In countries around the world, subnational governments and other local public sector entities often play a key role in delivering public services that people rely on every day. As the level of government closest to the people, regional and local governments are often at the frontline in pursuing inclusive, resilient and sustainable localized development.
However, the ability and empowerment of regional and local governance institutions to respond to the needs and concerns of their constituents varies vastly between different countries. While subnational governments in some countries have access to considerable fiscal resources, in other countries, subnational stakeholders have little or no resources at their disposal, thus vastly limiting their ability to act as champions for their local constituents. Even within countries, different regions or localities may be faced with vastly different fiscal conditions.
LPSA’s Intergovernmental Fiscal and Expenditure Review (InFER) Framework
LPSA’s Intergovernmental Fiscal and Expenditure Review (InFER) Framework provides a diagnostic framework to examine the public sector’s institutional structure and fiscal patterns across all government levels.
A comprehensive InFER review provides a deeper understanding of the nature of the public sector by not only exploring the revenues and expenditures of central government institutions, but by examining the revenues and expenditures of regional and/or local governments. An InFER review also considers extra-budgetary institutions, public corporations and other relevant stakeholders at all government levels that are often overlooked in more traditional public expenditure reviews.
Where possible, InFER aims to provide a breakdown of expenditures by function and economic type. In terms of revenues, it aspires to distinguish between own source revenues, shared revenues, intergovernmental fiscal transfers and other funding sources.
Adding value to existing methodologies
The Intergovernmental Fiscal and Expenditure Review (InFER) complements LPSA’s LoGICA Framework, which focuses on subnational governance institutions. The InFER framework builds on existing public finance data definitions and methodologies wherever possible, but goes beyond existing methodologies in a number of ways:
- The InFER methodology comprehensively considers revenues and expenditures at all government levels; not just central or subnational level;
- The InFER methodology considers general government institutions and finances at all government levels as well as institutions and finances outside general government (i.e., InFER includes extrabudgetary institutions, public corporations and other actors at different government levels, as relevant);
- In addition to devolution, the InFER methodology provides specific guidance to document funding flows associated with alternate approaches to decentralization and localization (including not only devolution, but also central government programs, deconcentration, and delegation);
- In addition to analysis of vertical expenditure and revenue patterns (on a sector-by-sector basis, where possible), the InFER methodology encourages investigation of “horizontal” expenditure and revenue patterns across the national territory.
The InFER methodology further permits deep-dives into sectoral finances or areas of thematic interest (including in areas such as urban development or climate finance) to strengthen links between public sector institutions, public finances and public financial management, and service delivery outcomes and development results.
InFER Framework Template – Excel (Working draft, June 2022)
InFER Framework Handbook (Currently under development)