The development of a spending review methodology in a developing country context

ABSTRACTThis article discusses the spending review methodology developed in the South African government. A typical spending review combines a deep institutional and policy evaluation with extensive expenditure analysis and cost modelling. The article discusses how, in the context of a developing country, the spending review methodology had to adapt to local conditions, such as constraints around political and institutional autonomy and cooperation, the skills level of government officials, data availability and communication around a reform agenda. The article outlines how, in responding to these challenges, the South African spending review methodology developed a six step modularised approach that standardised the methodology and provided clear guidance to civil servants, consultants and political leadership. This has allowed a sophisticated analytical process to be widely adopted in the public sector and could be of methodological value to developed and developing countries alike.KEYWORDS: Spending reviewpublic finance management reformsdeveloping countrySouth Africabudget reform Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 And indeed, in only one case out of 227 spending reviews did the line ministry object to the findings.2 ‘make a plan – do not complain’.3 In 2000, the Departments of Finance and State Expenditure amalgamated to form National Treasury.4 In the South African Treasury, the divisions of Inter-Governmental Relations, Public Finance and Budget Office forms the Budget group; the Budget Group is equivalent to a Budget Office in most other Departments of Finance.5 There was one department that objected, but they could not provide any real data to support their position and the objection was seen as purely ideological and not linked to the analysis in any way.6 Director-General is the most senior post in a government department and they function as the accounting officer of a department. This is the equivalent of a permanent secretary in the UK system.7 CONSTITUTIONAL COURT OF SOUTH AFRICADate of hearing: 24 August 2021 Date of judgment: 28 February 2022 National Education Health and Allied Workers Union and Others v Minister of Public Service and Administration and Others.South African Democratic Teachers Union and Others v Department of Public Service and Administration and Others.Public Servants Association and Others v Minister of Public Service and Administration and Others.National Union of Public Service and Allied Workers v Minister of Public Service and Administration and Others.CCT 21/21; CCT 28/21; CCT 29/21; and 44/218 This excludes the large state-owned enterprises who report directly to the Assets and Liabilities Management (ALM) branch of National Treasury.9 In 2022.