KEY MESSAGES
Public sector budgeting reforms, such as performance-based budgeting (PBB) are intended to improve good governance
by increasing transparency and accountability for resource allocation decisions, but evidence of effectiveness is limited.
Budget reforms urged by donors and led by the Ministry of Finance need to be adapted to the health sector. Before we
can evaluate outcomes of reform, it is essential to monitor implementation progress and, where progress falls short of
promise, understand why.
A framework for measuring reform activities in the health sector was developed and tested in four Lesotho hospitals, and
found little progress in budget reform. The reform’s failure is attributed to a complex design which was not adapted to
institutional constraints and lack of capacity in the sector, as well as weak leadership and professional boundaries
between clinical and accounts staff.
The complexity and labour intensity of public sector budgeting reforms, such as PBB, suggest that policy makers and
advisors may not fully appreciate the human resource realities of many developing countries. Simpler, more adapted
reform strategies may be needed.