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June 2014

June 30, 2014

How Expenditure Rules Can Help Get Public Spending Right

FM Blog PIx

Posted by Xavier Debrun

The April 2014 issue of the IMF’s Fiscal Monitor usefully reminded us of a simple truth: getting government spending right entails tough choices, always and everywhere. Since 2008, elevated risks of economic and financial collapse had forced policymakers to think mostly in terms of how much government money should be injected in the economy. Now that the crisis has morphed into an uneven recovery, more attention is being given to ensure that public finances are on a sustainable path, and that the allocation of resources through the budget is efficient and in line with a country’s spending priorities.

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June 27, 2014

Shining a Light on the “Hidden Corners” of Public Finance

  Hidden PFM

By Paolo de Renzio[i]


When the financial crisis broke out in 2008, many governments were caught off guard. In many cases fiscal risks had not been correctly assessed, leaving unexpected and unprecedented gaps in public finances. This in turn led to the adjustment and austerity measures which are still being felt today. According to the IMF’s own calculations, almost a quarter of the unexpected increases in government debt after the crisis were due to “incomplete information about the government’s underlying fiscal position”. In other words, serious gaps in fiscal transparency were at least partly to blame, and these were often related to particular areas of public finances that are kept hidden from public view. This includes activities that are not captured in the regular budget system and the reports generated throughout the annual budget cycle. Quasi-fiscal activities carried out by public corporations and extra-budgetary spending figure prominently among such activities.

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June 23, 2014

In Defense of Forecasting: Its Importance in the Budget Process

Boule de crystal
Posted by Tom Josephs
1

Recent research by IMF economists Hites Ahir and Prakash Loungani shows that forecasters comprehensively failed to predict the recessions that followed the 2008 financial crisis.2 This was the case even for forecasts made in early 2008 — after the collapse of Bear Stearns bank and with the crisis well established. This prompted the economist Tim Harford to write recently in the Financial Times that: “The obvious conclusion is that forecasts should not be taken seriously….It is still a source of constant wonder to me that the demand for forecasts – in economics and elsewhere – remains undiminished.”3

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June 20, 2014

Sovereign Wealth Funds—The Keys to Success

  SWF

Posted by Andrew Bauer1

A sovereign wealth fund (SWF) should serve a purpose; this seems obvious. Yet time and time again, as discussed in my previous blog, funds are established with no clear purpose or do not achieve their stated objectives.

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June 16, 2014

Book Review: Public Financial Management and its Emerging Architecture

9781475531091
Taking Stock and Looking in the Crystal Ball

Posted by John Kamensky1

I count myself as a close observer of U.S. trends in performance and budget reform efforts. But every so often, I find it useful to step back and survey global trends to gain a fresh perspective, and a new appreciation, of the art of the possible.

With that lens, I read the International Monetary Fund’s publication, Public Financial Management and Its Emerging Architecture,2 edited by Marco Cangiano, Teresa Curristine, and Michel Lazare, and found it provides me with the global perspective — and inspiration — I was looking for.

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June 12, 2014

Clouds on the Horizon - Part II

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Posted by Chris Iles and Benoit Wiest

This article is the second part of a two-part blog post that discusses cloud computing in the public sphere, especially in developing countries. It outlines the opportunities and obstacles, and discusses key issues to be considered.

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June 11, 2014

Job Offer: Public Financial Management Resident Advisor based in Cote d'Ivoire

AFRITACouest

Description

The Fiscal Affairs Department (FAD) of the IMF is looking for a well-qualified expert to fill a Public Financial Management (PFM) Resident Advisor position at the West African Regional Technical Assistance Center (West AFRITAC), established in 2003 and based in Abidjan, Côte d’Ivoire since 2012. The Advisor’s appointment term would be for a period of one year, on a renewable basis, subject to satisfactory performance.

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Job Offer: Public Financial Management Resident Advisor based in Cote d'Ivoire" »

Offre d'emploi: Conseiller résident en gestion des finances publiques (basé en Côte d'Ivoire)

AFRITACouest

Description

Le Département des finances publiques (FAD) du FMI recherche un expert hautement qualifié pour occuper un poste de Conseiller résident en gestion des finances publiques (GFP) au sein du Centre régional d’assistance technique pour l’Afrique de l’Ouest (AFRITAC de l’Ouest) créé en 2003 et basé à Abidjan, en Cote d’Ivoire. La durée du contrat proposé est d’un an, renouvelable sous réserve de satisfaire aux performances attendues.

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Offre d'emploi: Conseiller résident en gestion des finances publiques (basé en Côte d'Ivoire)" »

June 09, 2014

Why PFM Reforms Often Fail in Developing Countries

Why PFM Reforms Fails Pix for Blog Post
Posted by Noel Hepworth1

Public financial management (PFM) procedures and systems that are technically advanced – often copying practices that have been established in developed countries - are constantly being advocated as a solution in developing and transition economy countries. Examples include program and performance budgeting, medium-term expenditure frameworks, financial management and control systems based on COSO2 requirements, accrual accounting, cutting-edge financial management information systems (and derivatives), and even internal audit. Such solutions are often regarded as ends in themselves and that mere adoption will provide the ‘magic bullet’ that is often desperately required. However, the experience of working in countries seeking accession to the European Union, and European neighbourhood countries shows that this is just not true.

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June 05, 2014

Clouds on the Horizon - Part I

  Cloud_Computing_1

Posted by Chris Iles and Benoit Wiest

A prevailing trend in IT, cloud computing brings together high speed internet access, cheap processing power and web programming tools and platforms to deliver IT services in a new way. In the PFM area, the cloud is relevant in large-scale applications such as FMIS, payroll management and procurement systems, as well as tax administration. Organizations of all sizes are excited by the cloud’s promise of meeting variable user demands, reducing operating costs and capital investment, improving application performance and reducing the burden on IT departments. There are also opportunities for developing countries, as they often deal with IT maintenance, capacity and reliability issues which cloud computing could address.

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June 03, 2014

Performance Budgeting—Lessons from France and the United Kingdom

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Posted by Jon Sell1

As the international trend towards the adoption of performance budgeting systems continues, the models regarded as benchmarks in advanced countries come under increasing scrutiny. Emerging and developing countries quite rightly want to investigate all possible options. ‘What lessons can we learn from what went well and what failed?’ ‘Which systems have proven most effective?’ ‘How sustainable did the systems created in the economically good times of the late 1990s prove to be?’ ‘Can these systems accommodate our own national political and administrative characteristics?’

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