Aid

July 09, 2014

Australia to Enhance its Performance Management Framework

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Posted by Kris Kauffmann

Australia is widely recognized as a pioneer of the medium-term programmatic approach to budgeting but recent self-examination of these reforms indicates a need to strengthen the government’s approach. A strong performance management framework remains critical to the success of the Australian reforms. A range of recommendations to strengthen the framework have now been adopted that should be of interest to other jurisdictions intent on strengthening performance management in the public sector.

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August 29, 2011

IMF Technical Assistance: Positive Impact on the Ground

Posted by Camille Karamaga

Country leadership has been essential to the past and on-going success in implementing public financial management reforms in Liberia. But the IMF technical assistance seems to have played an important role, as acknowledged by the Liberian authorities in a video featured on the IMF external web.

Well coordinated assistance has been, and continues to be, provided by the IMF Fiscal Affairs department (FAD) and other development partners. FAD’s assistance, which is currently funded by the Swedish Development Agency (Sida) and the EU, relies on a resident advisor who provides intensive on-the-job capacity building and day-to-day guidance to support the ownership and sustainability of the reforms, in addition to regional activities funded by the Japanese government and routine visit from headquarters staff.

One of the lynchpins of the ongoing economic governance reforms has been the passage in 2009 of a new public financial management law, which along with its associated financial regulations, has re-established the legal basis for public financial transactions in Liberia, as portrayed in a recent blog post. As Minister Augustine Ngafuan stresses in the video, since 2007 FAD has assisted the authorities in designing and putting in place a modern legislative framework that will help Liberia manage its public finances for years to come.

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August 18, 2011

Certifying PFM Systems for Donor Budget Support to Fragile States – Professor Collier’s Proposal

Posted by Tej Prakash

In a recent op-ed (later also presented at an Overseas Development Institute (ODI) meeting), Prof. Paul Collier has put forward the argument that where donor aid is allowed to flow through the budget system of a fragile state, it has largely failed to deliver the results promised. The reasons given for this failure, range from incompetence to corruption. And, it is suggested that in the near future, there seems to be little chance of any meaningful improvement in these outcomes. He argues that the governance system in many of these countries is broken, and its focus is by no means primarily to provide services to the citizens. It is suggested that budget systems of these countries are extremely ‘leaky’ (‘looting of the public purse”) and that donors do not have, by and large, either the information or the technical expertise, to prevent misuse of aid money.

Collier makes a distinction between aid given for critical operations and for more general budget support operations. For critical operations he recommends using ‘imported administrative capacity’ to manage all spending, including donor funds through specific project support arrangements. His proposal relates only to donor budget support and does not address existing parallel project based arrangements operated by many donors. He does suggest that it is possible to improve the ‘technical’ aspects of donor flows. The focus of technical improvements would not be to introduce policy ‘conditionalities’ through a back door, but to enforce the country’s own laws. He cites the insight of Tinbergen that to implement any objective, there should be a distinct instrument with its distinct effect. Hence, the two main objectives: meeting the need for funds (how much) and ensuring their effective use (on what), should be managed by two different instruments.

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April 04, 2011

Global Aid Transparency Movement: A Call for Action?

Posted by Florence Kuteesa, former budget director of Uganda

A global aid transparency movement, bringing together several initiatives with a shared vision[1], has received increasing interest and attention since the 2005 Paris Declaration for Aid Effectiveness. The main thrust of the movement is to make information about aid spending easier to access and understand by promoting public disclosure of regular, detailed, and timely reports on volume, allocations, and, where available, results of aid spending.

The movement is premised on the understanding that joint commitment from both donors and recipient governments is required to enforce global aid transparency. The International Aid Transparency Initiative (IATI) advocates for one gateway to access information from different sources by setting up an online registry that records the location of information. Publish What You Fundconducted an assessment of donor transparency levels whose findings were published in the 2010 Aid Transparency Assessment Report and discussed below. A joint initiative[2] is underway to formulate common standards to determine what information participating donors will publish and formats in which it will be presented.

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May 07, 2010

Daniel Kaufmann (Brookings): Can Corruption Adversely Affect Public Finances in Industrialized Countries?

Posted by Michel Lazare

Kaufmannd_portrait

PFM Blog readers will remember that we published two previous posts on Daniel Kaufmann's blogs. The first one when Daniel created his own blog (Warm Welcome to "The Kaufmann Governance Post") and the second when he started posting on the Work Bank's blog Governance Matters (Another Warm Welcome to Daniel Kaufmann Who Does It Again).

Nowadays, while keeping his personal blog quite active, Daniel is a Senior Fellow at the Brookings where he does research and publishes on governance and anticorruption.

One of latest articles is a well-crafted piece titled: Can Corruption Adversely Affect Public Finances in Industrialized Countries? in which Daniel "departing from traditional “developing country” focused studies of corruption, [asks] whether corruption may adversely affect public finances in industrialized countries. With recent data, [he explores] the link between corruption (and other governance variables) and the public budget deficit of industrialized countries.

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December 10, 2007

Country PFM Systems — Monitoring Performance and Lessons for Reform

Lessons from IMF-World Bank work with HIPCs, 2001-2005

Posted by Bill Dorotinsky

One of the many developments in public financial management (PFM) over the past several years, one of the more interesting was in the field of monitoring PFM system performance over time. From 2001-2005, the IMF and World Bank developed and applied a new instrument for assessing country PFM systems and monitoring their development over time. The work was undertaken in the context of Highly-Indebted Poor Country (HIPC) debt relief, and covered 26 countries in Africa and Latin America.

The work is worth highlighting  for many reasons, not least of which are the approach used, the tool itself, and the lessons that emerged for PFM reform. This post summarizes the instrument and results of this work, especially important lessons for PFM reform, and subsequent posts will summarize more recent developments in this field.

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December 02, 2007

Motherhood, Apple Pie, and Good Governance

Posted by Michel Lazare

Like motherhood and apple pie, we all love good governance. Right?

Indeed, finding somebody --or an institution-- who does not claim to support good governance might be challenging. But defining good governance is equally challenging.

An illustration of this difficulty was given in a December 3, 2007 PFM Blog post, where our colleague Ian Lienert wrote:

A framework for relating the stages of PFM reform with governance categories, ranging from States that are “failing or collapsed” through to “institutionalized and competitive”, was presented. However, it was difficult to pin down the links between PFM reform frameworks and governance, in part because the concepts of “governance” and “political economy” are multi-dimensional and ill-defined.

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November 14, 2007

Better Meeting Country Needs -- IMF Regional PFM Technical Assistance Centers

Posted by Christian Schiller

Country PFM technical assistance needs range from strategic advice on feasible PFM reform paths to very short-term advice solving specific, practical PFM problems. To meet these differing needs, the IMF has multiple ways of delivering technical assistance (for an overview, see the blog post of November 7). One specific development is the regional technical assistance center (RTAC), of which there are six at present.

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October 05, 2007

Good Financial Governance in Africa - Insights into G-8 GTZ Effort

The G-8 Action Plan for Good Financial Governance in Africa was adopted by the G-8 earlier this year in Potsdam (Germany), and was one of the signature German efforts during their G-8 presidency.  GTZ, one of the German Development Agencies, in their latest Newsletter (September 2007, No. 9), focuses on the origins of the Action Plan concept.

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October 03, 2007

Low-Income Countries' Public Financial Management Systems Need Upgrading to Enhance the Benefits of Scaled-Up Aid

A September 2007, IMF Survey article, and associated staff working paper, examines the challenges facing low-income countries in upgrading their public financial management (PFM) systems, and their implications for international development assistance. The article notes that PFM systems in most low-income countries (LICs) need strengthening if these countries are to fully benefit from scaled-up aid. Weaknesses in PFM can undermine budgetary planning, execution and reporting, reduce fiscal transparency, and result in leakage of scarce resources.

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