Rwanda: A Decade of Difficult but Sustained Public Financial Management Reforms

 

Posted by Lewis Kabayiza Murara

Only a decade ago Rwanda did not possess a properly articulated public financial management system, and there were few qualified staff to run the system, especially public accountants. Since then the government has put in place many of the elements required for a sound system of public financial management. Some weaknesses remain, in particular in relation to local accounting capacity, but the government of Rwanda appears firmly committed to establishing a modern, efficient, transparent and accountable PFM system. In 2006, the government put in place a Public Financial Management Action Plan aimed at strengthening several aspects of the existing public financial management system. In particular, the government sought to strengthen accounting capacity, improve the audit function, and put in place more robust financial controls and reporting procedures, new rules on fiscal and financial decentralization, and procurement reforms. Subsequently, and following the first-ever PEFA assessment on Rwanda in 2007, a comprehensive and ambitious five-year Public Financial Management strategy was prepared in 2008 and is now being implemented, with some degree of success as evidenced by a repeat PEFA assessment concluded in December 2010.

This blog post attempts to summarize salient features of Rwanda’s public financial management landscape, including a short paragraph on public procurement (which tends to be forgotten by IMF and other PFM specialists as a key area in public financial management and tends to be treated separately).

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

Posted by Michel Lazare

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.

Government Payroll Management: Removing the Ghosts in the Databases

Posted by Franck Bessette

The wage bill is usually one of the biggest items of government expenditure and susceptible to weak control, misappropriation, and even corruption. From an expenditure policy perspective, the political economy of wage bill management often creates inflexibility because of pay increases linked to the electoral cycle, political preferences for wage scale compression, political or electoral based hiring, or the role of trade unions which favor seniority based promotions and management through the number of positions. This policy issue nevertheless requires a proper understanding of public financial management perspectives and the use of appropriate tools for budgeting and controlling personnel expenditures.

This post, based on a small sample of countries, looks at some PFM instruments and their linkage to personnel management issues.

Tackling public sector corruption with better information: the U.K. Treasury Fraud Report

Posted by Bill Dorotinsky

Anti-corruption is a major focus of governments and international organizations. An enormous amount of work is underway to combat corruption. Anti-corruption commissions are being established or operating in many countries, ranging from an advisory model (Macedonia) to those with police powers (Indonesia). Laws are being toughened. Anti-money laundering commissions are being established. Internal audit bodies and internal control systems are being reviewed and strengthened. Legislative oversight arrangements are being enhanced, and Supreme Audit Institutions (external auditors) fortified. And many other measures to enhance transparency and accountability undertaken.

But despite the attention to anti-corruption, most of the available data is limited to perception-based indicators. These are useful, but do pose challenges when trying to develop measures to tackle corruption in a specific country or context. For example, in the public sector, what are the most common patterns of corruption in country X?

PFM Blog has run across a useful practice underway in the U.K. for some years by H.M. Treasury.  Annually, government departments are surveyed for actual fraud cases detected (within government, primarily, but also capturing some external fraud against government programs). The latest report, Fraud Report 2006-7 (October 2007), and prior reports, are down-loadable.

Another Warm Welcome to Daniel Kaufmann Who Does It Again

Posted by Michel Lazare

In a March 11, 2008 post titled "Warm Welcome to the Kaufmann Governance Post", we announced the launch of Daniel Kaufmann's personal blog on governance issue.

Although this personal blog is still active, Dani Kaufmann has now created a World Bank blog on governance : "Governance Matters" which defines itself as "A Blog about Governance and Development for All."

The key difference between the two is that, while the Kaufmann Governance Post (KGP) was, initially at least, a one man show, Governance Matters is more an institutional and team approach. A number of Bank's experts on governance issues have already posted at least one article on this post. This difference should however not be overestimated as the KGP blog has now welcomed a number of guest bloggers and as Dani Kaufmann appears to be the key writer of the new Governance Matters.  Actually, convergence between the two blogs is such that most of Dani Kaufmann's latest posts have been posted on both blogs.

PFM blog likes the new Governance Matters as much as it liked the initial KGP. We wish long life and full success to both.

Extending Research on Corruption to Specific Features of PFM Systems

Posted by Francois Michel

If one wanted to summarize briefly how research on corruption has evolved in recent years, one could say that it has made progress in four different areas:

• The search for determinants of corruption and its transmission mechanism to growth and the exploration of linkages between corruption and other economic—GDP per capita, capital flows, aid, income distribution, inflation, etc.—or political variables. This is often achieved through panel data analyses;
• The improvement of transparency indexes—see Daniel Kaufmann and Aart Kraay’s recent article on "Governance Indicators: Where Are We, Where Should We Be Going?";
• Efforts to leverage insights from the corruption literature into sectoral, country-specific reform plans, and that have formed the core of the World Bank’s strategy in recent years. As the Bank’s recent flagship publication on corruption makes clear, public financial management reform are instrumental in tackling corruption;
• New microeconomic models explaining how corruption can originate in auctions of procurement contracts—e.g. on allowing ex-post collusion opportunities between the bureaucrat and one bidder.

Public Expenditure and Financial Accountability (PEFA) -- Part 2

Posted by Bill Dorotinsky

In an April 21, 2008, post, we described the origins of the PEFA framework, with a promise to blog about the framework itself. This post provides a brief overview of the assessment framework and indicator set.

The authoritative reference for the PEFA indicators is the PEFA Public Financial Management Performance Measurement Framework handbook, available in English, French, Spanish, Portuguese (Brazilian and Continental), Russian, Ukrainian, and Arabic.

Keeping-Up with Governance Issues -- World Bank Institute Governance Newsletter

Posted by Bill Dorotinsky

Stepping-back from core public financial management issues, there are frequently other public administration or 'governance' issues that emerge when trying to implement public financial management reforms. Civil service, parliamentary roles and responsibilities, and administrative reforms fit together to either enable or in some cases prevent PFM reforms.

For those interested in the broader context of governance, a useful resource is the World Bank Institutes monthly Governance and Anti-Corruption Newsletter, featuring recent, ongoing and upcoming events, publications and research, data and capacity-building issues, links, etc.

For example

• the recent May 2008 newsletter noted an upcoming Parliamentary Indicators and Benchmarks - International Seminar and Workshop at Griffith University, Brisbane, Australia (September 21 - 23, 2008). The workshop "will bring together key organizations working to develop parliamentary indicators and benchmarks with the aim of developing a generally accepted framework to measure parliamentary performance." This is an exciting development, building on the other indicator work we've blogged about (see the April 21, 2008 PEFA post).
• the June 2008 newsletter noted a recent event on Building Transparency and Reducing Corruption Related to Defense Establishments, Geneva, Switzerland (May 5-7, 2008). The workshop is part of a new, developing body of knowledge and practice that seeks to promote best practice and address the negative problems caused by corruption in defense establishments. This event was hosted by Geneva Centre for Security Policy (GCSP), the Geneva Centre for Democratic Control of Armed Forces (DCAF) and Transparency International UK (TI-UK).

Events include training for civil society and the media in budget monitoring, support to establish parliamentary budget offices, training for parliamentarians in the financial oversight roles, and many other relevant topics.

Interested readers can subscribe to the newsletter at the web site link above.

Bill Dorotinsky on Public Financial Management Reform -- Trends and Challenges (Video 3)

Posted by Michel Lazare

You liked Bill Dorotinsky's post of June 27 "Public Financial Management Reform -- Trends and Challenges"?

Well, you'll then love the video of this presentation delivered at the ICGFM meeting. Here is the third part of this YouTube video; parts 1 and 2 appear in other posts published today.

Bill Dorotinsky on Public Financial Management Reform -- Trends and Challenges ( Video 2)

Posted by Michel Lazare

You liked Bill Dorotinsky's post of June 27 "Public Financial Management Reform -- Trends and Challenges"?

Well, you'll then love the video of this presentation delivered at the ICGFM meeting. Here is the second part of this YouTube video; parts 1 and 3 appear in other posts published today.

Bill Dorotinsky on Public Financial Management Reform -- Trends and Challenges (Video 1)

Posted by Michel Lazare

You liked Bill Dorotinsky's post of June 27 "Public Financial Management Reform -- Trends and Challenges"?

Well, you'll then love the video of this presentation delivered at the ICGFM meeting. Here is the first part of this YouTube video; parts 2 and 3 appear in other posts published today.

Public Financial Management Reform -- Trends and Challenges

Posted by Bill Dorotinsky

On June 18, 2008, I spoke on Public Financial Management Reform: Trends at the the International Consortium on Government Financial Management (ICGFM) monthly speaker series in Washington, D.C.

I took the opportunity to share my personal views on current trends and challenges in public financial management (PFM) reform, drawing on my experience across the globe and multiple institutions. (As I noted, these are not the views of the IMF, or any other institutions with which I have been associated.)

The presentation covered three broad areas:

1. Common PFM reform recommendations, seen across all donors, consultants, etc.
2. Information on what reforms countries have been implementing in recent years
3. Challenges ahead for improving PFM

The PowerPoint can be downloaded here Download public_financial_reform_trends_icgfm_June_2008.ppt

The ICGFM Blog also posted a summary and video of the presentation on their Blog (CLICK HERE).

International Journal on Governmental Financial Management Available

Posted by Bill Dorotinsky

The latest issue of the International Journal on Governmental Financial Management (Volume VIII, No. 1, 2008) --- formerly known as the Public Funds Digest --- is now available. The Journal, sponsored by the International Consortium on Government Financial Management (ICGFM), is available for download in PDF format from the ICGFM website link above.

This issue has some interesting articles, covering a range of topics from anti-corruption to gap analysis on auditing standards. Specific articles include

• diagnostic tools for auditing and accounting, enabling gap analysis between national and international standards
• the Europe and Central Asian peer-assisted learning initiative in public expenditure management
• measuring and improving supreme audit institutions in developing countries
• two articles related to accrual accounting, one of which explains the 'German' cameral accounting model as an alternative to accrual accounting
• as well as articles on fighting corruption in Nigeria, Nigerian pension reform, and bureaucracy in Bangladesh.

A good collection of articles for public finance aficionados.

The Importance of Transparency and Accountability in Public Management

Posted by Michel Lazare

Fiscal policy makers, academia, and public financial management practitioners in general agree on the positive impact of transparency and accountability on economic performance and on public confidence and trust in government. Proving this positive impact to the general public in a convincing and accessible manner is, however, often a challenge--a challenge that Maurice P. McTigue, Vice President of the Mercatus Center at George Mason University and former Minister in New Zealand in the early 1990s, seems to successfully meet. Two speeches he pronounced in Louisiana over the last few months attest of his success in this area.

Post-conflict PFM -- IMF Lessons of Experience

Summary of lessons from FAD support

Posted by Bill Dorotinsky

The challenges of rebuilding fiscal institutions in post-conflict settings are daunting. An April 23, 2008, post summarized some lessons from USAID experience. The IMF Fiscal Affairs Department (FAD) has been directly involved in rebuilding fiscal institutions. Work done in 2004 summarized FAD's experience and some key lessons --- lessons reinforced by the recent USAID paper.

FAD experience was summarized in a 2005 Occasional Paper 247, Rebuilding Fiscal Institutions in Postconflict Countries, by Messrs. Gupta, Tareq, et. al. The work draws on background papers prepared in 2004, including a December 2004 paper "Rebuilding Fiscal Institutions in Post-Conflict Countries," and October 2004 case study summary Background Paper for "Rebuilding Fiscal Institutions in Post-Conflict Countries" (both available electronically).

DFID's Methodology for Managing Fiduciary Risks

Posted by Michel Lazare

Our March 31, 2008 post presented the recent DFID's Policy Paper on extending development aid through direct budget support. It indicated that provided that some conditions are in place DFID favors direct budget support. DFID like all the other development practitioners do recognize the fiduciary risks involved by the provision of aid through this form. Therefore, DFID has developed a methodology to manage fiduciary risk in its bilateral aid programs.

This methodology is the object of a DFID "How to note" published on January 30, 2008. Its full text can be accessed by clicking on the following link: Download howtonotefiduciaryrisk1.pdf .

This fairly technical note, which is mainly targeted towards DFID's country office staff, is nevertheless of interest for all PFM practitioners.

Talking about Taxes....the International Tax Dialogue

Posted by Bill Dorotinsky

You cannot spend what you do not have. Any good PFM system must start with revenue collection. Preferably, sound revenue policies that do not inhibit or distort economic growth. For those eager to keep abreast of the latest developments in tax policy and administration, a very useful reference is the International Tax Dialogue.

The International Tax Dialogue (ITD) was launched in 2002 by the IDB, IMF, OECD, UN and World Bank Group to "encourage and facilitate discussion of tax matters among national tax officials, international organisations, and a range of other key stakeholders."

The site has a library of over 2,700 documents, links to other useful sites, the ability to register as a member and receive newsletters and post tax policy questions, and a searchable database of technical assistance activities. And, the site is available in English, Spanish, French, German, Dutch, Norwegian, Chinese, and Russian.

A sampling of some recent documents posted to the site:

• a report by the U.K.'s Comptroller and Auditor General on "Tackling the Hidden Economy"
• an IMF report on "The Fiscal Implications of Climate Change"
• an OECD paper on "Tackling Cross-Border Tax Evasion"

(despite the many references to 'tackling,' this is not all about American football)

Visit the site and book-mark the page -- you'll want to visit regularly.

The Role of Fiscal Transparency in Sustaining Stability and Growth in Latin America

Posted by Taryn Parry

How can Latin America reduce its vulnerability to financial crises and global slowdowns?

The answer I developed in a recent IMF working paper is for these governments to focus on their full adherence to the IMF Code of Fiscal Transparency. Although there has been a strong rebound in growth in Latin America since the recession early in this decade, the pace of expansion has lagged behind other emerging market countries, and concerns have been raised about their ability to avoid future crises. Fiscal priorities for the region include avoiding procyclical fiscal policies, continuing to reduce public debt, improving the quality of the tax system, and promoting a better business environment. Fiscal transparency can play a critical role in meeting these challenges and remedying weaknesses in fiscal management practices that have been associated with past financial crises.

Poverty Reduction Budget Support -- A DFID Policy Paper

Posted by Michel Lazare

Further to our March 17 post: Is Providing Budget Support to Developing Countries Effective? -- Evaluation of DFID's Direct Budget Support by UK's National Audit Office, which discussed NAO's assessment of effectiveness of budget support, it is important to note that the UK's Department for International Development (DFID) has recently published a policy paper on budget support.

This paper updates DFID's previous policy (dating back to 2004). It draws on the conclusions of a May 2006 multi-donor Joint Evaluation of General Budget Support -- which provided new evidence about the effectiveness of general budget support -- and on the implications of the 2005 Paris Declaration on aid effectiveness.

It "reaffirms DFID's commitment's to using budget support -- alongside other aid instruments -- where it is appropriate to deliver aid to partner governments to reduce poverty. "

Is Providing Budget Support to Developing Countries Effective? -- Evaluation of DFID's Direct Budget Support by UK's National Audit Office

Posted by Michel Lazare

One of the main changes in development aid policy over the last decade was the decision made by the international community to move away from project aid in favor of direct budget support. This meant shifting away from aid financing specific projects and disbursed outside of the beneficiary country's public financial management (PFM) system (e.g., money deposited on projects' accounts in the commercial banks) to favor generally unearmarked aid funds directly disbursed using the beneficiary country's  PFM system (e.g., direct budget support deposited on the treasury's account at the central bank).

Evaluation of the efficiency and effectiveness of this new aid policy is a key issue for the international community. Just a few weeks before the upcoming Fourth High Level Forum on Aid Effectivemess to be held in Accra (Ghana), the UK's National Audit Office (NAO) has published, on February 8, 2008, a report evaluating DFID's (the UK's development agency) performance in providing budget support. This report titled: "Department for International Development -- Providing Support to Developing Countries", concludes in a nuanced way:

"Evidence on whether budget support has yielded better value for money than other forms of aid is not conclusive. While budget support has some advantages compared to other forms of aid, it also carries significant risks which need to be better managed."

Warm Welcome to "The Kaufmann Governance Post"

Posted by Michel Lazare

Daniel Kaufmann, a well-known authority on governance and one of the key governance experts at the World Bank, has just launched a personal blog: "The Kaufmann Governance Post.

In his first few posts, he shares his view that governance issues are by and large still misunderstood and indicates his intention to clarify misunderstandings with a series of posts to debunk myths about governance. For instance, the March 3 post is about: Myth #1.  Developing countries, and governments in particular, are all rife with corruption, while corruption is virtually absent in much of the rich industrialized world.  Worth reading.

Beyond the substance, PFM Blog also notes the modesty and human dimension relfected in the presentation pages of The Kaufmann Governance Post. Long life and full success to this new blog.

The Pile of Books on the “Resource Curse” Just Keep Growing !!!

So, why we should read “Escaping the Resource Curse”?

Posted by Teresa Dabán

Devising policies and institutions for the prevention of the “resource curse”—a term used to describe the surprisingly negative outcomes of resource-rich countries—has been the object of an extensive literature. One of the most recent contributions is Escaping the Resource Curse, a book edited by Macartan Humphreys, Jeffrey D. Sachs, and Joseph E. Stiglitz under the auspices of the Initiative for Policy Dialogue at the University of Columbia. The book reviews the main challenges posed by the management of resource revenues and proposes some interesting ways to address them.

To strengthen resource revenue management, for instance, the book proposes creating innovative budgetary  bodies and management arrangements that would operate in “parallel” to the existing ones. This post definitely recommends reading Escaping the Resource Curse, but argues that the benefits of creating such additional bodies and arrangements need to be carefully weighed against the risk of undermining and alienating existing budgetary institutions and discouraging reform efforts, especially in low-income countries, weakening governance and fragmenting already weak public finance systems.

Automating financial management systems -- it's not just the hardware

Posted by Bill Dorotinsky

As donors and governments spend enormous sums of money on automating financial management information systems in countries around the world, a great deal of attention is paid to the hardware and computer software. Debates over off-the-shelf or customized software, getting the right hardware, and setting up the right procurement arrangements, would fill volumes. But some recent cases illus rate the importance of paying attention to the 'soft' systems that surround the automated system -- the human systems that both serve and are served by the FMIS, the rules and controls embedded in and surrounding the systems.

On February 17, 2007, the Ugandan Daily Monitor broke a story ("Exposed: money racket in government") on an alleged scam being run from the Ministry of Finance and Ministry of Public Works, where fictitious suppliers where created in the computerized database, and payments were made to these suppliers for fictitious goods and services delivered. The article describes some of the means used to skirt what controls did exist, and but also illustrated that there were other controls missing.

A continent away, in Washington, D.C., a similar story unfolded in the District of Columbia tax office, where sham corporations were recorded in the automated information system, and tax refunds approved for these corporations. In some cases, the properties did not even exist, indicating absence of automated data-matching with property records or tax records to help control for such abuses. (See , for example, the November 14, 2007, Washington Post article, "D.C. Tax Scam Could Total $32 million".)

The Value of PETS

Public Expenditure Tracking Surveys: Detecting Leakages in Public Service Delivery Chains

Posted by Francois Michel

The major argument of the World Development Report 2004 : Making services work for poor people was that developing public services is fundamental for achieving the eight Millennium Development Goals and, beyond, creating conditions for sustainable growth. In addition, the report convincingly showed that the issue was not only one of funding. In most sectors and developing countries, there is a weak association between spending and outputs—more money does not translate directly into better “front-line” services. Associating inputs with outcomes appears to be an even thornier issue.

Public Expenditure Tracking Surveys (PETS) are one of the tools developed by the World Bank to grapple with the issue, as Doris Voorbraak and Kai Kaiser (respectively Senior Public Sector Specialist and Senior Economist, Poverty Reduction and Economic Management, World Bank) presented at an FAD seminar on December 20, 2007 (Download public_expenditure_tracking_surveys.ppt ).

Eyes wide shut? Understanding the politics of government auditing

He who lives outside the budget lives in error.
            Carlos Fuentes, La Silla del Águila, 2003.

Posted by Carlos Santiso (AfDB)

In the second generation PFM reform, strengthening transparency and accountability in public finances is a defining challenge for emerging economies seeking to foster fiscal responsibility and curb corruption. There is thus renewed interest in those oversight agencies tasked with scrutinizing public spending and enforcing horizontal accountability within the state.

Recent research by Carlos Santiso, titled Eyes Wide Shut? The Politics of Autonomous Audit Agencies in Emerging Economies, explores the external oversight of public finances. It models and measures the effectiveness of autonomous audit agencies, developing an index to evaluate their performance, and assesses their reform over time. It examines the institutional trajectory of the AAAs of Argentina, Brazil and Chile, which illustrate the three models for organizing the external audit function in modern states and three distinct trajectories of reform (or lack thereof).

A Principal-Agent Theory Approach to Public Expenditure Management Systems in Developing Countries - IMF Working Paper

Posted by Luc Leruth

A well-functioning public expenditure management (PEM) system is considered a critical pillar of government efficiency by most practitioners, who place it at par with a low-distortion tax system and an efficient tax administration. It is therefore unfortunate that economic research has shown so little interest in the design of PEM systems, especially on the theoretical side. A recent IMF Working Paper entitled "A Principal-Agent Theory Approach to Public Expenditure Management Systems in Developing Countries" by Elisabeth Paul and myself discusses Public Expenditure Management (PEM) systems in developing countries using an analytical framework based on principal-agent theory.

African Parliamentarians Discuss Ways to Promote Good Governance in the Management of Public Finance

Posted by Lubin Doe

The training center known as the Joint Africa Institute (JAI), created by the World Bank, the IMF and the African Development Bank (ADB), organized a five-day seminar in Tunis on the “Role of Parliamentarians in Promoting Good Public Financial Management (PFM) and Accountability.”

The seminar regrouped 26 legislators and officials from 8 English-speaking African countries (Ethiopia, Ghana, Liberia, Malawi, Mauritius, Rwanda, Sudan, Tanzania and Uganda). The team of presenters included Messrs Mitchell O’Brien (World Bank), Lubin Doe (IMF), Per Eldar Sovik (ADB), Augustine Ruzindana (African Parliamentarians Network Against Corruption), Adams Fusheni (Canada Parliamentary Center) and Niall Johnston (parliamentary consultant).

OECD Celebrates 10th Anniversary of its Anti-Bribery Convention

Posted by Luc Leruth

On November 21, 2007 in Rome, the OECD celebrated the 10th anniversary of its "Convention on Combating Bribery of Foreign Public Officials in International Business Transactions."

The meeting was chaired by Secretary General Angel Gurria and opened by Mr. Romano Prodi, the Italian Prime Minister. It ended with the unanimous adoption by all 37 states party to the convention of a statement reaffirming their commitment to fight bribery of foreign public officials in international business transactions.  Download Statement.pdf

For details on the 10th Anniversary Convention, please click here.

Corruption and Tax Revenue Generating Capacity Draft Paper

Posted by Davina Jacobs

A draft paper by Davina Jacobs and Patrick Imam, "Effect of Corruption on Tax Revenues in the Middle East" focusing on the impact of corruption on tax revenue performance was discussed at the International Institute of Public Finance (IIPF) 63rd Congress, in Warwick, U.K. (see October 10 blog post) This is the first study that estimates the impact of corruption on the revenue generating capacity of different taxes in the Middle East. We find that the low revenue collection as a share of GDP in the Middle East compared to other middle-income regions is due in part to corruption.

World Freedom Atlas: A Nice-Looking Tool to Visualize Good Governance Indexes

Posted by Michel Lazare

The time-series dataset (1990-2006) put together by the Quality of Government Institute of the Göteborg University (Sweden) is now available as an interactive mapping application in the World Freedom Atlas.

This data set is a very rich one. It contains dozens of data series and over 300 variables originating from a large variety of sources: World Bank, UNDP, NGOs, academia, etc. These data series cover not only good governance issues but also freedom, human rights, and democracy. Some of them relate to issues faced when reforming PFM systems (e.g., bureaucratic compensation) or could show, over time, the impact of PFM reforms (e.g., government effectiveness).

Illuminating Resource Revenue Transparency - A New Guide

Posted by Jon Shields

Available today (October 19) for the first time in hard print, the revised IMF Guide on Resource Revenue Transparency is a comprehensive handbook on good transparency practices for countries with substantial revenues from extractive industries. For governments, it provides detailed advice on  the information they need to make good decisions about the collection and use of these revenues - from the design of tax regimes to the management of resource funds. For citizens and other stakeholders, the Guide gives examples of good practice around the world and what can realistically be expected to be shared with them.

The Guide supplements the revised IMF Manual on Fiscal Transparency (see yesterday's Oct 18 blog). It applies the principles of the revised IMF Code of Good Practices on Fiscal Transparency to the unique set of transparency problems faced by countries that derive a significant share of their revenues from natural resources. The Guide has been revised to reflect the new Code and to provide more recent examples of good practice by individual countries. It provides a framework for assessing resource-specific issues within broader fiscal transparency assessments (including so-called ‘fiscal ROSCs’). Since its initial release in 2005, the Guide has been used by the governments and legislatures of resource rich countries, civil societies, the Extractive Industries Transparency Initiative (EITI), providers of technical support and interested academics and observers.

Anti-corruption: you know Bono and U2….What about U4?

Well, U4 is not a rock  band, but it nevertheless rocks.

It is actually an "Anti-Corruption Resource Centre [that] assists  donor practitioners to more effectively address corruption challenges through  their development support."

Public Financial Management and Anti-corruption: prevention through stronger PFM systems

Corruption is a hot  topic in international circles these days, and particularly with respect to country public finance systems. The IMF Fiscal Affairs Department has made a contribution to understanding how improvements in  public financial management systems can help fight corruption.

While  not an 'idiots guide to corruption',  a recent FAD staff paper (Dorotinsky,  William and Shilpa Pradhan), published in "The  Many Faces of Corruption: Tracking Vulnerabilities in the Sectors" (World Bank, 2007), explores the conditions of PFM systems that enable corruption to flourish, the ways corruption commonly manifests itself, and  develops a model for assessing the vulnerability of country PFM systems to  corruption.