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Do RESEARCH PAPER SERIES Improving public financial management. Supporting sustainable development. Fostering Health Service Delivery via Public Financial Management: The Case of Participatory Budgeting in Benin’s Local Governments Authors: Philippe Lassou, Kelum Jayasinghe, Teerooven Soobaroyen, Pawan Adhikari, Andy Wynne, and Maxime Akakpo (August 2021) For more information visit Follow PEFA on social media www.pefa.org PEFA Partners Abstract The principle of participatory budgeting (PB), as a mechanism to foster the involvement of local communities in sub-national public financial management (PFM) systems, rarely generates strong opposition given its inherent ability to embed ‘pro-poor’, equitable, and/or inclusive approaches to the allocation of public resources. Yet, and somewhat paradoxically, the depth and/or extent of its implementation and efficacy in many countries are seen to be limited in scope or lacking in dynamism. Drawing from a fieldwork of PB practices in selected municipalities in Benin and insights from different actors in the field (elected representatives, government officials, community groups, civil society organisations, donors), we add to existing expositions on PB’s emancipatory features, in terms of the space and voice it can offer for local engagement. At the same time, we see the need for a step change at the PFM supra-national policy and national/sub- national levels to ensure PB can be developed in a more strategic, sustainable and inclusive way - while minimizing the risks of ‘PB capture’. Our key recommendations are (i) the incorporation of PB within broader PFM frameworks and PEFA assessments at national level, and improving PEFA’s proposed subnational government indicator on public consultation, (ii) the promotion of a community of practice, by PEFA partners and the development agencies, to share good experiences and mechanisms, with the involvement of international PB networks, (iii) the need to embed a PB feedback process at national/sub-national levels to foster a cycle of learning, sustainability and inclusion within the community. _______________________________________ This paper is a product of the 2019 PEFA Research Competition that focused on the role of Public Financial Management (PFM) in public service delivery. The PEFA Research Paper Series provides open access to PEFA sponsored research to quickly disseminate knowledge that contributes to ongoing PFM discussions around the world. The broader objectives of the PEFA Research Competition are to contribute to addressing gaps in knowledge on fiscal management, how to improve PFM systems, and the practical implementation of PFM reform. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in the papers are entirely those of the authors. They do not necessarily represent the views of the PEFA Program or those of the PEFA Partners. 2 Fostering Health Service Delivery via Public Financial Management: The Case of Participatory Budgeting in Benin’s Local Governments (August 2021) Philippe Lassoua (Lead Investigator) Kelum Jayasingheb Teerooven Soobaroyenb Pawan Adhikarib Andy Wynnec Maxime Akakpod René Adéromou (Research assistant) a Lang School of Business & Economics, University of Guelph, Canada b Essex Business School, University of Essex, UK c Consultant, School of Business, University of Leicester, UK d Senior Advisor to the Ministry of Justice (former President of the Chamber of Accounts), Benin 3 Table of Contents Executive summary ..................................................................................................................................... 8 Sommaire ................................................................................................................................................... 10 1. Introduction ....................................................................................................................................... 13 2. Conceptual background and context ............................................................................................... 14 2.1. Conceptual framing of participatory budgeting .................................................................... 14 2.2. Context – Sub-Saharan Africa, Subnational Governance and Benin .................................. 15 3. Methodology ...................................................................................................................................... 17 4. Findings from SSA PEFA and selected health data ....................................................................... 20 4.1. Average PEFA Scores ............................................................................................................... 20 4.2. Progress achieved ...................................................................................................................... 25 4.3. Analysis of potential associations (correlations) between PEFA indicators/pillars and selected health expenditures and outcomes ........................................................................................ 28 5. Participatory Budgeting in Benin and its ramifications for health service provision to local communities ............................................................................................................................................... 34 5.1. Regulatory and Normative Aspirations .................................................................................. 35 5.2. PFM implementation through PB at local government level: actual practices ................... 39 5.2.1. Enabling actors on the ground ......................................................................................... 39 5.2.1.1. Community participation ............................................................................................. 39 5.2.1.2. The role of elected representatives .............................................................................. 42 5.2.1.3. Role of donors: funding of NGOs and CSOs for community mobilization ............. 45 5.2.2. Emerging context-specific factors that interact with Benin’s experience of PB implementation .................................................................................................................................. 46 5.2.2.1. Pragmatic use of PB for resource mobilization .......................................................... 47 5.2.2.2. Flexibility and empowerment ...................................................................................... 49 5.2.2.3. Gendered demands and challenges ............................................................................. 50 5.2.2.4. Bureaucracy and top-down, program-based budget allocations: resource constraints and budget delays .......................................................................................................... 51 5.2.3. PFM through PB systems in relation to community health .......................................... 53 5.2.4. Summary of findings: PB as an integrated system of PFM in Benin ........................... 57 6. Overall discussion ............................................................................................................................. 57 7. Conclusions and recommendations ................................................................................................. 61 References .................................................................................................................................................. 66 4 Appendixes ................................................................................................................................................ 70 Appendix A: Sub-Saharan African countries’ PEFA assessment reports used ............................ 70 Appendix B: PEFA Indicators used .............................................................................................. 71 Appendix C: Correlation between PEFA indicators and health expenditure and outcomes ........ 72 Appendix D: Selected health expenditure and outcomes for Benin ............................................. 74 Appendix E: Correlation between PEFA indicators and health expenditure and outcomes using only 2011 Framework-based assessments .................................................................................... 78 List of Figures Figure 1: Average score per PEFA pillar (SSA) ........................................................................... 25 Figure 2: Local Development Planning in Benin – The PDC framework .................................... 37 List of Tables Table 1: Research participants and their organizations ................................................................ 20 Table 2: Average score of PEFA SSA indicators from 2005 to 2019 .......................................... 21 Table 3: Average SSA score per PEFA pillar ............................................................................... 24 Table 4: Average SSA indicator scores for the period up to 2010 and after 2010 ....................... 26 Table 5: Average score per pillar in 2007 and 2014 ..................................................................... 27 Table 6: Correlations between PEFA pillars and selected SSA health expenditures and outcomes ....................................................................................................................................................... 29 Table 7: Health budget as percentage of total government budget