FEDERAL STATE AUTONOMOUS EDUCATIONAL

Institution for higher education

NATIONAL RESEARCH UNIVERSITY

HIGHER SCHOOL OF ECONOMICS

Faculty of Social Sciences

GARSHINA DARIA ANATOLYEVNA

name, surname

Master Thesis Project Management in the State Strategic Planning System

Field of Study 41.04.04 Political Science

Master’s Program “Politics. Economics. Philosophy”

Reviewer Boris Rudnik ___________________ signature Daria Garshina full name Moscow 2017

Scientific Supervisor Oleg Ananyin ____________________ signature Daria Garshina full name

Table of content

1. Introduction and research problem 2

1.1. Strategic planning as a weak link in public management in the Russian Federation 2

1.2. Law on strategic planning and decisions on project management 11

1.3. Short historical outline of strategic planning and management concepts 12

1.4. Strategic management in public management as compared with business organizations: applicability and adaptation 22

2. Goal-setting and projects 37

2.1. Approach according to Law on Strategic planning and decisions on Project management 37

2.2. International best practices 43

2.3. Conclusions and suggestions 63

3. The principle of stakeholders’ involvement in strategic planning process 66

3.1. Current approach and its criticism 66

72

3.2. International best practices 74

3.3. Conclusions and suggestions 76

Conclusion 79

References 82

Supplements 83

1. Introduction and research problem

1.1. Strategic planning as a weak link in public management in the Russian Federation

The law on strategic planning in the Russian Federation had a long pre-history. In fact, the law was based on current strategic planning practice, which was launched long before adoption of the Federal law.

In 2007 the President gave instructions to the government to elaborate a Federal law on strategic planning. In 2008 the Ministry for economic development prepared the law project, but its adoption was postponed due to the pressure of urgent anti-crisis measures. In 2009 it was decided to approve the decree of the President "Foundations of strategic planning in Russia" in the format of document for official use (Decree No. 536 dd. May 12, 2009). The act outlined main strategic planning participants and their power in the field of planning, defined strategic planning documents that spelled out the role of the representatives in planning development of federal districts and regions. "Second wind" to the process has appeared since the release of the presidential decree of 7 May 2012 № 596 "On long-term state economic policy".

And finally on the 28th of June 2014 the federal law "On the strategic planning in the Russian Federation" came into force. The main purpose of the law was to establish a system of strategic planning (SSP) aiming at providing conditions for sustainable socio-economic development and national security of the country.

The federal law 172-FZ covers three levels of government: federal, regional and municipal. It binds them with common goals of socio-economic development. Strategic planning at all levels have common stages: goal setting, forecasting, planning and programming, as well as monitoring and control. Rights to participation and accountability rules are distributed between the authorities at each stage. More detailed description of the Russian SSP is demonstrated in the Appendix 1.

However, the process of implementation of the federal law faced serious problems. At the moment it is widely accepted that the crucial problem of the SSP is that of discrepancy of goals in strategic planning documents.¹

1. Discrepancy of objective indicators between different strategic planning documents

Consistency of strategic planning documents implies:

• unity of strategic planning mechanisms to ensure the practical implementation of the principles of strategic planning;

• unity of methodological approaches that connect the system of strategic planning documents taking into account their purposes and types;

• compliance with the continuity and consistency of strategic planning documents in the process of their elaboration;

• presence of vertical and horizontal linkages (including objectives, targets and indicators) in the system of strategic planning documents;

• unity of criteria for determining goals, objectives, priorities, mechanisms and major activities for the implementation of state policy included in the strategic planning document, taking into account its intended use;

• presence of interaction and division of responsibilities of the state, business community and civil society in the implementation of strategic planning documents.

The system of strategic planning documents, approved by the Federal law "On strategic planning in the Russian Federation" provides for about 20 basic strategic planning documents developed at the Federal level that also contain forward-looking indicators.

The relationship between strategies/concepts and state programs looks like the following:

• Sectoral strategies are produced for a period of 6-12 years and contain a significant number of specific measures, target indicators

• Indicators of sectoral strategies cannot be immediately changed in order to achieve compliance with new strategies. Indicators of sectoral strategies also cannot be adequately transformed into the state programs, the validity of which is not regulated by law.

Meanwhile in the report of the Accounts chamber of the Russian Federation prepared on execution of the Federal budget for 2015²based on checks carried out by the Ministry of Finance and other Federal bodies of Executive power and organizations, it was shown thatstrategic planning documents contain inconsistent objectives, as well as allows of significant risks of not achieving the number of target values of macroeconomic indicators (labour productivity, the ratio of investment in fixed capital to GDP), as established in the Decree No. 596, and in Main directions of government’s activities (ONDP), which requires the adoption by the Government of the Russian Federation additional measures to ensure compliance stated in ONDP targets in a timely manner, as well as their consistency with the real prevailing socio-economic situation.

As a result of comprehensive analysis of the implementation of the state programmes of the Russian Federation, including the assessment of balance in their goals, objectives, indicators, measures and financial resources, as well as compliance of state programs with the priorities and long-term goals of socio-economic development of the Russian Federation, which is carried out by the Accounts chamber on a regular basis, it was determined that 31 approved state programs (79.5% of the total number of approved state programs) are not consistent to some extent with the strategic planning documents.

Thus, a number of government programs do not contain goals, objectives or indicators (indicators) set by strategic planning documents in the sphere of implementation of state programs. For example, it was found that 5 state programs do not fully take into account the priorities set in the Basic directions of activity of the Government of the Russian Federation for the period until 2018 (hereinafter – Main directions); the goals, objectives or indicators of the concept of long-term socio-economic development of the Russian Federation for the period until 2020 are not taken into account or are not consistent with similar indicators in almost half of the approved 2014 state programs.

It is also established that the values of the indicators (indicators) of individual state programs do not meet those set by strategic planning documents in the sphere of implementation of state programs.³

The discrepancies of state programs with the following strategic documents were found⁴: Main directions of the Government until 2018; The concept of demographic policy of the Russian Federation for the period till 2025; The National strategy of actions in interests of children on 2012 - 2017 years; The concept of long-term socio-economic development of the Russian Federation for the period until 2020; as well as sectoral strategies etc.

However, it should be noted that the parameters of the individual strategic planning documents in recent years are not updated, do not contain current assessments of the situation in the corresponding sphere of socio-economic development of the Russian Federation, real possibilities and conditions for the functioning of the economy. The lack of high priorities does not allow considering these outdated targets as targets of achieving goals and solving problems.

Moreover, even normative legal basis for the development and implementation of state programs in the SSP is in fact still missing. The only rule according to which state programs are developed to achieve the priorities and objectives of socio-economic development and national security of the Russian Federation, is fixed in the strategy for socio-economic development of the Russian Federation, and some similar documents prescribing that values of target indicators of the state programme have to take into account parameters of the forecast of the socio-economic development of the Russian Federation.

	Problems
Goals	The lack of specific goals. They are unattainable. Formal linkage with strategic planning documents and long-term social economic forecast
Indicators	Contain more than 2,000 indicators, many indicators are duplicated from program level to a sub-programme level. The timing of the calculation of the indicators goes beyond reporting
Approval	The need for ongoing formal approval of documents and results, both in their preparation and implementation stage
Participants	The lack of control over participants in the program from responsible Federal authorities and interdepartmental interaction
Budgeting	Planning of development expenditure is a residual following the formation of the public obligations. The distribution is fixed at the level of the Budget of the Russian Federation, there is no management flexibility in frames of the state program
Relevance	The loss of relevance of the state program, as well as the duration of the process of making changes in connection with necessity of issuing the regulation
Risks	The lack of monitoring and risk management implementation of the state policy

Table 1. Basic problems of state programs realization

As a result strategies lose their function of goal-setting, and state programs, in contrast, this function acquire.

So, government programs do not correspond with the norms of Federal law 172.

To crown it all, in the current SSP goals of sectoral strategies do correspond with the main goal setting strategic planning documents. As a consequence, state programs goals don’t correspond with sectoral strategies.

2. Overcomplicated strategic planning system

Considering the SSP, as demonstrated in the Appendix 1, we may easily understand that the system is overcomplicated.

The federal government faced with a problem of uncontrolled flow of sectoral strategies and concepts, that regulate some spheres. Criteria and frames of priorities are not clearly defined.

Furthermore, during the process of the project of the federal law consideration in the State Duma deputies offered to include the municipal level in the SSP. It was also proposed to include in the federal law project a register of documents, monitoring and controlling their implementation, and information supporting strategic planning, identifying mechanisms of documents implementation and to consolidate the transitional provisions.

In accordance with paragraph 2 of resolution of the Government of the Russian Federation from 25 June 2015 № 631 "On the procedure of state registration of documents of strategic planning and management of the Federal state registry of documents of strategic planning" December 1, 2015, carries out the work of Federal state register of documents of strategic planning (hereinafter – the Register). At the moment there are more than 30 000 documents of strategic planning in the Register.

The number of strategic planning documents

As of February 1, 2017 in the Federal register

• 55 documents of the Federal level (~0.1% of the total registered documents)

• 2127 documents at the regional level (~4 %)

• 48300 municipal documents (~95.9 per cent).

Existing information platforms only work as a "warehouse" of documents ignoring the analytical, predictive, and management functions. Moreover, the Federal register of documents of strategic planning has to re-register all updated versions of these documents.

The actual number of documents on regional and municipal levels is significantly higher due to the territorial planning schemes of the regions. Law No. 172 FZ considers them as single documents, but in fact they include lots of documents for each municipality.

According to the expert valuation, the cost of documents elaboration is more than 100 billion rubles:

on the federal level ~ 3,5 bln rub.

on the regional level ~ 14, 014 bln rub.

on the municipal level ~ 90, 568 bln rub.⁵

3. Poor strategies realization

In order to prepare a new long-term social-economic strategy of the Russian Federation the Centre for Strategic Research (CSR) has analyzed the results of the implementation of the "Strategy 2020", May decrees of the President (May 7, 2012), as well as priority national projects ("Health", "Education", "Housing", "Agriculture development").

According to the CSR Report, strategies were poorly implemented. And this indicator tended to decrease. Overall, the Strategy-2010 was implemented, as experts have estimated, by 39%, and the Strategy 2020 only by 29%.⁶

The main reasons indicated by experts why Strategy 2020 was not realized are the following:⁶

a) Co-existence of alternative strategies due to ideological differences in the expert community

b) Administrative factors

• Prevalence of current problems over strategic ones in civil servants’ activities

• Failures of inter-ministry coordination

• Short planning horizon of ministries

• Weak incentives for development due to high oil prices

• The limited capacity of “manual” management

c) Political and social factors

• Serious resistance to some measures from lobbying groups, lack of involvement of these groups in the work on the Strategy

• Disregard of current institutional environment

• Low effectiveness of public participation institutions and feedback channels

As far as priority national projects⁷("Health", "Education", "Housing", "Agriculture development") are concerned, ‘in contrast to the Strategy 2020 and most of May decrees, they didn’t change institutional environment, being focused rather on investments, and these public investments were generally effective. According to CSR experts, priority national projects is an example of good quality “manual” control, partly a prototype of project management principles. The experts emphasized regular control over the implementation of national projects: "The most important success factor of the national projects was the involvement of senior management in their implementation. Dmitry Medvedev personally looked at their implementation. State programs don’t have such control. No deputy opens the program, compares money with indicators! In developed countries the whole year the whole Parliament lives with these programs. And the government lives with them. We never live with them. Once we approved them and that’s it. The second time we will return to them when we need extra money”.⁸

Furthermore, analysis of Strategies 2010 and 2020 illustrates that absence of thorough measures selection creates many difficulties at the implementation stage. It is obviously more difficult to implement priority measures.