Dashboards are only tools: effectiveness depends on their use

A new report for the IBM Center by Dr. Sukumar Ganapati, “Using Dashboards in Government” provides a snapshot into the internal and external uses of dashboards as ways of monitoring performance and providing accountability and transparency in large organizations. Ganapati says: “Dashboards summarize key performance metrics of organzations. They typically integrate data from different sources and display performance measures through informative graphics. The visualization allows readers to understand complex data in less time than it would take to read similar material ocated in the text of a full report.

He says there are different types of dashboards: operational (for monitoring in real time such as call centers or air traffic control); tactical (for analysis and benchmarking such as welfare caseload processing); and strategic (such as balanced scorecards of agency performance).

Source: Using Dashboards in Government

Recent Reports - Indian Government

Report of the Technology Advisory Group for Unique Projects

Public Debt Management


Report of the Working Group on Foreign Investment in India

Outcome Budget

The Deficit Commission and Enactment Strategies

For Discussion- Should Public Commissions include concrete implementation strategies in their reports as David Brooks alleges below;

The report from the chairmen lists some of the best ways to raise revenue and cut spending. But it comes with no enactment strategy. In this climate, asking politicians to end the mortgage deduction and tax employer health care plans and raise capital gains taxes and cut benefits for affluent seniors is like asking them to jump on a buzzing sack full of live grenades. They won’t do it.

Related:
Deficit commission leaders are not addressing the root causes of the long-term deficit

The PowerPoint

So, About That Deficit Commission ...

Tax revenues capped at 21% of GDP

The deficit commission report
Mankiw is happy, Krugman and DeLong are upset.

Panel Seeks Social Security Cuts and Higher Taxes

The deficit commission’s plan

Fiscal Space

Interesting staff policy note from the Fund on Fiscal Space.

IMF's Fiscal Monitor

See the transcript of the discussion of the FM;

QUESTIONER: Hi. One, I have a basic math question I’m trying to understand and then a sort of broader question.

So, you’re saying overall for the advanced G-20 countries, by 2030 the debt increases by 40 percentage points or thereabouts. And so to get it to a safe level they have to reduce the deficit by 8.5 percentage points over 10 years -- 8.75, sorry. How does that math work? Why does 8-3/4 get you 40 percentage points?

And then secondly, a sort of broader philosophical question, so you have a variety of tax increases and spending cuts, why don’t you have built in there, since you’re saying growth is so important, growth measures that you would score in the same way you’re scoring this?

MR. COTTARELLI: Let me start from the second one. Of course, there is a recovering growth in the projections, but there is no major increase in potential growth. The reason why we have not done this is to be, in a way, on the cautious side because these reforms in this area are extremely important but it’s difficult to calculate when they will yield benefits.

So, I think that while all countries facing fiscal adjustment should implement the measures to boost potential growth, I think it would be a bit risky to assume from the beginning that potential growth would pick up more strongly than expected, than before the crisis.

What countries, in our view, should do is to base fiscal adjustment on relatively conservative projections on output growth and then hope, to have the strong expectation, that through reforms it would be possible to improve potential growth and there would be upside surprises.

But in terms of measuring risk, I think it would be better not to base fiscal adjustment plans on the expectation that potential growth will be higher than before the crisis. Actually, it is better to be cautious.

On your specific question, the difference is between flows and stock. The improvement in the primary balance is an improvement in the flow and that of course is not from the first tier. It’s a gradual improvement, but it’s an improvement in the flow, in the primary position every year. As a result of this, at the end, you get a decline in the debt ratio by about -- with respect to the baseline and to the starting point, by about 35, 40 percentage points. We can perhaps go through separately to do the math later on at the end.

Public Debt - the very basics

Why Our Current Budget Situation Is a Crisis;

In short, there is no precedent for reducing the ratio of debt to GDP by simply growing our way out of it. Instead, policy choices must be made in order to restore a primary surplus.

U.S Government Debt Since World War II;

My reading of this history is that one should not be optimistic that we can simply shrink the ratio of debt/GDP by growing the denominator. A lot of the reduction that took place between 1947 and 2000 was due to running primary surpluses. If we are going to do that again, we will have to do so in spite of the fact that military spending is a much smaller share of GDP (so that arithmetically there is less room to cut) and in spite of the way that Social Security and Medicare are going to be affected by demographics and health care spending trends.

Burundi Fact of the Day

GDP per capita is about $139, and only 18 percent of the population has food security. The IMF and World Bank have cancelled more than 90 percent of Burundi's debt, worth about $1.4 billion.

-Burundi's Debt Relief Savings to Go to Food, Health, Schools

Whither Intergenerational Equity

via Mark J. Perry

Publi Financial Management reforms in Cape Verde

The Cape Verdean authorities consider it a priority to strengthen debt management.
Notable progress has already been made:

• Debt sustainability analyses (DSAs) are now conducted annually. The Ministry of Finance and the Bank of Cape Verde (BCV) recently conducted a joint DSA applying the Bank-Fund Debt Sustainability Framework. The exercise benefited from assistance from Debt Relief International (DRI) and UNDP. The next DSA will be conducted in early 2009 at the beginning of the preparation of the 2010 budget to help determine the borrowing envelope consistent with debt sustainability.

• Internal controls have been substantially improved. Software from the Commonwealth Secretariat was upgraded and now records state guarantees as well as debt. With the assistance of the Crown Agents, the system will be fully operational by year-end. The software will allow for currency decomposition of the debt stock, be linked to the Government’s Financial Control Network (SIGOF), and allow for compilation of debt data in the new chart of public accounts (PNCP).

The authorities intend to further strengthen their debt management practices:
• The institutional framework for debt management will be adapted. The organic law of the Ministry of Finance will be amended to give the debt management office a clear mandate, and the budget execution law will be changed to allow the Treasury to manage debt efficiently.

• A new debt management strategy will be embedded in the procedures manual of the debt management office.

• The domestic market for Treasury securities will be developed. With MCC financing, Treasury securities will be easily available for purchase by nonbanks to make the market more efficient and liquid and reduce borrowing costs.

• Capacity in the debt office will be reinforced. A new financial analyst was hired in September, and another will be hired in 2009. Portugal trained four staff in debt management in September.

Source;Cape Verde: Fifth Review Under the Policy Support Instrument - Staff Report

What do they teach at University of Illinois Econ Dept.

President Rafael Correa has declared his country in default on foreign debt as his government grapples with falling oil income and a decline in remittances from Ecuadoreans living abroad. Calling the debt “immoral and illegitimate,” Mr. Correa said his government would not make a $31 million interest payment, a move heightening concern in global markets over Ecuador’s $10 billion in foreign debt. The decision by Mr. Correa, an American-educated economist, could have far-reaching impact in Ecuador, which risks being shut off from foreign credit markets even as the move temporarily frees up funds for social welfare projects.

-Ecuador: President Orders Debt Default

Correa did his Economics PhD at University of Illinois at Urbana-Champaign

Related;
Ecuador defaults on sovereign bonds;

Ecuador’s refusal to meet the $30.6m payment on the country’s Global 2012 bond, despite the fact that it has $5.65bn in cash reserves, sent dollar-denominated debt prices down sharply.

”I gave the order not to pay the interest and to go into default,” Mr Correa said. ”We know very well who we are up against - real monsters.”...

Alberto Bernal, Head of emerging market macroeconomic Strategy at Bulltick Capital Markets, said the move was a prelude to a decision to exit dollarisation.

”Dollarisation is popular in Ecuador. Yet president Correa does not believe in dollarisation, and he needs further tools to pump the economy, because he will never receive the support of the private sector to generate employment,” Mr Bernal said. ”We think that a 60 per cent to 70 per cent devaluation is likely to take place at some point in the near future, unless oil prices recover fast.”

Ecuador abandoned the sucre for the dollar in 2000 after the collapse of its banking sector, which effectively leaves Mr Correa with no monetary policy of his own...

Mr Correa, a US –trained economist and a close ally of Hugo Chávez, Venezuela’s president, has pledged an ambitious programme of social spending or on the implementation of a new constitution.

”The big problem with dollarisation is that if you don’t take it seriously, and you keep a loose fiscal policy as we have seen in the past few years, you have to provide an alternative for an overappreciated and uncompetitive economy,” a former Ecuadorean minister told the FT. ”If we didn’t have the commodities boom we could have very easily seen a collapse of the real sector and the financial sector in Ecuador much earlier.”

I.O.U.S.A. -The 30 Minute Version

I.O.U.S.A

Related;
PGPF Blog

India to create a Debt Management Office

Report of the Internal Working Group on Debt Management

Nothing new for Argentina

Argentina’s overdue loans from the Paris Club nations, principally Japan and Germany, have represented a serious obstacle to its medium-term growth potential. While the country was in arrears, the export-promotion agencies of many foreign governments were banned from providing subsidised credit for sales or investments in Argentina. Now, it will be eligible for such loans, substantially lowering financing and insurance costs for infrastructure projects and imports of capital goods. In particular, the move should expedite the construction of a high-speed rail line linking the country’s three largest cities, a costly project of questionable necessity strongly backed by Ms Fernández. “We haven’t been getting big investments of hundreds of millions of dollars because they need international financing,” says Beatriz Nofal, the president of the government’s investment-promotion agency. “Now they’ll start coming.”

But the mechanism Ms Fernández has chosen for repaying the debts is reinforcing widely held concerns about Argentina’s economic management. Just as her husband did when repaying the government’s debt with the IMF in 2005, Ms Fernández has rustled up the cash by helping herself to 15% of the central bank’s foreign-currency reserves. In addition to highlighting the bank’s tenuous independence, this decision implies a steep opportunity cost: Argentina could easily have paid the debt in instalments rather than in one lump sum. Doing so might have spared the country the need to borrow ever-greater sums from the Venezuelan government, which now charges a daunting 15% interest rate.

But according to the Paris Club’s rules, securing any such restructuring with the group would require the blessing of the IMF, which has long been the Kirchners’ favourite political scapegoat. And in turn, to obtain the Fund’s approval, Argentina would probably have had to reveal how it calculates its official inflation figure, which is manipulated so that it hovers at around a third of the true rate. Ms Fernández remains unwilling to reveal precisely how her officials doctor Argentina’s economic statistics.

If Ms Fernández hoped that her decision would calm investors’ nerves, she appears to have been mistaken: the spread between the interest rates on Argentina’s bonds and US Treasury notes actually increased on the day she made the announcement. The markets remain jittery because Argentina’s unpaid obligations to the Paris Club were in fact among the least of its worries. The government still refuses to negotiate with the private holders of $20 billion of its bonds who held out against the country’s harsh debt restructuring in 2005, a decision that prevents it from borrowing on the international capital markets. It continues to impose strict price controls and hand out lavish energy and transport subsidies. And it suffers from a yawning credibility gap, due to lies about the inflation rate

-Satisfying the creditors

How would an MTEF be like in Middle Ages

Even restricting the application of the principle of opportunity cost to just one facet, such as castle building in the High Middle Ages, involves many difficulties. Taxation, budgeting, and spending in the Middle Ages can only be described as haphazard, or at least they appear so because of the paucity of records.

It would be very interesting to know the sums spent by medieval monarchs on fortifications in their countries. It is known that cities gave enormous sums for building walls and ramparts, and for digging moats. Unfortunately there is a total lack of information about costs for this period.

This quotation, from a standard work on the military history of the age, reveals some frustration of the study of the period. Fortunately, progress has been made, and even as debate regarding the exact numbers will continue, a number of deductions can be made about the labor and capital cost necessary to construct medieval fortifications. About the overall cost there is little dispute. Medieval rulers had the greatest difficulties in paying for their wars, and powerful monarchs had no less trouble despite initially starting with more. “All were driven to desperate expedients to make ends meet.” Worse, possession of more power and territory gave one more to defend. Castles and troops were both necessary, and this led to every conceivable way being devised to raise money. “Since the time of Cicero and Tacitus to the fifteenth century and beyond, authors often asserted that the tranquility of nations was impossible without armies, armies without soldiers’ wages, or wages without tribute.”

The result of the search for funds has been described as “less a system of taxation than a system of plunder,” and this was no metaphor. In England, for example, goods were sometimes seized from merchants and only released after “tax” was paid. And it was never enough. Despite the most vigorous tax collections England had ever known, Edward I (r. 1272–1307) constantly outran his financial resources. Between 1294 and 1297 wars with Scotland, France, and Wales required such heavy war levies that laity and clergy alike rebelled, leading to a major constitutional crisis. This was not the result of mere royal greed; bad policy is another matter. In Edward’s last years, the Wardrobe, as the department that paid the army’s bills was called, rarely had a thousand pounds at any given moment, while earlier in his reign it had been able to send its paymasters sums as large as £5,000 at once.

Credit was no permanent solution. Since the twelfth century credit had been steadily expanding across Europe. Tempted, Edward I took two steps: he borrowed, usually from Italian bankers, and he did not repay them, at least not completely. His first bankers, the Riccardi, failed to collect some £18,924; the Frescobaldi firm was shorted some £25,000. It did little good. At his death, Edward I left a debt of some £200,000, almost four times the entire annual royal revenue. Justly, some of this could be attributed to the policies of a king who not only made war constantly but pursued policies almost guaranteed to lead to further wars. Unsurprisingly, periods of peace led to dramatic improvements in the condition of the treasury. But there was more to the matter than the behavior of an overly, and overtly, aggressive king. Far more interesting about Edward I is that, despite running repeated campaigns in France, Wales, and Scotland, he nevertheless chose to plow fortunes into the building of castles

Source: Castles, Battles, and Bombs: How Economics Explains Military History
Jurgen Brauer and Hubert van Tuyll

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You Ain't Seen Nothing Yet

'We suffer from a fiscal cancer'- David Walker, former Comptroller General of US