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Select indicators for monitoring of policy

A starting point for aligning governance indicators to policy may be to look at what other indicators are used by government at the various decision-making stages of the policy cycle. Key policy documents, such as Millennium Development Goals Reports, national development plans, national budgets, medium-term expenditure frameworks, sector reports, ministerial policy statements and local government financial statements provide information on key policy indicators.

The chart shows what kind of indicators are commonly used in various reporting documents, at the input, output, outcome and impact level.
Aligning governance indicators to policy processes complements existing reporting with a governance perspective and may uncover many governance deficits. For example, by looking at local governance financial statements, you may find that funding for poverty eradication activities has increased. Yet at the same time, Poverty Reduction Strategy Paper (PRSP) outcome indicators may show that poverty levels remain the same, for the same period. The reason for this lack of progress despite increased funding could be a result of various governance issues, such as institutional bottlenecks or accountability issues, that have not been addressed in the current monitoring and evaluation framework.
A preference often exists for outcome indicators over output indicators because they relate more closely to development goals. However, there remains a justifiable tendency to use output indicators for several reasons: (i) Outcomes are not always fully under the control of the agency that provides them, e.g., number of schools built (output) vs. number of children attending schools (outcome). This can be the result of several factors, many of which are outside policymakers' control; (ii) Outcome indicators generally change slowly, while output/input indicators change more rapidly, which provides a more complete snapshot of the current situation; (iii) Outcome/impact indicators can be more difficult and more costly to collect. 
A final issue in aligning governance indicators with policy processes may be lack of ownership of the policy processes themselves. An example of a policy process with weak ownership might be a budgetary process dominated by the executive branch of government at the formulation stage, but with little follow-up by the executive during implementation or monitoring and evaluation; poor coordination among ministries; little budgetary work or oversight by parliament; and no participation by civil society or political parties. A democratic governance assessment aligned to budgetary processes may suffer similar weak ownership and have little impact on further democratization of the process unless it is able to mobilize stronger involvement.