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March 2018

March 19, 2018

Making Gender Equality Operational

Posted by Carolina Renteria and Johann Seiwald[1]

A workshop on gender budgeting for southeastern European countries was held at the Joint Vienna Institute (JVI) from February 20-22, 2018. The event marked the initial step towards the creation of a new community of practice on gender budgeting in the region. It brought together representatives from ministries of finance and agencies/ministries responsible for gender equality from 13 countries, including Austria which is a world leader in gender budgeting.[2] The motto of the workshop was to “learn from each other”. The participants presented case studies of gender budgeting initiatives in their countries, and discussed plans, achievements, good practices, and challenges.

What is gender budgeting?

Most of the participating countries had a broad understanding of gender budgeting concepts and issues. However, there remains a lack of clarity about what gender budgeting means in practice. As was discussed in the IMF board paper on 2018 Gender Budgeting in G7 Countries[3], gender budgeting may be defined as the integration of a gender perspective into all PFM processes (see Figure 1). In short, gender budgeting is “good budgeting with a gender focus”, namely the application of the principles and practices of good budgeting from a gender angle. Gender budgeting does not only refer to women, but addresses a broader range of inequalities related to gender. It should assess the intended and unintended economic and social impact of gender-related policies, and make policy-makers aware of any biases in the design and implementation of these policies and programs.

Figure 1: Integration of Gender Budgeting into PFM
(Click on the image for better resolution)

Fig 1 Johann

Gender equality is a priority for all

A survey carried out before the workshop, based on an updated questionnaire, revealed that all the participating countries are committed to promote gender equality (see Figure 2). The principle of equality has been enshrined in these countries’ constitution or laws (e.g., the 2008 Constitution in Kosovo, an amendment to Montenegro’s Gender Equality Law of 2015, Bulgaria’s Gender Equality Act of 2016, and an amendment to Albania’s Organic Budget Law in 2016) and their governments have developed either national or sectoral plans to promote equality (e.g. the Croatian National Gender Equality Strategy 2017-2020, and Romania’s National Strategy for Equal Opportunities for Women and Men).

When it comes to tools and instruments to operationalize and monitor progress, no country has already implemented a comprehensive gender budgeting approach. However, some countries have plans to do so, including Albania, Bosnia Herzegovina, and Serbia. As shown in Figure 1, the coverage of gender budgeting instruments in all the countries is still in its early stages, but some countries have made progress. For example, Ukraine has announced plans to integrate gender aspects in performance budgeting, and Macedonia has issued a circular to include gender information in the budget.

Figure 2: Gender Budgeting in Southeastern Europe
Fig 2 Johann

(percent of countries surveyed)

Source: FAD survey, staff estimates

Bringing together the different constituencies

One striking feature of the workshop was how barriers of communication and mutual understanding between the ministries of finance and gender equality agencies represented were overcome. Fiscal and gender experts discussed and reflected on their different ideas and priorities for gender equality, the challenges for fiscal policy and gender policy, and how to work together to move forward with implementation. One country team summarized this shared understanding as creating the possibility to “promote gender equality with the same resource envelope by using available funds better”.

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March 12, 2018

How Useful are Perception Indices of Corruption to Developing Countries?

Posted by David Fellows[1]

There are numerous corruption perception indices. They provide an outsider’s impression of the prevalence of corruption across the various branches of government. Some indices focus on issues of bribery, others are more general in scope. Some indices aim to engage with the general public, and others with businesses or NGOs. Perception indices can incentivise governments to tackle corruption given the reputational damage that they can inflict.

The shortcomings of perception indices, however, have been widely recognized, including in recent studies by UNDP and the IMF.[2] Their evidential base is limited; survey samples are generally small; within the same index a variety of methodologies may apply so they can lack internal consistency; methodologies change so trends can be questionable; standardization is difficult to achieve between or even within countries and, as a result, the ranking of countries can vary from one perception index to another.

Those agencies and officials responsible for preparing these indices are aware of the deficiencies and make considerable efforts to mitigate them. Their key deficiencies are unassailable, however. Perception indices are based on impression, personal experience and hearsay rather than hard fact. In a multi-faceted study of villagers’ perceptions of corruption affecting road building in Indonesia, Olken finds that perceptions are a good indicator of the presence but not the quantum of corruption. He concludes that “there is little alternative to continuing to collect more objective measures of corruption, difficult though that may be”.[3] These factors can allow governments to diminish the importance of the messages that perception surveys contain.

An alternative approach has been proposed in a recent paper by Fazekas.[4] The paper gives an account of recent research into public procurement in which legal, regulatory and administrative records have been analysed to reveal the presence of corruption. Relevant factors include: the characteristics of the tendering process; the political affiliations and personal connections of suppliers; and the location and transparency of information about the ownership of these supplier companies. Fazekas correlates these various data sets to reveal behaviour that indicates a skewing of contract awards toward suppliers with particular characteristics.

Fazekas uses the term ‘objective’ to refer to factual data that are not mediated by stakeholders’ perceptions, judgments, or self-reported experiences. Nevertheless, the data are based on provable characteristics (e.g., from suppliers and procurement agencies). This approach, however, can provide some significant challenges. Databases may not be available electronically, thus hampering data collection, and information is not collected on a systematic basis across countries. Despite these reservations, the approach can produce valuable evidence identifying areas of public administration that are especially prone to corruption, the role of officials in facilitating corruption, and the means by which corruption is being perpetrated.

European countries and the USA have been at the forefront of this kind of work, but it also has potential for guiding administrative scrutiny and reform in developing countries. The necessary analysis could be undertaken by internal auditors, anti-corruption agencies, or other oversight bodies. These agencies could use the results to improve system design, and commission detailed forensic investigations of those concerned.

Fazekas uses sophisticated statistical techniques, but simpler methods could also be employed to measure inappropriate administrative processes, potentially illicit flow of funds between parties with close personal ties, the unexplained accumulation of personal wealth, citizens’ complaints, and other indicators of corruption. These results could then be used to identify potential levels and sources of corruption and, if acted on, lend credence to the government’s anti-corruption commitments.

The approach outlined above is relevant to national and local government, as well as public corporations where significant levels of corruption can occur at the highest levels. Such work could be enhanced through external moderation and research collaboration across national boundaries. A recent piece by the present author, published by the Australian National University’s DevPolicy Centre, discusses the growing relevance of digital media to governance reform.[5]

Objective data analysis can offer a clearer insight into the systemic nature of corrupt behavior, thus providing a more precise indication of the corrupt parts of an administration, the number of external parties that are engaged in corruption, and features of the PFM system that need to be strengthened. It can provide data to support a vigilant administration that wishes to maintain pressure on corruption, complementing efforts to increase prosecutions or administrative reforms.

Whatever ideas are advanced, they will all require commitment from national leaders if they are to succeed.


[1] David Fellows is Co-principal of PFMConnect. He is an accountant and PFM specialist with significant interests in digital service development and performance management. His thanks are extended to Cornelia Körtl and Domenico Polloni for their invaluable contribution to this article.

[2] UNDPs Guide to Measuring Corruption and Anti-Corruption (2015). See also IMF 2017, “The Role of the Fund in Governance Issues - Review of the Guidance Note, Preliminary Considerations”.

[3] Benjamin A Olken, “Corruption Perceptions vs Reality” -  https://economics.mit.edu/files/3931

[4] Mihály Fazekas “A Comprehensive Review of Objective Corruption Proxies in Public Procurement”  https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2891017

[5] See: http://devpolicy.org/international-ecollaboration-route-public-service-reform-20170720/.

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.

March 08, 2018

Moldova Strengthens Fiscal Risk Management

Posted by Natalia Sclearuc, Johann Seiwald and Eivind Tandberg[1]

Moldova published its first Fiscal Risk Statement (FRS) in December 2017[2]. The FRS provides a comprehensive overview of key fiscal risks facing the country, and is a useful tool for assessing the consistency and credibility of fiscal policies. Whereas much of this information has been available from various sources in the past, the consolidated presentation allows for assessment of the relative importance of each risk category, and provides a basis for prioritizing risk mitigation measures. The table presents the key fiscal risks in the FRS.

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March 05, 2018

Launch of the New ‘PEFA Check’


Posted by the PEFA Secretariat[1]

Since 2012, countries undertaking a PEFA assessment have been invited to submit their reports for a ‘PEFA Check’. The Check certifies that a report is compliant with PFEA Guidance on the assessment and reporting process. PEFA Checks have been widely adopted by the governments and institutions sponsoring PEFA assessments (see charts below). All PEFA reports published in 2016 and 2017 received a PEFA Check.

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March 01, 2018

Sharing the Burden: Taxation of the Peer-to-Peer Economy

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Posted by Aqib Aslam and Alpa Shah[1]

Within less than a decade, companies such as UberAirbnb, and TaskRabbit have become an integral part of the personal and social experience globally. Services that previously appeared impossible to organize beyond the community level have instead become almost impossible to do without. In this way, peer-to-peer (P2P) activities have seeped their way into everyday functions and therefore the psyche of the consumer.

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