Governance and Institutional Development Project

closed

The Governance and Institutional Development Project will assist the Government of Madagascar implement the poverty reduction strategy, as set in the Poverty Reduction Strategy Paper (PRSP), by rationalizing and modernizing budget, and public expenditure management; improving accountability and transparency of Government operations; and, by strengthening the capacity of public institutions, in light of complex change processes. The two main components address the following: 1) Improving transparency, and economic governance will require a comprehensive reform of the public finance system, for which the component will include: a) budget preparation, and management, on the basis of a comprehensive computerized system, to which all agencies involved in budget, and expenditure management would be connected. The system would encompass the whole national budget, i.e., wages, non-salary operating costs, investment, debt service, income mobilization (customs, taxes); b) adjusting the existing institutional, and procedural framework to international standards. In this context, the project will support the establishment of an independent internal audit function in the Ministry of Finance and Budget, the strengthening of other control functions, and, the transformation of the Office of the Auditor General; c) adjusting the public procurement system to international standards, through a comprehensive reform of the regulatory, and institutional framework, as well as significant capacity building, to ensure compliance with new rules and regulations; and, d) support capacity building activities to strengthen information for decision making, management, public investment oversight, policy analysis, evaluation and reorientation of policies, and programs within the context of the PRSP. 2) Focus on institutional development and capacity building activities in selected government institution, such as strengthening capacities to complement the significant changes triggered by financial and institutional reforms; continuing the judicial reform through improved operational efficiency, particularly regarding expeditious civil, and commercial proceedings, and by improving the delivery of selected public services with large public-private interface. In addition, the project will support the establishment of a project management system, to ensure effective implementation of the reforms.