seminar on independent budget analysis & transparency “how to overcome the missing data...
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Seminar on Independent Budget Analysis & Transparency
“How to Overcome the Missing Data Problem”
June 9 – 12, 2014
Venue: University of Ottawa, Canada
Parliamentary Budget Office Kenya 1
PARLIAMENTARY BUDGET OFFICEKENYA
Parliamentary Budget Office (PBO) Kenya
PBO Kenya carries out independent budget, finance and economic analysis to Committees of Parliament.
PBO is a non-partisan professional officePrimary function is to provide timely and
objective information and analysis concerning the national budget and economy.
The objective of the office is “to enhance the oversight role of Parliament by creating the necessary capacity for scrutiny of the national budget and the economy”
Parliamentary Budget Office Kenya 2
PBO Kenya - BackgroundEstablished in 2007 . It got a legal backing with the enactment of
the Fiscal Management Act, 2009 (FMA) which established the PBO as an office in Parliamentary Service Commission.
The FMA was repealed in 2012 and an overarching law, the Public Finance Management Act, 2012 (PFM) was enacted.
The PFM law re-established the PBO enhancing its roles and stipulating the budget process in line with the Constitution of Kenya 2010.
Parliamentary Budget Office Kenya 3
Structure of PBO Kenya
Parliamentary Budget Office Kenya 4
CALENDAR OF EVENTS OF PBO KENYA
Parliamentary Budget Office Kenya 5
Activity Sub- Activity TimelinePreparation of options for economic outlook, prospects and opportunities
Preparation of the Budget Options
January
Review of government’s policy options and budget assumptions
Analysis of the Budget Policy Statement
February
Review of the budget proposals
Analysis of the estimates of revenue and expenditure
May – June
Preparation of MP’s Budget Watch
June
Conduct Public Hearings on the budget estimates
Prepare report on public views concerning the budget
May
Conduct analysis of proposed taxation measures and tax policy changes
Analysis of the Finance Bill June
CALENDAR OF EVENTS OF THE PBO CONT.
Parliamentary Budget Office Kenya 6
Activity Sub- Activity TimelineReview of government’s macroeconomic assumptions
Analysis of the Budget Review and Outlook Paper
October
Carrying out performance monitoring and analysis for oversight
Tracking of Revenue performance
Quarterly
Expenditure Tracking QuarterlyMacroeconomic forecasting
Continuous
Bill Analysis As need arisesResearch on urgent issues Thematic research
papersAs need arises
A Guide to the Budget ProcessThe MP’s Budget WatchBills/Motion Analysis and Cost Estimates ReportsPublic Expenditures trend data bankRegular Budget Reporting Analysis.The Budget OptionsThematic Research Papers Parliament Budget Office ModelContacts: Director, PBO Kenya
Website: www.parliament.go.keEmail: pbo@parliament.go.keTel: +254-20-2133074 Parliamentary Budget
Office Kenya 7
PBO KENYA PUBLICATIONS
MISSING DATA PROBLEM
Missing data problem occur when no data value is stored for the variable in an observation.
It is a common occurrence and can have a significant effect on the conclusions that can be drawn from the data.
Missing data can occur because of non response
No information is provided for several items or whole unit.
Parliamentary Budget Office Kenya 2
SOURCES OF DATA
Economic Survey Reports
Statistical Abstract
Annual Sector Working Group Reports
Annual Expenditure and Revenue Estimate Books
Public Expenditure Review Analysis Report
Public Debt Reports
Quarterly Economic and Budget Review Reports (QEBR)
Monthly Exchequer Release Reports
Audit ReportsParliamentary Budget
Office Kenya 9
PBO MACROECONOMIC MODEL (PBOM)
• A data driven macroeconomic analysis and forecasting tools used by PBO Kenya in its regular work to enhance the quality of its reports.
• Model is comprehensive enough to describe the whole economy.
• Model is tailored to meet the needs of parliament in playing its budget oversight role.
• The model is critical in informing budgetary formulation process e.g. macroeconomic projections.
Parliamentary Budget Office Kenya 10
THE BASIC PBOM STRUCTURE
• Model built along the aggregate demand-aggregate supply framework
• Real side of the economy contains 4 types of economic agents;a) Domestic production (private firms,
parastatals)b) Householdsc) Governmentd) Rest of the World (RoW)
Parliamentary Budget Office Kenya 11
THE BASIC PBOM STRUCTURE…..ContModel contains 3 types of markets
a) Labor market
b) Product market
c) Financial market
Model is demand driven in the short run with multiplier effects through consumption and investment
Parliamentary Budget Office Kenya 12
POVERTY MODULE IN THE PBOMThe PBOM contains a poverty module The poverty module which is used in
combination with PBOMSimulate the effects of macro-economic
developments and poverty reduction strategies on the number of poor households.
Welfare is measured in terms of total household expenditure
The poverty module also gives crude estimates of the income tax revenues and can therefore be used to analyze and monitor effects of policies and developments on income tax revenues
Parliamentary Budget Office Kenya 13
MISSING DATA CHALLENGES
Lack of right of access to government data
Data exists but is scattered in the various Ministries, Departments and Agencies of Government
Data is fairly historical, updated data not readily available.
Available data is at a highly aggregated levels.
Most of the existing data is in paper based form and not digital form therefore hard to retrieve
Parliamentary Budget Office Kenya 14
MISSING DATA CHALLENGES……..Cont
Limited information sharing and collaboration among MDAs, work tends to be fairly competitive in nature
Kenya Open Data Initiative launched in 2011 but has not taken off since the launch.
Access to information shrouded in bureaucracy.
Security/military data-highly classified (Top Secret)
Parliamentary Budget Office Kenya 15
OVERCOMING MISSING DATA CHALLENGES
Building Informal Networks
Nurturing complementarities NOT competition with professional colleagues
Baseline surveys.
Proxy modelling
Personal judgement/Intuition
Build on existing competencies and experiences.
Undertaking joint publication & peer review forums
Parliamentary Budget Office Kenya 16
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Thank You – Q & A
.
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