UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

Integration of development plan with the budget : an evaluation of the usefulness of program and performance budgeting to "Planning for development" Omane, Isaac Antwi


In the developing countries where development plans are effected through the budget, it is imperative that effective and efficient execution of plans require not only integration between planning and budgeting, an efficient budgeting system, but also that, since national goals are realized through fulfilment of planned targets in programs and projects, the budgeting system should have a built-in format which reflects such activities, and that they ought to be the basis for financial allocations. The essence of such effective integration, an efficient budgeting system and presentation of activities in the budget, lies in the fact that since planning is a continuous process which involves the constant re-examination of trends, tendencies, policies, in order to adapt and adjust government policies and to make plans flexible, it requires as its basis for rational decision-making and ultimate selection of courses of action, assemblage of facts, data thoroughly analysed to ensure that what has been planned is in fact achieved. The planning process, and even more so the plan execution process, thus needs a lot of active, positive support to be successfully maintained; an efficient management tool providing the necessary vehicles for evaluation of achievements of planned targets. Therefore it is hypothesized that the evaluation of a development plan's performance is of only partial validity if it is not based on a budgetary classification system, which along with reflecting the physical and financial targets in the plan is effectively integrated with it. Integration between a comprehensive plan and the budget involves first, annual programming of the goals and targets in the plan; second, assignment of responsibility of carrying out its component programs and projects; third, effective coordination and the closest of co-operation between the central planning agency, the ministry of finance and the operating agencies; making such an annual program the basis of budget presentation and allocation of financial resources to accomplish the targets; and fifthly integrating the physical and financial plans of the programs in the budget classification system to provide tools for progress reporting and evaluation. Using the Soviet planning experience to illustrate the processes involved, it is noted that although the processes are complex, yet the planning and budgeting systems are fully synchronized. Such effective co-ordination and integration are found to be wanting in many developing countries. The formulation of plans is divorced from plan implementation and there is no link anywhere in the budgeting system between planned targets and financial allocations. Planning is thus not only incomplete but also ineffective as the mechanism to give effect to planning decisions is not attuned to the requirements of development planning. It is demonstrated that owing to inadequate planning, or lack of flexibility in planning, absence or inadequacy of proper and efficient communication between planning and budgeting agencies, deficient budgetary techniques employed in the process of plan implementation and failure of the budgetary system to link financial resource allocations to the needs of physical targets, the system operating, leads one to conclude that an efficient budgeting management system to implement plans may be more important than the plans themselves. Therefore since evaluation and analysis of progress on projects and programs is critical to "planning for development" to enable selection from among alternative objectives, policies and programs and optimal allocation of limited resources, the attributes of program and performance budgeting that help in this process are analysed. It is demonstrated that it is an efficient management tool whose salient features can contribute to both effective plan implementation and execution and the whole planning process. It is pointed out that the technique links planning with budgeting and provides in its format planning goals in the form of programs and project targets linked to the requisite financial resources and also provides the necessary classification systems and tools to evaluate a plan's performance. The principles of program and performance budgeting provide the basis for the case study of Ghana's planning and budgeting systems. It is demonstrated that although some features of the technique are being utilized, there is not effective coordination and co-operation in the formulation and presentation of annual programs and the budget. Owing to this lack of coordination it is demonstrated that plan implementation and execution has been ineffective and that there is room for improvement. In conclusion, it is emphasized that in countries "planning for development" an efficient budget mechanism to effectuate the social, economic and physical development policies of governments is more important than the development plans. Thus it is noted that program budgeting is an efficient mechanism and the information it provides is very essential and useful to formulating, implementing and evaluating soundly conceived plans. As such it is a useful tool which a developing country, like Ghana, should adopt to buttress its development planning efforts.

Item Media

Item Citations and Data


For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use.