Planning in the new public management model

[je(K.m>^^ UPPSALA UNIVERSITY (SWEDEN) & UNIVERSITY OF ECONOMICS AND BUSINESS, VNUH MASTER PROGRAMME OF PUBLIC MANAGEMENT Hoang Quang Tuan, Tran Thi Kim Phu & Tran Hoang Hiep MPPM-Uppsala - Intake PLANNING IN THE NEW PUBLIC MANAGEMENT MODEL Supervisor: Prof Dr SVEN-ERIK SVaRD Local Supervisor: Dr HOANG THI THUY NGUYET Hanoi, May 2011 Abstract model for MPPM ABSTRACT Title: PLANNING IN THE NEW PUBLIC MANAGEMENT MODEL (The sector planning in linkage with the State budget: the typical case of Ministry of Agriculture and Rural Development, Viet Nam) Level: Final assignment for Master Program in Public Management Authors: Hoang Quang Tuan, Tran Thi Kim Phu, Iran Hoang Hiep Supervisor: Pro./Dr Sven-Erik Svard; Dr Hoang Thi Thuy Nguyet Date when the thesis is presented: May, 2011 The necessity: In Vietnam, planning is an important management tool for the State to manage the socio-cconomy to achieve the State's objectives In nature, the plan is a comprchcnvise math which contains many objectives within a scope of using some certain resources The phenomenon of resources disputes during the objective realisation process is often happened and the arrangement of priority among objectives is a very important base in the plan determination for each period Therefore how to link plans with resources and make the plans to become an efficient managament tool is always a difficult question for planners The tendency of changing the traditional public administration apparatus into the New Public Management model presents a change in the management philosoph\ from "governing" to "serving"; the State's role and functions arc accordingly changed from "Row" into "Steer" towards an Economic - Efficient - Effective State This tendenc\ has also been formed in Vietnam lowcver in practice, although it is considered as an important management tool for the State to manage the socio-economy the planning in Vietnam has exposed man> limits and not linked with resources and not really become a Government's efficient management tool As the research proposal is bordered, the study group only anal> ses deeper on the point of: "Planning in the New Public Management Model needs to be linked with the State buduct resources" As the study group's opinion, although man> studies have acknowledue the planning's greatly important role, in order to realise that the planning is respected and reallv becomes a Government's efficient management tool, it must be ensured in term of resources for implementation while it can be seen that the most important resource within the GON emment's scope and control is the State budget Aim/Purpose: the thesis's studv purj.ose is to develop a planning model in a tight linkage uith the State buduet in Vietnam's instutional conditions and market econom> in order to make the planninu to become a Government's efikient management tool In order to achieve Abstract model for MPPM the study purpose, the thesis raises several study objectives as followings: (1) (1) Systematising the theoretical bases about the planning and the approaches to link planning with the State resource; (2) Selecting typical study case in the sector development planning at MARD to analyse and assess the situation of linkage planning with the State resource; (3) Proposing the completed model of the sector planning at the macro management level towards the trend of linking with the State budgeting Study's questions: In order to realise the purpose of this thesis a few questions will be asked and answered The primary question which all other questions rest upon is: How to link planning with the State budget resource? There are a lot of different ways to answer this question This thesis will tr> to answer it by asking and answering two new questions, more specifically two of the main questions that can be deduced from the proposals The two core questions are: (1) What conditions are needed to link the planning with the State hudget?(2) Which causes have made the planning not link with the State budget?Thcsc questions are maybe the most central ones to answer the primary question presented above and to achieve the thesis's objecti\cs Method: (1) Analysing and synthcsise: analysing stypical studies to synlhesise and form the thesis' theoretical framework This method is selected as: - The trust in well-known, enthusiastic and experienced researchers who see the study issue from different aspects and general they all base on the systhesis of practices to upgrade them into the philosophyies from which experiences are drawn and learnt and further applied into practice; - Through many available studies, we can learn tnethods of scientific study and the approach to present a certain point of view - When many studies see one issue in the satne tendency and if there is a conciousness with our group's thinking, this will provide a trust for us about our proposed study (2) Comparison method: Comparing the theoiy framework with the real planning situation at MARD's in the period of 2001-2010 The method is chosen as: - In our opinion, the theory should be linked with the pratices The practices are place where test theoritical findings In the revert way, when studying practices, there will have futher fulfilled views in term of theory and revertly contribute into the theory Jramework - The period of^ 2001-2010 was a transitional period from the central planning approach in the centrally subsidied economy into the oriented planning one in the market economy with the socialist orientation (3) Making of interviews and discussions with planning officers at MARD It is surveys interviews and discussions to,find down new views, to test the method and main tendencies in experts, researchers and colleguages' self-thm^kin^ thmkmg and Abstract model for MPPM wishes At the same time, through those it also strengthens proposed study topic, out trust to continue the (4) Collecting the secondary data from Ministry of Planning and Investment, Ministry- of Finance and MARD's reports and summative reports publicised at the planning workshops/conferences // is diversified data sources to help us think about the Vietnam's current planning situation, the needed and satsifartory conditions to possibly link the planning with the State budget resource within the Vietnam's existing conditions as well as subjective and objective assessments from leaders and managers who have a role of affecting on the planning work Results: (1) systematising the philosophy bases about the planning and approaches to link with the State budget resouce By analysing and synthesising available studies from both international and local, the theoretical bases on planning and approaches to link the planning with the State budget resource are systematised and formed the thesis's theorestical framework (2) Analysing and assessing the real planning situation at MARD Basing on the thesis's theoretical framework, we analysing and assessing the real planning situation at MARD on aspects: (i) planning process: dO plan content: and (Hi) planning method Finnally it can develop a lively and comprehensive picture about the existing situation of the linkage between the sector development planning and the State budget resource at MARD (3) Proposing the completed model of the sector planning at the macro management level towards the trend of linking with the State budgeting Bv analysing and assessing the real planning situation in the linkage with State budget at MARD as mentioned in the item of thesis, and the comparisions with the theoretical framework have been developed in item of the thesis, we have proposed the further complete the sector development planning at the macro management level towards the trend of linking with the State budget resource The specific proposals include: (1) completion in term of instituions and apparatus to participate in the planning process; (2) development of models to further complete the planning work based on all factors of(i) the planning process: (ii) the plan content and (Hi) the planning method including: the planning process model towards the trend oj linking with the State budget resource, the proposed model of relation among different types of plans, the State budger resource allocation and the approach to develop a monitoring arui evaluation framework of the plan implementation etc Conclusions: In order to link the planning with the State budget resource, the plan must be firstly strategic and results-focused: the plan preparation, implementation and Abstract model for MPPM monitoring and evaluation process must be open, transparent and mobilise related parties' participation; the plan implementation must be regularly monitored and evaluated through a results-based monitoring and evaluation system The completion and renovation of the sector development plan in linkage with the resource is to renovate in term of the sector plan's techniques but first of all it should be the renovation in the management thinking, legal institutions and the public sector's management method to suit with the State role in the market economy Therefore, the planning renovation is required to link with the public reform process including the public finance managemen reform, decentralisation and develop the democratic in the execution management This is a fundamental foundation to complete the planning work inclduing the sector development plan On the contrary^ if the planning renovation is successful, it will general favorable conditions for efforts of reforming other fields in order to develop a sound, efficient and effective State administration foundation Suggestions for future research: factors needed to really make plans to become an efficient management tool in the new public management model: plans (i) must be strategic, (ii) must be able to attract relevant parties' participation, (iii) must focus on results as well as make the prioritisation resources from the State resource in order to implement the priority solutions and (iv) must develop a results-based monitoring and evaluation system All the above-cited factors must be tightK linked and not be indispenserable Each factor will be the tool to achieve the remaining factors and the factors are all tools to develop an efficient management one Therefore, if it is possible, the thesis will study deeper about the remaining factors Beside that, for the further study factors, it shoud study deeper about the quantitative methods in order to calculate and link into a chain of objectives, activities, results and impacts within a plan Contribution of the thesis: In the thesis's study process, it can access to various available studies/researches, the time investment in term of analysis and synthesis to jorm the thesis's theoritical framework helps not only the group complete our study tasks but also change our awareness and thinking about an efficient and effective public administration Jbundotion Another important point, with the theoritical framework as developed by our group that can be applied to analyse different circumstances and aspects in the public sector towards the tendency of transitioning into a new public management model Key words: New public management Planning, Resource, Results/Outcomes, Objective, Efficiency and Fffectiveness TABLE OF CONTENT INTRODUCTION 1.1 The necessity ^ 1.2 The thesis's purpose A 1.3 The thesis's key study questions 1.4 The study's sope and object 1.5 Theoretical frame of reference THEORETICAL FRAMEWORK -''^^^^^^""^^ 2.1 Several key concepts g 2.1.1 Plan and planning g 2.1.2 Recourses and the State budget resource 2.2 The planning in the New Pubic Management model 10 2.2.1 The NPM model and the State role 10 2.2.2 The development process of the Planning approaches and the formulation of the planning in the NPM model 11 2.3 Results-based management - a key approach to link the planning with resource 13 2.4 The results-based management orientating for the new approach to link the planning with the State budgeting 15 2.5 The model of medium-term expenditure framework to help changed and developing economies to form initial ideas about the results-based budgeting 17 2.6 The theoretical framework on analysis of the linkage between the planning and the State budget resource 19 THE SECTOR PLANNING SITUATION IN THE LINKAGE WITH THE STATE BUDGET AT MARD IN PERIOD OF 2001-2010 20 3.1 The Process 20 3.1.1 The planning process at MARD scope 20 3.1.2 The planning process at the Department scope 21 3.1.3 The budget allocation process 21 3.2 The Method 23 3.3 The Content 25 3.4 The pilot MTEF model 28 3.5 The summarv of assessment 29 PROPOSALS, CONCLUSIONS AND SUGGESTIONS FOR FURTHER RESARCH 31 4.1 Proposals 31 4.1.1 View on the sector development planning completion 31 4.1.2 Proposals of the completed models of the sector planning at the macro management level towards the trend of linking with the State budgeting 32 4.1.2.1 In term of the institutions -^2 4.1.2.2 In term of the apparatus organisation 33 4.1.2.3 In term of the development planning process, content and method in the linkage with the State budget resource ^^ 4.2 Conclusions 4.3 Suggestions REFERRENCE DOCUMENTS ^2 INTRODUCTION l.I The necessity The management's comprehension includes planning, organisation, control, coordination and checking ' This is a concrete brief about the management's functions to ensure activities to be well and efficiently implemented in which the planning function covering 'forecast and planning' is considered as the most principle and needed one in the management course of action Many arguments about the planning role in the market economy has been taken place in both theory and practice while many countries in the world still highly respect benefits of the planning tool for the socio-economic development and actively build up 'Development Plans' ^ The change from the bureaucratic administration model into the NPM model has presented a great shift in the management philosophy from 'Governing' to 'Serving', and a transfer of the State's role and functions from "Row" to "Steer" ^ When the State management function is changed, this will certainly lead to the adjustments to the planning tools in the new public management model in order to ensure the NPM model's objectives: (i) be strategic and results-based; (ii) ensure the accountability, (iii) creating a democratic, open, transparent mechanism and (iv) to promote the soiety's participation In nature, plans are an optimal problem with many objectives within a scope of having certain resources A phenomenon of having conflicts for resources during the objective implementation is \er\ popular and the reallocation of priority orders among objectives is a ver> important base for the plan development to each period "* Therefore, how to make planning link with certain resources and become an efficient management tool is a posing problem for planners The overall public administration reform of Vietnam's cross-through objective in the period of 2001 and 2010 was to improve the State management etTiciency and effectiveness through the improvement of public service quality delivered to people, to enhace the seft-decision right and accountabilit\ for agencies, organisations and individuals within the public operation apparatus All the reformative contens proved to be fit with the NPM model's requirements It therefore could say thai ihc tendancy of transfering (he traditional apparatus of public administration into the NPM model has been formed in Viet Nam However, although planning in practice is considered as an important tool for the Stale management in the socio-economic ground but the Viet Nam's planning has exposed many di.scripcncicx limits and still not become an efficient and effective managcmenl tool ' Fa\o\ }\cr\ (\^)A9) .Idmmislrcilion imhislrielle CI gcnerale ' Ministry o f Ph.nning and Investment (2008), Discussions ahou, the ricnam planning works In the rcn.nannn period U^a^\dOshiV-,^c.K: \\-i\C,^cbkr(\992) Rcmvcniing Govcrnmcnl ' Min,s.r> ol I'lanning and investment (2008) Discussions about the I wtnum planning L ,u works in the r.nnvaiion remnalion From the above-cited analyses, deeper studies about the planning in the NPM model is very nessessary Within a limited study framework, the study group has tried best to intensively analyse the focal point that 'the Planning in the NPM model must be linked with the the State budgeting As at the view of the study group, although the great role of planning has been acknowledged by many researches and studies, in order to turn the planning to be respected and really become one of the Government's efficient management tools, the planning must be ensured by resources for realisation which the most important resource within the Government's scope and control is 'the State budget', itself 1.2 The thesis's purpose The thesis's purpose is to build a model of planning in the linkage with the State budget resource in the Viet Nam's institutional and market economy conditions To achieve the purpose of research, the thesis posed the following objectives: (1) Systematising the theoretical bases about the planning and the approaches to link planning with the State resource; (2) Selecting typical study case in the sector development planning at MARD to analyse and assess the situation of linkage planning with the State resource; (3) Proposing the completed model of the sector planning at the macro management level towards the trend of linking with the Slate budgeting 1.3 The thesis's key study questions In order to realise the purpose of this thesis a few questions will be asked and answered The primary question which all other questions rest upon is: n How to link planning with the State budget resource? There are a lot of different ways to answer this question This thesis will try to answer it by asking and answering two new questions, more specifically two of the main questions that can be deduced from the proposals The t^\^o core questions are: o o What conditions are needed to link the planning with the State budget? Which causes have made the planning not link with the State budget? These questions are maybe the most central ones to answer the primary question presented above and to aehie\ e the thesis's objectives 1.4 The study's sope and object With the status of a management tool, the planning can he applied at dilTcrciit levels such as: strategies long-range(5 years)'annual national socio-economic de\elopnicnt planning, long-range/annual sector field de\elopmenl planning, long-range annual local socio-economic development planning compan> planning etc However, the thesis's study scope is framed within the sector planning work and the stud\ object is the agriculture sector development planning model at MARD in the transitional period of 2006-2010 to meet the reformative demands on the public sector towards the NPM model Within the study framework, the sector planning work at MARD is selected to be the thesis's object with the following reasons: (1) the agriculture sector is a sector containing failure factors of markets and fields where require to have the resources allocation by planning, many needed factors to create attractiveness to investors and one more additional factor is that in Vietnam, the agriculture and rural population present above 70% of the whole country's population and labor; (2) MARD was one of the active and pioneer ministries to renovate the medium-term financial framework (MTFF) and medium-term expenditure framework (MTEF) in the years of 2006, 2007 and 2008 In addition, MARD has been supported by SDC through the project "Monitoring and Evaluation for the Management of the Agriculture and Rural Development" to help further renovate the sector planning 1.4 The study's methodology The study methods applied in the thesis are: (1) Analysing and synthcsise: analysing stypical studies to synthcsise and form the thesis' theoretical framework; (2) Comparing the theory framework with the real planning situation at MARD's in the period of 2001-2010; (3) Making of interviews and discussions with planning officers at MARD and (4) Collecting the secondary data from Ministry of Planning and Investment, Ministry of Finance and MARD's reports and summative reports publicised at the planning workshops/conferences 1.5 Theoretical frame of reference There has been available many studies about the planning in the public sector in different social, economic and institutional contexts, espcially the planning role in the market economy Among them, it should typically mention about: (1) studies about concept, characteristics and role of the planning including: ' (2) studies about the development history of the management models within the public sector where planning have considered as one of the most important tools and have presented specialities to distinguish the public sector's plans from the private sector's ones such as.^ It has specifically mentioned about the "borrowing" the stretergic planning tool from the private sector to apply into the public sector in order to improve the creativeness, efficiency and effectiveness and the rcxolution process of the strategic ' Stephen Robbin (2008) Mana^cnwnt, Prentice - Hall International; Ackoff R (1970), ^ A (1973) Implementation: How Great Expectations in Washington planning in the public sector through ^\ (3) studies about the conditions to successfully apply the planning in the public sector: issues about the linkage between planning at lower levels with the strategic plans at higher level ^ strong commitments from leaders ^; the linkage between the budget and strategic plan '^; activities' results-based management , the need of the society's participation etc The synthesises, studies and assessments of the planning in Viet Nam have been collected by Ministry of Planning and Investment through many papers '^ as developed by the sector's first-ranked experts as well as leaders at the Government of Viet Nam All the studies seem to acknowledge that the concentrated planning well presented the focal role and efficient use of resources in the war time, however when the countr\ is in peace, this model seems to be no longer suitable as it can not promote the creativeness and activeness at the local level and also not ensure the efficient operation, limit the society's development and participation, especially bureaucratize the Government's apparatus The above-mentioned collection also mentions about challenges and demands on renovations in the Viet Nam's planning in order to satisfy the transitional process from the ordered to market economy The key tendencies in the planning renovation process will be: (1) strategic, (2) linked with resources (3) participatory and (4) concentrate on the social objectives Although, there are many differences, the general charactersitic of the abovementioned studies about the planning can be seen as: (1) Planning is a management tool to help organisations forecast and orientate the future and acti\el\ propose solutions and assumptions about market, social, economic and political environment as well as other affected factors in order to achieve the objectives in future as expected, (2) the strategic planning is understood as a movement process where continuously happens while always adjusted to adapt with the organisation's internal and external changes to ensure the organisation's stability and development towards the objectives set, (3) the development process of the planning approaches is linked with the management science development oi which the 'long-range' planning approach is suitable with the bureaucratic adminstration model while the NPM model requires to apply the strategic planning tools The strategic planning application process is a learning and non-slop perfection process by various and specific planning approaches ' AckofT, R (1970), A Concept of Corporate Planning John Wiley and Sons, USA; Steiner G (1979), Strategic Planning-H'hat Every Manager Mu.st Know: Bryson J (1995), Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement; Marx T (1990), Strategic Planning in Public AJfairs, Long Range Planning ** Stephen Robbin (2008), Management, Prentice - Mall Inteniaiional, *' Minl/bcrg 11,(1994), The Rise and ball o/Strategic Planning '*' Mint/berg 11.(1994), The Ri.^e and Fall o/Strategic Planning " Vin/ant D & Vin/ant J (1996) Strategy and Organizational Capacity '^ Mclntyrc-Mills (2003), Participatory Planning: Drawing on C West Churchman S thinking when making Public policy '' Ministr> of iManning and investment (2008), Discussions about the I ietnum planning works m the renovation period Cac hinh thi>c lap ka hoach nganh dich vu cong? Cip trung u'cng: Lap ke hoach phat then xa hoi • Quy dinh si> dung tai nguyen, vi du: dat va nu'ac nhu th4 nao (nha a cong nghiep thi/ong mai), co so tang va muc dich kinh te, van hoa, xa hoi khac • Thong qua qua trinh cac loi ich xa hoi duoc dinh lu-gng, so sanh, li/a chpn mot each minh bach va coi mo du'a tren quyen cua moi nhom • Cap trung u^ong theo doi viec thu-c thi theo vai tro va quy dinh tren Lap ke hoach nganh djch vu cong nen kinh t6 thi tru^ong Lap ke hoach dai han / vien canh L|p ngan sach qude gia Lap kd hofich xa hpi, quy ho^ch C^c chinh sdch vd quy (Jinh cip frung irang vd Iheo dCi Cdc c4p tinh vd (Jia phu-ong ph6 duy$t vd ki4m sodt v«c thyc hi$n cdc quy dinh L|p ngan sach bp Bo NN nen kinh te thj triFang (Thuy Dien) Lap ngan sach Bo NNPTNT Lap ngan sach cac CucA/u thuoc Bp Lirang t h ^ v^ chin nudi Lap ngan sach cac Tong cue PTNT San bin, dcinh cd vd ngu'd^i thi4u s6 Sami Nong ISm VM cdc vin d4 EU Thdng tin Phdp ch4 Vg phdt triin vd hdnh chinh Cac chi>c nang chinh tai cap trung iFong Hdp tac quoc te Phan tich chinh sach Xay di/ng chien lu-dc cho viec trao quyen cho ngu-di du'dc hu-dng Idi / cac ben tham gia (nong dan, v.v ) Cung cap moi tru-cfng phap ly Lap ngan sach hoat dpng To chCrc cung cap dich vu cong Theo doi va Danh gia ket qua Danh gia tac dong chinh sach Government's Managment Tool Other Klors Objectives ^ Flnanc(i>t(fQKt Regulattont ' • " - - , * — ; Appointments of^Mtdtfi-s ^ brqentiitlon Xin cam an quy vj TAM NHIN VU Kg HOACH Cac yeu to tac dpng den tien trinh cai each Hoi thao Phue Igi cho ngu^ai dan Viet Nam Yeu to quan trpng nhat cua tat ca cac qua trinh cai each la cam ket nang cao phue Ip-i cho ngu'cyi dan Viet Nam Yeu to 2: Toan cau hoa loan cau hoa la mot san pham cua sij kit hp-p giO'a qua trinh phat trien sau va rong cua mang lu^m hgp tac, truy§n thong, giao dich, to chi>c voi cac he thong tieu chuan, quy chuan, quy dinh vu'p't khoi bien giai quoc gia Yeu to 3: Thach thtpc toan cau ve lu^ong thyc • Thach thLFC mang tinh toan cau ve lu'ong thi/c doi hoi phai co S\J hgp tac quoc te va chia se trach nhiem ve quy dinh (luat choi) toan cau va dieu chinh cac that bai thi tru'ong thong qua nhu'ng can thiep hieu qua kip thcyi Yeu to 4: Quy djnh thu'ong mai toan cau Cam ket cac Hiep djnh thu'ong mai toan cau se co tac dpng manh me doi voi Viet Nam, dat yeu cau phai chu trpng den hgp tac quoc te va cac thoa thuan quoc t§ Yeu to 5: Yeu cau ve tang cu'O'ng tinh hieu lu'C va hieu qua cua khoi • • • • hanh chinh cong Trong mpt trat {u> the gidi ma nang lijc canh tranh quoc te quyet dinh su' tang tru^ong va phue Igi cua mot qu6c gia, tinh hieu lijc, hieu qua cua khoi hanh chinh cong tro mpt yeu to quan trpng cong tac doi ngoai, dem Iai nhung lo-i thi kinh te thiet thu'c cho mpt quoc gia Yeu to 6: Phan cap va Quan tri tot • Nang ILFC canh tranh nganh khong chi phu thupc vao hieu qua san xuat va nang ILFC cung d p djch vu cong ma phu thupc vao hieu lijc, hieu qua cong tac to chiFc, dieu hanh he thong cua khoi hanh chinh cong Oilu dan din yeu cau thiet yeu cang tang ve phan cap va quan tri tot Yeu to 7: Thu hut dau tu' nu'oc ngoai Viet Nam co toe dp tang tru'ong kinh te cao nhu'ng thj tru'ong tai chinh Iai nho be De khai thac tiem nang Ion de phat trien kinh te tu'ong Iai, can thiet phai thu hut them dau tu' nu'oe ngoai Yeu to 8: IVloi tru'ong kinh doanh minh bach • De thu hut dau tu^ nu'oe ngoai Viet Nam phai c6 moi tru'ong kinh doanh minh bach Yeu to 9: Bien doi hau De dpa tu' bien doi hau se dat yeu cau phai hanh dpng chinh trj va hieu biet hon ve anh huong cua chung, sCr dung bien phap kinh te xa hoi khac can thiep vao thj tru'cyng de tac dpng vao cac co che thj tru'ong Cac chLFc nang ehinh tai cap trung u'cng Hgp tac quoc te Phan tich chinh sach Chien Iwac trao quyen cho doanh nghiep, nong dan Cung cap khung phap ly nganh Xay du-ng l^hung ngan sach (l