenses, but the calculation of the number of participants – program beneficiaries - is connected with exclusion of those who had not obtained the end program result, i.e. who had not completed training and had not been employed. The issue of forming the denominator value is principally important, i.e. it does not characterize the program coverage, but its end result. Thus, in calculation of the economic efficiency of the program by the formula (2.2, § 2.1), the author used index method for the calculation of the number of the program beneficiaries, who obtained its end result (Кi) on the relevant program direction. For the program sub-direction “Professional training” two stages are allocated: training stage and employment stage. In this case, in order to calculate the number of the program beneficiaries, who obtained its end result (Ki) on this sub-direction, the author offers to use the index method and the following formula (3.1):

Ki=N.cov.*S.w.comp.tr.*S.w.emp.comp.tr./10000 (3.1)

where Ki – number of the program beneficiaries on “Professional training”, who obtained its end result. N.cov. – number of people covered by the training; S.w.comp.tr. – specific weight of participants who completed training, % S.w.emp.comp.tr. – specific weight of employed participants who completed training, %

In a similar way, for such program sub-directions as “Youth practice” and “Social workplaces”, the author allocates two stages: stage of temporary employment for the workplace in order to develop professional skills and the stage of permanent employment connected with the conclusion of the contract for the permanent job.

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In this case, to calculate the number of the program beneficiaries (Ki), the author offers using an index method and the following formula (3.2):

Ki= N.cov.*S.w.perm.contr./100 (3.2)

Where Ki – n umber of the program beneficiaries on sub-directions “Youth practice” and “Social workplaces”, who obtained its end result. N.cov. – number of the direction participants, people; S.w.perm.contr. – specific weight of participants who concluded the permanent contract on the completion of the period of temporary employment, %.

By the results of implementation of these stages of the program direction and calculation of indicator of the number of the program beneficiaries it is possible to perform dynamic and comparative analysis of the end results of the program directions. 1. Calculation of efficiency in the form of specific costs per participant – program beneficiary. This evaluation procedure assumes dynamic and comparative analysis of the specific cost per participant – program beneficiary to determine its economic efficiency on the relevant directions and sub-directions of the program. Dynamic analysis and calculation of the average value for the period allows: 1) To evaluate the dynamics as the positive or negative from the perspective of growth or costs reduction; 2) To evaluate the average value for the period as compared with the separate years of the period; 3) To evaluate the relative change for the period in percentage. Example of calculations based on data of §2.2 is provided in table 3.2.

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Table 3.2 – Specific costs for achievement of the end results of three directions of “Employment roadmap – 2020” program in the Republic of Kazakhstan for 2013-2015

Specific costs on 2013 2014 2015 Absolute Relati

and the program deviation, ve directions and sub- 2015/2013 chang

directions (per one e, % participant)

directions

period (costs period in (costs

Average Average forthe

KZTpers.) 1 per

Program directions sub 1 Direction “Ensuring of employment through the development of infrastructure and housing and utilities” Employment at the expense of construction of the 1 infrastructure and 4,26 4,08 3,05 -1,21 -28,4 4,00 direction housing and utilities facilities, mln. KZT per 1 participant 2 Direction “Creation of the workplaces through the development of entrepreneurship and support villages” Employment for the workplaces created 2 by the microcredit 2,65 1,95 1,70 -0,95 -35,8 2,14 direction recipients, mln. KZT per 1 participant 3 Direction “Assistance in employment through training and movement within the employer’s needs” Coverage by the 1 professional Sub- training, thous. 587,6 532,2 308,4 -279,1 -47,5 476,1 direction KZT per 1 participant Subsidizing of the 2 social workplaces, Sub- 200,0 190,9 160,0 -40 -20 183,6 thous. KZT per 1 direction participant Subsidizing of the 3 workplaces for Sub- youth practice, 484,4 272,7 246,2 -238,2 -50 334,4 direction thous. KZT per 1 participant Note – Compiled and calculated by the author

Calculations in table 3.2 to define the economic efficiency of the program allows making the following conclusions:

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1) The first direction is the most expensive, as within this direction, significant financial resources for construction of facilities are provided. The direction provides only temporary employment for participants, after completion of construction all the employees shall be dismissed. By this direction, 28,4% costs reduction for the period is recorded. Comparison with other directions is difficult due to the lack of the possibility for the program participants to conclude the permanent employment contract. 2) The second direction is on the second place by costs – 2,14 mln. KZT per person. But these costs are objectively caused by the minimum amount of credit provided for doing own business. At the same time, from the viewpoint of the permanent employment, the issue of conclusion of employment contracts remains open, as it is unclear what contract type is concluded by them. Actually, they can be the contracts for definite scope of works or temporary contract or other short-term contracts. As the contract type is not recorded in the monitoring indicators, then it is difficult to establish the costs for the permanent employment more accurately. 3) Professional training is the most expensive of all the sub- directions within the third direction. In average 501,1 thousand KZT were spent for one project participant employed to the permanent job. Despite the fact that there is the most reduction of costs among the direction projects in amount of 476,1 thousand KZT per one participant, the absolute value of specific costs remains the largest – 308,4 thousand KZT. It is necessary to study the costs growth factors on this direction which may be identified as the result of the social effectiveness evaluation. “Youth practice” project is the leader in reduction of costs in the relative calculation. In 2015, the amount of costs is 50% less than in 2013. However the value of costs for the period of 2013-2015 in amount of 334,4 thousand KZT is a significant value. Factors identified as a result of survey of the experts and program participants influencing on the value of costs for the permanent employment of the program participants are provided in paragraph 3.2. “Social workplaces” project is the least expensive, but here there is 20 % reduction of costs for the period. For the regions, it is reasonable to compare with the republican average values to identify and to eliminate the costs growth factors, if possible. Evaluation of the program social effectiveness (efficiency evaluation), according to the controlling scheme is performed at the stage of exit of the participant from the program. The algorithm of evaluation of the social effectiveness or satisfaction of the beneficiaries with the program results as exemplified in “Youth practice” sub-direction is provided in details in paragraph 3.2. Evaluation of the social impact and its social groups (impact evaluation) is also performed at the stage of the exit of

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participants from the program, i.e. upon completion of their program. Possible methods for evaluation of the impact on society and its target social groups are presented in paragraph 3.3. Summarizing the material of this paragraph we can make the following conclusions. The evaluation institute in the state controlling system in the Republic of Kazakhstan is on the stage of establishment. Despite the fact that the first regulatory legal acts were accepted from 2007, we can say that only now there is the understanding of the complexity and multivariance of the scenarios of transition to the new system of regulation of social and economic processes in the regions within the country. The problems of regulation mentioned earlier by the author based on the results of a study of the official conclusions of higher state bodies include the issues of methodological justification for the evaluation of the efficiency of the program implementation. In 2016, new Methodological provisions: development, implementation, monitoring and evaluation of the Strategic Development Plan of the Republic of Kazakhstan, Forecast Scheme of territorial and spatial development of the country, state and government programs, strategic plans of state authorities and areas development programs were accepted. However, according to the author, even these provisions contain simplified procedures on the methods of the state programs evaluation. In particular, social efficiency is defined simply as the satisfaction or non-satisfaction of the citizens that is needed but insufficient rationale to acknowledge the program results as socially effective. Concerning the field programs, including ERM – 2020, the existing regulatory legal acts do not contain methodological provisions on their evaluation. This paragraph provides methodological provision to evaluate the program efficiency. In this connection, for an objective evaluation of the program functioning, it is necessary to develop a methodology for evaluation of the social efficiency of the program and for evaluation of its impact on society.

3.2 Methodological basis for evaluation of social efficiency of “Employment roadmap – 2020” program of the Republic of Kazakhstan In his Address to the Nation of Kazakhstan “Social and economic modernization is the main vector of development of Kazakhstan” in 2012, the President of the Republic of Kazakhstan N.A. Nazarbayev defined the employment of Kazakh people as the first set of tasks for development of Kazakhstan. As compared with many developed and emerging countries in post- crisis conditions of global economy, a stable situation has been created in

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the population employment and in Kazakh labour market. Thus, over 5 years, starting from 2009, according to the Agency of the Republic of Kazakhstan on statistics, the country has experienced the increase of economically active population, increase of employment and reduction of unemployment. By the order of the President of the Republic of Kazakhstan N.A. Nazarbayev, the Government approved a completely new Employment program “Employment roadmap – 2020”. It includes three important tasks: - creation of the efficient system of training and support in employment. - support of business development in villages. - increase of labour resources mobility, priority employment in the centers of economic activity of Kazakhstan. The State of the Nation specified the need and implementation of new tasks by ten areas. The first is employment of the citizens of Kazakhstan. Below is the table of employment of women and men by the main labor indicators (table 3.3). By table 3.3 we can analyze the population employment across the republic.

Table 3.3 – Main indicators of the labor market in the Republic of Kazakhstan for 2011-2015 Indicators Including

term term Self- - Emp- employe

Employed Employed

Long

percentage percentage

population, population, hous. people hous. loyees

thous. people thous. t people thous. percentage in percentage in people thous. activity of the the of activity in population, d people Economically in population,

inactivity of the the of inactivity

Total number of of number Total

Level of economic economic of Level economic of Level

inactive population, population, inactive

unemployment rate, rate, unemployment

unemployed people, people, unemployed

Economically active active Economically

Unemployment rate, rate, Unemployment

1 2 3 4 5 6 7 8 9 10 11 Women Republic of 4 4 2 65,8 3 105,9 1 071,9 252,9 5,7 3,1 34,2 Kazakhstan 430,7 177,8 306,3 Akmola 221,3 74,0 210,6 3 130,8 79,7 10,8 4,9 1,5 77,8 26,0 region Aktobe region 210,9 65,4 198,9 157,2 41,6 12,0 5,7 1,8 111,5 34,6 Almaty region 503,5 70,8 474,4 339,0 135,4 29,1 5,8 4,5 207,4 29,2 Atyrau region 150,9 72,5 143,8 130,6 13,2 7,1 4,7 1,2 57,2 27,5 West Kazakhstan 162,4 64,4 153,0 99,9 53,2 9,4 5,8 2,6 89,8 35,6 region Zhambyl 254,6 65,4 239,4 134,3 105,1 15,2 6,0 4,6 134,5 34,6 region Karaganda 352,9 61,1 330,6 286,1 44,5 22,3 6,3 4,3 224,8 38,9 region

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Continuation of the table 3.3 1 2 3 4 5 6 7 8 9 10 11 Kostanay 260,5 68,5 246,1 154,3 91,7 14,5 5,6 3,1 120,1 31,5 region Kyzylorda 150,7 61,5 142,3 95,5 46,8 8,3 5,5 4,8 94,2 38,5 region Mangistau 136,5 65,6 125,8 119,1 6,7 10,8 7,9 5,8 71,7 34,4 region South Kazakhstan 577,0 62,0 542,9 330,0 212,9 34,1 5,9 3,7 354,1 38,0 region Pavlodar 223,6 69,8 212,6 167,5 45,1 11,1 4,9 0,2 96,8 30,2 region North Kazakhstan 167,7 69,0 158,3 100,5 57,8 9,4 5,6 2,2 75,5 31,0 region East Kazakhstan 355,6 60,7 335,4 235,4 100,1 20,2 5,7 3,2 230,1 39,3 region Astana 241,8 72,0 229,0 219,9 9,2 12,7 5,3 1,7 94,0 28,0 Almaty 460,8 63,3 434,8 406,0 28,8 26,0 5,6 2,7 266,7 36,7 Men Republic of 4 77,2 4 3 1 198,2 4,3 1,8 1 373,8 22,8 Kazakhstan 644,2 446,0 188,9 257,0 Akmola 223,4 83,2 212,4 135,9 76,6 11,0 4,9 1,0 45,1 16,8 region Aktobe 230,7 80,0 221,1 175,3 45,8 9,6 4,2 0,5 57,7 20,0 region Almaty 530,5 79,7 510,0 356,5 153,5 20,5 3,9 2,6 134,8 20,3 region Atyrau 161,3 83,4 152,7 135,7 17,0 8,6 5,4 0,3 32,2 16,6 region West 172,8 76,4 165,7 100,1 65,6 7,1 4,1 1,3 53,5 23,6 Kazakhstan region Zhambyl 284,7 79,2 273,3 141,8 131,4 11,4 4,0 2,5 74,9 20,8 region Karaganda 377,7 76,7 364,0 308,6 55,3 13,7 3,6 1,7 114,7 23,3 region Kostanay 259,8 79,6 248,4 166,8 81,6 11,4 4,4 1,2 66,7 20,4 region Kyzylorda 174,5 72,9 166,6 102,8 63,8 7,9 4,5 2,6 64,7 27,1 region Mangistau 155,5 78,2 151,4 142,1 9,3 4,1 2,6 1,4 43,3 21,8 region South 639,5 72,2 609,8 308,6 301,2 29,7 4,7 3,2 246,6 27,8 Kazakhstan region Pavlodar 216,0 78,9 206,1 163,7 42,4 9,9 4,6 0,1 57,7 21,1 region North 169,4 79,7 162,4 114,6 47,7 7,1 4,2 0,8 43,2 20,3 Kazakhstan region East 376,9 73,6 361,3 247,4 113,9 15,7 4,2 1,3 135,0 26,4 Kazakhstan region Astana 247,1 82,5 237,0 223,0 14,1 10,0 4,1 1,4 52,4 17,5 Almaty 424,3 73,7 403,8 365,9 37,8 20,6 4,8 2,0 151,4 26,3 Note – Compiled by the author according to source2

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The share of people employed in service sector is lower in the Republic of Kazakhstan than in the European Union. Taking into account the great number of diverse industries forming the part of this sector, it should be noted that professional and maintenance services have a significant weight in the service sector of developed countries, while in Kazakhstan 30 % of the population employed in the service sector is accounted for trade and provision of repair services. In the labor market, with an abundance of humanitarian specialists, there are not enough workers introducing new technologies, modern science- intensive industries, doctors, teachers. The lack of workers and technical specialties forces enterprises to attract qualified human resources from abroad. The country as a whole has an inadequate educational system: the employment structure differs sharply from the qualification structure of the training system. Thus, there is much larger part of employed people in services, than is trained in universities. At the same time, the number of specialists trained for the industry is larger than the number of people employed there. Graduated specialists are further retrained, and, as a rule, they are not working according to their qualification. However, the problem of both the employment of young people and the quality of their knowledge may be exacerbated in the coming years. Over the past 10 years, a record number of children born in the Republic of Kazakhstan – has been up to 400 thousand annually. The population at the age of 1 to 9 years is 3,6 mln. people, which is 1,5 times more than the population at the age of 10-19 years – this is a new load on the school, which is 1,5 times higher than the population at the age of 55-64 years, which is a load on the labor market. Thus, in 2020, 700 thous. more children will study at schools than now, - 3,5 mln., that is, a 30 % increase of the load. In order to prevent the growth of the load, and the current one is 8,6 children per a teacher, an additional 100 thous. teachers are needed, while the higher education system will be able to provide only 40 thous. At the same time, in 2016-2020 the population of the Republic of Kazakhstan over the age of 15 will grow by 350 thous. Let’s consider the table of the population at the age of 15 and over according to the basic labor indicators (table 3.4).

Table 3.4 – Main labor market indicators by the category “Population aged 15 years and over” in the Republic of Kazakhstan for 2011-2015 Indicators 2011 2012 2013 2014 2015 Level of economic activity, in 71,6 71,7 71,7 70,7 71,1 percentage Employed population, thous. 8301,6 8507,1 8570,6 8510,1 8623,8 people Employment rate, in percentage 94,6 94,7 94,8 95,0 95,0 Employees, thous. people 5581,4 5813,7 5949,7 6109,7 6294,9

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Continuation of the table 3.4 Indicators 2011 2012 2013 2014 2015 Share of employed population, in 67,2 68,3 69,4 71,8 73,0 percentage Self-employed population, thous. 2328, 2720,2 2693,4 2621,0 2400,4 people 9 Share in the number of employed 32,8 31,7 30,6 28,2 27,0 people, thous. people Unemployed population, thous. 473,0 474,8 470,7 451,9 451,1 people Level of unemployed population, in 5,4 5,3 5,2 5,9 5,0 percentage Number of citizens applying for employment from the start of the 322,5 344,5 325,3 323,3 409,0 year, thous. people Of them - employed people 235,0 213, 4 200,9 185,7 304,2 Number of citizens registered as unemployed in employment 36,6 34,6 30,0 33,8 34,6 agencies at the end of the year, thous. people Share of registered unemployed people in the number of 0,4 0,4 0,3 0,4 0,4 economically active population, in percentage Economically inactive population, 3477,3 3538,7 3569,4 3715,9 3680,1 thous. people Level of economic inactivity 28,4 28,3 28,3 29,3 28,9 (passivity), in percentage Note – Compiled by the author according to source.

According to the data provided in table 3.4, the unemployment rate in the Republic of Kazakhstan is reduced by 0,9 % in 2015 and represents the best result of 5,0 % for 2011-2015. Within this, in the Baltic States, in particular in the Republic of Latvia, the unemployment rate is quite high, amounting to 8,4 % in 2015, which is the most painful social problem and the reason for the continuing emigration, especially among the able-bodied population. In the labor market, the most vulnerable population category includes young people, especially those who do not have the experience or required qualification. In this connection, various kinds of psychological and professional consultations are provided in the country's employment sector, various local initiative projects are being introduced and other activities are being implemented in the labor market, but in fact the effectiveness of these projects is rather low, as the situation in the population employment in the regions of the country does not improve. Thus, in December 2016, the unemployment rate in the Republic of Latvia was 9,8

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%, and represented the highest unemployment rate among the EU countries, by the beginning of 2017 unemployment in Latvia is above the average among the EU countries. This indicates the lack of quality monitoring of ongoing activities in the labor market in the country's regions, as well as evaluations of post-program employment of the population. One of the most serious problems of providing employment in depressed regions, in single-industry towns is the lack of social elevators, therefore quite ideological youth in the productive age falls into the category of social outsiders. Employment issues in the Republic of Kazakhstan are caused first of all by the lack of new types of labor application due to the low diversification of the economy and the underdevelopment of vocational training system. The number of unemployed population in 2015 was 36648 thousand people. Youth unemployment rate was 4.1 % (in 2001 – 16,6 %) in 2016. Out of the total number of unemployed, urban population was 36648 people, rural population - 16263 thousand people. In the Republic of Kazakhstan, the unemployed are the people of the age established for measuring the economic activity of the population, who during the period under consideration met three main criteria at the same time: a) they were unemployed (did not have any profitable occupation); b) actively searched for employment; c) were ready to start working within the certain period of time. In the context of the regions, the unemployed population for 2016 was distributed as follows (table 3.5).

Table 3.5 – Distribution of unemployed population with qualification by the regions of the Republic of Kazakhstan for 2001-2016, thous. people Name of the 2001 2002 2003 2004 2005 2006 2007 2008 region 1 2 3 4 5 6 7 8 9 Republic of 269, 194, 328,9 272,3 281,5 269,5 263,7 224,6 Kazakhstan 0 4 Akmola region 17,2 13,7 12,1 15,9 16,0 14,3 10,3 10,3 Aktobe region 14,6 9,3 11,9 11,1 11,2 12,5 9,6 9,6 Almaty region 30,0 28,4 29,0 22,4 24,8 26,3 14,9 18,8 Atyrau region 13,5 11,5 11,9 12,1 12,0 9,4 8,1 6,5 West Kazakhstan 22,2 14,5 13,5 15,4 16,0 13,1 9,2 8,8 region Zhambyl region 25,0 22,6 22,8 25,1 20,2 20,0 14,7 10,1 Karaganda region 32,5 23,3 22,6 23,0 18,6 17,5 18,1 17,5 Kostanay region 21,8 19,6 16,4 17,1 17,6 22,2 15,3 19,1 Kyzylorda region 22,1 19,4 19,2 20,5 11,5 9,9 10,2 6,3

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Continuation of the table 3.5 1 2 3 4 5 6 7 8 9 Mangistau region 6,6 5,1 7,1 8,5 9,0 6,3 7,5 4,5 South Kazakhstan 45,3 31,9 31,5 33,1 36,3 35,9 36,7 28,6 region Pavlodar region 14,2 11,4 11,4 10,9 9,7 8,8 7,2 7,6 North Kazakhstan 17,3 16,8 15,2 13,3 12,9 12,6 9,9 8,0 region East Kazakhstan 22,6 17,7 23,3 19,1 22,7 21,2 18,8 17,7 region Astana 5,0 5,4 5,6 8,0 4,2 7,1 6,3 5,8 Almaty 18,9 18,3 18,8 25,9 26,8 26,6 27,8 15,3 Name of the 2009 2010 2011 2012 2013 2014 2015 2016 region Republic of 155, 194,6 143,3 130,7 132,7 103,9 103,9 92,8 Kazakhstan 0 Akmola region 10,9 6,5 5,9 5,4 5,6 3,1 3,1 3,2 Aktobe region 7,5 4,8 5,1 4,6 3,5 3,5 3,4 3,1 Almaty region 19,4 11,2 9,9 11,3 19,9 11,5 8,2 9,8 Atyrau region 6,2 6,5 3,9 3,1 3,1 2,7 2,1 2,0 West Kazakhstan 8,4 6,4 5,1 5,6 4,5 4,3 3,5 3,6 region Zhambyl region 16,3 7,1 11,1 14,1 12,6 7,6 6,8 5,3 Karaganda region 18,6 14,2 11,7 10,0 8,0 7,3 8,2 7,7 Kostanay region 10,4 11,5 10,5 8,1 3,9 4,5 3,8 3,9 Kyzylorda region 6,6 6,8 7,0 6,2 7,2 5,0 4,2 4,7 Mangistau region 4,7 5,5 5,2 3,1 6,0 4,0 3,2 3,1 South Kazakhstan 31,0 25,0 20,0 18,9 12,0 10,2 14,3 12,6 region Pavlodar region 8,2 7,9 7,1 5,4 5,9 2,5 3,0 2,4 North Kazakhstan 6,8 7,3 6,3 5,3 5,7 2,4 1,9 1,8 region East Kazakhstan 15,5 13,0 13,4 9,9 9,5 6,7 6,9 4,6 region Astana 6,7 5,4 8,0 9,2 6,9 8,1 8,1 6,6 Almaty 17,5 16,0 13,0 10,5 18,3 20,3 23,2 18,5 Note – Compiled by the author according to the source.

In absolute values, the largest number of unemployed people in 2016 is observed in SKR, Almaty region and in Almaty. However by the number of the population, these regions are also leading. In the structure of unemployed people in the Republic of Kazakhstan, every second unemployed person is a woman. The share of people aged 25-34 is 43,5 %, and aged 15-24 – 9,6 %. Out of the number of unemployed people, 131,3 thousand people (27,9 %) have higher education, 146,3 thousand people (31,1 %) – general 113

secondary education, 146,9 thousand (31,2 %) - secondary vocational education. Summarizing the performed analysis, we can distinguish the following features of modern unemployment in the Republic of Kazakhstan: - the largest proportion among the unemployed people is youth aged 25-34; - the smallest proportion in the structure of unemployed population includes young people aged 16-19 and people of pre-retirement age; - the long-term unemployment rate among women is much greater than that of unemployment among men, and this difference is stronger in cities than in villages; - the largest proportion in the structure of unemployed population by the level of education includes unemployed people having secondary vocational education, the smallest proportion is represented by unemployed people with the basic and incomplete higher education. As it was already noted by the author, the main goal of creating “Employment roadmap – 2020” state program is to form and expand new jobs, to increase employment in the regions of the Republic of Kazakhstan and thereby to reduce unemployment rate in the country, and to involve citizens in entrepreneurship. The growth in the number of jobs as a result of the Program implementation reflects the opportunities of enterprises in the regions of the Republic of Kazakhstan to address problems in employment. Meanwhile, it should be noted that, according to the experience of developed countries, the development of entrepreneurship generates a self- sustaining process of development and expansion of the real sector of the economy and services to ensure growth of the population employment, promotes the growth of its business activity and solution of social problems of the population. In this regard, during the analysis, the impact of the number of registered small and medium enterprises on the unemployment rate in the Republic of Kazakhstan for 2001-2016 was investigated. The number of small and medium enterprises and the unemployed population in the Republic of Kazakhstan for 2001-2016 is presented in table 3.6.

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Table 3.6 – The number of small and medium enterprises and the unemployed population in the Republic of Kazakhstan for 2001-2016 Number of small and medium Number of unemployed population, Years enterprises, units (X) thous. people (Y) 2001 154 334 780,3 2002 171 661 690,7 2003 188 030 672,1 2004 206 371 658,8 2005 224 854 640,7 2006 245 776 625,4 2007 266 284 597,2 2008 281 372 557,8 2009 295 656 554,5 2010 284 639 496,5 2011 299 022 473,0 2012 315 594 474,8 2013 336 548 470,7 2014 351 358 451,9 2015 357 801 454,2 2016 381 414 445,5 Note – Compiled by the author according to the source.

Calculation of the covariance coefficient. Covariance coefficient characterizes the degree of linear dependence of two random variables, represented by the formula (3.3): 1 n cov( X ,Y)   (xk  M x )(yk  M y ) (3.3) n k 1

Where Мх – evaluation of the mathematical expectation of a random variable X; Му - evaluation of the mathematical expectation of a random variable Y.

The value of the mathematical expectations of the random variables X and Y was calculated by the formulas (3.4), (3.5):

1 n M x   xk  272544,625 (3.4) n k1

1 n M y   yk  565,25625 (3.5) n k1

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The calculation of the centered values for calculating the covariance coefficient is presented in table 3.7.

Table 3.7 – Calculation of centered values for calculating the covariance coefficient k xk yk ( хk-Mx ) ( yk-My ) ( хk-Mx )∙( yk-My ) 1 154334 780,3 -118210,62500 215,04375 -25420456,08984 2 171661 690,7 -100883,62500 125,44375 -12655220,23359 3 188030 672,1 -84514,62500 106,84375 -9029859,46484 4 206371 658,8 -66173,62500 93,54375 -6190129,03359 5 224854 640,7 -47690,62500 75,44375 -3597959,58984 6 245776 625,4 -26768,62500 60,14375 -1609965,48984 7 266284 597,2 -6260,62500 31,94375 -199987,83984 8 281372 557,8 8827,37500 -7,45625 -65819,11484 9 295656 554,5 23111,37500 -10,75625 -248591,72734 10 284639 496,5 12094,37500 -68,75625 -831563,87109 11 299022 473,0 26477,37500 -92,25625 -2442703,32734 12 315594 474,8 43049,37500 -90,45625 -3894085,02734 13 336548 470,7 64003,37500 -94,55625 -6051919,12734 14 351358 451,9 78813,37500 -113,35625 -8933988,63984 15 357801 454,2 85256,37500 -111,05625 -9468253,29609 16 381414 445,5 108869,37500 -119,75625 -13037788,08984 Note – Calculated by the author according to source.

The final calculation of the covariance coefficient.

cov( X ,Y)  6479893,122656

Then, it is necessary to calculate the correlation coefficient (Pearson coefficient) - the indicator of mutual probability influence of two random variables. The correlation coefficient can be calculated by the following formula (3.6): cov( X ,Y) R  (3.6) x, y σ σ x y

where cov(X,Y) – covariance of random values Х and Y; σ – standard deviation of covariance.

Estimates of the variances of the random variables X and Y, respectively, are determined by the formulas (3.7), (3.8):

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n 2 1 2 σ x   (xk  M x ) (3.7) n k 1

2 where σ x – variance of a random variable Х.

n 2 1 2 σ y   (y k  M y ) (3.8) n k 1 where 2 σ y - variance of a random variable Y.

Evaluations of the mathematical expectation of the random variables X and Y, respectively, are determined by the formulas (3.4), (3.5) or by the formulas (3.9-3.12):

M  M  M R  x, y x y (3.9) x, y S S x y

1 n M x, y   xk  yk (3.10) n k 1

n 2 1 2 2 Sx   xk  M x (3.11) n k 1

n 2 1 2 2 S y   yk  M y (3.12) n k 1

In practice, the formula (3.9) is often used to calculate the correlation coefficient, since this formula requires less computation. However, if the covariance cov(X, Y) was previously calculated, then it is more convenient to use the formula (3.6), since in addition to the covariance value, the results of intermediate calculations can be also used. In order to calculate the correlation coefficient by the formula (3.6), it is necessary to use the results presented in table 3.7, by adding two new 2 2 columns (xk - Mx) , (yk - My) to this table, in which (based on preliminary calculations) the values of the squares of centered random variables. The calculated data for estimating the variances of random variables X and Y are presented in table 3.8.

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Table 3.8 – Estimated data for evaluation of variances of the random variables X and Y 2 2 k xk yk ( хk-Mx ) ( хk-Mx ) ( yk-My ) ( yk-My ) - 46243,8144 1 154334 780,3 13973751862,89062 215,04375 118210,625 1 690,7 - 10177505793,14062 15736,134 2 171661 125,44375 100883,625 41 672,1 - 11415,586 3 188030 7142721838,89062 106,84375 84514,625 91 658,8 8750,4331 4 206371 -66173,625 4378948645,64062 93,54375 6 640,7 5691,7594 5 224854 -47690,625 2274395712,89062 75,44375 1 625,4 3617,2706 6 245776 -26768,625 716559284,39062 60,14375 6 597,2 1020,4031 7 266284 -6260,625 39195425,39062 31,94375 6 557,8 8 281372 8827,375 77922549,39062 -7,45625 55,59566

554,5 9 295656 23111,375 534135654,39062 -10,75625 115,69691

496,5 4727,4219 10 284639 12094,375 146273906,64062 -68,75625 1 473,0 8511,2156 11 299022 26477,375 701051386,89062 -92,25625 6 474,8 8182,3331 12 315594 43049,375 1853248687,89062 -90,45625 6 470,7 8940,8844 13 336548 64003,375 4096432011,39062 -94,55625 1 451,9 12849,639 14 351358 78813,375 6211548078,89062 -113,35625 41 454,2 12333,490 15 357801 85256,375 7268649478,14062 -111,05625 66 445,5 11852540812,89062 14341,559 16 381414 108869,375 -119,75625 41 Note – Calculated by the author according to source.

Hence, 2 σx = 71444881129,75000 / 16 = 4465305070,609375

2 σy = 162533,239375 / 16 = 10158,327461

2 2 σx σy = 4465305070,609375∙10158,327461 = 45360031120234,6796 88

σxσy = 6734985,606535

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The author calculates the correlation coefficient (Pearson coefficient) by formula (3.6).

Rx,y=-6479893,122656 / 6734985,606535=-0,962124

The resulting value (Rx,y), or more precisely Pearson correlation coefficient, indicates that X factor has a significant impact on Y. Now we need to check the significance of the correlation coefficient (test the dependence hypothesis). Since the evaluation of the correlation coefficient is calculated based on the final sample, and therefore may deviate from its general value, it is necessary to check the significance of the correlation coefficient. The test is performed using the t-criterion, formula (3.13):

R  n  2 t  x, y (3.13) 1 R2 x, y

A random value t follows the t-distribution of Student and, according to the t-distribution table, it is necessary to find the critical value of the criterion (tкр.α) for a given significance level α. If t value calculated by formula (3.13) is less than tкр.α by module, then there will be no dependence between the random variables X and Y. Otherwise, the experimental data do not contradict the hypothesis of dependence between random variables.

 0,96212 16  2 t   13,20540 1 (0,96212)2

By the table of t-distribution, the author defines the critical value of tкр.α parameter. In this case, the number of degrees of freedom is 16 (n-2 = 16-2) and α = 0.1, which corresponds to the critical value of tкр.α criterion = 1,761 (table 3.9).

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Table 3.9 – t-distribution for defining of the critical value of tкр.α criterion Number of the degrees of α = α = α = α = α = α = freedom 0.1 0.05 0.02 0.01 0.002 0.001 ( n - 2 ) 1 6,314 12,706 31,821 63,657 318,31 636,62 2 2,920 4,303 6,965 9,925 22,327 31,598 3 2,353 3,182 4,541 5,841 10,214 12,924 4 2,132 2,776 3,747 4,604 7,173 8,610 5 2,015 2,571 3,365 4,032 5,893 6,869 6 1,943 2,447 3,143 3,707 5,208 5,959 7 1,895 2,365 2,998 3,499 4,785 5,408 8 1,860 2,306 2,896 3,355 4,501 5,041 9 1,833 2,262 2,821 3,250 4,297 4,781 10 1,812 2,228 2,764 3,169 4,144 4,587 11 1,796 2,201 2,718 3,106 4,025 4,437 12 1,782 2,179 2,681 3,055 3,930 4,318 13 1,771 2,160 2,650 3,012 3,852 4,221 14 1,761 2,145 2,624 2,977 3,787 4,140 15 1,753 2,131 2,602 2,947 3,733 4,073 16 1,746 2,120 2,583 2,921 3,686 4,015 17 1,740 2,110 2,567 2,898 3,646 3,965 18 1,734 2,101 2,552 2,878 3,610 3,922 19 1,729 2,093 2,539 2,861 3,579 3,883 20 1,725 2,086 2,528 2,845 3,552 3,850 21 1,721 2,080 2,518 2,831 3,527 3,819 22 1,717 2,074 2,508 2,819 3,505 3,792 23 1,714 2,069 2,500 2,807 3,485 3,767 24 1,711 2,064 2,492 2,797 3,467 3,745 25 1,708 2,060 2,485 2,787 3,450 3,725 26 1,706 2,056 2,479 2,779 3,435 3,707 27 1,703 2,052 2,473 2,771 3,421 3,690 28 1,701 2,048 2,467 2,763 3,408 3,674 29 1,699 2,045 2,462 2,756 3,396 3,659 30 1,697 2,042 2,457 2,750 3,385 3,646 40 1,684 2,021 2,423 2,704 3,307 3,551 60 1,671 2,000 2,390 2,660 3,232 3,460 120 1,658 1,980 2,358 2,617 3,160 3,373 ∞ 1,645 1,960 2,326 2,576 3,090 3,291 Note – Calculated by the author

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The absolute value of t-criterion is compared with tcr α. The absolute value of the t-criterion is not less than the critical value: t = 13,20540, tcr.α = 1,761. Consequently, the experimental data, with a probability of 0,9 (1 - α), will not contradict the hypothesis of dependence of random variables X and Y. Calculation of the coefficients of the linear regression equation. The linear regression equation is the equation of a straight line approximating (approximately describing) the relationship between the random variables X and Y. If we assume that X is free and Y is dependent on X, then the regression equation will be written as follows, formulas (3.14-3.16):

Y = a + b∙X (3.14)

σ S b  R y  R y (3.15) x, y σ x, y S x x

a = My - b∙Mx (3.16)

The coefficient b calculated by formula (3.15) is called the linear regression coefficient. In some sources, a is called a constant regression coefficient and b, respectively, is called the variable. Errors in prediction of Y by the given value of X are calculated as follows: the absolute error by formula (3.17), the relative error by formula (3.18):

σ  σ 1 R 2  S 1 R 2 (3.17) y/x y x, y y x, y

σ y / x δ y / x  100% (3.18) M y

σy/x value (formula (3.17) is also called the residual mean square deviation, which characterizes the loss of Y from the regression line described by equation (3.14) for a fixed (given) value of X. 2 σ y Calculation of the ratio 2 : σ x

2 2 σy / σx = 10158.32746 / 4465305070.60938 = 0,00000

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σ Calculation of the ratio y . σx As a result of extraction of the square root from the last number, the following value is obtained: σy / σx = 0,00151. Calculation of b coefficient by formula (3.15): b = -0,96212 ∙ 0,00151 = -0,00145 Calculation of a coefficient by formula (3.16): a = 565,25625 - (-0,00145 ∙ 272544,625) = 960,76339 Estimation of the error of the regression equation. 2 As a result of extracting σy from the square root, the following value is obtained: σ  10158,32746  100,78853 y Based on the results of squaring Rx,y, the following value is obtained: 2 2 R x,y = -0,96212 = 0,92568 Most often, by giving an interpretation of the determination coefficient, it is expressed as a percentage, i.e. changes in X lead to a change in Y in 92,57 % of cases. In other words, the accuracy of selecting the regression equation is high. The remaining 7,43% change in Y is explained by to the factors not taken into account in the model (as well as by specification errors). Calculation of the absolute error (residual mean square deviation) by the formula (3.17):

σy/x 100,78853 1 0,92568  27,47609 Calculation of the absolute error by the formula (3.18):

27,47609 δ y/x  100%  4,86082% (3.18) 565,25625

Errors of equation: σy/x = 27,47609, δy/x = 4,86082 %. As a result, the linear regression equation has the following form, formula (3.19):

Y = 960,76339 - 0,00145X (3.19)

The regression coefficient b = -0.00145 shows the average change in the resulting indicator (in the units of Y) with an increase or decrease in the value of X coefficient per the unit of its measurement. In this example, with 1 unit increase Y decreases by -0,00145 on average. The coefficient a = 960,762 formally shows the predicted level of Y, but only if x=0 is close to the sampled values. 122

The approximation error (Ā) in the range of 5-7 % indicates a good selection of the regression equation for the original data.

0,642 A  100%  4,01% 16

On average, the calculated values deviate from the actual values by 4,01 %. Since the error is less than 7%, this equation can be used as a regression. For the visual representation, a scattering diagram (correlation field) and the regression line diagram are built (figure 3.1).

Note – Compiled by the author

Figure 3.1 – Scattering diagram (correlation field)

The author finds the minimum and maximum X sample elements. st th These are the 1 and the 16 elements, respectively, Xmin = 154334 and Xmax = 381414. The author finds the minimum and maximum Y sample th st elements. This is the 16 and the 1 elements, respectively, Ymin = 445,5 and Ymax = 780,3. The starting point is chosen on the abscissa axis slightly to the left of X1 = 154334, and a scale is selected to place X16 = 381414 point and other points on the axis. The starting point is chosen on the ordinate axis slightly to the left of Y16 = 445,5, and a scale is selected to place Y1 = 780,3 and the remaining points on the axis. The author places the values of Xk on the abscissa axis, and Yk values - on the ordinate axis. The author applies the points (X1, Y1), (X2, Y2), ..., (X16, Y16) to the coordinate plane. Then the author draws a regression line and obtain the scattering diagram (correlation field) shown in the figure.

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For this purpose, the author finds two different points with coordinates (Xr1, Yr1) and (Xr2, Yr2) satisfying the equation (3.19), applies them to the coordinate plane and draws a straight line through them. The author takes the value Xmin = 154334 as the first point abscissa. The author substitutes the value of Xmin in equation (3.19) and obtains the first point ordinate. Thus, the author has a point with coordinates (154334; 736,79934). Similarly, the author obtains the coordinates of the second point by setting Xmax = 381414 as the abscissa. The second point will be: (381414; 407,26886). The regression line is shown in red in the figure. Thus, the dependence of the number of the unemployed population in the regions of the country (Y) on the development of entrepreneurship (X) in the Republic of Kazakhstan for 2001-2016 has been studied. Paired linear regression (Pearson correlation coefficient) was selected at the specification stage. Its parameters are estimated by the least squares method. The statistical significance of the equation is verified by means of the determination coefficient and the Fisher criterion. It was found that in the investigated situation, 92,57 % of the total variability of Y is explained by the change in X. It is also established that the parameters of the model are statistically significant. An economic interpretation of the model parameters is possible - an increase in the number of small and medium enterprises (X) by 1 unit leads to an average decrease of the unemployed population (Y) by 0,00145 measurement units (persons). Thus, with an increase in the number of small and medium enterprises (X), the number of unemployed people in the country will decline. The resulting estimates of the regression equation also allow us to use it for the forecast. With the number of small and medium enterprises (X), equal to 299799 units, the number of unemployed population (Y) will be in the range from 460,44 to 590,97 people, and with a probability of 95 % will not go beyond these limits. In general, according to the analysis, the influence of the development of entrepreneurship on the reduction of unemployment in the country is confirmed. Thus, the important role of the state industry program “Employment roadmap – 2020” in addressing employment problems is emphasized, contributing to the creation of new jobs at the country's enterprises, in particular, promoting the development of entrepreneurship as a driving force in the economy of the country’s regions. Qualitative evaluation of the program should include not only evaluation of the program process and products, but also evaluation of its social efficiency - the satisfaction of the beneficiaries – program participants with their personal results. Since three directions of

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“Employment roadmap – 2020” program are sufficiently different by the content of activities, then each of them should have own methodology of social efficiency evaluation, taking into account its aim and end result. In order to develop and test the methodology for evaluation of the social efficiency of “ERM-2020” program, the author has taken “Youth practice” (YP) project (sub-direction) within the third direction “Support in employment through the education and movement within the employer’s needs”. “Youth practice” project has the aim to provide professional experience for the graduates who suffer from difficulties with employment after the graduation. The main problem in employment of the graduate is the lack of professional experience according to qualification. In this connection, the scheme of movement of the project participant in “Youth practice” project may consist of the following stages (figure 3.2):

Admission to the Employment according to Performance of program functional obligations diploma qualification relevant to the specialist training

After completion of the internship period, employment for the workplace according to the diploma qualification for the same or another job according to qualification

Figure 3.2 – Organization model of the process of participant stay in “Youth practice” project within “Employment roadmap – 2020” program of the Republic of Kazakhstan

Note – Compiled by the author

Quality evaluation of the program results of “Youth practice” project within “ERM-2020” program, including satisfaction of the participants with the program project results may be performed by the results of the social survey of the project participants, as this is the only way to identify “the satisfaction of the project participant”. Methodology of evaluation through the prism of characteristics of the workplace is provided in the form of matrix in table 3.10. Evaluation methodology is based on the following provisions:

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1) The evaluation object is the workplace of the program participant. There are two workplaces: workplace within the passage through YP (Youth Practice) and workplace of the questioned participant, for which he was employed after the youth practice. If the participant was not employed after the youth practice or the employee was dismissed in the short term by the subjective reasons (objective reasons are: bankruptcy, reduction of the company’s staff, health condition etc.), then the unemployed status is registered. If the fact of employment took place and the contract was terminated by the objective reason, then the individual is registered in the database as employed after the youth practice. 2) Workplace within the youth practice is characterized by the feature “compliance with the diploma”, which has one of three values:  corresponds to diploma qualification. This characteristics of the workplace corresponds with the line 1.1-1.9 in table 3.10, that is indicated as Pp=D;  corresponds to the diploma qualification, but the graduate student was offered another functional, not complying with the workplace (for instance, work in the prosecutor’s office corresponds to the lawyer’s diploma, but fulfillment of the courier’s functions, who should distribute notices does not correspond to the diploma qualification). This characteristic of the workplace corresponds with the line 2.1-2.9 in table 3.10, that is indicated as Pp=D≠F;  does not correspond to diploma qualification (for example: work in “Kazpost” JSC does not correspond to “financial expert” qualification, and work at the chamber of entrepreneurs does not correspond to “state and local administration” qualification). In this case the workplace will refer to the line 3.1-3.9 in table 3.10, indicated as Pp≠D; 3) Workplace after the youth practice is characterized based on two features: “correspondence of the workplace according to the diploma qualification, skills and competences acquired in undergoing the youth practice” and “employment channel”. In the first case, the feature has four values: - workplace corresponds to the diploma, and skills and experience acquired within the youth practice are connected with the current workplace. In this case, the workplace will be identified as WP=D=Pp and referred to columns 1.1-3.1 and 1.2-3.2 of table 3.10. - workplace corresponds to the diploma, but the skills and experience acquired practically are not connected with the current workplace. In this case the workplace will be identified as WP=D≠Pp and referred to the columns 1.3-3.3 and 1.4-3.4 of table 3.10.

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- workplace does not correspond to diploma, but skills and experience acquired practically are connected with the current workplace. In this case the workplace will be identified as WP≠D=Pp and referred to the columns 1.5-3.5 and 1.6-3.6 of table 3.10. - workplace does not correspond to diploma, skills and experience acquired practically are not connected with the current workplace. In this case, the workplace will be identified as WP≠D≠Pp and referred to the columns 1.7-3.7 and 1.8-3.8 of table 3.10. - unemployed status is recorded in the column 1.9-3.9 of table 3.10. Workplace after completion of the youth practice should be evaluated also by the feature “employment channel”. This feature also characterizes the end result of the project, its ability to facilitate employment for the permanent workplace through the personal and other connections. Theoretical scheme of the result evaluation based on the workplace characteristics of the program participant in the project “Youth practice” and employment channels is provided in figure 3.3.

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Table 3.10 – Evaluation methodology of the workplaces in “Youth practice” project and after its completion within “Employment roadmap – 2020” program of the Republic of Kazakhstan (compiled by the author) Current WP=D=Pp WP=D≠Pp WP≠D=Pp WP≠D≠PP Unemploy WP Employme Employmen Employmen Employmen Employmen Employmen Employmen Employmen ed nt channel t channel is t channel is t channel is t channel is t channel is t channel is t channel is WP by Pp is not connected not connected not connected not connected connected with Pp connected with Pp connected with PP connected with Pp with Pp with Pp with Pp with PP Pp=D 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Pp=D≠F 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 Pp≠D 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 Note - Compiled by the author: 1. WP – workplace; Pp – place of practice; D – diploma (qualification); F – functional duties. 2. Workplace by the place of practice: 128 Pp=D – place of practice corresponds to the diploma qualification of the respondent

Pp=D≠F – place of practice corresponds to the diploma qualification of the respondent, but does not correspond to the functional duties of the respondent’s qualification Pp≠D – place of practice does not correspond to the diploma qualification of respondent

3. Current workplace: WP=D=Pp – workplace corresponds to the diploma, skills and experience acquired practically are connected with the workplace. WP=D≠Pp – workplace corresponds to the diploma, but the skills and experience acquired practically are not connected with the current workplace. WP≠D=Pp – workplace does not correspond to diploma, but the skills and experience acquired practically are connected with the current workplace WP≠D≠Pp – workplace does not correspond to diploma, skills and experience acquired practically are not connected with the current workplace. 4. Channel for employment for the permanent job is evaluated as connected or not connected with the youth practice, that is also the quality result of the project and influences on the satisfaction of the program participant.

Current workplace ("compliance with the diploma and youth practice skills")

Employment channel for the current workplace WP=D=Pp ("connection with the youth practice" feature)

WP=D≠Pp Workplace in Pp project Connected with Pp ("compliance with diploma" feature)

129 WP≠D=Pp

Not connected Pp=D Pp=DǂF PpǂD with Pp WP≠D≠Pp

Figure 3.3 – Theoretic scheme of evaluation of “Youth practice” project result based on characteristics of the workplaces and employment channels

Note – Compiled by the author

Based on the developed evaluation methodology, a field survey of the program participants is conducted, based on the results of which it is possible to identify the characteristics of their current workplaces and those jobs that were available to them in the framework of youth practice. A possible version of the interview text, developed by us, proposed for assessing the results of youth practice, is presented in Appendix 3 (Questionnaire (interview) on Youth Practice). The characteristics of jobs are derived from the following questions: - The workplace within the framework of youth practice is characterized on the basis of answers to questions 8 and 10. - The employment channel for connection with youth practice is characterized on the basis of questions 11 and 12. - The characteristic of this workplace is determined on the basis of answers to questions 11, 13, 15. When the respondents are separated according to the characteristics of their workplaces, the following qualitative assessment of the final results of “Youth Practice” project may be provided (table 3.11).

Table 3.11 – Quality characteristics of the end results of “Youth practice” project № Positio Quality characteristics of the result ns in table 1. 1 2 3 Block 1 – Place of youth practice coincided with the diploma qualification and participation in the program (direct or indirect) helped to be employed 1 1.1 The best project result where the workplace of the youth practice coincided with the diploma qualification, and based on this employment channel the program participant further concluded an employment contract. This may be the same or another workplace, but the program participant specified this connection. Typical example: Quality control engineer is employed at the plant according to qualification, after the practice he concludes the contract for this position 2 1.2 The result is similar to the variant 1.1, but the current workplace of participant is not connected with “youth practice” employment channel 3 1.3 Good project result, where the practice place corresponds to diploma, the current workplace by the employment channel is connected with the youth practice, but the skills and experience acquired during the youth practice are not used. Typical example: Financial expert worked for the bank according to qualification, but further he was employed by insurance company. The proposal is obtained in connection with participation in the project.

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Continuation of the table 3.11 1 2 3 4. 1.4 The result is similar to 1.3, but the current workplace of participant is not connected with “youth practice” employment channel 5 1.5 Satisfactory project result: youth practice corresponded to diploma qualification, but the current workplace does not correspond to it. However, the employment possibility occurred in connection with the youth practice and skills were obtained during the YP Typical example: The qualified lawyer worked in the regional court administration office, now he works in the regional akimat administration office. 6. 1.6 The result is similar to 1.5, but the employment channel is not connected with youth practice 7. 1.7 Unsatisfactory project result, as the current workplace exists but it is not connected with the diploma qualification and the youth practice place. 8 1.8 The results is similar to 1.7, but the employment channel is not connected with youth practice Block 2 – Place of practice formally corresponded to the diploma qualification, but the functions did not 9 2.1 Good project result, when the practice place by its functions did not correspond with the diploma qualification, but the current workplace was obtained by the employment channel, connected with the youth practice and corresponds with the diploma qualification. Skills obtained during the youth practice were useful. Typical example: The ecologist in the process of youth practice works as the benchmarking analyst, but further he is employed according to qualification at the same organization. 10 2.2 The result is similar to 2.1, but the employment channel is autonomous 11 2.3 Satisfactory project result, wherein the practice place did not coincide with the functional duties, but the current workplace was obtained by the employment channel, connected with the youth practice and coincides with the diploma qualification. Skills obtained during the youth practice were useless. Typical example: the qualified lawyer works at the prosecutor’s office, but actually he distributes calls. Further he is employed according to qualification in connection with the practice place. 12 2.4 The result is similar to 2.3, but the employment channel is autonomous 13 2.5 Satisfactory result: the practice place does not coincide with the functional duties, but the current workplace was obtained by the employment channel connected with the youth practice, although it is not connected with the diploma qualification. Typical example: Marketing expert actually works as the sales manager and is employed as a merchandiser after the practice completion. 14 2.6 The result is similar to 2.5, but the employment channel is autonomous

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Continuation of the table 3.11 1 2 3 15 2.7 Unsatisfactory result: practice place did not coincide with the functional duties, but the current workplace was obtained by the employment channel connected with the youth practice and some skills are used although they are not connected with diploma qualification. Typical example: Designer held the similar position but she performed another functional duties. Then she left her job and was employed to the sales department of another company affiliated with the practice place. 16 2.8 The result is similar to 2.7, but the employment channel is autonomous Block 3 – Practice place did not coincide with the diploma qualification 17 3.1 Satisfactory result: practice place did not coincide with the diploma qualification, the current workplace corresponds to the qualification, was obtained by the employment channel, connected with the YP, and some skills acquired in the youth practice process were useful. Typical example: Software Engineer underwent practice as a sales manager, but now she changed her position according to qualification by the youth practice channel, some skills obtained during the YP were useful 18 3.2 The result is similar to 3.1, but the employment channel is autonomous 19 3.3 Satisfactory result: the practice place did not coincide with the diploma qualification, the current workplace corresponds to the qualification, obtained by the employment channel, connected with the YP, but skills obtained in the youth practice process were useless. Typical example: The qualified programmer underwent practice as the assistant to PCS inspector, but further the employment contract was concluded, i.e. he was employed due to the youth practice, but the skills were useless in general 20 3.4 The result is similar to 3.3, but the employment channel is autonomous 21 3.5 Satisfactory result: the practice place did not correspond to the diploma qualification, the current workplace also does not correspond, but it was obtained by the employment channel connected with the project and the skills acquired in the process of the youth practice were useful. Typical example: Financial expert works as the accountant’s assistant, further he is employed as an accountant at the practice place or in another place, the information on which is received in connection with the practice place. The qualified teacher works as the records manager in the city educational department, after that he works at the same place by the contract.

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Continuation of the table 3.11 1 2 3 22 3.6 The result is similar to 3.5, but the employment channel is autonomous 23 3.7 Unsatisfactory result: the practice place does not correspond to the diploma qualification, the current workplace also does not correspond, but it was obtained by the employment channel connected with the project and the skills acquired during the youth practice were useless. Typical example: Social teacher works at the practice as assistant to PSC (Public Service Center) inspector, and after the program he is employed as a secretary to the akimat according to the information obtained in connection with participation in the project 24 3.8 The result is similar to 3.7, but the employment channel is autonomous Typical example: Financial analyst works at “Kazpost” JSC, is not satisfied, is going to leave her position, currently works at the clinic as a registering clerk. Block 4 - Unemployed 25 1.9 Unsatisfactory result: underwent practice according to the diploma qualification, but currently are unemployed 26 2.9 Unsatisfactory result: during the youth practice, the workplace officially corresponded to the diploma qualification, but actually it was needed to perform other functions 27 3.9 Unsatisfactory result: the practice place did not correspond to the diploma and currently the respondent has “unemployed” status Note – Developed by the author

As the result of applying the author’s methodology of screening the quality results of “Youth practice” sub-direction (project), characteristics of the end results of the project may be transformed as follows (table 3.12).

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Table 3.12 – The matrix of the quality evaluation of “youth practice” project end results Curre WP=D=Pp WP=D≠Pp WP≠D=Pp WP≠D≠Pp nt Emp Empl Empl Empl Empl Empl Empl Empl WP loy oyme oyme oyme oyme oyme oyme oyme men nt nt nt nt nt nt nt WP t chann chann chann chann chann chann chann accor chan el is el is el is el is el is el is el is -ding nel not conne not conne not conne not to Pp is conne cted conne cted conne cted conne

conn cted with cted with cted with cted Unemployed ecte with Pp with Pp with Pp with d Pp Pp Pp Pp with Pp Pp=D 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Pp=D ≠F 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 Pp≠D 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 Note - Developed by the author: 1) Optimal result – cells 1.1 and 1.2 2) Good result – cells 1.3;1.4;2.1;2.2 3) Satisfactory result – cells 1.5;1.6;2.3;2.4;2.5;2,6; 3,1;3,2;3,3;3,4;3,5;3,6. 4) Unsatisfactory result – cells 1,7;1,8;1.9; 2,7;2,8;2.9; 3,7;3,8;3.9.

As the result of completion of this table, we may indicate the percent of the results of high, good, satisfactory and unsatisfactory outcomes of participation in the project. 4. Evaluation of satisfaction of the program participants from participation in it may be performed by the results of completion of table 3.12 and by definition of the share of unsatisfactory results. At the same time, the questionnaire has the answer No.16, which is also designed to provide detailed evaluation to satisfaction with comments. The author has performed testing of the proposed methodology as exemplified in the materials of Karaganda Employment Center. The testing process included the following stages. 1) Field examination of the program participants by the method of telephone calls on the issues of open interview. The project results examination was performed based on the information base of 512 participants. 238 participants or 46,4 % took

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complete part in the survey. 42 participants or 8,2 % of the remaining 274 people refused to participate in the survey due to different circumstances. 37 % were unavailable, they have changed their phone numbers etc. 2) Distribution of the program participants who responded to the interview (Appendix 3) by the methodology represented in the table 3.13 is as follows (table 3.13).

Table 3.13 – Distribution of quality outcomes of “Employment roadmap - 2020” program of the Republic of Kazakhstan (as exemplified by the materials of Karaganda Employment Center), people and percentage Outcome quality № of cell in the Number of Share, % (result) table 3.14 people 1 2 3 4 1.1 39 16,4 Optimal 1.2 18 7,6 Total 23,9 1.3 12 5,0 1.4 4 1,7 Good 2.1 11 4,6 2.2 1 0,4 Total 11,8 Satisfactory 1.5 2 0,8 1.6 1 0,4 2.4 10 4,2 2.5 1 0,4 3.1 2 0,8 3.2 3 1,3 3.3 1 0,4 3.4 6 2,5 3.5 5 2,1 3.6 2 0,8 Total 13,9 Unsatisfactory 1.7 2 0,8 1.8 18 7,6 1.9 44 18,5 2.7 2 0,8

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Continuation of the table 3.13 1 2 3 4 2.8 6 2,5 2.9 22 9,2 3.7 4 1,7 3.8 20 8,4 3.9 2 0,8 Total 50,4 Note - Compiled by the author according to the results of the sociological examination

According to the table 3.13 data, it can be concluded that in 122 cases, that is 50,4 % outcomes, the program did not provide satisfactory result. The analysis of answers of the respondents to question No. 16 measuring the attitude to the program allowed defining the share of participants satisfied with participation in the program at the level of 60 % and identifying the most significant comments in details. The main claims of the participants include the following: - strict schedule of completion of the practice limited by the calendar December that reduces the actual period of practice, if the participant addressed later than July; - the proposed practice places does not include vacant workplaces, therefore the contracts are not concluded upon its completion. It seems that only free workforce performing the most routine and low quality work is of interest; - delay of salary and its complete absence (salary for two months was not received at the practice place); - poor selection of practice places and organizations involved in the program; - practice place does not correspond to diploma qualification, the participants have to do any job; - social package is not provided at the practice place; - attitude to the practice participant is unsatisfactory. It is reasonable also to perform analysis and to evaluate the results on the following indicators: 1) S1 – Share of the project participants, the practice place of whom corresponded to the diploma qualification, in %; (data from table 3.14 are used), formula (3.20):

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1 Si = (∑9 푁푅푗) ∗ ∗ 100 (3.20) j =1 푇푁푅

where i = line number (i=1), j – number of the column; NRj – number of respondents in cell j; TNR – total number of respondents.

2) S 2 – Share of the project participants whose practice place corresponded to the diploma qualification, but they were provided with other functional duties ate the workplace, measured in percentage. The calculation formula is similar to Si, but the value of line 2 are used, i.e. i=2. (data from table 3.14 are used). 3) S3 – Share of the project participants, whose practice place did not correspond with the diploma qualification, %; the calculation formula is similar to Si, but the values of line 3 are used, i.e. i=3. (data from table 3.14 are used). 4) S4 – Share of the project participants, whose employment channel for the current workplace is connected with the project, in %; (data from table 3.14 are used), formula (3.21):

3 3 3 3 3 1 S4  ( NRj1  NRj3   NRj5   NRj5   NRj7)  100 (3.21) i1 i1 i1 i1 i1 TNR

where i – line number, j – column number; NRj – number of respondents; TNR – total number of respondents.

5) S5 - Share of the project participants, whose employment channel for the permanent workplace is not connected with the project, in %; (Data from table 3.14 are used), formula (3.22):

S5 = 100% - S4 (3.22)

6) S6 - Share of unemployed project participants for the next year after participation in the youth practice project, in %;(Data from table 3.14 are used), formula (3.23):

1 S6 = (∑3 푁푅푖푗) ∗ 100, (3.23) 푖=1 푇푁푅

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where i – line number, j – column number; NRij – number of respondents; TNR – total number of respondents. 7) S7 - Share of employed participants as the result of the “Youth practice” project (S71 in %), including in accordance with the qualification (S72 in %), formulas (3.24-3.25):

S71=NER/TNR*100 (3.24)

where NER – number of respondents employed after participation in the project; TNR – total number of respondents.

S72=NERs/ TNRs*100 (3.25)

where NERs – number of respondents with diplomas according to qualification s, employed by qualification after participation in the project; TNRs – total number of respondents having diplomas according to their qualification s. 8) IEs – Index of participants employed by qualification in the total number of the program participants, who responded the questions (in %) (examination data are used), formula (3.26):

IEs=S71* S72/100 (3.26)

9) Share of participants of different qualifications in the project (in %), their shares among the employed, employed by qualification (in %) and among unemployed (%), the examination data are used. By this paragraph, it is reasonable to calculate and to compare the values, formulas (3.27-3.30):

S8 = NRs/TNR*100; (3.27)

S9 = TNERs/NRs*100; (3.28)

S10 = NERsd/ TNERs*100; (3.29)

S11 = NUs/TNU*100; (3.30)

where NRs – number of respondents with qualifications; NTR – total number of respondents; TNERs – total number of employed respondents according to qualification s; NERsd – number of employed according to qualification s according to diploma;

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NUs – number of unemployed by qualification s; TNU – total number of unemployed.

The obtained data will represent the analysis of the structure of the program participants and the following positions are analyzed on their basis: 1) The ratio of the number of participants employed according to diploma and not according to diploma evidences the demand of this qualification in the labour market. It should be noted that the total number of respondents in the group should be at least 10 people, as in this case, the adequate conclusions shall be made. 2) If the qualification share in the total group of the project participants is higher than in the group of employed by qualification, then we can say that the labour market conditions for these qualifications is favourable, and they will be employed faster and better. If the share of unemployed is higher than the share of participants in the group then it is obvious that the labour market is exceeded. In order to analyze provided results indicators, it is more convenient to use the following table form (table 3.14):

Table 3.14 – Quality characteristics of the results of “Youth practice” sub- direction within “Employment roadmap – 2020” program of the Republic of Kazakhstan (as exemplified by the materials of Karaganda Employment Center) Cur- WP=D=Pp WP=D≠Pp WP≠D=Pp WP≠D≠Pp rent Employ Employ Empl Employ Employ Empl Empl Empl WP -ment ment oyme ment ment oyme oyme oyme channel channel nt channel channel nt nt nt By is is not chann is not is con- chann chan- chann the connect con- el is connected el is nel is el is Pp ed with nected connected with not con- not

the Pp with nected with the Pp connected con- Unemployed the Pp with the Pp nected with nected the Pp with the Pp with the Pp the Pp 1 2 3 4 5 6 7 8 9 10 Pp= 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 D 39 - 18 44 – 18 p.- 12 – 4 – 2- 1- 2 – 16,4 – 7,6 18,5 7,6 % 5,0 % 1,7 % 0,8 % 0,4 % 0,8 % %* % % Pp= 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 D≠F

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Continuation of the table 3.14 1 2 3 4 5 6 7 8 9 10 22- 11 – 1- 10 – 2- 2- 6- 0 0 9,2 4,6 % 0,4% 4,2 % 0,8 % 0,8 % 2,5 % % Pp≠ 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 D 2- 2- 3- 1- 6 – 5 – 2 – 4 – 20 – 0,8 0,8 % 1,3 % 0,4 % 2,5 % 2,1 % 0,8 % 1,7 % 8,4 % % Note – compiled and calculated by the author according to the examination results *The numerator reflects the number of the project participants, denominator has their structural share

Data from table 3.14 allow making the following conclusions: 1. The share of the project participants whose practice place coincided with the diploma qualification, %; S1 = 58,8 % Actually the share of respondents who demonstrated full coincidence of the diploma qualification with the youth practice place was 58,8 %. 2. Share of the project participants whose practice place coincided with the diploma qualification, but the workplace offered other functions, %; S2 = 22,5 % The specific weight of respondents who noted the coincidence of the practice place according to qualification, but performance of other functional duties at the proposed workplace was 22,5 %. 3. Share of the project participants whose practice place did not coincide with the diploma qualification, %; S3 = 18,7 % Specific weight of respondents, who demonstrated non-coincidence of diploma qualification and offered youth practice workplace, was 18,7%. Within this, it should be noted that this is significant percent of the entire set of the project participants and its reduction would allow to increase the positive end result of the entire project with the definite likelihood ratio. The share of unsatisfactory outcomes associated with initially incorrect practice place is 10,9 % of 50,4 %. 4. Share of the project participants whose employment channel for the permanent workplace is connected with participation in the project, %; S4 = 34,2 % The specific weight of respondents who noted that their current workplace is obtained as the results of participation in the youth practice

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project was 34,2 %. Therefore, actually only slightly more than one third of respondents specified the direct or indirect connection of their employment with the project. This is insignificant value having significant reserves for increase. 5. The share of the project participants whose employment channel for the permanent workplace is not connected with participation in the project, %; S5 = 65,8 % 6. Share of unemployed project participants for the year after the participation in the youth practice project, in %, including by the specific qualifications; S6 = 28,5 % 7. Total share of employed “Youth practice” project participants, including of all employed, concluded the employment contract according to qualification, % (data are provided in table 3.14). S71= 62 %; S72=65 % Index of employment according to qualification: IEs = 40 % 8. Share of participants of different qualifications in the projects (%), their shares among the employed, employed according to qualification (%) and among unemployed (%). Calculation data by qualifications are provided in table 3.15. According to the obtained calculation data, the following conclusions can be made. Lawyer’s diploma owners are the dominating group of the project. They represent 25,6 % or ¼ of all the project participants, are the leaders in the group of employed (24 %) and in the group of unemployed (30,8 %). Other significant groups are teachers (7,9 %), economists (7,1 %), financial experts (7,1 %), translators (7,1 %), engineers and graduates of State and municipal management (5,3 % each), accounting and audit and programmers (4,4 % each).

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Table 3.15 – Results of the structural analysis of the group of the “Youth practice” project participants according to qualification within “Employment roadmap – 2020” program of the Republic of Kazakhstan Employed Unemployed Employed Structure of Structure of Total Employed not in the group of Total the group of Total № Qualifications number of according to accordance employed number of unemployed number employed qualification with according to unemployed according to qualification qualification qualification people % people % people % people % (%) people % (%) 1 Jurisprudence 61 25,6 33 54 23 70 10 30 24,0 28 46,0 30,8 2 Teacher 19 7,9 11 56 6 60 4 40 6,6 8 44,0 9,1 3 Economics 17 7,1 6 38 4 67 2 33 4,5 10 62,0 11,4

142 4 Finance 17 7,1 4 25 4 100 0 0 4,4 13 75,0 13,8

Translation 5 17 7,1 17 100 13 88 4 23 13,5 0 0,0 0,0 major SLA (state and 6 local 13 5,3 6 48 4 67 2 33 4,2 7 52,0 7,2 administration) Engineer, 7 13 5,3 13 100 8 67 4 33 8,8 0 0,0 0,0 technician Accounting 8 11 4,4 6 60 3 33 3 52 3,1 4 40,0 4,6 and audit 9 Programmer 11 4,4 8 80 5 60 3 40 5,3 2 20,0 2,3

10 IS (information systems) 8 3,5 6 75 2 33 4 67 2,2 2 25,0 2,3 11 Philology 8 3,5 6 75 4 67 2 33 4,4 2 25,0 2,3 12 Evaluation 8 3,5 6 100 4 65 2 35 4,3 0 0,0 0,0 13 IER (international economic relations) 8 3,5 4 50 2 50 2 50 2,2 4 50,0 4,6 14 Design 6 2,1 4 100 2 50 2 50 2,2 0 0,0 0,0 15 Int. law 5 1,9 4 100 2 50 2 50 2,2 0 0,0 0,0 16 Soc. work 4 1,8 2 50 2 100 0 0 2,2 2 50,0 2,3

143 17 Ecology 4 1,8 4 100 2 50 2 50 2,2 0 0,0 0,0 18 Marketing 3 1,3 2 80 1 50 1 50 1,3 1 20,0 0,7 19 Tourism 2 0,9 1 50 1 100 0 0 1,0 1 50,0 1,2 20 Land use 1 0,9 1 50 1 100 0 0 1,0 1 50,0 1,2 21 Archive science 1 0,9 1 50 1 100 0 0 1,0 1 50,0 2,3 23 Instrumentation 1 0,9 0 0 0 0 0 0 0,0 2 100,0 2,3 Total 238 100 148 62 96 65 51 35 100 90 - -

Note – Calculated by the author by the results of the sociologic survey in 2015

Based on the ratio of structural shares of different groups in the total number of the project participants, the group of employed according to qualification and the group of unemployed it can be concluded that such qualifications as “translation major”, “engineer/technician”, “programmer”, “philology”, “evaluation” are of greater demand their employment level is high. At the same time it can be concluded that specialists with diploma of the “lawyer”, “teacher”, “financial expert”, “economist”, “State and local administration (SLA)” certainly have lower demand fluctuations and, accordingly, the employment level by qualification for them is low. Summarizing the results of materials of this paragraph the following conclusions can be made: 1) Evaluation methodology of the social efficiency is transparent and measures the satisfaction of the program participants from participation in it. Evaluation by the program participants may be obtained as the result of the survey in the form of an interview or questioning. We can say that the survey identifies general evaluation, main advantages as well as the shortcomings of the program. But for the extended view of the program issues and its quality results as well as for the quantity characteristics of the quality results, the methodology for their measuring is required. Such methodology is provided in the text of the paragraph and tested on the specific “Youth practice” project results for 2015 implemented in Karaganda. 2) Evaluation methodology is based on characteristics of the workplace of the program participant in the process of participation in the youth practice and the workplace where the young participant currently works. The youth practice workplace is evaluated by the feature “accordance with the diploma” and three possible outcomes of this event are distinguished. The workplace after the youth practice is evaluated by the features “compliance with diploma and skills acquired during the youth practice” and “employment channel” and there are ten possible outcomes of such event, including the “absence of the workplace”. All 27 possible incomes are evaluated by the quality of results as: optimal, good, satisfactory, unsatisfactory. All 27 results have developed characteristics and typical examples. In addition, 11 indicators for evaluation of the program results quality with the corresponding formulas are proposed. 3) Testing was performed based on the materials of the project implementation in 2015 in Karaganda involving 512 people. 238 people were involved in the telephone survey, the remaining part were unavailable or refused to participate in the survey by different reasons. 4) The results of use of the methodology provided the following quality characteristics of the program results:

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- According to the evaluation method through the characteristics of the workplace, in 50,4 %, the program did not provide satisfactory result. The share of participants satisfied with participation in the program was a little more than – 60,1 %, as the participants underlined the collection of knowledge and skills even without the employment result for the specific workplace, i.e. they evaluated the practice place from the position of the possibility of getting experience. - 40,3 % of the program participants have the workplace according to qualification for the year after the end of practice. Share of employed participants is more and is 62 %, i.e. 11,7 % are not employed according to the diploma qualification. - Factors decreasing the quality of end program results are its following parameters: full coincidence of the practice place and diploma qualification is observed at 58,8 % program participants, 22,5 % none another functions at the workplace, 18,7 % of participants mention the lack of coincidence of practice place and diploma qualification. Share of unsatisfactory outcomes, which were primarily defined by inappropriate practice place is 10,9 % of 50,4 %. - The share of the program participants who noted it as an employment channel was 34,2 %, i.e. only one third of participants noted connection with the youth practice in any form (the same workplace, workplace in affiliated organization and personal relations which appeared during the practice) - The share of unemployed project participants for the next year after its completion was 28,5 %. The main claims of the project participants allow identifying its deficiencies, the major of which are: strict schedule of the practice completion with the calendar year; poor choice of organizations and practice places; lack of vacant places for permanent employment in organization practice places and use of probationers as free workforce; delay of salary at the practice places including its non-payment after completion; non-compliance of the practice place with the diploma and the need to do everything; lack of the social package at the practice place; unsatisfactory attitude to the probationer. Thus, according to the evaluation of the social effectiveness of the “Youth practice” project within the framework of the “Employment roadmap-2020” program, which aims to help graduates who experience difficulties finding employment after graduation, the share of employed is 62 % that evidences the significant impact of “Employment roadmap – 2020” program of the Republic of Kazakhstan on the growth of the population employment in the regions of the country.

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This is confirmed by evaluation of the impact of entrepreneurship development on the reduction of unemployment in the country on the basis of a linear paired regression analysis (Pearson correlation coefficient). Thus, the important role of the state industry program “Employment roadmap – 2020” in addressing employment problems is emphasized, contributing to the creation of new jobs at the country's enterprises, in particular, promoting the development of entrepreneurship as a driving force in the economy of the regions of the country.

3.3 Methodological approach to social impact evaluation of “Employment roadmap – 2020” program of the Republic of Kazakhstan Since the “Employment roadmap – 2020” program’s aim is maintenance of effective employment and increase of the level of revenues of the population due to creation of new jobs, then the effect of assignment should be provided not only at the individual level, but at the level of the whole society and at the target groups. Actually, this type of evaluation provides answers to the questions: - If the socio-economic effect was at the social level? - Was it possible to involve the target groups to the program? - Did the program change socio-economic position of these target groups in economy and society? By the program idea, the effect should be demonstrated at the level of social groups of unemployed, self-employed, participants with income below the poverty line, potential employees with disabilities (disabled persons), young people. In order to evaluate the influence on the groups of young people and women, the program provides the official target unemployment indicators among youth and unemployment among women designed to indicate the social effect. The problem is that in calculation of this indicator, the share of the contribution of macroeconomic trends (for instance, economic growth or crisis) and effects caused by the program activities are indivisible [229]. The author developed the following indicators provided in table 3.16, which measure the program effect [230]. From five indicators available for calculations, indicator number 1 was calculated by the author for the macro-level earlier in paragraph 2.2 (table 2.1). Quality value of the indicator evidences high degree of the program impact on social development of the country, as the number of unemployed may would have increased by 1/3 in 2014-2015, if the citizens had not opportunity to participate in the program.

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Three following indicators (No.2-4) are aimed at evaluation of impact on three socially vulnerable group of citizens: self-employed with the revenue below the poverty line disabled persons - recipients of the state targeted social support (hereinafter – STSS), i.e. the poorest part of society. According to the structure of STSS recipients, self-employed and disabled persons are the major target groups after children. As the employment for the permanent workplace stabilizes the household income, then it has a chance to exit the number of STSS recipients.

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Table 3.16 – Methodology for the calculation of indicators of impact of the activities within “Employment roadmap – 2020” program of the Republic of Kazakhstan on society and its social groups No. Indicators Contents Calculation formula Actual value 1 Ratio of the number of Influence of the I.n.unemp. = I.n.unemp. participants employed program activities on N.emp./N.reg.unemp.*100, where 2013=15,6% for the permanent the number of N.emp. – number of employed for I.n.unemp. workplace after unemployed and the permanent workplace in the 2014=33,54% participation in the unemployment level current year; after participation in I.n.unemp. ERM-2020 program and (I.n.unemp.) “ERM-2020” Program 2015=31,53% number of unemployed, N.reg.unemp.– number of (Primary data for % officially registered unemployed in calculations are the current year. provided in table 2.1 of

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2 Ratio of the number of Influence of the I.n.s-emp.= N.s-emp.pwp/N.s- Information on the self-employed, employed program activities on emp.*100, where number of self- for the permanent the number of self- N.s-emp.pwp – number of self- employed, employed workplace after employed and the employed for the permanent after participation in the participation in ERM- level of self- workplace in the current year; program which should 2020 program and the employment (I.n.s- N.s-emp. – number of officially be presented within the number of self- emp.) registered self-employed in the program monitoring employed, % current year. indicators is required 3 Ratio of the number of Influence of the I.n.rec.STSS= Information on the citizens with the level of program activities on N.emp.STSS/N.rec.STSS*100, number of poor – STSS income below the the number of where recipients employed poverty line, employed recipients of state N.emp.STSS – number of after participation in the

for the permanent targeted social recipients of STSS, employed for program and who did workplace after support the permanent workplace in the not return there within a participation in ERM- (I.n.rec.STSS) current year; year. Such information 2020 program and who N.rec.STSS – number of STSS should be presented left the number of recipients in the current year within the program receivers of the State monitoring indicators targeted social support (including the family members) to the number of such support receivers, % 4 Ratio of the number of Influence of the I.dis.emp. = Information on the

149 employees with program activities on N.dis.emp./N.reg.dis.emp.*100, number of employees disabilities (disable the number of where with disabilities who

people) employed for the employed persons N.dis.emp. – number of employed employed on all permanent workplace with disabilities participants with disabilities for the program directions for after participation in (I.dis.emp.) permanent workplace in the current non-subsidized “ERM-2020” program year under the Program; employment in respect and the number of N.reg.dis.emp. – number of to all who addressed to individuals who officially registered employees employment centers for addressed to with disabilities. employees of Employment Center on disabilities is required. the issue of employment, % 5 Ratio of the number of Share of young I.dis.emp. = N.y.emp./N.y.*100, Information on the young employees people who entered where number of young

employed for the the official labour N.y.emp. – number of young employees who permanent workplace market after employees employed for the employed for the after participation in participation in the permanent workplace by the permanent workplace ERM-2020 program and program, in the entire Program on all program the number of young number of employees N.y. – number of young employees directions (monitoring) people of the relevant of the same age group of the same age group among and the number of age, among the among employed, % employed participants. young employees of the employed, % same age employed in the labour market (statistical data). Note – Compiled by the author based on the studies

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In order to calculate these indicators, data are required which should be the monitored in terms of their employment for the permanent workplaces by the results of participation in the program, but currently such data are absent in the official reports on implementation of the program of the Ministry of Healthcare and Social Development. Data on the total number of self-employed persons are contained in statistics, and data on STSS recipients are at the local authorized bodies in the field of social support. Data on disabled persons who addressed the program and disabled program participants are available in the Population employment centers. During the period under consideration, the number of self-employed people in Kazakhstan reduced as well as the share of self-employed in the number of employed population. These values in the country were 2621,4 mln. people in 2013 and 2328,9 mln. people in 2015. This means that during the period, reduction by 292,5 people occurred. But it is impossible to define the share of self-employed program participants and people who employed for the permanent workplace, i.e. who changed the status in the labor market according to the statistical data. These data may be obtained only as the result of the program monitoring. Concerning the reduction of the number of STSS recipients at the expense of participation in ERM-2020 program, then such information also should be presented in the Program monitoring, as it is received due to coupling of the relevant information bases available in the social support sectors and employment centers. Concerning the youth, then except the youth unemployment indicator calculated by the statistical authorities, we can observe the ratio of young employees after the program to the total number of employed youth. Such indicator in dynamics will characterize the results of ERM-2020 program results for the target group of young people. Except for the calculation methodology for five indicators provided in table 3.16 concerning the target group, it is possible to apply the methodology of evaluation of the influence of “ERM-2020” Program on the labor market as a whole by the ratio of temporary and permanent employment, taken into account in the program. The permanent employment is the priority because it provides more opportunities for professional and carrier growth. As several program directions offer their participants only temporary employment and subsidize it, there always is the possibility that the program works only in the short term period when the workplace is subsidized. This means that its result is temporary employment and short term support of the individual’s revenue. That is why in calculation of the

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indicators in table 3.16, we should track the program participants who left the program and did not return to it within a year. This evaluation methodology consists in comparison of the number of the program participants involved in the labor market on temporary (subsidized) contracts and the number of participants who found permanent employed as the result of participation in the program, i.e. who concluded the labor contract for at least one year. Since data on the types of contracts are not provided in the Program monitoring, we can base on the fact that all participants who concluded the contract at the exit from the program conclude it for at least one year. The calculation includes the following stages: 1) Defining the summarized number of participants by the program directions, providing the employee with the temporary (subsidized) contract by the formula (3.31):

3 N.temp = ∑푘=1 푁푘 (3.31)

where Ntemp – number of the program participants with the contracts for subsidized (temporary) employment; k – program directions providing labor contract with subsidized employment; Nk – number of participants of k direction.

2) Defining of the summarized number of participants by the program directions providing the employee with non-subsidized and presumably permanent contract for one calendar day by the formula (3.32):

2 Nperm = ∑푚=1 푁푚 (3.32)

where N.perm. – number of the program participants who concluded contracts for non-subsidized (permanent) employment; m – program directions providing the labor contract with non- subsidized employment; Nm – number of participants of m direction.

As the author noted before, since by the program monitoring, information on the contract type concluded within non-subsidized employment is absent, then we can assume that all the contracts on the Program directions are permanent. 3) Defining of the ratio between the number of permanent and temporary contract.

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Two indicators are calculated by one formula (3.33): a) as of the date of participation in the program – S1; b) as of the date of exit from the program – S2.

S1= (S2)=N.temp/N.perm (3.33)

where S1 – the ratio between the number of permanent and temporary contracts as of the time of participation in the program; S2 – the ratio between the number of permanent and temporary contracts as of the moment of exiting the program; Ntemp – the number of participants in the program, with contracts for subsidized (temporary) employment; Nperm – the number of participants in the program who conclude contracts for unsubsidized (permanent) employment.

Approbation of this evaluation method according to formulas 3.31-3.33 by the author is performed by the official data of the program monitoring for 2013-2015 without taking into account the data of the previous periods (till 2013) and the following results were obtained (table 3.17).

Table 3.17 – The ratio of permanent and temporary employment in the Program and after leaving “Employment roadmap – 2020” program of the Republic of Kazakhstan, 2013-2015 Types of Types of Number of Number Final Ratio of employme workplaces participants of people, result permanent nt for program for 2013-2015 who and produced participants at the stage of concluded temporary by the (by directions participation the employme program and sub- in the Program contract nt, % directions of after the Program) participati ng in the program 1 2 3 4 5 6 Temporar For Data is 29 64 y infrastructure not 1 134 44 employent projects available 7 For social 53 38 900 (64,9 73 847 workplaces 484 35,6 %) For youth 51 21 700

practice 322

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Permanent Employed for employme additional nt jobs created 26 by 003 72503 133 103 64,3 microcredit (35,1 %) recipients Employed 46 after training 500 Total: 2069 100,0 100,0 206950 100,0 50 Note - Calculated by the author.

At the stage of the Program implementation (a), we have the following picture:  134 447 people signed a temporary contract on the program direction “Construction of infrastructure facilities” and sub-directions “Social workplaces”, “Youth practice”;  72 503 people signed a permanent contract on direction “Microcrediting” and employment after sub-direction “Professional training”. The ratio between temporary and permanent employment was 64,9 %/35,1 %. Thus, the temporary employment is clearly predominant at the stage of the program implementation. After the end of “ERM-2020” program, 38900 people (of 53484) on “Social workplaces” sub-direction and 21700 (of 51322) on the “Youth practice” sub-direction entered into a permanent employment contract, as the result of which the ratio between the permanent and temporary employment will change after the program completion: 35,6% is temporary employment, 64,3 % - permanent employment, i.e. actually, the end result in this case will be permanent employment. Thus, according to the calculations in table 3.17, in the process of the program the ratio between temporary and permanent employment 64,9 %/35,1 % is changing to 35,6 %/64,3 % when receiving its final results (after the Program completion). Thus, based on the obtained data, it can be concluded that the Program produces a permanent employment, which positively affects the level of employment of the population in the labor market. For example, if the program generates mainly temporary employment, this indicates its orientation to the short-term results and, therefore, the short-term effect of the spent budget funds. Since temporary jobs in the program are subsidized in terms of salary, the dominance of temporary

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contracts can indicate the predominance of employers' desire to use free labour force. As the author demonstrates in paragraph 3.2 such cases exist, and the participants of the program note this in their interviews. If the final result in the program is dominated by permanent employment contracts, the effect of the program can be evaluated as medium and long-term. If permanent employment contracts dominate as the final result in the program, the effect of the program can be estimated as medium and long- term. Naturally, for adequate conclusions, monitoring data on the type of labour contract concluded at the program exit is needed. In the author’s opinion, it is reasonable to calculate the proportion of young program participants who are employed for a permanent job in the total number of employed participants of the corresponding age. The data for such calculations can be collected under the condition of the program monitoring or using official statistics (for example, on the number of young people among the employed population). In addition to these types of impact evaluation, in some cases it is also recommended that a comparative evaluation be used the purpose of which is to identify the medium and long term impact of the program on the relevant social group. The idea of such an evaluation is to compare the life results of the program participants in 2-3 years and a social group that has similar social characteristics, but did not go through the program. Social characteristics include age, gender, social origin, education, profession, marital status, area of residence, work history before the period of unemployment. Life results include the place of work, position, salary, satisfaction of an individual with his life results. Since such an evaluation requires a special sociological study and the formation of a large sampling, including regional profile, this type of evaluation is the most costly and is applied last. Although its undoubted advantage is the evaluation of the medium- and long-term results of the program. Summarizing the materials of this paragraph, we can note the following provisions. It should be noted that in the official reports on the implementation of “Employment roadmap – 2020” Program for the period under study, there is no objective evaluation of the Program, as the unit costs per the program participant –beneficiary are not calculated to achieve the final results - employment of participants to a permanent workplace. Official evaluation is carried out only for the implemented program products. While the calculation of unit costs, in particular at the regional level, when compared with the average indicators for the country, should demonstrate significant discrepancies and cause further search for the reasons. This, in turn, will be the basis for making managerial decisions aimed at reducing costs in the region.

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In order to determine the qualitative results of the program, to measure the satisfaction of participants by the program, the methodology for evaluation of the social efficiency of programs (on the example of the sub- direction “Youth Practice” within “Employment roadmap – 2020” program of the Republic of Kazakhstan), based on the characteristics of the program participant’s workplace in the process of undergoing the youth practice and the workplace where the young person is currently working. The workplace of youth practice was evaluated on the basis of “compliance with the diploma”, the workplace after the youth practice was evaluated on the basis of “compliance with the diploma and skills acquired during the youth practice” and the “employment channel”. All possible outcomes are evaluated based on the quality of the results as: optimal, good, satisfactory, unsatisfactory. Testing of the social effectiveness evaluation of the sub- direction “Youth Practice” was carried out based on the project materials in 2015 in Karaganda, which involved 512 people. Based on the results of the social effectiveness evaluation of the sub- direction “Youth Practice”, it was determined that the share of those satisfied with participation in the program was slightly higher than 60,1%, because the participants noted the accumulation of knowledge and skills even without the result of employment for a particular job, i.e. evaluated the place of practice from the perspective of the possibility of gaining experience. 40,3 % of the program participants obtain the workplace according to qualification for the next year after the end of the practice. The share of employed participants is more than 62 %; i.e. 11,7 % are employed not according to diploma qualification. The main claims of the project participants allow to identify its shortcomings, the main of which are: strict schedule for the end of the practice by the calendar year; small choice of organizations and places of practice; lack of vacant places for permanent employment in organizations-places of practice and use of the trainees as free labour force; the delay of salaries at the places of practice and non- payment after the practice completion; non-consistent of the place of practice with the diploma and the need to deal with everything; the absence of a social package at the practice place; unsatisfactory attitude to the trainee. Public services on the example of “ERM-2020” program are provided both for individuals and the whole society and its social groups. The impact of “ERM-2020” program on the situation of target social groups can be evaluated on the basis of the methodology developed by the author for evaluating of the share of self-employed participants, STSS recipients, employees with disabilities in the labor market after participating in “ERM-

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2020” Program in terms of the program impact on society. For this, it is necessary to calculate the ratio of the number of members of these social groups employed for the permanent job after participating in the Program and the number, respectively: self-employed, STSS recipients, disabled people who wished to be employed. However, for adequate conclusions, information is needed on the number of relevant target social groups employed after participating in the program, as well as on the type of labor contract concluded at the program completion, presented in the number of program monitoring indicators. The impact of employment promotion programs on the whole of society is expressed in the reduction of unemployment (a statistically measurable effect), and therefore in the reduction of social tension. For this purpose, the author proposed a methodology for evaluation of the impact of “ERM-2020” Program on the labor market as a whole by the ratio of temporary and permanent employment, taken into account in the program. By the results of the calculations, when the final results were obtained (after the Program completion), the ratio between temporary and permanent employment was 35,6 %/64,3 %, which indicated the dominance of permanent employment. Permanent employment is a priority, because it provides more opportunities for professional and career growth, and, accordingly, positively affects the population employment. In the world practice, a comparative evaluation of two social groups is applied to assess the long-term effect of the program: the program participants and the control group that did not take part in the program. The groups for analysis are made up of citizens with similar social and economic characteristics, and the influence of the program or the absence of this influence on their working career and well-being is revealed. Since such an evaluation requires funding and carrying out a special rather extensive sociological study, it is clear that at the present stage there are difficulties in applying it. Thus, due to the lack of the methodology for evaluation of economic and social efficiency of the program (based on the example of the industry program of the Republic of Kazakhstan “Employment roadmap – 2020”), as well as for evaluation of the program impact on the whole society (evaluation is performed only for the fulfilled program products and is based only on the target indicators), it can be concluded that the existing evaluation of the state programs does not provide an objective evaluation of the efficiency of the implemented state program, in particular, of “Employment roadmap – 2020” program of the Republic of Kazakhstan.

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Conclusion

The aim of work is to research the features and regularities of using methodological bases of the state controlling system for development of the methodology for evaluation of the efficiency of implementation of the regional state programs of the Republic of Kazakhstan in the field of the population employment. By the results received in the research, we can conclude the following: 1. From the middle 20th century, the world developed countries and, first of all, the USA developed new approaches to state regulation of the social and economic processes in the country based on the systemic features of the controlling method, developed and applied in the corporate sector. As the market economy has not generated systems for regulation of the activities of enterprises that are more effective than controlling, then its management elements, principles, characteristics and methods became adapted to the terms and features of the public sector of the economy. Currently, the fourth stage of the state regulation of social and economic processes in the regions of countries takes place in the developed countries, which on one part borrows all the positive features from the corporate field and on another part tries to take into account the difficulty and multiobjectivity of the modern society with its interests and needs. In the work, the author has considered logical controlling schemes in the business sector and public sector of the economy and has identified the similarity of the main stages of modern business cycle and state regulation cycle: planning, implementation, budgeting, monitoring and evaluation. The complexity of evaluation as the stage of controlling which should evaluate not only business process of the public sector, but also its results by the methods specially developed for this, as there is no simple and transparent market regulation tool in the state sector. 2. Having considered the experience of developed countries on the example of the USA and Great Britain, the author has defined the methodological bases supporting the modern system of regulation of social and economic processes in the country and five components of the system or processes, arising from the business controlling concept and comprising the state regulation framework in the public sector: - The strategic national priorities as goals with indicators for each level of results are planned. These results should be clearly defined within the budget resources, they should have aims and indicators, should suppose the appropriate monitoring and analysis and evaluation structure. - Budgeting guarantees that the budget is formed for achieving the results specified in the strategic plan.

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- In order to achieve the results, the following activities are organized: the human resources are selected, the processes aimed at getting the results are formed. - Monitoring for intermediate and end results designed to timely define the obtained results and to define their compliance with the planned results is performed. - Analysis and evaluation are performed based on the methodology developed for identification of compliance of the obtained results with economic and social criteria. Also the principles of budgeting by the results arising to controlling as the system for support of organization’s activities: - Focus on a unified system of results established in planning, provided through the budget and obtained in reality which are controlled and evaluated; - Cyclic relations and close integration between five management elements; - Horizontal and vertical links between the levels of management with the focus on additional initiatives and responsibility for results; - Focus on the needs of the citizens and the society as a whole. The experience of developed countries which actively introduce the system of management by the results within the last 20 years which is of interest from the perspective of identifying typical problems and difficulties in establishing the controlling model in the state regulation of social and economic processes in the Republic of Kazakhstan is considered in the work. Systematization of experience of South Korea, Cambodia, Sri Lanka, Indonesia, Malaysia and Philippines allows making the following conclusions: - Every component of managing cycle has own establishment difficulties. According to considered experience of these countries which do not refer to OECD group (excluding the South Korea), their planning process is the most developed. - Budgeting is more complicated stage, as its coordination with planning requires transition to more comprehensive cost items, allowing inclusion of many diverse tasks aimed at the single result. In many countries, it is necessary to strengthen its coordination with planning. - In the most countries, implementation is ensured by the state services standards that are improved and, finally depend on budgeting, as they are the budget resources which define the amount of provided services and their quality.

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- In almost half of the countries the monitoring is good and excellent, but its relation with implementation also needs strengthening, as the monitoring indicators not always reflect intermediate results and quality of services. - Evaluation is the weakest element and in the half of countries, there are problems with methodologies, procedures, costs for evaluation, that provides the need to develop and improve it. State controlling system has been formed in Kazakhstan since 2007, when the first Concept on introduction of the state planning aimed at the results has been accepted. New methodology is officially introduced in 2009, the appropriate regulatory legal acts are adopted. In 2013, the Concept on improving the state planning aimed at the results was adopted. Its analytical part contains the problems of new system functioning, one of which is imperfection of the evaluation of effectiveness and efficiency of implementation of the documents of the State planning system, including the field programs. For instance, “Employment roadmap – 2020” is such program. 3. The program evaluation methodology is the set of methods used to define: - the significance of established aim of the program for society and for the citizens; - compliance of the program activities with the established aims; - methods of organization of the practical implementation of these measures, - identification of the costs efficiency in obtaining the end result; defining the quality of obtained results for the target groups and society. The significance of the methodology provides reasoning and provision of the tools appropriately evaluating the effect of the costs of the public resources, taking into account their economic, social and public nature. Adjustment of the program or activities in the program based on evaluation allows to improve its effectiveness at the minimum costs for their achievement. The author defined the evaluation principles as the rules for forming its content and evaluation principles from the view of its implementation. Within the development of the methodology in the work, it is proposed to use classification of evaluation types for the programs, features of each class and individual types as well as time compliances between them are disclosed. Each type of program evaluation is based on its own information basis, defined depending on the program features and its

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business process. It is defined that several alternative information bases may be used at the same time. Evaluation uses not only quality and quantity methods of processing and interpretation of the program results, but also joint quality and quantity methods if they allow to provide multifaceted evaluation of implementation of the program and its results. 1. Analysis of “Employment roadmap – 2020” program results based on the information provided in the official reports of the Ministry of Health and Social Development for 2013-2015 allowed making the following conclusions: - Program results are evaluated based on direct results such as the amount of funds allocated for direction (program resources); number of the project participants; number of employed for permanent workplace after participation in this direction (program products). The following target program indicators are considered as the final results of the program: the unemployment rate – 5 % in 2015 (the planned value is not more than 5 %); poverty level – 2,5 % in 2015 (the planned value is not more than 6 %); the share of employed people in the total number of self-employed population reached 77,6 % in 2015 (the planned value is 64,5 %). These indicators are calculated by the statistical authorities, which are influenced by many other factors, except for “ERM- 2020” program. Relative indicators such as specific weight of participants, who completed training (on professional training direction), specific weight of employed for the permanent workplace, specific costs for employment of one participant of the youth practice for the permanent workplace and other are absent in official reports. Thus, the end results analysis in the relative form, specific costs for the calculation of the program economic efficiency (efficiency evaluation/cost-benefit analysis) and for defining of the satisfaction of beneficiaries (social efficiency - effectiveness evaluation) with the results of the implemented program is not carried out and is not provided in the official reporting. In addition, such important program evaluation as its social impact (impact evaluation) is absent. One of the significant reasons of the absence of these evaluation types in official reporting is the absence of official methods of monitoring of the post-program employment and evaluation of the program results. The program evaluation should include not only evaluation of the process and products of the program, but also its economic and social efficiency (satisfaction of beneficiaries – program participants with own results), social impact evaluation based on end results.

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2. Taking into account all stages of evaluation institutionalization in Kazakhstan and content of the regulatory legal act “Rules for development, implementation, monitoring, evaluation and control of field programs”, the author has developed proposals on the methodology for three types of evaluation of the program implementation efficiency: economic, social and public. For the economic evaluation, supposing the calculation and analysis of specific costs for one program participant, the author offers two proposals allowing ensuring of completeness and complexity of the program evaluation: - In calculation of specific costs, an index method shall be used allowing on a chain basis to exclude the participants who leave the program on different stages and do not achieve end results – permanent employment in the form of conclusion of the contract for 1 year – from the result. In the end result, all costs will be divided by the number of participants who managed to obtain the target benefit of the program - employment. - It is offered to perform dynamic and comparative analysis of the values of specific costs for achievement of end results by directions and projects (sub-directions) of “ERM-2020” program. This will allow to compare separate projects and program directions by costs in dynamics and to further indicate the factors operating on their unjustified growth. Calculation of indicators is significant in the regional perspective, as it allows seeing the regions which significantly deviate from the national values this or other way. This information will be valuable for identifying the reasons for such deviation and adjustment of the project and program direction in the region under study. 3. In connection with the fact that three directions of “Employment roadmap – 2020” program are rather varied by the activities content, then own methodology of social efficiency providing its aim and end result should be created for each program direction. Methodology of evaluation of social efficiency developed by the author (as exemplified by the “Youth practice” project within “ERM-2020” program) to identify satisfaction of the program participants with participation in it. “Youth Practice” project is aimed to provide work experience for the graduates of universities who suffer from difficulties with employment after the graduation. In order to define the degree of satisfaction of the program participants with participation in it, the author initially defined evaluation by the program participants on the basis of the survey (on the basis of the example of Karaganda region as one of the major regions of the Republic of Kazakhstan). Based on the survey of “Youth Practice” project participants, an overall evaluation of the project was carried out and the

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main positive and negative characteristics of the program were identified. For a more detailed picture of the identified problems of the program and for the definition of its final qualitative results, as well as for quantitative characteristics of qualitative results, the author developed a methodology for measuring the results obtained from the survey. The methodology for the social efficiency evaluation developed by the author is based on characteristics of the workplace of the program participant during the youth practice and the workplace where the young man works at present. The youth practice workplace was evaluated by the feature “compliance with diploma”, workplace after the youth practice is evaluated by the feature “compliance with diploma and skills obtained during the youth practice” and “employment channel”. All possible outcomes are evaluated by the quality of results as: optimal, good, satisfactory, non-satisfactory. Approbation of the social efficiency evaluation for the “Youth practice” sub-direction was performed based on the project implementation materials in 2015 in Karaganda, involving 512 people. Based on the results of the social efficiency evaluation of the sub- direction “Youth Practice”, it was determined that the share of those satisfied with participation in the program was slightly higher than 60,1%, because the participants noted the accumulation of knowledge and skills even without the result of employment for a particular job, i.e. evaluated the place of practice from the perspective of the possibility of gaining experience. 40,3 % of the program participants obtain the workplace according to qualification for the next year after the end of the practice. The share of employed participants is more than 62 %; i.e. 11,7 % are employed not according to diploma qualification. The main claims of the project participants allow to identify its shortcomings, the main of which are: strict schedule for the end of the practice by the calendar year; small choice of organizations and places of practice; lack of vacant places for permanent employment in organizations-places of practice and use of the trainees as free labor force; the delay of salaries at the places of practice and non- payment after the practice completion; non-consistent of the place of practice with the diploma and the need to deal with everything; the absence of a social package at the practice place; unsatisfactory attitude to the trainee. In general, the evaluation of the social efficiency of “Youth Practice” project allowed to give a detailed qualitative and quantitative description of the final results of the program, to reveal its advantages and causes of negative results.

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To confirm the positive impact of the state industry program “Employment roadmap – 2020” on the labor market, the author evaluates in the work the impact of business development on the reduction of unemployment in the country on the basis of a linear pair regression analysis (Pearson correlation coefficient). Based on the evaluation results, the important role of “Employment roadmap – 2020” program in addressing employment problems is identified, contributing to the creation of new jobs at the country’s enterprises, in particular, promoting entrepreneurship as the driving force in the economy of the country's regions. To confirm the performed evaluation, the Republic of Kazakhstan adopted the Program for the Development of Productive Employment and Mass Entrepreneurship for 2017-2021 aimed at further securing of jobs in the labor market and reducing unemployment in the regions of the country. 7. Impact of employment support programs on the whole society is expressed in reduction of unemployment (statistically measured effect), and therefore in the reduction of social tension. For this purpose, the author proposed the methodology for evaluation of the impact of “ERM-2020” Program on the labor market as a whole by the ratio of temporary and permanent employment, taken into account in the program. By the results of the calculations, when the final results were obtained (after the Program completion), the ratio between temporary and permanent employment was 35,6%/64,3%, which indicated the dominance of permanent employment. Permanent employment is a priority, because it provides more opportunities for professional and career growth, and, accordingly, positively affects the population employment. The impact of “ERM-2020” program on the situation of target social groups can be evaluated on the basis of the methodology developed by the author for evaluating of the share of self-employed participants, STSS recipients, employees with disabilities in the labor market after participating in “ERM-2020” Program in terms of the program impact on society. For this, it is necessary to calculate the ratio of the number of members of these social groups employed for the permanent job after participating in the Program and the number, respectively: self-employed, STSS recipients, disabled people who wished to be employed. However, for adequate conclusions, information is needed on the number of relevant target social groups employed after participating in the program, as well as on the type of labor contract concluded at the program completion, presented in the number of program monitoring indicators. Thus, due to the lack of the methodology for evaluation of economic and social efficiency of the program (based on the example of the industry program of the Republic of Kazakhstan “Employment roadmap – 2020”),

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as well as for evaluation of the program impact on the whole society (evaluation is performed only for the fulfilled program products and is based only on the target indicators), it can be concluded that the existing evaluation of the state programs does not provide an objective evaluation of the efficiency of the implemented state program, in particular, of “Employment roadmap – 2020” program of the Republic of Kazakhstan. As the result, the author’s methodology for evaluating the efficiency of program implementation in the economic, social and public perspectives will improve the quality of information provided for the state programs implementation, needed for both program managers and the entire society, which would like to have an adequate idea of the efficiency of the use of public resources. Since evaluation is an important part of the state controlling system and a key element of regulation of social and economic processes in the regions within the country, it requires an address-oriented approach to the content and a deep understanding of the interconnection of economic, social and political processes in society, to which the program has an impact.

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Appendix А (necessarily)

Table – The first direction “Ensuring employment due to the development of infrastructure and housing and utilities” in 2012 and 2013 Regions Deve- Numb Total Among Number of % of Develo- Number Total Among Number of % of loped er of number of them, employed employment for ped in of number of them, employed employ- in compl employed number of participants created 2013, comple- employed program participants ment for

2012, e-ted for created the per one workplaces mln. ted for created partici- per one created mln. projec work- program completed from the KZT projects, workplaces pants in completed workplaces No. KZT ts, place, partici- project in number of the units in in 2013, 2013, project in from the units. people pants, 2012 (people) program 2013 people people 2013 program in people participants in (people) participants 2012 2012 in 2013 А В 1 2 3 4 5 6 7 8 9 10 11 12 In the region 946,9 84 948 430 5,1 45 % 2124,1 101 1019 650 6,4 64 % Including in

181 1 Balkhash 0,0 0 0 0 0 0 2 Zhezkazgan 17,4 2 17 12 6 71 % 3 Karaganda 70,1 5 78 22 4,4 28 % 4 Karazhal 91,0 1 41 25 25 61 % 5 Saran 9,9 1 7 4 4 57 % 6 Abai district 93,4 6 93 51 8,5 55 % 192,8 12 98 68 5,7 69 % 7 Aktogai district 58,6 5 58 11 2,2 19 % 90,5 6 70 40 6,7 57 % 8 Bukhar-Zhyrau 177,0 12 177 64 5,3 36 % 246,3 11 132 102 9,3 77 % district 9 Zhanaarka 94,3 7 95 54 7,7 57 % 379,2 7 120 66 9,4 55 % district 10 Karkaralinskiy 100,3 15 100 57 3,8 57 % 295,9 19 188 119 6,3 63 % district 11 Nurinskiy 100,3 13 102 47 3,6 46 % 396,3 7 183 123 17,6 67 % district 12 Osakarovskiy 115,7 12 116 53 4,4 46 % 121,9 9 55 35 3,9 64 % district 13 Ulytauskiy 51,0 3 51 19 6,3 37 % 50,7 9 15 15 1,7 100 % district 14 Shetskiy district 138,9 9 139 62 6,9 45 % 179,6 14 32 31 2,2 97 % Note – prepared and calculated by the author based on the materials provided by “Administration of coordination of employment and social programs of Karaganda region” SI for 2012, 2013

Appendix B (referential)

Table – The second direction “Creation of workplaces through the development of entrepreneurship and support villages” in 2012 and 2013 No Regions Deve Number Number of created % of Deve Numb Created workplaces % of . - of workplaces (employed) employe - er of (employed) people emp- loped particip people d loped partici loyed in ants Exclu- Including through in -pants Exclu- Including throug 2012, who ding employed the 2013, who ding employed h the mln. obtaine the through the employm mln. obtain the through the emp- KZT d micro- Employment ent KZT ed micro- Employment loyme microcr credit centers centers microcredit centers nt

182 edits recipie (excluding the in 2012 credits recipie (excluding the center (people nt microcredit (peopl nt microcredit s in ) recipient) e) recipient) 2013 А В 1 2 3 4 5 6 7 8 9 10 In the region 763,5 601 221 59 27 % 747,9 435 114 10 8,8 % 1 Balkhash 7,5 5 13,6 7 2 Zhezkazgan 75 25 5,3 12 3 Karaganda 4 Karazhal 9 4 0 4 2 50 % 5 Priozersk 3 2 8,2 3 6 Saran 0,9 1 2 7 Satpayev 7,5 4 4,8 2 2 100 % 8 Temirtau

9 Shakhtinsk 22,5 11 21,1 12 10 Abai district 65 61 61 0 0 43,9 25 11 Aktogai 34 30 3 1 33 % 34,6 25 district 12 Bukhar- Zhyrau 150 115 80 20 25 % 156,2 72 35 6 17 % district 13 Zhanaarka 183 74 59 36 14 39 % 85,4 51 73 district 14 Karkaralinski 68 75 8 8 100 % 176,2 95 y district 15 Nurinskiy 74 65 4 0 0 32,8 28 district 16 Osakarovskiy 78 57 16 16 100 % 47,6 43 district 17 Ulytauskiy 25 19 3 0 0 10,5 5 district 18 Shetskiy 71 69 10 0 0 106,9 54 district Note – prepared and calculated by the author based on the materials provided by “Administration of coordination of employment and social programs of Karaganda region” SI for 2012, 2013

Appendix C (Recommendable)

Questionnaire Dear respondent! We ask you to take part in evaluation of the “Youth practice” project results within “Employment roadmap – 2020” program

1. Your name______

2. Your qualification according to diploma ______

3. When did you finish your studies ______(year) 4. What is your work experience ______years

5. How many jobs did you have?  1  2  3  4  5 and more

6. What is your current status in the labour market??  Employee  Self-employed  Unemployed: registered, unregistered (underline whatever applicable)

7. Why did you decide to participate in the youth practice direction within “Employment roadmap – 2020” program? Other methods were inefficient. I decided that this method allows to get work experience (i.e. employment history for further employment) Own variant ______

8. Does your diploma qualification correspond to the work that you received in the framework of youth practice?  Yes, I can say that ______

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 No, I can say that ______

9. What was the duration of work at the workplace proposed within “Youth practice” project (specify the exact number of months)?  Less than 1 month ______ Less than 6 months ______ Less than 1 year ______ More than one year ______

10. The functions that you performed at the workplace offered to you corresponded to your diploma qualification?  Yes, I dealt with ______ No, I dealt with ______

11. Was there an employment contract concluded with you for a permanent job at the end of youth practice?  Yes, I stayed to work under the contract at the place offered during the practice; (Go to question 14)  Yes, I stayed to work, but I was offered another job within the same organization; (Go to question 14)  No, it was explained like this:______(Go to question 12)

12. Is the fact of employment in your workplace in any way connected with the “Youth practice” project  Yes, ______ No,______

13. Does your current workplace correspond to the qualification for which you have a diploma?  Yes, ______ No, ______

14. What contract have you concluded?  Permanent contract for 1 year;  Temporary contract for ______

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 Contract for a certain amount of work  Contract for seasonal work

15. Was the work proposed within the youth practice useful for developing your professional skills and competences? ______

16. How do you evaluate your experience in direction “Assistance in employment through training and resettlement as part of the employer's needs” within “Employment roadmap – 2020” program within the framework of youth practice? ______

Thank you for your participation!

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Content

Introduction 3 1 Theoretical aspects of evaluation institute in the state conrolling 10 system 1.1 Controlling in the field of state social and economic regulation: 10 principles, contents and functions 1.2 Evaluation of state programs efficiency as the main controlling 22 tool 1.3 Peculiarities of evaluation in the state regulation system of 35 developed and emerging countries 2 Analysis and evaluation of the state program implementation (as 48 exemplified in “employment roadmap – 2020” program of the republic of kazakhstan) 2.1 Methodology for evaluation of regional development programs 48 2.2 Evaluation of economic efficiency of "Employment roadmap - 61 2020" program 2.3 Evaluation of “Employment roadmap – 2020” program 78 implementation in Karaganda region 3 Efficiency evaluation methodology for the programs of the 100 republic of kazakhstan in the population employment 3.1 Establishment of the evaluation institute in the state controlling 100 system of the Republic of Kazakhstan 3.2 Methodological basis for evaluation of social efficiency of 107 “Employment roadmap – 2020” program of the Republic of Kazakhstan 3.3 Methodological approach to social impact evaluation of 146 “Employment roadmap – 2020” program of the Republic of Kazakhstan Conclusion 158 Bibliography 166 Appendices A 181 Appendices B 182 Appendices C 184

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G. S. Dyussembekova

PRINCIPLES AND METHODOLOGICAL APPROACHES OF EFFICIENCY EVALUATION OF PROGRAMS IN THE STATE CONTROLLING SYSTEM

Monography

Technical Editor: Z. Zh. Shokubayeva Executive Secretary: Z. S. Iskakova

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