South Africa: Transition to Democracy Offers Opportunity for Whole System Reform

Abstract

This case study considers the substantial reforms to the South African public expenditure management system undertaken since the mid-1990s. The key aspects of the reform process have been: establishing the institutional framework for budget reforms through the “new” Constitution and further national legislation and practice; adopting a multi-year budget framework and top-down budget process; developing a framework for public financial management and reporting; improving the classification system of public finances; and creating a performance-oriented public service. South Africa has successfully implemented a number of these reforms and has radically altered the way in which it budgets for public services and how it accounts for public expenditure and commitments. The case study concludes by drawing on the lessons learned through this process.

Making It Happen: Selected Case Studies of Institutional Reforms in South Africa

“…The MTEF was based on cautious assumptions, which meant that there was little deviation between forecast and actual revenues shares going to the subnational spheres. The marked-over expenditure of 1997/98 was reversed and stabilized with an overrun of less than 2 percent in 1998/99, the first year of the MTEF (Fölscher and Cole 2004).…”

Turning points for sustainability transitions: Institutional destabilization, public finance and the techno-economic dynamics of decarbonization in South Africa

“…The adoption of South Africa’s new Constitution in 1996 necessitated a comprehensive reform of the management of public finances, including its budget procedures. The latter were amended in several respects, such as strengthening the link between policy and budget allocations, the introduction of systems to address fragmentation and lack of clarity, and measures to improve transparency and re-establish fiscal stability [39] . Although the new processes were more top-down, the changes improved the alignment between post-1994 priorities and actual public expenditure [39] .…”

Public Financial Management Reform in South African Provincial Basic Education Departments

“…service delivery outputs and outcomes) and essentially situated PFM within an institutional performance management framework. Inspired by international NPM approaches, the PFMA envisaged moving from a highly centralised input‐oriented expenditure control system towards a more performance oriented system that would ‘allow managers to manage but hold them accountable’ (Folscher and Cole, ).…”

“…service delivery outputs and outcomes) and essentially situated PFM within an institutional performance management framework. Inspired by international NPM approaches, the PFMA envisaged moving from a highly centralised input-oriented expenditure control system towards a more performance oriented system that would 'allow managers to manage but hold them accountable' (Folscher and Cole, 2006). The PFMA and its regulations introduced a number of reforms, inter alia, relating to integrating planning and budgeting through greater use of performance information, regular monthly reporting of financial outcomes and quarterly reporting of actual performance vis-à-vis targets, cash management, supply chain and asset management reforms, and accounting reforms from a pure cash accounting system to a modified system as a springboard to a more accruals-based accounting system.…”