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Demonstrating Performance: A Primer for Expenditure Reviews (June 2008)

Pre-condition #1: Address Needs and Aspirations That Remain Relevant

Good policy design.

Effective policies are grounded in real community and government needs, and have goals, outcomes and outputs relevant to those needs[1]. Proponents must link the goals, scale and design of major interventions to real needs.

Major expenditures which are not grounded in today’s needs should be queried. The onus is on the agency receiving funding to show ongoing need using the most objective means available, or to provide a credible explanation of why this was not done.

Where measurement is feasible, agencies should show the distribution and scale of the need, and how this drives the goals, design, coverage and scale of interventions. Targets may be set when needs are specific, tangible and measurable.


Need is often assessed by comparing outcome indicators or looking at demand, eg:

  • Benchmarking to establish and compare levels of need, or establish whether there is real scope for improvement (eg, victimisation rates; incident rates; costs).
  • Disaggregation to see who - or what - needs support or observation (eg, is at risk).
  • Risk assessment to prioritise access, quantify the costs of not intervening and, in retrospect, refine targeting criteria (eg, for road safety, regulatory and health work).
  • Forecasting to predict changes in demand (eg, schools; investigations; benefits).

Results often paint simple pictures of where major effort may (or may not) be warranted.

Top 10 Avoidable Causes of Disability and Death (MoH, 2001)
Top 10 Avoidable Causes of Disability 
and Death (MoH, 2001).
Where Should Interventions Focus?
Where Should Interventions Focus?.

But remember ‘needs’ depend on how data is interpreted, and data can be used badly:

  • Needs must be defined in terms of outcomes (not as ‘improved’ outputs or delivery).
  • ‘Needs’ without effective solutions are not priorities - outputs must improve lives!
  • Poor ability to target effective outputs on areas of need will limit value-for-money.
  • Check comparisons are valid. (Could results be skewed by culture, wealth, etc?)
  • Distributions matter. (Averages conceal equity issues and targeting choices).


  • [1]In this paper ‘needs’ include the need to pursue opportunities, as well as the need to remedy problems
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