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Estimating cost implications of the Kosovo government Programme

The objective of this short report is to evaluate the costs of the government programme while mirroring it with the current economic situation, the budget, and the Medium Term Expenditure Framework (MTEF). It ought to contribute towards improving performance and accountability in reaching its targets and objectives. The report also shortly highlights some risks associated with intervention areas and likely sources of funding. The report is available in Albanian and English.

Evaluation of the cost schedule of the governing programme is of utmost importance for improving performance and accountability in reaching its targets and objectives. Estimating costs can be a crucial step within the government programme formulation process which allows decision-makers to consider the extent to which policy objectives and strategic orientations are feasible and affordable. The process of costing a programme should be considered an essential part of the planning process and not undertaken after the overall plan has been completed and presented as a finalized document.

In order to fill a gap, the focus of this report is on an ex-ante estimation of costs associated with selected intervention areas and likely sources of funding as proposed by the government programme. This evaluation will attempt to assess assumptions and risks associated with the government programme critically. Doing so will inform the general public and initiate an informed debate that ultimately would lead to better monitoring, transparency and accountability.

Cost estimates are necessary for government programmes for many reasons: to support decisions about funding one project over another, to develop an annual budget, to evaluate resource requirements at crucial decision points, and to develop performance measurement baselines. Moreover, having a realistic estimate of projected costs makes for effective resource allocation, and it increases the probability of a programme’s success. Developing reliable cost estimates is not a traditional practice in Kosovo. The governments typically lacked the willingness to provide reliable cost estimates, which would become an essential source of information for accountability seeking efforts. Also, cost estimating is challenging as it requires time and resources. Government programmes characteristically are based on unrealistic assumptions, especially about the complexity or difficulty of introducing new policies. Also, the programmes are based on a culture of optimism which, apart from some merits, can also lead to overestimation of the ability of the government to deliver accordingly. It can also result in an underestimation of risks, which can lead to the development of unrealistic cost and schedule estimates.

To properly mitigate this optimism, it is essential to have an independent view of the programme. While this function can also be performed by outside organisations like Riinvest, it is still important that the government is willing to address and understand the risks its programme faces. Having an independent view of the programme can help to bring to light actions that can potentially limit the government’s ability to succeed.

This report is prepared on the basis of data that can be quantified from the government programme, augmented by the data from official sources, primarily the Kosovo Agency of Statistics (KAS). In some cases, the authors have made certain assumptions to account for missing information or to provide a scenario. All those instances are labelled accordingly.

The report is organised as follows: section 1 presents key governmental programme orientations. The second section gives an overview of the government programme vis-à-vis the fiscal situation of the country. Section three provides a tentative costing of some of the elements of the government programme and budgetary implications. The key findings and policy recommendations are concisely presented in the executive summary.