Introduction to the Guidance Document       

                      

2.0    Within the last decade issues surrounding good governance and the balance to be maintained between the state and the private sector have risen to the top of the public policy agenda. Much of this debate has emerged from a widespread re-appraisal across many countries throughout the 1980s of the relative responsibilities to be associated with those engaged in the wealth producing sectors of the economy and, on the other hand, those whose conventional role has been to engage in the promotion and regulation of this wealth producing sector. Although much has been said about the competitive gains and efficiencies which may be secured under an open market economy, the fact remains that in many developing countries the existence of a relatively weak and underdeveloped private sector, operating within a context of a limited capital and infrastructural endowment, simply does not allow the State to seek out a minimalist role for itself. In most cases, such a policy of minimalist government intervention would in fact be incompatible with the government’s responsibility to assist in the process of economic growth and social development.

2.1    This is not to advocate an elaborate or extensive role for the government sector. Nor indeed is it to suggest that governments in developing countries should stand back from the process of privatisation which - typically - many of them are now implementing. Such privatisations remain urgent, particularly in those countries, which have, over the years, accumulated an unnecessarily large and burdensome para-statal sector. But expressions of support for such privatisation programmes should not necessarily be seen as evidencing a wider support for the complete withdrawal of the government from the economy, and the related assumption of a minimalist and completely non-interventionist posture. It remains true that in certain instances, only the State can expect to make a real economic impact and to correct market failures as and when they arise. In a very fundamental sense this is true in terms of the provision of basic Public Goods, as well as in resourcing and programming a high level of investment in the nation’s physical infrastructure and its human assets. This latter form of investment is unlikely to emerge spontaneously from a private market source, and is much more likely to be led effectively through a well co-ordinated government programme. The continuing absence of this kind of investment will inevitably prevent the economy achieving its growth potential, and will represent an enduring constraint on development. In an economy characterised by a limited amount of investment capital and a narrowly focused indigenous private sector, the identification and exploitation of strategic opportunities for economic growth is unlikely to take place if government is not an active participant in the national planning framework.

2.2    Implicit in this debate then is an acknowledgement that the manner in which the state seeks to involve itself in the management or direction of the national economy - and the mechanisms which it establishes to do so - must inevitably produce a consequential stream of effects which can have a significant impact upon the systems and procedures under review. Nowhere are these consequential effects more significant than in the financial area. This is particularly true of the manner in which governments attempt to source their finances and of the arrangements which they subsequently introduce for their disbursement. In short, all governments (irrespective of their political colour or whether they profess to claim a minimalist role for the state sector or a highly interventionist one), would argue that their actions, and the set of policies and instruments over which they preside, serve to bring about an environment within which a disciplined and sound system of financial management can flourish. In every country, it is useful to test this proposition occasionally.

2.3    This Guidance Document has been developed in order to assist countries in preparing a National Profile which will facilitate an assessment of the National Legal Infrastructure for Sound Financial Management. It has been prepared by UNITAR (Geneva) with a view to affording all stakeholders with a legitimate interest in the control and regulation of the Financial Management process, an opportunity to participate in and contribute to a comprehensive review of relevant procedures. By drafting a National Profile in accordance with the principles set out in this Guidance Document, each participating country will as a matter of course evolve a detailed inventory of all relevant institutions and procedures pertaining to Financial Management. However it is the view of UNITAR that the National Profile should not simply culminate in a passive listing of relevant institutional arrangements. Rather it should also assist those concerned with these matters to move a step further in terms of "benchmarking" best practice in the area, and in considering the extent to which the prevailing arrangements described in the National Profile measure up to this standard. For most countries it is this latter concern which is more likely to be of interest. The structure of the Guidance Document is as follows:

Section 3 describes the scope and purpose of the National Profile document and deals with some definitional issues as well as listing some of the benefits which might be expected to accrue to those countries which become involved in the process.

Section 4 focuses on some of the practical and procedural issues which must inevitably be addressed by countries interested in preparing a National Profile. This has been written with a view to alerting those who might consider preparing such a document to some of the routine steps that need to be taken as well as some obstacles or limitations which might impede progress. In so doing it is hoped that these comments will provoke the user into seeking alternative means of eliciting relevant information or making an assessment of the extent of information deficiencies where such inadequacies may be encountered.

Section 5 describes the structure and content of the National Profile. This is the core section of the Guidance Document, and provides a listing of the principal areas which merit attention in the context of developing systems of Sound Financial Management. It also carries an associated set of "Issues for Consideration" which indicates to the user those matters which merit examination in greater depth. In many respects, the extent to which constructive use is made of this opportunity for issue exploration, will determine the likelihood of the National Profile emerging as a credible and useful instrument of policy analysis, rather than a disappointing and lifeless catalogue of the existing institutional architecture (both adequate and inadequate).

Section 6 provides some concluding comment and tries to signal to the reader how the set of possibilities represented by the National Profile can be most effectively realised.

Following some preliminary contacts between UNITAR and the Republic of Ghana, an outline agreement has been reached that the development of a National Profile to assess the National Legal Infrastructure for Sound Financial Management will be piloted in that country. This should not however be understood to suggest that the Guidance Document is in any sense context specific or bound within any particular institutional culture. Rather it is the belief of UNITAR that this Guidance Document will serve as a more generic model or template which will assist relevant groups of public officials from whatever country to prepare an accurate and workable National Profile.