Performance-based systems are goal-oriented approaches focusing on results rather than inputs, aiming to improve public administration practices. Implementing these systems requires careful consideration of incentives, risks, and stakeholder participation. Our experience with the Decentralization and Municipal Support (DEMOS) project in Kosovo shows that advocating for complex performance systems to be embraced by governments requires donors to harmonize their instruments while also ensuring their presence makes the system trustworthy and equitable. This approach fosters a conducive environment for effective implementation and meaningful impact.
Introducing Performance-Based Mechanisms
Introducing or integrating a performance-based mechanism into a partner country’s system requires understanding of the existing government systems and their interactions. Bringing a performance-based mechanism “on system” is often gradual and evolving. It involves aligning the project with legislative frameworks and capacities and integrating relevant parts of the project into the partner country’s system.
A development project (multi donor-funded) can contribute to developing and implementing performance-based systems by providing technical assistance and financial resources and facilitating stakeholder collaboration. By supporting the establishment of credible systems, tailoring incentives, and promoting innovation, these projects can help improve the performance and results of public administration for the benefit of citizens on one side and build data-driven evidence for policymaking on the other side.
Credible Performance Systems
Implementing a performance-based system involves addressing various challenges during the design and implementation process. Establishing a clear and realistic vision with achievable objectives for the performance-based system is crucial. The system should have a strong normative framework and set credible metrics for measuring performance in various areas of public administration. Furthermore, the system should provide beneficial incentives to local governments that promote positive behavioural changes without adverse effects. Performance incentives should encourage positive behavioural changes and mitigate potential risks associated with the incentives. Efforts should be made to ensure the active participation of citizens, civil society organizations, and the private sector to foster inclusiveness, transparency, accountability, and better outcomes for the public.
Role of Multi Donor-Funded Projects
Multi Donor-funded projects play a crucial role in supporting performance-based systems by offering assistance and support in various ways.
- Facilitating dialogue by assisting different actors involved in the performance-based system in communicating and collaborating effectively and creating platforms and opportunities for multilevel dialogue, enabling stakeholders to better understand their roles and responsibilities.
- Providing technical and financial assistance to fill the gaps in technical expertise and providing financial resources to accelerate the implementation of performance-based systems by offering tools, processes, and methodologies to improve performance measurement and reporting.
- Supporting the establishment of a legal basis by sharing the lessons and experiences from similar projects to help incorporate performance-oriented approaches into the existing legal and regulatory frameworks.
- Promoting innovation by encouraging the adoption of innovative solutions, including technology and digitalization, to enhance the performance-based system and supporting the introduction of new technologies and digital tools that improve data collection, analysis, and reporting processes.
- Tailoring incentive packages that incentivize positive changes in the behaviour of public administration officials and political representatives. These incentives can be customized to align with the desired outcomes of the performance-based system and encourage improved performance. Financial incentive, through performance grants, provides important stimulus for public institutions to compete and improve their performance, as well as improve services for citizens.
A shift in credibility from development actors to system actors
Quality assurance mechanisms ought to be established for credibility of data. Credible metrics which showcase performance of services, good governance processes, etc. which are broadly and recognized from politicians, citizens, and civil society, as well as the government create a good base for policy initiatives that are based on evidence. In addition, they enable a consensus around the overtightening function of both representative and civil society institutions. Quite often, system actors put development projects in the front line of advocacy for performance-based approaches due to neutrality, fairness, reliability, and technical skills. While development projects guarantee such features at the starting phase, an exit strategy and ownership building should be well thought out from the beginning. Once advocacy is over, policymakers and implementers are the only ones on the driving seats.
This article expands on several Webinars on Regional Exchange on Performance-Based Systems which concluded with the publication of the joint paper Helvetas-SDC (https://www.shareweb.ch/site/DDLGN/Documents/SDC-PBS_Local-Governance.pdf).
The Regional Advocacy Network would like to thank the key contributors from our projects in Kosovo (DEMOS), Albania (Strong Municipalities), Serbia (MED), and North Macedonia (NALAS) as well as UNDP in BiH who shared their valuable experiences with us. This initiative would not be possible without the Swiss Development Cooperation (SDC) support and collaboration. A special gratitude goes to Sascha Müller (Head of Governance Unit / Regional Governance Adviser) and Andrea Iff (Thematic Advisor Governance)
Interested in learning more about the advocacy network? Contact us at AdvocacyWesternBalkans @helvetas.org.