National Happiness and Public Financial Management

Transcription

1 National Happiness and Public Financial Management Manuel Pietra ICGFM Past President Chairman of the Advisory Board, World Happiness Summit President and CEO, FreeBalance

2 Why happiness in Public Policy?

3 Why Now?

4 Policy Complexity

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6 Busy Happy Week in Miami March FISC: FreeBalance International Steering Committee March 16 H20: Happy 20 Government Track March WoHaSu: World Happiness Summit March 20 World Happiness Report

7 FISC

8 Happy 20 Vicente Fox Tal Ben-Shahar Dr. Saamdu Chetri

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10 World Happiness Summit Statistics WOHASU >90 # 1 COUNTRIES ATTENDEES SPEAKERS

11 Vote

12 Trust 100% 80% 60% 40% % 0% NGOs Business Media Government Source: Edelman Trust Barometer

13 Tight Budgets Poor Citizen Services Low Trust Government Infrastructur e Gap Poor Outcomes

14 Power Shift Institutions Reduced Digital Divide Social media Cross-border Blogging Rating systems Mobile Reduced Information Asymmetry Communities

15 1. GROWTH AS PUBLIC POLICY

16 Positive?

17 GDP, Happiness & Life Satisfaction Live Satisfaction GDP

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24 Consequences

25 Stress

26 Inequality

27 Health

28 Time Ticking on GDP

29 2. SCIENCE OF HAPPINESS

30 More than Happiness Well Being Life Satisfaction Happiness Social Capital Prosperity

31 World Happiness Report Social Support GDP Per Capita Government & Country Statistical Analysis Perception Surveys Corruption Perception Life Expectancy at Birth Freedom of Life Choices Generosity Self-Reported Behaviour

32 Pseudo Science Immoral Lacks Objectivity Happiness? Unrelated to Spending Cultural Differences Not for Government

33 Science of Happiness Moral More Objective than Growth Happiness? Prioritizes Spending Cultural Differences Is for Government

34 3. POLICY PRIORITIZATION

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36 Public Policy Spectrum Economics Long Term Goals Short Term Goals Policy Budget Results

37 Public Policy Spectrum Defence Economics Public Security Environmental Social Welfare Long Term Goals Short Term Goals Education Health Policy Transportation Budget Energy Results

38 Public Policy Spectrum Defence Economics Public Security Environmental Social Welfare Long Term Goals Short Term Goals Education Health Transportation Energy Budget Policy Results Media Civil Society Donors Businesses Unions

39 Public Policy Spectrum Defence Public Security Environmental Social Welfare Long Term Goals Short Term Goals Economics Happiness Education Health Transportation Energy Budget Policy Results Media Civil Society Donors Businesses Unions

40 Policy Guidelines Participation Health Education Employment Anti- Corruption Equity

41 Policy Guidelines Happiness Economics Participation Health Education Employment Anti- Corruption Equity

42 Anti-Corruption Anti- Corruption Impact of trust in government on stability Impact of trust for tax compliance Reduced corruption (revenue & expenses) + increased tax compliance = financing better outcomes

43 Participation Participation Impact of trust in government on stability Improvement of government policy Efficacy leads to improved wellbeing

44 Employment Employment Long-term negative societal impact of unemployment Mental health implications of unemployment Importance of meaningful work

45 Equity Equity Perceptions of procedural and discriminatory inequity Income inequity perceptions have cultural implications

46 Health Health Negative impact of poor mental health far higher than impact of poor physical health Shift to preventative health Significant linkage between environment & health

47 Education Education Cornerstone for happiness & wellbeing Shift from exam factories to future skills Instill life-long learning

48 Holistic Considerations Participation Health Education Employment Effect of unemployment on mental health Anti- Corruption Equity

49 Holistic Considerations Participation Health Education Employment Effect of health on education Anti- Corruption Equity

50 Holistic Considerations Participation Health Effect of education on employment Education Employment Anti- Corruption Equity

51 Holistic Considerations Effect of participation on anti-corruption Participation Health Education Employment Anti- Corruption Equity

52 Holistic Considerations Participation Health Education Employment Anti- Corruption Equity Effect of bias in inequality

53 Holistic Considerations Participation Health Education Employment Cost of corruption to government programs Anti- Corruption Equity

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55 Personal Happiness & Wellbeing Social Capital Life Long Learning

56 Personal Happiness & Wellbeing Participation Health Education Employment Social Capital Life Long Learning Anti- Corruption Equity

57 But Pressure for growth & doing business Globalization Open Government Partnership Sustainable Development Goals Wide ranging & complex!

58 But Pressure for growth & doing business Globalization Open Government Partnership Sustainable Development Goals Now? Wide ranging & complex! Happiness and Wellbeing?

59 Sustainable and Equitable Socio- Economic Development Good Governance Gross National Happiness Pillars Environmental Preservation Promotion and Preservation of Culture

60 Happy Planet Index Health Justice Well Being Ecological Footprint

61 Health Governance Education Personal Freedom Legatum Prosperity Index Economy Safety & Security Entrepreneurship & Opportunity Social Capital

62 World Happiness Index Happy Planet Index Gross National Happiness World Happiness Summit Governance Corruption Perception Justice Good Governance Social Social Support Life Expectancy Health Sustainable & Equitable Socio-Economic Development Social Physical Cultural Generosity Promotion & Preservation of Culture Community Economic GDP Per Capita Sustainable & Equitable Socio-Economic Development Financial Environmental Ecological Footprint Environmental Preservation Personal Freedom of Life Choices Purpose Mindfulness

63 Sustainable Development Goals 1 NO POVERTY 2 NO HUNGER 3 GOOD HEALTH 4 QUALITY EDUCATION 5 GENDER EQUALITY CLEAN WATER 6 & SANITATION Governance 7 RENEWABLE ENERGY 8 GOOD JOBS AND ECONOMIC GROWTH 9 INDUSTRY, INNOVATION, INFRASTRUCTURE 10 REDUCED INEQUALITIES 11 SUSTAINABLE CITIES AND COMMUNITIES 12 RESPONSIBLE CONSUMPTION Social Cultural 13 CLIMATE ACTION 14 LIFE BELOW WATER 15 LIFE ON LAND 16 PEACE AND JUSTICE 17 PARTNERSHIP FOR THE GOALS Economic Environmental

64 4. MEASURING WHAT S IMPORTANT

65 Corporate Performance Management Input Output Outcome Bottom Line Budget Output Output Outcome Outcome Outcome Outcome Profit

66 Government Performance Management Mandate Input Output Outcome Outcome Output Outcome Objectives Budget Outcome Output Outcome

67 Why Balance Performance? Process Politics People Public Finances Performance

68 Balanced Scorecard Financial Stewardship financial performance Strategic Objectives Strategy Map Performance Measures & Targets Strategic Initiatives Customer/Stakeholder satisfaction Vision and Strategy Internal Business Process efficiency Organizational Capacity knowledge, innovation

69 FISC WORKSHOPS

70 Government Balanced Scorecard Private Sector Financial Customer Internal Process Learning & Growth Public Sector Citizen Internal Process Learning & Growth Financial

71 Balanced Scorecard Concepts Citizen Perspective Government Service Delivery Government Transparency & Accountability Equity Employment Health & Education Internal Process Perspective Automation & Efficiency Program Management Scenario Planning Decision Support Policy Coherence Learning & Growth Perspective Organizational Change Management Learning & Promotion Opportunities Adequate Compensation Job Satisfaction Empowerment Financial Perspective Budget Credibility Debt Management Value for Money Taxation Public Investments

72 Trust Citizen Perspective Government Service Delivery Government Transparency & Accountability Equity Employment Health & Education Internal Process Perspective Automation & Efficiency Program Management Scenario Planning Decision Support Policy Coherence Learning & Growth Perspective Organizational Change Management Learning & Promotion Opportunities Adequate Compensation Job Satisfaction Empowerment Financial Perspective Budget Credibility Debt Management Value for Money Taxation Public Investments

73 Efficiency Citizen Perspective Government Service Delivery Government Transparency & Accountability Equity Employment Health & Education Internal Process Perspective Automation & Efficiency Program Management Scenario Planning Decision Support Policy Coherence Learning & Growth Perspective Organizational Change Management Learning & Promotion Opportunities Adequate Compensation Job Satisfaction Empowerment Financial Perspective Budget Credibility Debt Management Value for Money Taxation Public Investments

74 Effectiveness Citizen Perspective Government Service Delivery Government Transparency & Accountability Equity Employment Health & Education Internal Process Perspective Automation & Efficiency Program Management Scenario Planning Decision Support Policy Coherence Learning & Growth Perspective Organizational Change Management Learning & Promotion Opportunities Adequate Compensation Job Satisfaction Empowerment Financial Perspective Budget Credibility Debt Management Value for Money Taxation Public Investments

75 Sectors Citizen Perspective Government Service Delivery Government Transparency & Accountability Equity Employment Health & Education Internal Process Perspective Automation & Efficiency Program Management Scenario Planning Decision Support Other Sectors to Support Policy Coherence Learning & Growth Perspective Organizational Change Management Learning & Promotion Opportunities Adequate Compensation Job Satisfaction Empowerment Financial Perspective Budget Credibility Debt Management Value for Money Taxation Public Investments

76 Measurement Citizen Perspective Government Service Delivery Government Transparency & Accountability Equity Employment Health & Education Goods Internal Process Perspective Automation & Efficiency Program Management Time Scenario Planning Process Decision Support Policy Coherence Learning & Growth Perspective Services Organizational Change Management Information Learning & Promotion Opportunities Quality Adequate Compensation Cost Job Satisfaction Empowerment Financial Perspective Budget Credibility Debt Management Value for Money Taxation Public Investments

77 Relevance

78 5. ROLE OF PFM

79 5.1. Classification is Important

80 Government Matrix Structure Government Ministries Departments Agencies

81 Government Matrix Structure Government Ministries National Objectives Departments Agencies

82 Government Matrix Structure Government Ministries National Objectives Departments Sectors Agencies

83 Government Matrix Structure Government Ministries National Objectives Departments Sectors Agencies

84 PFM: Core of National Wellbeing Fund Climate Organization Health Budget Classification Responsibility Program Decision- Making Transparency Education Infrastructure Performance Classification Organization Gender Accounting Growth

85 5.2. Public Investments

86 1.1 Performance Structure Objectives Hierarchy Public Investment Planning 1.4 Cost Drivers Financial Assumptions 2.4 Multiple Year Previous Year Multiple Year Estimates 2.6 Portal Budget Planning Transparency 2.1 Program Budgeting Programs Objectives 2.2 Scenario Planning Financial Scenarios 2.3 Collaboration Multiple Versions 2.5 Approvals Formal & Legal Budget Approval

87 5.3. Controls

88 Controls Income Tax Customs & Excise Sales Tax Non-Tax Debt Income Budgets Segregation of Duties Transfers & Virements Supplemental Process Purchase Procurement Social Programs Grants Debt Repay

89 Points of Control Failure Income Tax Customs & Excise Sales Tax Non-Tax Debt Income Budgets Segregation of Duties Transfers & Virements Supplemental Process Purchase Procurement Social Programs Grants Debt Repay

90 5.4. Fiscal Transparency

91 Fiscal Transparency O No Fiscal Information Available 1 Printed Fiscal Information Available for a Fee 2 Printed Fiscal Information Available for Free PDF Reports Available on Web Search, Select & Download Fiscal Information from Web Open Data API Integration for Civil Society Software

92 Role of Public Financial Management Performance Structure Financial Structure Cost Drivers Previous Year Financials Transparency 1. Performance Configuration 2. Public Investment Planning Multiple Year Scenario Planning Collaboration Program Objectives Approval Transparency Controls Procurement Contracts Progress Transparency 3. Implementation 4. Results Management Dashboards Performance Outputs Performance Outcomes Return on Investment

93 Vote

94 6. PUBLIC FINANCIAL MANAGEMENT LESSONS

95 A. Clarity

96 Wellbeing & Happiness National Goals Citizen-Driven Context Relevant Sustainable Development Goals Relevant Measurements

97 Wellbeing & Happiness National Goals Citizen-Driven Context Relevant Sustainable Development Goals Socio-Cultural Context Relevant Measurements

98 Best Practices

99 B. Integration

100 Performance Integration Different Databases Lack of Consistent Information Different Classifications Metadata Inconsistent controls Fragmented Information No single view of government Multiple versions of the truth No budget visibility Manual Intervention Error-prone Lack of timeliness Poor decisions

101 Decision-Making

102 Transparency Integration Different Databases Lack of Consistent Information Different Classifications Metadata Fragmented Information No single view of government Manual Intervention Error-prone Lack of timeliness Poor Transparency

103 Life, Liberty, and the Pursuit of Happiness

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