Monitoring and Review

Monitoring and review is a key component of an effective integrated national financing framework (INFF).FN It brings together the information required by policy makers and ensures necessary systems are in place to facilitate transparency and accountability in the implementation of the INFF and related activities and reforms.FN In so doing, it can facilitate learning, improve the effectiveness of financing policies, and enable policy makers to adjust course when conditions change. For example, monitoring systems can be an important enabler for rapid response and recovery planning during a shock such as COVID-19. Regular reviews provide lessons to improve implementation and design of the INFF, including governance and coordination mechanisms and processes.

Monitoring and review can be conducted at all levels of government – central agencies such as Ministries of Planning and Ministries of Finance, line ministries with sector responsibilities, and at the sub-national level by decentralized institutions. It can also be conducted by non-state actors to hold government accountable (see guidance on Building Block 4 Governance and Coordination for the institutions and processes that can facilitate access to information by all stakeholders).

In the context of an INFF, monitoring and review brings together existing data and tracking systems from across different types of finance, and links them to results (see Box 1 in Section 2). It does not aim to replace or duplicate these systems. Rather it acts as an ‘integrator’ by streamlining efforts and providing access to policy-relevant information across multiple financing policy areas, and feeding it back into integrated policy making processes.

Sections 2 and 3 of this guidance outline the value and role of INFF monitoring and review. Section 4 lays out relevant stakeholders, as well as processes that could be used as entry points. Section 5 focuses on steps countries can take to strengthen relevant monitoring and review systems and ensure the required data and information to guide overall INFF implementation is gathered and used by policy makers (Annex 2 provides an illustrative INFF monitoring and review frameworkFN that may be used to bring together data and information from different systems). It puts forward key elements of a monitoring and review system in the context of an INFF and proposes two steps to strengthen (or establish) such a system, depending on a country’s existing processes, capacities, priorities and needs. The first is to establish a baseline, including levels of buy-in, roles and responsibilities, and data systems and capacity (a checklist for this step is included in Annex 1). The second step is to build on the baseline and fill any gaps, drawing on established good practice in the field and country examples, across four areas: i) institutionalise INFF monitoring and review; ii) integrate existing systems; iii) link the process to ongoing or planned data/ statistical reform processes, and make use of needs-based IT solutions; and iv) leverage insight and lessons from peers and regional/global knowledge-sharing platforms.

National government officials, especially members of the INFF Oversight Committee, where one is in place, and those with roles and responsibilities related to monitoring and review of financing flows and policies, are the primary audience. The guidance also provides a common reference point for development partners that support countries in these efforts. 

INFF monitoring and review can help governments to:

• Streamline monitoring efforts by reducing gaps (common in areas of private finance and investment, and in relation to impact of financing), redundancies, overlaps (such as between government and donor systems) and misalignments in existing monitoring systems and processes related to different types of finance and financing policy areas (INFF monitoring and review as an ‘integrator’, see Box 1);
• Build the necessary evidence base (i.e., with enhanced data) to improve efficiency and effectiveness of financing policies and reforms, encourage broad-based participation in policy processes by all relevant stakeholders, and enhance buy-in and understanding of the value of the INFF;
• Regularly review the value added of the INFF financing strategy, including whether it is succeeding in enhancing mobilization and increasing coherence and alignment of financing vis-à-vis national sustainable development priorities; 
• Support dynamic policy making by facilitating learning on what works and what does not work, and by enabling timely course adjustments in response to changes in conditions, such as in the financing and risk landscapes;
• Create positive feedback loops, encouraging learning and innovations from the implementation level to be fed back to policy design;
• Strengthen partnerships, dialogue and trust among stakeholders;
• Improve transparency and accountability.

Similar to Building Block 4 on Governance and Coordination, Building Block 3 on Monitoring and Review cuts across the various INFF phases, from inception to design and ongoing implementation. Lessons from early implementers underline the importance of agreeing and clearly articulating the value added of the INFF from the inception phase. Monitoring and review tools, such as the Theory of Change, can help with this, while also providing an integrated perspective on activities related to the entire INFF process (see Box 2). Information on volumes and impact of financing as well as on the workings of related governance arrangements can feed into ongoing or updated financing needs and landscape assessments, risk assessments and binding constraints diagnostics (Building Block 1), to better understand the allocation and use of current financing sources, track mobilization and alignment efforts, and identify emerging risks and challenges. Information related to progress in the implementation of the financing strategy and to the effectiveness of INFF design can inform adjustments to specific policies (Building Block 2), and further strengthen governance and coordination arrangements (Building Block 4). 

As illustrated in Figure 2, INFF monitoring and review can help gather data and insight on three main areas: i) volumes and impact of financing; ii) progress in implementation of the financing strategy; and iii) what works/ what does not work in INFF design and implementation. More specifically, it can help answer the following questions:

Volumes and impact of financing

• How much public and private financing is spent/ invested in the country?
• How is financing currently allocated? How does it contribute to the achievement of national sustainable development priorities?
• To what extent do different types of finance work synergistically and in an integrated manner toward identified goals (versus undermining each other’s impact)?

Progress in implementation of the financing strategy

• Is the financing strategy (and related policy reforms) succeeding in increasing mobilization of additional financing in line with set targets and from the required sources (e.g., public/ private/ domestic/ international)?
• Is the financing strategy (and related policy reforms) succeeding in increasing overall coherence and alignment between financing and national sustainable development priorities?

What works/ what does not work in INFF design and implementation

• What lessons can be learned to further support adjustments and improvements in financing policies? For example, how effective are the underlying governance and coordination mechanisms? Are there areas of the financing strategy that may be working better than others?

Annex 2 provides an illustration of a full INFF monitoring and review framework. It shows how information from different monitoring and review systems (e.g., those related to government finance, international development cooperation and private finance, where existing) may be brought together to guide overall INFF implementation and related financing policy making.

The following elements form the basis of the framework:

• A theory of change (TOC) - or similar logical framework - to ensure common understanding of the rationale, effects, barriers and enablers of the INFF, while keeping in mind complexity of the change process, and with an emphasis on enabling feedback loops and learning. The scope of the TOC, which will in turn define the scope and depth of required monitoring and review, will depend on the scope of the INFF (e.g., in countries where INFFs are focused on specific sectors or financing policy areas, the TOC will be narrower in scope compared to that of an INFF covering an entire national development plan as illustrated in Box 2 in Section 3.1 and in Annex 2) and on specific activities and objectives articulated in the financing strategy (e.g., changes in, or introduction of new, policies, regulations and instruments).
• Indicators to identify which data should be regularly collected and reported on to monitor progress against the TOC. Where possible, they should be lifted from existing monitoring frameworks for different types of finance (such as those related to the national budget, and development cooperation results frameworks). Relevant globally agreed SDG indicators may also be applicable, depending on the scope of the country’s INFF. At the impact level, indicators from national development plans or sectoral plans may be used. At the activity and output levels, the choice of indicators will be informed by the INFF action plan articulated as part of the financing strategy building block (see for example Table 5 in Building Block 2 guidance on the financing strategy). Indicators can be quantitative or qualitative, and should be clear (precise and unambiguous), relevant (appropriate to the subject at hand), economic (available at a reasonable cost), adequate (providing a sufficient basis to assess performance), and monitorable (amenable to independent validation) (CREAM). Figure 4 provides some examples. Additional examples are included in Annex 2, which also lays out key information that is typically required for each indicator.  

• Targets to establish common objectives for what needs to be completed by when, in order to achieve the outcomes identified in the TOC. Targets should be specific, measurable, achievable, relevant, and time-bound (SMART). Such SMART targets should be informed by timeframes and sequencing considerations in the INFF roadmap and financing strategy, and use, to the extent possible, already identified targets in existing financing policies and strategies. Annex 2 provides some examples.
• Data systems and capacity to generate ‘good enough’ data to enable regular reporting on identified indicators, as well as access and use of such data by decision-makers and those holding them to account. Table 2 in Building Block 1.2 Financing landscape assessment provides an overview of national data sources that would likely form the basis of relevant data systems, such as central bank statistical publications, national accounts, surveys by national statistics offices, budget publications, economic bulletins, etc. (International data sources can complement national ones where there are gaps; e.g., monitoring data from Development Cooperation Forum surveys and the Global Partnership for Effective Development Cooperation may shed light on alignment of ODA with national priorities; World Bank data on Private Participation in Infrastructure can contribute to monitor the scale and alignment of public-private partnerships with national priorities).
• Adequate resources, including human resources within national government to ensure the system is effectively implemented and remains functional over time, and incentives to focus on results and impact. Responsibility for INFF implementation falls primarily on national governments, and thus requires relevant resources and capacity to be available among government officials. However, it also relies on the collaboration and participation of other actors such as development partners, the private sector and civil society. Adequate resourcing of, and skills in, monitoring and review among all these stakeholders is thus also an important element of success.

As with all INFF components, government plays the central role when it comes to monitoring and review. Leadership from both the political and senior technical levels is key to ensure sustainability and effectiveness of monitoring and review efforts (see success factors listed in Section 5.2). Typically, this leadership stems from the Ministry of Finance and/ or Planning, or the Office of the President or Prime Minister. Depending on the focus of the INFF, it may also be within specialized agencies or line ministries. 

The INFF Oversight Committee, when one is present, is the likely body with overall responsibility to oversee the design and implementation of an adequate monitoring and review system, and to report on progress in implementation of the INFF financing strategy both internally (such as to senior government leadership) and publicly (e.g., around annual budget statements). 

Various stakeholders, both within and outside government, will be involved in monitoring financing efforts at different levels and in different sectors. Their experience and expertise should be sought when considering INFF monitoring and review systems. 

Figure 5 illustrates typical producers and users of data. Depending on the scope of the INFF, monitoring and review roles may differ. For example, if a country’s INFF is focused on a specific sector or a specific financing policy area, the role of specialized agencies may become more central. If the INFF is focused on the sub-national level (such as in Ghana) then the role of sub-national agencies would be more prominent. 

Countries do not need to start from scratch when it comes to INFF monitoring and review. Existing monitoring systems, processes and frameworks should be the starting point. Such systems can be strengthened or expanded, better aligned and made more coherent within an INFF as necessary. Similar to Building Block 4 Governance and Coordination, the overarching aim should be to streamline efforts, not to replace or duplicate existing systems nor to establish new systems, unless there are gaps that need to be filled.

Table 1 illustrates potential entry points for INFF monitoring and review, as well as relevant stakeholders typically involved in establishing and maintaining adequate systems. It also includes links to useful resources and tools that can shed light on existing systems and processes. (Table 2 in Building Block 1.2 Financing Landscape Assessment provides an overview of data sources, which can inform the tracking of volumes of financing).

Overall, if a well-established system for monitoring implementation of the national development plan is in place, it could serve as a starting point for INFF monitoring and review. Similarly, if established processes around Voluntary National Reviews (VNR) exist, these should also be considered (see Box 4). Data and statistical strategies and reform processes may constitute another entry point (see more in Section 5.2, Action Area 3). Existing monitoring systems for different types of finance (such as national budget tracking systems and review processes, or private finance reporting initiatives) can act as entry points to build a more comprehensive system. As further articulated in Section 5, the comprehensiveness of such a system will differ depending on country contexts, reflecting the nature of INFFs as a long-term and gradual approach to guide better planning for, and implementation of, financing policy reforms.

With regard to public finance, monitoring systems relate to government finance (revenue, spending and investment), as well as development cooperation. Public financial management information systems (PFMIS) are typical starting points from the government’s perspective. A growing number of countries have gender, climate, or SDG budget tagging or coding systems in place, or are developing them as part of their INFF. Monitoring systems for government finance are usually developed around the annual budget process, with both volumes and data on performance indicators reported in relation to objectives that programmes within each budget agency are expected to achieve on an annual or multi-year basis. In the budget planning and formulation stage, and as part of their submissions to the Ministry of Finance, budget agencies may be required to articulate a narrative around how they will contribute to identified national priorities or the SDGs, and/or to link their programmes to specific goals. Data on government revenue may be collected to various degrees of disaggregation and may be subject to review with regard to questions of progressivity or inequality. There are also varying practices in relation to monitoring of tax expenditures, used to shed light on revenue foregone through tax incentives. Specific monitoring frameworks may also be in place for major investment projects (e.g., articulated by ministries and other entities involved in major infrastructure projects) and for state-owned enterprises, which may have dedicated systems to track their investments and contributions toward national development.

Monitoring systems for development cooperation and finance are based on national aid information systems and country results frameworks. According to 2018 GPEDC monitoring data, 96% of developing countries have one or more information management systems in place to collect information on development cooperation. While the quality of such information varies, it typically includes data on financial commitments, scheduled and actual disbursements, and in some cases on intended and achieved results. Data from the 2020 DCF survey shows, however, that less than half of development cooperation information systems tracked results, off-budget flows, funding gaps and conditionalities. A results framework to review the performance and results of international development cooperation was in place in just over half of respondent countries (56%). Critically, in the context of an INFF, in only 36% of cases countries and development partners use the same, or mostly overlapping, results framework, meaning that there are multiple parallel systems. Furthermore, only half of results indicators from development partners’ projects are monitored using national statistics and monitoring systems, according to GPEDC data.

With regard to private finance, the monitoring and reporting landscape is even more fragmented. On financing flow volumes, national accounts and related central banks reporting are common systems. In addition, relevant line ministries (e.g., ministries of business or local development) may have systems in place to collect and report data on investments in the country, including in relation to the role of SMEs at the sub-national level. Beyond volumes, policymakers need data and information on the impact of private business and investment on economic, environmental, and social issues to assess the private sector’s contribution to sustainable development objectives. Meaningful data and information on this remains scarce though a number of initiatives and innovations are ongoing, with INFFs providing a platform for enhancing coherence of this increasing wealth of information at the country level and feeding it into financing policy making processes.

For example, private sector- or government-led systems for consolidating data on the contributions of business to sustainable development priorities exist in some countries (e.g., in the Philippines and in Colombia) and there is a growing number of companies publishing a sustainability report (mainly large, listed companies). However, information published is often not comparable across companies or time, and tends to focus on qualitative indicators rather than on quantitative data. Companies select the issues they choose to communicate, as sustainability reporting remains largely voluntary. In addition, sustainability-related information is generally behind paywalls and is not in the public domain; policymakers could change this by creating an open repository for company sustainability data to create more transparency. Companies also need to adjust their internal systems to track and report data on environmental and social issues. This might be particularly challenging for smaller companies with limited resources. Nonetheless, voluntary sustainability reports can be a starting point. Governments can increase their relevance by agreeing (including at the global level) on harmonized metrics and indicators to be used for company disclosure. Countries across a range of development contexts (e.g., EU, China, Mexico, South Africa, Mongolia, Bangladesh) have developed or are in the process of developing taxonomies that could enhance reporting on both volumes and impact of private business and finance. The G20 Sustainable Finance Working Group (SFWG), established in 2021, is also working on improving corporate sustainability disclosure and on facilitating the compatibility and consistency of national approaches regarding sustainable taxonomies. The INFF process can help consider these national and international efforts in connection to public finance classification systems.

Building Block 4 on Governance and Coordination provides an overview of the institutions and processes that underpin transparency and accountability, and that can support adequate availability and access to relevant knowledge and information by stakeholders both within and outside government. The focus in this section is on the systems that such institutions and processes would need to supply necessary data and information, and to enable their use.

Suggested approach

There is no one-size-fits all model to establish an effective monitoring and review system for INFFs. Different countries will start from different baselines and may have identified different priority areas as part of their financing strategies. Consequently, their focus and level of ambition with regard to INFF monitoring and review will also differ. Figure 6 sets out two common steps that may be used to guide efforts to establish and/or strengthen monitoring and review functions in all contexts. The first focuses on establishing the baseline, looking across existing systems and the ‘enabling environment’ for monitoring and review (including underpinning elements, such as level of buy-in, roles and responsibilities, and relevant data systems and capacity). An illustration of basic, intermediate, advanced levels of integrated monitoring and review is presented to guide countries in establishing their level of ambition with regard to strengthening existing systems in the context of their INFF. The second step lays out possible actions to do so, drawing on good practice in the field complemented by country examples, and focusing on: i) institutionalizing INFF monitoring and review, and forging alliances among stakeholders; ii) enhancing integration of existing systems and developing pilots to fill gaps; iii) linking to ongoing or planned data/ statistical reform processes and making use of needs-based IT solutions; iv) leveraging insight and lessons learned from peers and regional/global knowledge-sharing platforms. 

The first step is to identify all relevant systems used in the country by government and non-government stakeholders to monitor and review financing flows and their impact, as well as the implementation of financing policies and strategies, and the extent to which the key elements listed in Section 3.2 are incorporated. Section 4.2 provides an overview of relevant systems and processes that countries may have in place. The following questions (also included in Annex 1 in the form of a checklist) can help to further guide the identification exercise:

• What systems are in place to monitor and review execution of the government budget, including the extent to which spending allocations are in line with identified sustainable development objectives?
• What systems are in place to monitor and review government revenue, including the extent to which it is aligned with sustainable development objectives (e.g., progressivity of taxes)?
• How is the sustainability of public borrowing monitored?
• What systems are in place to monitor and review allocation and impact of public investment? Are findings from such systems considered alongside those related to government spending?
• What systems are in place to monitor allocation, use, and impact of international development cooperation, including from public development banks? Are these separate or integrated into other monitoring and review processes related to government finance?
• What systems are in place to monitor volumes, allocation, and impact of private investment in the country? Are there different systems for domestic and foreign investment (including from MDBs)?
• Are there reporting requirements for companies and other financial institutions active in the country? If so, do these include requirements to report data on contributions to sustainable development outcomes? Are these mandatory or voluntary?  If mandatory reporting requirements are not in place, are there established voluntary norms?
• What systems are in place to monitor volumes and allocation of non-profit/ philanthropic finance in the country? Are there different requirements for domestic and foreign foundations? Is data and information from these systems considered alongside data related to other sources of finance (public and private)?
• What systems are in place to monitor risks to the country’s capacity to finance sustainable development? Which types of risks are monitored (e.g., economic/ non-economic risks)?
• How often is data collected through the above-mentioned systems? How is it used by government to inform policy making? How is it published for wider accessibility?
• How often are existing monitoring and review systems related to different types of finance reviewed to ensure their continued relevance?
• How compatible are they (e.g., do they rely on common definitions of key terms and/or on comparable data sources)?
• How is the implementation of specific financing policies (e.g., medium-term revenue strategies/ debt management strategies/ public investment strategies/ development cooperation strategies/ investment promotion policies/ financial inclusion strategies/ etc.) monitored? How regularly are they reviewed? How are the findings from such reviews used?

For illustrative purposes, Table 2FN presents three stylized levels of development of monitoring and review systems related to the areas listed above: basic, intermediate, advanced. Countries may of course be at different stages with regard to different elements of the system; the purpose of this illustration is to help countries establish the appropriate level of ambition in terms of moving along the levels in the context of their INFF. Existing legal, political, and organizational factors will shape the ‘enabling environment’ for progress and whether it can be sustained over time.  They should be assessed as part of establishing the baseline. The following questions can help guide this exercise:FN

Buy-in:

• Who are the champions behind the INFF in the country? Do they have the required authority and political clout to drive efforts to strengthen monitoring and review systems and capacities across all relevant ministries/ stakeholders?FN
  
• Is there broad-based buy-in for INFF monitoring and review, including a common understanding of the rationale behind it and its potential value?
• Is there buy-in from development partners to support INFF monitoring and review, including through capacity building, where needed?

Roles and responsibilities:

• What are the roles and responsibilities in relation to monitoring and review of financing issues in government, and among non-state actors? What is the role of Parliament and of the Supreme Audit Institution?
• Who in the country produces data (both at the national and sub-national levels)? E.g., central ministries, line ministries, specialized units, provincial ministries, local government, NGOs, development partners, etc.
• Who uses data? E.g., for budget preparation, resource allocation, programme policymaking, legislation and accountability to parliament, planning, fiscal management, evaluation and oversight. 

Data systems and available capacity:      

• What is the quality of data produced and used in the country? Are needs-based IT processes in place to facilitate collection and processing of required data? (See Box 6).
• What are the skills of civil servants in the national government in programme management, data analysis, budget management, performance auditing? Are these functions adequately resourced (including financially)?
• Are any statistical/ data reform processes ongoing or planned (e.g., development of a national statistics development strategy, or related efforts in specific sectors or financing policy areas)?
• Is there any technical assistance, capacity building, or training in monitoring and review underway or that was recently done? Who provided this support?
• Are there any institutes, research centres, private organisations, or universities in the country that have capacity to provide technical assistance and training in monitoring and review to civil servants and other relevant stakeholders?

Building on the established baseline and targeted level of ambition, the second step is about taking action to strengthen existing systems, and to close any gaps, thus supporting the move along the ‘levels’ depicted in Table 2. Depending on the country baseline, capacity and needs, such action may be taken in one or more of the following areas:

• Action area 1: Institutionalise INFF monitoring and review by progressively raising the level of ambition, putting in place or reinforcing the right incentives, establishing an effective monitoring and review function within government, and ensuring participatory approaches to shift the culture around monitoring and review from seeing it as a compliance exercise to focusing on accountability and learning;
• Action area 2: Enhance integration of existing systems by ensuring they are compatible and able to feed the necessary information into key INFF indicators of performance, reviewing data and information currently being collected, and implementing pilots where changes or new systems may be required;
•  Action area 3: Link to ongoing or planned data/ statistical reform processes and make use of needs-based IT solutions by reviewing ongoing statistical capacity development efforts, articulating a data development plan (if needed), and considering the potential role of business intelligence software to facilitate collection, processing, use and storage of data in ways that can serve country needs;
• Action area 4: Leverage insight and lessons learned from peers and regional/ global knowledge-sharing platforms by making use of existing knowledge on what may or may not work, with a focus on INFF-specific initiatives and platforms.

Overall, these actions involve strengthening both institutional arrangements and technical systems, which can help countries overcome common challenges in establishing effective monitoring and review systems (see Box 7). While every country is different, a pragmatic approach, taking advantage of monitoring and review ‘champions’ where they exist and of existing knowledge and current practices as a starting point, can help ensure sustainable improvements over time. Success factors in implementing these actions will depend on the specific country context, including institutional and cultural specificities; however, the following have been proven to be applicable in most situations:

• A common understanding of the purpose and value of INFF monitoring and review. Monitoring and review requires additional time and efforts from government officials and professionals who may be already overwhelmed by current tasks. Unless everyone involved can clearly see the value of INFF monitoring and review, success and sustainability of the exercise will be at risk.
• Buy-in from key stakeholders. Buy-in at both the political level and at senior technical levels within government can ensure that adequate resources (financial, time, human) are dedicated to monitoring and review activities from the inception and on an ongoing basis thereafter to support effective implementation and positive policy feedback loops. In addition, buy-in from non-state actors, including the private sector, is needed to ensure effective collaboration and sharing of relevant data and information.
• Realism on what constitutes ‘good enough’ data. It is easy to be discouraged by the inadequate coverage and reliability of available data. However, once the idea that data quality is a relative concept is understood and internalised, a more realistic approach of trying to obtain ‘good enough’ data can be taken, which can form the basis for additional, gradual improvements over time, while at the same time providing the evidence needed to begin adequate monitoring and review.
• Dissemination of intermediate results. Producing and sharing presentations, videos, infographics, and other similar materials that showcase results related to different aspects of the INFF can help demonstrate its value added and broaden buy-in. For example, disseminating success stories on what improvements in data and monitoring systems helped accomplish can help expand monitoring and review efforts beyond pilots where champions already exist. 

Action Area 1: Institutionalise INFF monitoring and review

Building and sustaining a monitoring and review system in the context of an INFF is no small endeavour. Practicality dictates that the objectives and scope of any such system need to be realistic and take into account a diversity of factors, such as: the slowness of bureaucratic processes; the importance of incentives to vanquish vested interests and resistance to change; the need to understand the legal, political, institutional and cultural dimensions of monitoring and evaluation; and the complexity of building successful partnerships. An INFF monitoring and review system should be designed and managed as a medium-term process with a progressive expansion of scope, starting from existing monitoring platforms and any related reform processes (ongoing or planned).

This involves building on existing institutional mechanisms (see examples in Building Block 4 guidance on Governance and Coordination) and defining clear and complementary roles and responsibilities with regard to producing, collecting, analysing, reporting and using data and information related to financing (both public and private). It involves putting in place or reinforcing the right incentives (see Box 8), e.g. the opportunity to better align and consolidate existing systems, and to reduce, or at least not add to, administrative burdens. It also involves sensitizing policy makers and senior technical officials on the need for, and value of, adequate INFF monitoring and review, to create and maintain buy-in (for example, based on the experience of pilots as discussed under Action 2 below). In addition, institutionalising INFF monitoring and review may require capacity building activities (see Box 9).

A balance is needed between making monitoring and review ‘everyone’s job’ (integrating it in all planning and implementation processes) and putting in place a dedicated monitoring and review unit with the required power, capacities and independence to exercise its mandate and bring together relevant information from different stakeholders. This balance will be dictated by country contexts, the level of ambition, and the focus and needs related to the country’s INFF.

Examples of good practices that can inform decision making around this include:

• The elaboration and official adoption by the highest executive and legislative branches of policies or laws regarding monitoring and review (e.g., evaluation policies in Uganda by the Office of the Prime Minister and then officially vetted by Parliament, and in the Philippines by the Department of Budget and Management and the National Economic and Development Authority);
• The creation of a monitoring and review unit at the highest level of the executive branch for coordination purposes. This could be linked to, or established by, the INFF Oversight Committee (where this is in place) and liaise with existing monitoring and review units of line ministries/ agencies (e.g., the Department for Planning, Monitoring and Evaluation at the Presidency of South Africa, the Center for Excellence in Evaluation at the Treasury Board Secretariat of the Federal Government of Canada from 2001 to 2016, and the Consejeria Presidencial para la Gestion y CumplimientoFN in Colombia);
  
• The elaboration of working-level monitoring and review guidelines (e.g., Monitoring for Results Handbook by the Department of Budget and Management of the Philippines);
• The adoption of an institutional capacity building approach (e.g., the support to the “Ecole Nationale d’Administration” of Niger to develop and improve its training programmes in results-based management) rather than an individual capacity building approach (e.g., the training of thousands of civils servants in public investment management that may then be dismissed due to changes in administration).

Forging alliances at all levels of government (e.g., between the Ministries of Finance and/or Planning, and line ministries, as well as between central and subnational governments) and with, and among, non-state actors, can be a powerful way of creating the necessary buy-in to institutionalise monitoring and review and enhance related processes and practices.

In many contexts, monitoring and review is seen as a compliance exercise, without sufficient focus on accountability and learning. Ensuring participatory, inclusive approaches to budgeting and broader financing policy making can help shift the culture and attitude. Guidance on Building Block 4 Governance and Coordination (Section 5.2) lays out ways in which participation of all relevant stakeholders can be enhanced to strengthen accountability of public and private finance providers in the country (such as through dedicated agencies or units that ensure systematic dialogue between stakeholders, consultative committees or fora, networks, open government initiatives and citizen budgets). Country experiences with such participatory approaches highlight the importance of: i) significant technical skills and overall capacity of intermediary civic groups who analyse, track and evaluate different stages of the budget process (or other financing policy areas being considered); ii) a conducive political environment in the form of free and able media, information disclosure laws, and political will to make government systems more open; iii) institutionalized processes for participation at all stages of the policy cycle, and for disclosure of key data and information by all relevant stakeholders (including private finance providers).

Action Area 2: Enhance integration of existing systems

Moving along the levels illustrated in Table 2 does not imply replacing existing monitoring and review systems. Rather, it is about enhancing compatibility among them to ensure they are aligned with, and can feed into, the overarching INFF monitoring and review framework (illustrated in Annex 2). In this sense, and as illustrated in Figure 1 in Section 2, INFF monitoring and review is an integrator system, taking data and information from a variety of existing systems related to different types of finance and policies, and bringing it together into key indicators of performance.

Not all the information collected via the specialised monitoring systems (e.g., on the government budget, on development cooperation, or on private investment in the country) and via the reviews of different financing policies will be reflected in the overarching INFF monitoring framework. Similarly, there may be gaps in the data and information currently being collected via existing systems that is required for overall INFF monitoring and review. The INFF process is an opportunity to review whether the data and information being collected via existing systems is relevant, adequate, and being used, as well as to adjust related indicators and data sources accordingly. The overall guiding principle when it comes to INFF monitoring and review should be to select the smallest number of indicators possible that combined, can provide a comprehensive enough picture of progress on the implementation of the country’s financing strategy and the functioning of underpinning governance structures and mechanisms. 

Public finance plays the foundational role when it comes to financing sustainable development, and it will be the starting point in many countries. Countries will typically have better developed systems to monitor domestic public finance (government expenditure and investment) and development cooperation than private finance. Government officials may consider enhancing the compatibility and integration of public finance-related systems, and learn from this exercise before embarking on the creation of additional systems for other types of finance, such as private finance. In line with globally agreed principles, development partners should ensure that preference is given to national processes for monitoring allocation and impact of aid resources,FN to avoid hindering such integration (see for example Box 10 on health sector financing).

Better integration of national and donor monitoring systems can be prioritised across a range of areas, including capital investment projects. These projects play a critical role in achieving national development priorities and often receive substantial support from donors active in the country. Experience in numerous countries has shown the value of a structured and stepwise approach. Lessons learned include the need for a flexible investment monitoring system able to accommodate various levels of project complexity and size, sector specificities, data availability, and project analysis capacity within line ministries, along with explicit consideration of political priorities in the ranking of investment projects (rather than imposing a straight-jacket which looks good on paper but is unrealistic). The system should be easily customisable to reflect different situations and national business processes. (Building block 4 on Governance and Coordination provides insight into ways in which access to perspectives and input of various stakeholders (government, development partners, and private sector where relevant) may be facilitated, to ensure resulting systems can serve the needs of all relevant stakeholders).

Where there are gaps in existing systems and/or additional systems need to be established, government officials could start with pilots in sectors and/or financing policy areas where champions can be identified (and interest in testing exists), as a way of learning what may work and what may not, and of demonstrating the feasibility of enhanced systems.FN Box 11 illustrates the case of Guyana, where efforts to enhance monitoring and review of government finance started from specific ministries before being rolled out across central government.

Following a demand-led approach is important to ensure sustainability and a higher likelihood of success and learning. Progressive expansion of scope and depth can then be more easily pursued as successes from pilots are demonstrated and buy-in is broadened as a result. A balance between perfection, practicality and sustainability should always be pursued, when selecting pilots and when expanding efforts beyond them. For example, relying on consultants to conduct pilots and set up systems for data collection and analysis may yield to results that cannot be extended or adopted in other sectors/ areas, given common issues related to data availability and human resource capacities in the public sector. Relying on available human resources and data systems, investing in capacity building, and adopting a stepwise and pragmatic perspective, though longer-term, can ensure more sustainable improvements and expansions in monitoring and review practices.

Action Area 3: Link to ongoing or planned data/ statistical reform processes and make use of needs-based IT solutions

Data systems and capacity underpin effective monitoring and review. INFF monitoring and review should take into consideration all ongoing efforts that government may have in place to improve existing data and statistical capacity in different areas. Often, statistical capacity development efforts happen in siloes, in response to specific donor interests and requirements, and not necessarily linked to overarching national development priorities. The INFF process, and the monitoring and review building block in particular, offers an opportunity to review all ongoing initiatives and to establish whether a process may already exist within which INFF monitoring and review can be considered. If needed, an overarching data development plan hinged on nationally identified needs and priorities may be articulated. The INFF Oversight Committee, where one is present, should lead the process and review the plan to ensure a systemic approach. The findings from the assessment of the quality of data systems undertaken as part of step 1 (see Box 6) can be used to inform such a plan. Box 12 illustrates Niger’s experience.

A data development plan can identify critical data improvement needs using a participatory approach and then work out a stepwise workplan to improve the business processes related to information flows and address key methodological issues. It should not only focus on the production and collection of data but on data use too. Enhancing the reporting of relevant data in a way that facilitates access and use by target users should be considered as part of the plan.  

Information technology (IT), and more specifically the use of business intelligence software, can help address and implement the improvements identified in the data development plan, and support to enhance processes related to INFF monitoring and review (e.g., see Box 13). Where this is feasible, to be efficient, such software should: i) be built or customized according to specific country business processes; ii) include interfaces with existing relevant information systems; iii) support the analysis of data through dashboards and reporting features that respond directly to users’ needs. What is usually required is not a complex, costly solution that is good in theory, but is incompatible with existing data limitations, staff capacities and technological capacities in the country (including for example access to reliable large band internet). Rather it should use an Extract, Transform, Load (ETL) approach that enables extraction of relevant data from a variety of databases on different platforms (e.g., related to different types of finance), transform and store them in a secure way. The value added of the IT solution will depend on the extent to which it can be customized in terms of programme architecture, data disaggregation, reporting dashboards, alert systems, and report generation. Automatization and systematization of reports can save time at critical moments of budget preparation for example. However, the adoption of IT solutions should always be mindful of the shortcomings that may be associated with them, such as the potential loss of contextual information surrounding data findings, which tends to be difficult to obtain without in-person data collection and validation methods.

Action Area 4: Leverage insight and lessons learned from peers and regional/ global knowledge-sharing platforms

To support actions related to all the above-mentioned areas and facilitate the shift toward more effective and efficient INFF monitoring and review, governments should leverage insight and knowledge from others who have already gone through the process. While each country situation will be different, implementation experiences from peers can provide valuable lessons on what may or may not work, and on how to best overcome specific challenges.

Since 2019, when the first pioneer countries begun their INFF journeys, INFFs are now being considered and implemented in over 70 countries worldwide. The INFF Knowledge Platform provides a digital space where country experiences and lessons from early implementers can be shared and accessed, and represents the basis of a growing community of practice. The INFF Dashboard tracks operationalization of INFFs at the national, regional and global levels. It contains data and information related to the ways in which different countries across the globe have started to design and implement various elements of INFFs, ranging from the inception phase to each of the four INFF building blocks. With specific reference to the monitoring and review building block, it provides the status of the monitoring system for the country’s financing strategy, its key elements (such as public financial management information systems and private sector monitoring initiatives), and information on any planned or ongoing capacity building support for monitoring and review. The UN system is also working to foster regional and global exchanges, ensuring peer learning at the regional level and facilitating knowledge transfer at the global level.