Posted by Tej Prakash.
The Ministry of Finance (MOF)[1] has been the keeper of the public purse in nearly all countries almost as long as nation states have existed. Its role and mandate has evolved over time reflecting requirements of political and economic management. This article looks at the core roles of MOFs, specifically in small developing economies, and asks the question how best can they perform this role given the constraints faced by these economies
While there is no standard model for the organizational structure of a MOF, it is generally agreed that there is a set of core tasks that any MOF should fulfill. This includes (1) budget formulation and implementation, (2) collection, custody, management, accounting, control and disbursement of public monies, (3) management of public assets and liabilities, (4) revenue and expenditure policy and management, and (5) design and implementation of macroeconomic and fiscal policies of government. MOFs have also added many other tasks such as donor coordination, oversight of domestic financial markets (often by establishing regulatory bodies) [2], managing fiscal risks arising from various sources, financial oversight of public enterprises, and relations with international organizations such as the World Bank and the IMF. It also often takes a lead role in designing and implementing the government’s overall economic policies. The global financial crisis will cause governments in many countries to review the roles and responsibilities of the finance ministry, and how these are carried out.
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