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November 2016

November 23, 2016

Stepping Up the Financial Oversight of Public Corporations

HowToNote

Posted by Richard Allen and Miguel Alves[1]

Why should policy makers worry about the performance of public corporations (PCs)?  One reason is that, despite the large-scale privatizations that began in the 1980s, companies owned or controlled by the government continue to account for a large share of economic activity, and of public assets and liabilities (see charts below). Many PCs are pressured or mandated into fulfill political objectives and engage in public service obligations and other quasi-fiscal activities (QFAs) for which they are not compensated. PCs may also be used as a mechanism for circumventing traditional fiscal controls and as a conduit for financial corruption. (click to enhance images)

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November 22, 2016

Public Investment – The Perils of Premature Election Commitments

PublicInvestment

Posted by Jason Harris[1]

Increasing public investment is one of the more common pieces of advice given to countries over recent years, particularly in the presence of economic slack and low interest rates. In these conditions the short-term boost from increased demand adds to long-term benefits from increasing productive capacity. 

But while increasing investment is relatively easy to recommend in aggregate terms and at the political level, when it comes to the nuts and bolts of project selection, approval and execution, problems abound.  This is particularly so when premature commitments are made before a full project assessment has been done, resulting in cost blowouts and implementation delays.

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November 18, 2016

Senior Program Officer, Country Finance

GatesFoundation

The Gates Foundation is advertising a new position for a PFM expert in its Washington DC office. Details are provided in the Job Board page of this blog, on which information about other PFM-related positions may be advertised from time to time.

Enjoy!

November 15, 2016

PFM Reforms in South Africa after the End of Apartheid

An Interview with Trevor Manuel

South Africa

In this extended article for the PFM Blog, Trevor Manuel[1] describes some of his experiences as Minister of Finance in South Africa under Nelson Mandela and subsequent Presidents. Mr. Manuel oversaw huge reforms in the South African public finances as well as the creation of the National Treasury. The article is based on extracts from an interview taped during the Annual Meetings of the World Bank and the IMF held in Washington DC in October 2016. The interview was conducted by Lesley Fisher of the IMF’s Fiscal Affairs Department.

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November 10, 2016

How to Check Integrity of Fiscal Data

HotToNote

Posted by Benoit Wiest and Pokar Khemani[1]

Why is integrity of fiscal data so important?  Fiscal data relates to the use of public funds and its accurate reporting is a high priority for governments and donors, as well as for the IMF in its work on surveillance and program monitoring. Comprehensive fiscal reporting in line with international standards such as the IMF’s Fiscal Transparency Code and the Government Finance Statistics Manual (GFSM 2014) provides reasonable assurance about a government’s fiscal position and the integrity of the underlying data. However, the accuracy and reliability of government accounts and fiscal data can still be an issue. In many cases, the data provided by the authorities for program monitoring and surveillance are characterized by significant and persistent statistical discrepancies between the fiscal balance (“above-the-line”) and net financing (“below-the line”). These discrepancies are usually an indication of underlying weaknesses in a country’s public financial management (PFM) system, as well as issues with the integrity of financial data, and processes for collecting and disseminating this information. Significant and persistent discrepancies in data may require an investigation, and the development of specific measures to deal with these issues.

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