Development Agencies

January 16, 2014

Politics Matter…But PFM Reforms Do Too.

Posted by Carlos Scartascini*

Politics
The recent CAPE 2013 conference organized by ODI provided a forum for discussing where PFM is and where it is going. While many interesting issues arose from the discussions, one theme was ever present: namely, the importance of considering PFM as much more than a purely technocratic process. Politics matter, and they tend to determine the way reforms are implemented, and their probability of success. In this note, I highlight the reasons why politics matter for the budget process and how this issue can be dealt with.

Continue reading "Politics Matter…But PFM Reforms Do Too." »

December 02, 2013

Is There a “New Consensus” on PFM Reform?

Posted by Richard Allen

Odi logo
The Overseas Development Institute’s annual CAPE Conference (the eighth in the series) on Budgeting in the Real World took place in London from November 13–14, 2013. The Conference attracted an impressive group of 110 national and international public servants, consultants and academics who work on budget institutions. For many practitioners, CAPE is the definitive PFM event of the year. The keynote speech, which was featured in a recent blog post, was given by Antoinette Sayeh, Director of the IMF’s Africa Department. Other notable presentations were made by Matt Andrews of the Harvard Kennedy School, and Allen Schick of the Brookings Institution and University of Maryland.

The Conference included sessions on the form and functionality of budget systems, what constitutes a capable ministry of finance, how reform can deliver change in the budget process, and how improved budget systems impact on development outcomes. Much of this is familiar ground and there was a sense of déjà vu in some of the presentations. One participant asked rhetorically why there were no feedback loops in our profession, why the same messages kept on being repeated from one year to the next, and why PFM practitioners appeared to learn so little and did not change their attitudes or behavior. Nevertheless, while the agenda had a familiar look on the surface, there were encouraging signs that an important if uncomfortable truth about the nature of budget reform is beginning to sink in to the collective mind of the PFM community. Indeed, the Conference may prove to be a watershed in the development of thinking on PFM reform, though much work remains to be done to flesh out the details of the new approach—an emerging “New PFM Consensus”—and put it into practice.

Continue reading "Is There a “New Consensus” on PFM Reform?" »

November 11, 2013

Online PFM Conference: ODI Event Being Streamed Live this Week

Posted by Ryan Flynn

ODI-CAPE
The Overseas Development Institute (ODI) is one of the UK's leading independent think tanks on international development and humanitarian issues. It is organizing a major conference this week: the 2013 CAPE Conference: budgeting in the real world. CAPE stands for Centre for Aid and Public Expenditure, which is hosted by ODI. It aims to shape and drive the agenda for international development assistance, as well as efficient and effective public spending for development at the country level.

The conference will focus on PFM and budgeting in developing countries. The whole two-days (13 & 14 November) will be streamed live online, and questions fielded through social media (#CAPE2013) will be answered by speakers and panellist. You can register to attend here.

Continue reading "Online PFM Conference: ODI Event Being Streamed Live this Week " »

September 17, 2013

FOTEGAL: Sharing Experiences of Treasury Management in Latin America

Posted by Israel Fainboim

Latin American budget officials are members of an association (Asociacion Internacional de Presupuesto Público—ASIP) which delivers an annual international seminar and regional seminars and publishes its own journal. Recently, the countries of the region together with two multilateral donors (the Inter American Development Bank and the World Bank) joined forces with the Fiscal Affairs Department (FAD) of the IMF to set up a similar organization for state treasurers.

That is how the Government Treasury Forum of Latin American (FOTEGAL) was born in 2010. The organization was formalized in a document named the Lima Declaration and through the approval of its own statutes. A total of 16 countries are currently members of FOTEGAL (Argentina, Bolivia, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, and Uruguay) and an invitation has been extended to Brazil to join (this country has participated in several of the annual seminars). The Government of Japan (JSA) has also been a key financial supporter of the activities of FOTEGAL. In addition, the IDB is supporting the development of FOTEGAL’s website. A link to this network and many of the documents and presentations made for FOTEGAL already exists within the website of one of the government treasuries, and a separate web page is under construction.

Continue reading "FOTEGAL: Sharing Experiences of Treasury Management in Latin America" »

September 06, 2013

PFM Innovations: ICGFM Issues Call for Speakers at its Upcoming Conferences

Posted by David Nummy, ICGFM Vice-President for Programs

ICGFM
One outcome of the global financial crisis has been recognition that Public Financial Management is critical to management of the fallout as well as to prevent future crises.   With greater attention, new approaches to the core elements of the PFM cycle have been employed and interest has grown in the experience of countries around the world in meeting the challenges of effectively managing resources in a manner that is transparent.   ICGFM will explore the innovations in PFM that have emerged as well as practices that are recognized as effective.

The International Consortium on Governmental Financial Management (ICGFM) has issued a call for speakers, panels, and presentations that address good practices in public financial management. As this topic will cover both of its upcoming conferences, proposals are solicited for both the winter conference in Washington, DC from December 9-11, 2013, and the 28th Annual International Training Conference in Miami in May 2014.  The Winter Conference will be held at the International Monetary Fund and is conducted in partnership with the Fiscal Affairs Department (FAD).

Continue reading "PFM Innovations: ICGFM Issues Call for Speakers at its Upcoming Conferences" »

July 08, 2013

Keeping Reform in the DRC on Track

Posted by Oscar Melhado Orellana

In this third article on the blog in which IMF area department staff express their views on PFM reforms in “their” country, Fiscal Affairs Department technical assistance advisor, Jean Pierre Nguenang, speaks with IMF Resident Representative for the Democratic Republic of Congo (DRC), Oscar Melhado Orellana, about the importance of PFM technical assistance in keeping the IMF program on track.

Photo
What contribution are reforms of PFM, revenue administration and tax policy expected to make to improved economic and fiscal performance in the DRC?

The DRC is one of the poorest countries in the world in terms of nominal GDP, despite being considered one of the richest countries in terms of natural resources. It has more than 30 percent of the world’s diamond reserves and 70 percent of the world’s coltan. The DRC is also one of the lowest-ranked countries in the international Corruption Perception Index. The government is still struggling to bring order to the eastern part of the country where recurrent attacks on citizens are perpetrated by armed groups opposed to the regime.

Continue reading "Keeping Reform in the DRC on Track" »

June 24, 2013

Successful International PFM Workshop for IFMIS Coordinators at IDB

Posted by Carlos Pimenta[1]

This event, which took place in Washington, DC from May 15-17, discussed the PFM challenges faced in modernizing Integrated Financial Management Information Systems (IFMIS), as they relate to technology, public accounting, treasury and budget. The workshop was attended by about 120 participants, including IFMIS coordinators from 17 countries in Latin America and the Caribbean, private consulting firms, international experts and staff from IDB, IMF and World Bank.

The agenda of the event included topics such as: (1) How to measure progress in efficiency and quality of PFM reforms and systems? (2) The role of IFMIS in cost systems and result-based management, (3) Technological advances in IFMIS development, (4) Budget transparency and accountability, (5) Definitions, techniques and regulatory framework for interoperability and its impact on IFMIS context, (6) Change management and IFMIS implementation, and (7) Service management, maintenance and support for IFMIS.

All presentations, speakers and other information can be reached using the links in the Final Report attached below (in English and Spanish) or here

Continue reading "Successful International PFM Workshop for IFMIS Coordinators at IDB" »

June 07, 2013

Treasury Community of Practice Debates Internal Control Issues in Kiev

Posted by Mark Silins

The Treasury Community of Practice (TCOP) of PEMPAL[1] conducted a highly participative three-day workshop entitled “Internal Control and the Role of a Modern Treasury” from April 24–26, 2013.  Over 60 officials, including treasury managers and specialists from 18 TCOP-member countries, as well as representatives of the Ministries of Finance of the Netherlands and Ireland, took part in the workshop held in Kiev, Ukraine. The workshop was also supported by experts from the World Bank, OECD, and the Slovenian Centre of Excellence in Finance.

The general objective of the Kiev event was to provide an opportunity for TCOP members to exchange experiences and take stock of the steps taken to date in implementing internal controls in each country and what, if any, steps remained. The workshop discussed both the role of a treasury in terms of managing internal controls within its own operations along with the broader role of the treasury as a key player within the overall public internal control framework in government. Prior to the workshop, participant countries responded to a 40-question survey to ascertain the status of their internal controls in relation to both of these two roles. Responses to the surveys proved extremely useful in designing an agenda relevant to participating countries.

Continue reading "Treasury Community of Practice Debates Internal Control Issues in Kiev" »

June 05, 2013

Japan Approves Continued Funding for IMF Technical Assistance to South Eastern Europe

Posted by Rocio Sarmiento[1]

JSA
Since 2009, the Fiscal Affairs Department (FAD) of the IMF has been providing considerable technical assistance (TA) to South East European (SEE) countries through a Regional Program that is sponsored by the Japanese Government, and is implemented in close cooperation with the Center for Excellence in Finance (CEF), based in Ljubljana, Slovenia. The overarching objective of the Program is to strengthen fiscal management capacity to ensure that all SEE countries—EU member and non-EU member countries alike—have the necessary capacity to design and implement measures to support fiscal consolidation and long-term fiscal sustainability.

The fiscal consolidation efforts of SEE governments have been supported by strengthening fiscal controls, improving the allocation of budgetary resources and more cost-effective service delivery, while efforts to protect revenue through more efficient revenue administration have focused on facilitating reform efforts that over time should bring the region’s tax administrations on par with modern European counterparts, and achieve consistency in the application of tax administration practices throughout the region.

Continue reading "Japan Approves Continued Funding for IMF Technical Assistance to South Eastern Europe" »

May 13, 2013

Twenty-one Countries Meet in Albania to Discuss Program Budgeting Reforms

Posted by Gelardina Prodani, Ministry of Finance, Albania and Konstantin Krityan, Ministry of Finance Armenia

Albania
As Chair and Deputy Chair of the Public Expenditure Management Peer Assisted Learning (PEMPAL)[1] Budget Community of Practice (BCOP), we would like to inform you about an exciting meeting that was held recently in Tirana, Albania on program budgeting.

From February 25th to 28th 2013, the Ministry of Finance of Albania hosted 81 participants from 21 PEMPAL member countries from across Europe and Central Asia (ECA). As suggested by our BCOP members from last year’s plenary meeting,[2] the agenda focused on technical aspects of program budgeting and performance measurement. The three main sessions of the meeting covered international approaches and country cases in (i) design of programs and performance measures, (ii) budget documentation, and (iii) performance monitoring and evaluation.

Continue reading "Twenty-one Countries Meet in Albania to Discuss Program Budgeting Reforms" »

Представители двадцати одной страны встретились в Албании, чтобы обсудить переход на программное бюджетирование

Авторы: Джеральдина Продани, Министерство финансов, Албания, и Константин Критян, Министерство финансов, Армения

Albania
В качестве председателя и заместителя председателя Практикующего сообщества по бюджету (В СоР) Сети по взаимному обучению и обмену опытом в управлении государственными финансами (PEMPAL)[1] мы хотели бы проинформировать вас о встрече, которая недавно состоялась в Тиране, (Албания), по теме программного бюджетирования.

С 25 по 28 февраля 2013 года Министерство финансов Албании приняло в общей сложности 81 участника из 21 страны-члена PEMPAL из Европы и Центральной Азии (ЕЦА).  Как и было предложено членами нашего Практикующего сообщества по бюджету (BCOP) на пленарном заседании в прошлом году,[2] повестка дня фокусировалась на технических аспектах бюджетного финансирования программ и на оценке эффективности работы.  Три основных сессии заседания были посвящены международным подходам и практическим примерам стран в следующих областях: (i) дизайн программ и критерии эффективности работы, (ii) бюджетная документация, и (iii) мониторинг и оценка эффективности программ.

Continue reading "Представители двадцати одной страны встретились в Албании, чтобы обсудить переход на программное бюджетирование" »

January 17, 2013

How Can the Pace of Budget Transparency Be Increased? Examining the Results of the Open Budget Survey 2012

Posted by Vivek Ramkumar

IBP WB medium


The International Budget Partnership (IBP) and the World Bank Institute (WBI) are pleased to invite you to join practitioners in the fields of development and fiscal management in a discussion on how to increase budget transparency and participation around the world. The discussion will include a presentation of the results of the IBP’s latest round of the Open Budget Survey and then focus on indentifying innovative and practical suggestions for rapidly improving country performance on the Survey.

Date: 5 February 2013
Time: 9.30-11 am (Breakfast will be served from 9 am)
Venue: IFC Auditorium, 2121 Pennsylvania Avenue, Washington D.C.

There is growing interest in the role of open budgeting systems in development. An increasing body of evidence shows that the best way to manage public funds efficiently and equitably is through budget systems that are transparent, inclusive, and monitored through independent oversight institutions. Recent research studies also show that transparency can help to attract easier and cheaper international credit and thereby increase public revenues. On the other hand, lack of fiscal transparency can undermine fiscal discipline,increase borrowing costs, and promote opportunities for corruption and other leakages.

Continue reading "How Can the Pace of Budget Transparency Be Increased? Examining the Results of the Open Budget Survey 2012 " »

December 20, 2012

Following the Money: Examining the Evidence on Pro-poor Budgeting

Posted by Rebecca Simson[1]

ODI logo
ODI’s Centre for Aid and Public Expenditure has recently initiated a work stream on pro-poor budgeting to investigate how governments choose to spend public funds and what this tells us about allocative efficiency.  In 2001 Adrian Fozzard published a paper on this topic, which presented approaches to resource allocation in the public sector and their implications for pro-poor budgeting. A decade on, and after billions of dollars spent to further pro-poor priorities in developing countries, have we learnt anything new about how to allocate public funds?

Our first background paper, Following the money: examining the evidence on pro-poor budgeting, explores what we do know about the influence of the poverty reduction agenda on resource allocation in developing countries. The paper goes on to propose some possible research topics that could begin to evaluate whether spending patterns have in fact changed in systematic ways in response to the high growth and falling poverty experienced over the past 15 years.

Continue reading "Following the Money: Examining the Evidence on Pro-poor Budgeting" »

December 17, 2012

Towards Better Public Expenditure Management: Experience Across Asia

Posted by Suhas Joshi  and Greg Smith

Despite heavy snowfall, government officials from mostly warm countries landed in Seoul for a high-level conference on how to improve public expenditure management (PEM) in the region. The event convened member nations of the Public Expenditure Management Network in Asia (PEMNA). The network, launched in June 2012 in Bangkok, provides opportunities for practitioners across the region to share knowledge and experiences in implementing PEM reforms. PEMNA is modeled on the PEMPAL network that has been operating successfully in central and eastern Europe for several years.

PEMNA comprises two communities of practice (CoPs). The budget CoP is managed by the World Bank, and the Treasury CoP by the IMF. PEMNA’s Steering Committee provides strategic oversight and governance. The Korea Institute of Public Finance (KIPF), a research and training institute associated with the Korean Ministry of Strategy and Finance, provides the secretariat for PEMNA and the two CoPs, and is supported in its work by development partners including the World Bank, AusAID, the IMF, and the OECD.

The demand-driven nature of the network allows members to focus dialogue on solving practical implementation issues.  By sharing common experiences and benchmarking performance with peers, members are able to deepen their understanding of the reform process. Across the budget and treasury areas members recognize that they cannot rely on theory alone and that the cross-fertilization of ideas is essential for the successful design and implementation of reform.

Continue reading "Towards Better Public Expenditure Management: Experience Across Asia" »

November 05, 2012

The Importance of Strengthening PFM at the Sub-National Level in Sub-Saharan Africa

Posted by Stephan Klingebiel and Timo Mahn[1]

The ongoing trend of decentralizing governance responsibilities to the sub-national level in many countries in sub-Saharan Africa (SSA) is likely to continue in the near future. In order to achieve its objectives, it will be crucial that this transfer of responsibilities will be matched by equal efforts to increase sub-national Public Financial Management (PFM) capacity.

As a cross-cutting issue of domestic accountability systems and of development policy, PFM lies at the heart of countries’ governance systems. It therefore comes as no surprise that PFM systems at the level of the central state have become one of the key reform areas in developing countries in SSA. At the same time, however, the capacity of, and the conditions for PFM at the sub-national tiers of government to date have received much less attention. While there are signs of a growing demand for sub-national PFM approaches, development partners so far have not fully come to terms with the implications of this trend in designing their technical and financial support programs.

Continue reading "The Importance of Strengthening PFM at the Sub-National Level in Sub-Saharan Africa" »

August 17, 2012

The sequencing debate is over… or is it?

Posted by Philipp Krause*

There seems to be an emerging consensus that advanced budget reforms should not be attempted in developing countries before budgetary basics have been soundly established. In many countries, this may well mean a focus on budgetary basics for the foreseeable future, consigning more advanced techniques to the inbox of another generation of budget officials.

It has not always been so. It has been 15 years since Allen Schick first warned practitioners to “look before they leapfrog”. It shouldn’t be forgotten that his warning came in response to widespread enthusiasm for adopting New Public Management reforms the world over. An often overlooked feature of Schick’s work is his emphasis on the external factors that function as preconditions for advanced budget systems to become viable. For instance, Schick noted that New-Zealand-style contractualism in the public sector only becomes viable in countries where informality has been firmly overcome in private sector practices.

A few weeks ago, Colin Talbot noted that Britain is another example for just such a co-evolution of public sector and private sector practice: in the mid-19th century, private sector property rights, democratic accountability and the professionalization of the civil service all proceeded in lockstep over the course of several decades. One might also add that the formal budget process was only established towards the end of this evolution, in the 1860s. Talbot’s key point is about co-evolution: large-scale societal changes depend on one another as they develop, and such developments are at best measured in decades and possibly a lot longer.

Continue reading "The sequencing debate is over… or is it?" »

June 29, 2012

Public Financial Management Information System in Georgia

Posted by Nino Tchelishvili, Deputy Head of State Treasury, Ministry of Finance, Georgia  

After the Rose Revolution (2003) the new government of Georgia undertook a large number of reform initiatives targeted at strengthening PFM. MoF focused on further developing the institutional framework of the budget process in order to improve its credibility and the effective allocation of public resources. An FAD mission visited Georgia twice in 2004 and assisted the MoF in formulating its strategy for treasury reforms. An FAD technical expert was assigned to help implement the reform measures in the areas of: Treasury Single Account, Budget Classification, Commitment Control, Accounting Reforms, and Cash Planning and Management.

In parallel with developing the PFM institutional framework, including basic components of a modern treasury system, MoF and the State Treasury started considering measures for reforming the then rudimentary and fragmented treasury information system. The decision to introduce integrated information systems was taken in 2006. Development Partners (WB, SIDA, Netherlands and DFID) provided funds for the Public Finance Management Information System (PFMS) implementation project and MoF embarked on this long and exciting journey in 2007. External technical experts recommended procuring commercial off-the-shelf (COTS) packages and customizing them to local context.

Continue reading "Public Financial Management Information System in Georgia " »

March 06, 2012

Job Offer: Position in the INTOSAI-Donor Secretariat, INTOSAI Development Initiative (IDI)

The IDI announces a new position in the Secretariat for the INTOSAI-Donor Cooperation. The position is temporary until end of 2015 with the possibility of an extension. 

Background

The INTOSAI-Donor Cooperation was established in 2009 by INTOSAI (the International Organization of Supreme Audit Institutions) and 15 Donors to intensify and strengthen work to support to Supreme Audit Institutions (SAIs) in developing countries. This entails a more strategic approach to capacity building of SAIs, improving the coordination and increasing the levels of support to SAIs from development partners.

The INTOSAI-Donor Cooperation is governed by a Steering Committee comprising representatives of INTOSAI and the Donor community. The Steering Committee decided in February 2010 that the IDI, located in Oslo, Norway, should host the INTOSAI-Donor Secretariat. The INTOSAI-Donor Secretariat is funded by Austria, Ireland and Norway and currently staffed with four positions/3,5 full time equivalents (one of whom is provided through a rolling secondment arrangement with the Office of the Auditor General of Norway). In February 2012 the IDI, in collaboration with its funding donors, decided to recruit one additional full time international staff member.

Continue reading "Job Offer: Position in the INTOSAI-Donor Secretariat, INTOSAI Development Initiative (IDI)" »

March 02, 2012

Job Offer: Campaign Coordinator, Global Movement for Budget Transparency and Accountability

The government’s budget affects the life of every citizen, especially those that are poor or marginalized. Yet, in many countries citizens have very little access to information about how the government plans to raise and spend public resources, let alone how effectively they have been used. For this reason, civil society organizations from over 50 countries recently came together to launch an international advocacy initiative and sign a Declaration of Principles to secure greater access to information and accountability for public funds (see www.Makebudgetspublic.org).

The Steering Committee of this nascent global movement, currently based at the International Budget Partnership, is looking to recruit a Campaign Coordinator to shape and lead a global campaign to secure greater public access to budget information and accountability for public funds.  This is an exciting opportunity for an experienced civil society advocate to play a formative role in developing and leading a global campaign to open budgets to public scrutiny and transform the lives of citizens throughout the world.

Continue reading "Job Offer: Campaign Coordinator, Global Movement for Budget Transparency and Accountability" »

February 22, 2012

Accrual Accounting Essential for Government Transparency and Accountability!

Posted by Ian Ball [1]

In this post Ian Ball, CEO, International Federation of Accountants, argues that it is time for governments to take their accounting responsibilities seriously and to modernise their financial management practices. The eurozone debt crisis has highlighted widespread financial reporting failures and must lead to extensive reform, including adoption of accrual accounting and budgeting practices. Politicians and Ministries of Finance must be pressured to implement these reforms before the next crisis hits.  

The sovereign debt crisis has emphasised the seriousness of the results of poor financial management and financial reporting. Obviously, government actions to limit the impact of the global crisis have exacerbated their financial positions, as many governments acquired significant assets and liabilities, gave guarantees of various kinds, and engaged in massive fiscal stimulus programmes. But the situation now would not be as dire if so many governments had not already made commitments that they did not account for properly, and may not be able to meet.

Governments in general are clearly accounting very poorly for their financial performance and position. This could, and should, lead to significant reform. We saw how financial reporting failure in the private sector a decade or so earlier led to dramatic action, including the passage of the Sarbanes-Oxley Act 2002 in the United States, and the creation of regulatory bodies for private sector audits in most major countries.

Continue reading "Accrual Accounting Essential for Government Transparency and Accountability!" »

February 10, 2012

IMF and CEF Strengthening Cooperation on Fiscal Management in South East Europe

Posted by Brian Olden and Norman Gillanders

Photos
Given the challenging international economic environment, the IMF and the Center of Excellence in Finance (CEF),[1] based in Ljubljana, Slovenia, are intensifying their cooperation. The global economic and financial crisis has contributed to an increase in the level of demand in South East Europe (SEE) region for technical assistance and cooperation in the public financial management and revenue administration areas. The IMF has been providing technical assistance through a Japanese Government funded program for some years. The program recognizes that measures to mitigate the impact of the crisis, and promote fiscal consolidation, should be anchored in sustainable medium-term fiscal policies. While the key priority has been to support longer term institutional reform, it has been necessary also to assist the authorities in some shorter-term measures to mitigate the immediate impact of the crisis. Many countries in the region are candidates or potential candidates for membership of the EU, and implementing reforms aimed at improving institutional capacity is an important element of the EU accession process.

Working with the CEF - Why it makes sense

In 2011 the IMF’s regional PFM and Revenue Administration advisors, located at the CEF in Ljubljana, had a mixed agenda with a number of requests to assist with specific weaknesses in institutional or management capacity that the economic crisis has highlighted, coupled with ongoing reform agendas to strengthen institutional capacity over the longer term. Technical assistance was delivered through a mixture of short individual missions, longer missions with teams bolstered by IMF headquarters staff and regional experts, targeted short-term experts visits and ad hoc desk-based research and reviews. A significant segment of the work also consisted of identifying training needs in the SEE region and, in close cooperation with the CEF, delivering workshops and seminars. This combination of CEF training and IMF technical assistance creates synergies and increases the impact of capacity development efforts in CEF member countries.[2]

Continue reading "IMF and CEF Strengthening Cooperation on Fiscal Management in South East Europe" »

January 30, 2012

How to Become a PFM Specialist – ODI to the Rescue!

Posted by Holger van Eden

PFM is an odd specialization. Not really taught at university, practiced but not really reflected on in government, PFM specialists usually roll into the topic after a dubious career in ministries of finance, consultancy or academia, or all three. Also, PFM specialists tend to come in blood groups: macrofiscal experts, budget “preppers”, performance specialists, experts on treasury management, IFMIS, government accounting, procurement, budget law, and so on. The generalists are harder to find, and are often so general that they can’t really provide advice on the “nuts and bolts” for improving government systems. Then again, the “nuts and bolts” guys often prefer to keep their esoteric knowledge to themselves. If you know how to modernize a chart of accounts, introduce IPSAS accrual accounting, or develop outcome based budgeting, well there are 190 or so countries which might avail of your services. No need to put the family silver on the table, as it were.

The UK’s Overseas Development Institute (ODI), perhaps sensing the scattered natured of PFM’s knowledge base, recently commissioned a very useful guide to the PFM literature. There is a lot of information out there both at the general and at the “nuts and bolts” level (including on the PFM Blog as the guide helpfully indicates), much of it produced by international organizations as the World Bank, the OECD and the IMF. The intro does warn the reader on the “established” nature of the reading suggestions: “it is up to the reader to remain critical and determine whether the international advice is appropriate to specific country contexts”.  Nothing wrong with that advice.

Continue reading "How to Become a PFM Specialist – ODI to the Rescue!" »

January 11, 2012

Country PFM Systems That Donors Can Believe In – A Glass Half Full

Posted by Camille Karamaga

As many participants and stakeholders in developing country budget processes have recognized, channeling external aid through country systems has helped to strengthen institutional and individual capacities, enhance domestic accountability for resources, improve expenditure prioritization, and, ultimately, contribute to more sustainable economic development. However, a recent OECD report on “Aid Effectiveness 2005-10” indicates that, while some progress has been made, donors and developing countries have fallen well short of the goals that they set themselves in the 2005 Paris Declaration on use of country PFM systems.

The findings from the 2011 OCED survey on aid effectiveness-covering 78 countries- provided significant input into the Fourth High Level Forum held in Busan, South Korea on November 29th to December 1st, 2011. This forum acted as a platform for renewed impetus for creating stronger, collective and inclusive global partnership in the final push to meet the Millennium Development Goals (MDGs) by 2015.

Continue reading "Country PFM Systems That Donors Can Believe In – A Glass Half Full" »

December 27, 2011

Fiscal Consolidation Plans in OECD Countries: What Do They Mean for the Role of the State?

Posted by Natalia Nolan Flecha[1]

Times are challenging and “austerity” is the watchword. After all, the pressure is on- with the OECD estimating that, on average, a total fiscal surplus of nearly 4% of potential GDP will be needed over the next 15 years just to stabilise public debt levels. Nearly 7.5% will be needed over the same period to reduce debt-to-GDP ratios to the Maastricht-approved level of 60% of GDP.

With their backs against the wall, what choices are governments making regarding their (current and future) obligations to citizens and firms? Where are governments holding their ground, and where are they willing to retreat and make more room for other service providers? Choices taken now could be telling and, to those looking for signs of what’s to come, may even provide some clues into the changing role of the State in a post-crisis world.

A 2011 survey of OECD member countries’ fiscal consolidation plans shows some interesting trends. Noteworthy was that, on average, more than two-thirds of planned retrenchment efforts will take the form of spending cuts (as opposed to revenue raising measures). Operational cuts were a staple of all countries surveyed; on average making up 27% of countries’ total retrenchment efforts. These included across-the-board reductions and/or freezes on such line items as staff wages, IT, procurement, as well as expected efficiency gains from mergers and restructuring of public sector organisations. Second, “big ticket items” also emerged as important targets of finance ministries. As of the end of 2010, 20 of the 30 OECD countries who participated in the study had announced cuts to social protection spending (e.g., pensions, unemployment and other social benefits). Health was next in line, with 15 countries reporting planned reductions here. In total, these two government functions accounted for about half of total general government spending in pre-crisis times.

Continue reading "Fiscal Consolidation Plans in OECD Countries: What Do They Mean for the Role of the State?" »

December 23, 2011

Fixing the Foundations: A Global Call to Action on PFM!

Posted by Steve Freer[1]

CIPFA – the UK-based Chartered Institute of Public Finance and Accountancy – is inviting organisations which share its passion for Public Financial Management (PFM) to come together and deliver a quantum leap in the quality of governments’ accounting, auditing and financial management practices. Steve Freer, Chief Executive of CIPFA explains why the present may be the best time for action……

Readers of this blog will know – better than anyone - the value of sound, effective PFM. You’ll also be aware of the potentially dire consequences of getting it wrong. Sadly, shortcomings in governments’ financial management practices are all too common in many jurisdictions around the world.

Many of our weaknesses have been exposed by the current sovereign debt crisis. Markets depend upon certainty and confidence. But what could be more uncertain than government accounts prepared on a cash basis without full balance sheet disclosure of assets and liabilities? How can that inspire confidence when governments are at the same time entering into complex guarantees to shore up ailing financial institutions?

Continue reading "Fixing the Foundations: A Global Call to Action on PFM!" »

December 12, 2011

Liberia Budget Reflection Workshop: Laying the Foundation for a Medium-Term Budget Framework

Posted by Kubai Khasiani, Steve Gurr, and Florence Kuteesa

Liberia is set to introduce a medium-term budget framework starting July 2012. The government of Liberia—with support of a joint team of IMF staff and the UK ODI’s Budget Strengthening Initiative—conducted a workshop in August 2011 to discuss implementation issues and challenges, chart a way forward, and obtain commitment from the various government institutions and stakeholders. The workshop was attended by officials from a wide variety of government institutions and generated lively debates as participants came together and candidly shared their experience. A set of recommendations was agreed at the end of the workshop, which would enhance cooperation and political commitment from all parties and facilitate the consultative process.

The introduction of a medium-term budget framework (MTBF)[1] by the government of Liberia, starting in the fiscal year 2012/13 budget, is stipulated in the 2009 Public Financial Management Act. The provisions of the Act set new challenges for the Ministry of Finance (MoF), line ministries, and development partners. The reform implication(s)—such as mandates and responsibilities of the various actors, and coordination perspectives—formed the focus of a five-day budget process reflection workshop held in Monrovia during August 29 and September 2, 2011. The workshop, organised by the MoF and facilitated by a joint IMF /ODI[2] technical assistance team, allowed an exchange of views between representatives of the ministries responsible for finance and planning on the one hand, and spending agencies on the other, on the potential challenges and prerequisites for a sustained reform implementation. The workshop was attended by 175 officials from the MoF, the Ministry of Planning and Economic Affairs (MoPEA), as well as line ministries and agencies across the government of Liberia.

Continue reading "Liberia Budget Reflection Workshop: Laying the Foundation for a Medium-Term Budget Framework" »

November 23, 2011

The Political Economy of Budget Reforms in Aid-Dependent Countries: Domestic and External Factors Shaping Success

Posted by Paolo de Renzio, Senior Research Fellow, International Budget Partnership and Research Associate, Global Economic Governance Programme, University of Oxford

The quality of governance and institutions is increasingly seen as a fundamental factor in shaping the development prospects of poor countries. As a consequence, donor agencies have increasingly allocated resources to providing support for improving governance standards in such countries. Their interventions are based on the assumption that, through a combination of financial and technical assistance, they can provide better incentives for reform and affect the quality of institutions in positive ways. Despite this existing consensus, research on how institutions develop and change over time is still incipient, especially in developing countries. Research on how donors’ influence affects governance trajectories and processes of institutional change in aid-dependent countries is even more scarce.

A paper recently published by the Global Economic Governance Programme at the University of Oxford investigates the domestic and external factors affecting the outcomes of reforms aimed at improving the quality of government budget institutions across a group of 16 aid-dependent countries. Government budgets are a key area of government action, through which policy objectives are chosen and acted upon, and the necessary resources are collected, allocated and spent. They have also become a crucial area being promoted by donors, backed by an increase in funding for technical assistance from US$ 170 million in 1997 to US$ 1.6 billion in 2007), covering a range of initiatives aimed at strengthening the rules and procedures which underpin budget processes. How has such external assistance worked? Were donors able to ‘buy’ better governance? What other factors shaped the outcomes of budget reforms? These are the key questions that the paper seeks to answer.

Continue reading "The Political Economy of Budget Reforms in Aid-Dependent Countries: Domestic and External Factors Shaping Success" »

November 21, 2011

Parliamentary Powers and Capacities

Posted by Mohamed Moindze, international consultant

The budget is the instrument used to implement the most important public policies. It affects the lives of all citizens. However, the budgetary process has for many years been under the exclusive control of government. Yet there is no way to achieve good governance of public finances (needed to implement public policies) without effective external control of public finances. In the past, the public’s involvement in the budgetary process (as well as the involvement of parliaments) was not considered useful. Some suggested that such participation could be dangerous since it might undermine a country’s budgetary stability by sacrificing the macroeconomic equilibria.

Increasingly over the last twenty years or so, the developing countries have been undertaking courageous reforms to allow national parliaments to play the eminent role that constitutions grant them in the management of public affairs. This transition is occurring in the context of a general trend toward democratization and good governance. This increased role of parliaments consists of debating the broad outlines of the course that countries wish to take, thus helping to define them, to enact laws, to allocate resources to government for implementing policies, and to control their application.

Continue reading "Parliamentary Powers and Capacities" »

Note de présentation du document sur le contrôle parlementaire

Affiché par Mohamed Moindze, consultant international

Le budget est l’instrument de mise en œuvre des politiques publiques le plus important. Il affecte la vie de tous les citoyens. Pourtant, le processus budgétaire a été, pendant très longtemps, sous le contrôle exclusif du gouvernement. Or, il ne saurait y avoir de bonne gouvernance des finances publiques (qui est nécessaire pour la mise en œuvre des politiques publiques) sans contrôle externe efficace des finances publiques. L’implication du public dans le processus budgétaire (et même des parlements) n’était, dans le passé, pas considérée comme utile. Certains avançaient qu’une telle participation pouvait être dangereuse puisqu’elle pouvait saper la stabilité budgétaire d’un pays en sacrifiant les équilibres macroéconomiques.

Depuis près de vingt ans, et de façon croissante, les pays en voie de développement engagent des réformes courageuses pour permettre aux parlements nationaux de jouer le rôle éminent que les constitutions leur accordent dans la gestion des affaires publiques. Ce mouvement se place dans le cadre d’une tendance générale à la démocratisation et à la bonne gouvernance. Ce rôle accrû des parlements consiste à débattre des grandes orientations des pays et à contribuer ainsi à les définir, à adopter les lois, à allouer des ressources aux gouvernements pour la mise en œuvre des politiques, et en contrôler l’application.

Continue reading "Note de présentation du document sur le contrôle parlementaire" »

November 16, 2011

Burkina Faso and Mali: Developing Program Budgeting While Getting the Basics Right

Posted by Benoit Taiclet and Lewis Murara

Program-based budgeting (PBB) is considered an important tool for developing countries to channel more efficiently their resources to achieving their development goals. However, PBB is also a rather sophisticated PFM reform, especially when certain public finance management (PFM) basics still need to be improved. Burkina Faso and Mali offer interesting examples of low-income countries whose reforms started at different stages, but finally made good progress both in program budgeting and more general improvement of their respective PFM systems. This success –although it must be stressed that PPB is not yet fully functional - mostly relies on the countries’ own determined pursuit of reform. However it has been facilitated by the synergy built between several stakeholders, the IMF and its Regional Center AFRITAC West, the UNDP and its regional pole in Dakar, as well as bilateral partners such as the Belgian, German and Japanese governments.

Gradual reform or a more risky Big Bang approach?

Both countries chose at an early stage a similar, cautious multi-step scheme for reform. The first step was to ensure a strong state commitment and civil society backing, then to develop costing of policy expenditures and medium term expenditures frameworks. In this scheme PBB was planned to be developed alongside the usual input budget prior to its full implementation. So far Mali has - and Burkina Faso intends to - set up a comprehensive PBB budget as an appendix of the draft budget bill. But still this appendix remains an information tool and to some extent a planning tool only, for the Executive, Parliament and the donor community; it has, however, not yet been considered an appropriate tool to actually manage government financial resources and to monitor the performance of the services.

Continue reading "Burkina Faso and Mali: Developing Program Budgeting While Getting the Basics Right" »

November 14, 2011

Reforming PFM Country Systems: The Benefits from a Governance Perspective

Posted by Dr. Stephan Klingebiel, Director, and Timo Mahn, of the KfW Bank office in Rwanda

The road to the 4th High Level Forum on Aid Effectiveness in Busan later this month is paved with many reports, declarations and surveys. One of the key inputs for Busan is the OECD-DAC survey on monitoring the implementation of the 2005 Paris Declaration. Alas, the results of this third and final survey round, which were published a few weeks ago, show that overall progress has been dismal since 2005. While this does not come entirely unexpected, there has been a vibrant debate about the reasons for this outcome. Since the publication of the survey, several contributors suggested that, going forward, one key element that is required to make progress on the aid effectiveness agenda is to pay more attention to the governance dimensions of aid reforms.

In a paper published at the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), we have argued that reforms of Public Financial Management (PFM) systems should have a key part in this. One of the challenges for development practitioners in the field of PFM is that often times, PFM reforms are still not seen as reform programs in their own right, but rather from the narrow angle of improving technical efficiency of financial management systems, processes and procedures. For PFM reforms to succeed, however, it is vital that their effects on governance are recognized and taken into account.

Continue reading "Reforming PFM Country Systems: The Benefits from a Governance Perspective" »

October 31, 2011

PEMPAL Treasury Community of Practice Workshop on Use of Information Technologies in Treasury Systems

Posted by Deanna Aubrey, PEMPAL Community Facilitator

On September 27-29, 2011, PEMPAL[1] Treasury Community of Practice (TCOP) held a workshop in Astana, Kazakhstan. Astana provided a spectacular backdrop for the meeting with the modern capital, only established some 14 years ago, preparing for events to celebrate Kazakhstan’s 20 years of independence.

Most countries participating in the TCOP from the Europe and Central Asia (ECA) region are in the process of modernizing or developing their Treasury information systems and many of them are either considering or already moving towards expanding system functionality and creating integrated Financial Management Information Systems (FMIS).  Given the importance of this theme to TCOP PEMPAL members, PEMPAL already organized previous meetings, including on the use of digital signatures in treasury operations, and more are planned for the future. The Astana meeting focused on the development and application of FMIS solutions, as well as the effective utilization of such web-based platforms for the public financial management needs of decentralized budget institutions and their spending units, in support of various reforms such as improvements in accounting and reporting and strengthening internal control frameworks.

Continue reading "PEMPAL Treasury Community of Practice Workshop on Use of Information Technologies in Treasury Systems" »

October 28, 2011

République Démocratique du Congo: Conférence sur les Reformes Budgétaires

Affiché par Ian Lienert

Une conférence sur les réformes budgétaires en République Démocratique du Congo (RDC) a été organisée les 3 et 4 octobre 2011 à Kinshasa, par le Comité d’Orientation de la Réforme des Finances Publiques (COREF).[1]  Plus de 150 personnes étaient présentes, avec une participation importante des ministres provinciaux du budget et des finances, ainsi qu’une représentation des ministères centraux (Plan, Budget et Finances) et sectoriels et de l’Assemblée nationale et du Sénat. Le Ministre du Budget a ouvert la conférence.

A l’issue des discussions, les participants ont validé l’idée d’une approche priorisée des  réformes des finances publiques. La première priorité est de restaurer la crédibilité de la loi des finances. Pour les représentants des provinces, une grande importance est attachée à la mise en œuvre de la Constitution de 2006, notamment en ce qui concerne l’allocation aux provinces de 40 % des recettes à caractère national.

Continue reading "République Démocratique du Congo: Conférence sur les Reformes Budgétaires" »

Democratic Republic of the Congo: Conference on Fiscal Reform

Posted by Ian Lienert

A conference on budget reforms in the Democratic Republic of the Congo (DRC) was organized in Kinshasa on October 3 and 4, 2011 by the Committee for Public Finance Reform(COREF).[1] Over 150 persons took part, including provincial ministers of budget or finance, and representatives of the central ministries (Planning, Budget and Finance) and sectoral ministries, as well as the National Assembly and the Senate. The (national) Minister of Budget opened the conference.

At the conclusion of the discussions, the participants validated a prioritized approach to public finance reform. The first priority is to restore the credibility of the annual budget law. The provincial representatives emphasized the need to implement the 2006 Constitution, particularly the provisions on the allocation of 40 percent of national revenues to the provinces.

Continue reading "Democratic Republic of the Congo: Conference on Fiscal Reform" »

October 13, 2011

IFAC Urges G-20 to Pursue Coordinated, Long-Term Approaches to Global Economic Stability and Fiscal Sustainability

International Federation of Accountants Calls for Institutional Change in Public Sector Financial Management, Adoption and Implementation of Global Standards, Support for Integrated Reporting

(New York/October 11, 2011) – In a letter submitted this week, the International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 125 countries, urged the G-20 leaders at their November 3-4, 2011 meeting in Cannes, France, to focus on three long-term initiatives aimed at promoting global economic stability and greater fiscal sustainability: 1) public sector financial reporting and management reforms; 2) global regulatory convergence; and 3) development of integrated reporting.

Address Public Sector Debt Problems: Encourage Review of Institutional Changes in Public Sector Financial Management and Adoption of Accrual-Based Accounting

In order to address the sovereign debt crisis, IFAC recommends that the G-20 commission the Financial Stability Board (FSB) to consider the institutional changes that are needed in public sector financial management to protect investors in government bonds, as well as the public. Further, the G-20 should actively encourage the adoption of accrual-based accounting and budgeting by governments and public sector institutions, which will promote greater transparency and accountability in public sector finances and allow for monitoring of government debt and liabilities for their true economic implications. IFAC also encourages the adoption and implementation of International Public Sector Accounting Standards (IPSASs).

Continue reading "IFAC Urges G-20 to Pursue Coordinated, Long-Term Approaches to Global Economic Stability and Fiscal Sustainability" »

Job Offer: IDI Seeking Consultants for SAI Capacity Development (Framework Agreement)

The IDI is looking for several consultants experienced in providing capacity development to Supreme Audit Institutions. Candidates should have experience of working with and for SAIs, and implementing SAI capacity development initiatives in a variety of developing countries. A number of consultants will be awarded a place on the framework agreement, to provide IDI with access to consultants with working level proficiency across the INTOSAI languages (Arabic, English, French, German and Spanish) as well as Russian and Portuguese. Applications, based on the terms of reference below, should be received by October 31, 2011.

The opportunity is also advertised on the IDI website

The IDI is a non-profit organisation that aims to enhance the institutional capacity of Supreme Audit Institutions in developing countries through needs-based, collaborative and sustainable development programmes in INTOSAI regions and groups of SAIs to meet the existing and emerging needs of stakeholders.

Continue reading "Job Offer: IDI Seeking Consultants for SAI Capacity Development (Framework Agreement)" »

October 12, 2011

Transparency and Participation in Public Financial Management: What Do Budget Laws Say?

Posted by Paolo de Renzio, International Budget Partnership, and Verena Kroth, London School of Economics

An increasing number of governments, as well as international and civil society organizations, are promoting the public disclosure of budgetary information, and calling for greater citizen involvement in budget processes. Most agree that fiscal transparency generates significant benefits, as it is an important precondition for better governance, improved economic performance and prudent fiscal policy, resulting in lower deficits and debt accumulation. Moreover, transparency functions as a political expression of democratic governance, giving citizens and taxpayers information that they are entitled to, and that they can use to hold their governments accountable.

Given its increasing importance, how can transparency and participation in public financial management be promoted or improved? As a possible avenue, it is interesting to look at the role of legislation in promoting both disclosure of budgetary information and opportunities for citizen engagement in the budget process. Key questions then are: (a) to what extent does budget legislation in different countries cover issues related to budget transparency and participation, and in what level of detail? and (b) does the degree to which legislation covers issues related to public disclosure of budget information seem to affect the actual level of budget transparency in different countries?

Continue reading "Transparency and Participation in Public Financial Management: What Do Budget Laws Say?" »

October 03, 2011

Budget Institutions Supporting Fiscal Consolidation

Posted by David Nummy

Countries around the world are struggling to devise the policies that will best address the challenges resulting from the financial crisis. In a book to be issued by the Fiscal Affairs Department of the International Monetary Fund, the case is made that key budget institutions will be necessary to both devise and execute those policies.

Previewing the book that will be issued later this year, Marco Cangiano kicked off the International Consortium on Governmental Financial Management (ICGFM) fall season by presenting on Budget Institutions for the 21st Century at the monthly DC Forum held at the Carnegie Endowment for Peace in Washington, DC on September 7, 2011. Mr. Cangiano, an Assistant Director of the IMF Fiscal Affairs Department, outlined ten budget institutions that will be key to countries around the world in addressing the challenges of dealing with the post-financial crisis environment in the three typical phases of a fiscal consolidation (but the same would apply in designing a stimulus package): understanding the fiscal challenge; developing a strategy; and implementation of the strategy though the budget process.

Continue reading "Budget Institutions Supporting Fiscal Consolidation" »

September 29, 2011

"The Overall Evaluation of the Performance of the PEFA Programme is a Resoundingly Positive One"

Posted by Michel Lazare

"The overall evaluation of the performance of the PEFA programme is a resoundingly positive one" is the first sentence in the main findings section of executive summary of the recently published independent evaluation report of the PEFA programme.

In November 2010, the Steering Committee launched an independent evaluation of the  PEFA Program, covering the period 2004 to 2010. The evaluation was undertaken by a team of consultants led by Andrew Lawson, and the final report has now been completed and is available on the PEFA website (www.pefa.org) or clicking on the following link: Download PEFAEvaluationRevisedFinalReportJuly2011[1].

The report notes a number of markedly positive achievements of the PEFA programme. Lets just mention the following three: (a) "Across the world 90 per cent of low income, 75 per cent of middle income and 8 per cent of high income countries had been assessed, were in the process of assessment or were going to be assessed by October 2010;" (b) "The PEFA Programme has succeeded in creating a credible framework for the assessment of PFM functionality, which manages to be comprehensive in its coverage and yet sufficiently simple for the non-technical user to understand;" and (c) "The PEFA assessment framework is now used by all major development agencies working with PFM systems, either as a tool to support the design and monitoring of PFM reforms or as a key element of fiduciary risk assessment processes."

 

Continue reading ""The Overall Evaluation of the Performance of the PEFA Programme is a Resoundingly Positive One"" »

September 09, 2011

Evaluation of Governance: A Study of the Government of India’s Outcome Budget

Posted by Anand P. Gupta, Director, Economic Management Institute, New Delhi, India. E-mail: anand@EconomicManagement.com

In 2005, the Government of India launched an apparently excellent initiative – the Outcome Budget – with the objective of changing the culture of measuring performance in terms of the amount of money spent against the budgeted allocations, to one of measuring performance in terms of the delivery of the outcomes that people are concerned with. This paper describes how the Outcome Budget was launched, articulates the theory of change underlying the Outcome Budget, presents a case study of the Outcome Budget of the Government of India’s Accelerated Power Development and Reforms Programme, and discusses the lessons that the Government of India may learn from its experience with the Outcome Budget.

The paper argues that the Outcome Budget has failed. This has happened because the assumptions of the theory of change underlying the Outcome Budget have not been satisfied. The failure of the Outcome Budget has extremely important lessons for the Independent Evaluation Office, which the Government of India has decided to set up. The paper articulates the theory of change underlying the Independent Evaluation Office. This theory assumes that policymakers in India currently demand rigorous impact evaluations of public interventions and will continue to demand such evaluations in future, not because they have to comply with any requirement but because they really want to know the answers to the impact evaluation questions of ‘what works, under what conditions does it work, for whom, what part of a given intervention works, and for how much?’, so that they may draw appropriate lessons from these answers and use these lessons while designing and implementing public interventions in future.  However, given Indian public officials’ current culture, the Independent Evaluation Office may not make any visible difference in development effectiveness in India.

Continue reading "Evaluation of Governance: A Study of the Government of India’s Outcome Budget" »

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.

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

July 27, 2011

No one ever said it was going to be easy…

Posted by Greg Horman

As economies recover, fitfully, from the global economic and financial crisis, policymakers are facing the challenge of how to accelerate growth. Growth alone will not be enough, however, to restore public finances to a sustainable path. Fiscal consolidation is necessary as well, but the challenges here are even more difficult.

Recent work by the IMF, including the Fiscal Monitor Update in June 2011, finds that the pace of adjustment in advanced countries is uneven. Consolidation is well underway in some places, but has been only modest so far in others. Some countries have yet to begin to address long-run imbalances. Indeed, continual fiscal deficits have characterized public finances in many advanced countries over the past decades. Deficits rose during downturns, but were not reduced sufficiently during years of economic expansion to prevent debt levels from climbing. More than ever, governments are being scrutinized by citizens, markets, and their sovereign peers over their commitment to bring down deficits and debt.

Continue reading "No one ever said it was going to be easy…" »

July 20, 2011

Program or Performance: What Comes First?

Posted by Holger van Eden

Inspired by the success of the PEFA diagnostic tool, staff from the Fiscal Affairs Department (FAD) and their counterparts from World Bank and EC, have been having a creative debate/not seeing eye-to eye/duking it out (all depending on one’s perspective of course) on how PEFA indicator scores should impact PFM reform programs in countries. Is there a one on one relationship between PEFA score and design of reform programs? This interesting question is not the topic of this post, however. The answer on how best to integrate PEFA in reform design is still pending. Interesting work has been done recently by Jack Diamond, Daniel Tomassi, and Ron Quist on the issue, and there seems to be some consensus at least that PEFA scores can help identify which of the “basic” PFM capacities in a country need upgrading. But this still leaves questions on optimal strategy and sequencing unanswered.

PEFA in any case says very little about the sequencing of advanced budget reforms such as MTEF and performance budgeting, as the indicators deal mostly with the basic functionality of PFM systems. One of the interesting questions in sequencing of advanced reforms is how the introduction of performance oriented budgeting should be handled. In recent years, the standard answer by many in the profession has been that program budgeting, including a fully defined program classification, has to be introduced first. Once program budgeting has become the core of the budget management system, then gradually performance indicators, first output and then outcome indicators, can be attached to the program structure. At that point, voila, one has performance budgeting.  How effective the program is in achieving policy objectives can be measured by setting targets for outcomes, and the efficiency of programs can be assessed by measuring costs of outputs relative to, for example, some benchmark, or over time.

Continue reading "Program or Performance: What Comes First?" »

July 11, 2011

Kazakhstan Hosts a Regional Workshop on Macro-Fiscal Forecasting and Medium-Term Budgeting

Posted by John Zohrab, FAD regional PFM advisor for Central Asia

The IMF’s Fiscal Affairs Department (FAD) and the Kazakhstan Ministry of Economic Development and Trade (MEDT) recently jointly hosted a regional workshop on macro-fiscal forecasting and medium-term budgeting issues. It was co-financed by the Government of Japan, through its technical assistance program Safeguarding Financial Resources in Central Asian Countries (JSA Program), and the MEDT.

The workshop took place in Almaty May 26-27, 2011. Representatives from Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Russia, Tajikistan, Turkmenistan and Uzbekistan participated in the workshop. They were mainly department and division chiefs from ministries of finance, ministries of economy, and economic research institutes under the ministries.

Continue reading "Kazakhstan Hosts a Regional Workshop on Macro-Fiscal Forecasting and Medium-Term Budgeting" »

July 04, 2011

METAC Workshop on Expenditures Control and Internal Audit: A Good Example of Donor Coordination

Posted by Pierre Messali

As part of its work program in the area of public financial management, METAC organized a regional workshop in Cairo, Egypt from May 30 to June 1. The objectives of the workshop were to review the systems of expenditure control and internal audit in the Middle East and North Africa (MENA) region and to come up with reasonable and practical recommendations for reform and modernization. The event was very successful and gathered a large number of officials from the METAC and Gulf Cooperation Council (GCC) countries (some 50 participants).

This was a collaborative effort of METAC[1], the Ministry of Finance of Egypt, and donors. These included the European Union (EU), jointly with the SIGMA-OECD program[2], the USAID, jointly with the Egypt Competitiveness Project (ECP) program[3], the World Bank[4]  (HQ and Cairo and Beirut offices), and ADETEF[5], affiliated to the Ministry of Finance of France. 

The workshop exemplified a high degree of collaboration between donors and it should set a precedent for future activities. Such cooperation: (i) avoids duplication of efforts and waste of resources; (ii) gives more consistent messages to recipient countries; and (iii) benefits   participants from exchanging experiences with donors and making full use of respective comparative advantages. This is also in line with the Paris Declaration on aid effectiveness which calls for donors to harmonize their actions and to work together to reduce duplication of work and promote joint training to share lessons learnt and build a community of practice.

Following the workshop, USAID issued a newsletter highlighting the success of the workshop (attached). Other collaborators, the EU and the WB and ADETEF have also expressed a great deal of satisfaction with the workshop and agreed on further cooperation.

Continue reading "METAC Workshop on Expenditures Control and Internal Audit: A Good Example of Donor Coordination" »

July 01, 2011

PEFA: Le Rapport de suivi 2010 et l’analyse des évaluations répétées

Affiché par Frans Ronsholt et Phil Sinnett

Pefa logo 
Le quatrième rapport de suivi du déploiement du Cadre PEFA a été préparé par le Secrétariat. Le Rapport de suivi 2010 analyse les évaluations répétées et notamment l’évolution de la performance des systèmes de GFP mesurée au moyen des indicateurs PEFA.

Le Rapport de suivi 2010 avait pour principal objectif de déterminer si le Cadre PEFA permet d'obtenir des mesures fiables de l'évolution de la performance depuis les évaluations précédentes ; une évaluation répétée examine les changements particuliers intervenus dans la performance d'un système en vérifiant ce qui a changé et dans quelle mesure. Le nombre d’évaluations répétées s’accroît nettement car beaucoup d’évaluations de référence ont été menées il y a trois à six ans. Entre le lancement du Cadre PEFA en juin 2005 et le bilan des évaluations effectué en octobre 2010, 45 évaluations répétées ont été menées dans 38 pays. 

Le Rapport de suivi 2010 cherche des réponses aux questions suivantes : i) quelle est la fréquence des évaluations répétées et pour quelles raisons sont-elles réalisées ? ii) le Cadre permet-il réellement de mesurer les changements intervenus et serait-il possible de mesurer ces changements par des méthodes plus valides et plus fiables ? et iii) quelles sont les évolutions de la performance de la GFP qui ressortent des évaluations répétées ?

Continue reading "PEFA: Le Rapport de suivi 2010 et l’analyse des évaluations répétées" »

PEFA: Monitoring Report 2010 on Repeat Assessments

Posted by Frans Ronsholt and Phil Sinnett

Pefa logo 
The fourth monitoring report on the roll-out of the PEFA Framework has been prepared by the Secretariat. The Monitoring Report 2010 (MR 10) analyzed repeat assessments including changes in PFM systems performance measured by means of PEFA indicators.

The main purpose of the MR10 was to assess if the PEFA framework is able to provide reliable measurement of performance changes over time. One of the objectives of a repeat assessment (RA) is to measure performance since the previous assessment (PA); a RA looks at the specific changes in system performance by verifying what has changed and by how much. RAs are emerging in significant numbers as many baseline assessments took place 3-6 years ago. Between the launch of the PEFA Framework in June 2005 and a stocktake in October 2010, forty five RAs have been carried out in 38 countries.

The MR10 seek answers to the following questions: (i) what are the frequency of and drivers behind the repeat assessments, (ii) does the Framework effectively enable measuring changes and could changes be measured with better validity and reliability and (iii) what trends in PFM Performance do repeat assessments reveal?

Continue reading "PEFA: Monitoring Report 2010 on Repeat Assessments" »

June 23, 2011

Job Offer: International Budget Partnership Seeks Events Coordinator

The International Budget Partnership (IBP) is based at the Center on Budget and Policy Priorities in Washington, DC.  The IBP provides a range of services to help non-profit organizations in developing and transition countries to analyze and influence public budgets.  The IBP is seeking an Events Coordinator (exempt post) to join the administrative team that supports and assists all IBP programs.  The Events Coordinator will report to the Director of Operations. 

Continue reading "Job Offer: International Budget Partnership Seeks Events Coordinator" »

June 14, 2011

Discussions of PEM PAL Treasury Community of Practice on Public Sector Accounting and Reporting Reforms

Posted by Anila Çili (Director, Central Harmonization Department on Financial Management & Control
Ministry of Finance, Albania) and Deanna Aubrey (Budget, Treasury and Internal Audit Community Facilitator, PEM PAL CEF Secretariat, Center of Excellence in Finance, Slovenia)

From 18-22 April 2011, 41 participants from Ministries of Finance and Treasuries from 15 European and Central Asian countries[1] met in Ljubljana, Slovenia to discuss public sector accounting and reporting reforms as part of the ongoing network activities under the Public Expenditure Management Peer Assisted Learning Program (PEM PAL) program.[2]  This program has 21 member countries from across the Europe and Central Asia (ECA) region who regularly meet in ‘communities of practice' to discuss reform issues in the areas of budget, treasury and internal audit (www.pempal.org). The event was also linked to a conference on international trends in public sector accounting reforms organized by the Center of Excellence in Finance, Ljubljana Slovenia held on 20-22 April.[3] The conference involved discussions on the increased role of accounting in the public sector, especially in the post financial crisis era, its evolution in the recent years and the lessons learned.

Continue reading "Discussions of PEM PAL Treasury Community of Practice on Public Sector Accounting and Reporting Reforms" »

May 18, 2011

Addressing Challenges in Public Financial Management Reforms in the PEM-PAL Network - January 2011 Plenary Meeting on Managerial Accountability and Budget Execution

Posted by Tomislav Micetic, CAE, CPIA, Head of Internal Audit Service, Ministry of Finance – Republic of Croatia, and Chair of Internal Audit Community of Practice PEM PAL tmicetic@mfin.hr

The PEM PAL (Public Expenditure Management Peer Assisted Learning) network (ww.pempal.org) aims to support reforms in public expenditure and financial management in 21 countries in Central Asia and Central and Eastern Europe by promoting capacity building and exchange of information. PEM PAL is organized around three Communities of Practice (CoPs), for budgeting, treasury, and internal audit, bringing together a number of high-level practitioners. They meet regularly to share experiences among themselves and seek practical solutions for the most pressing issues related to reform implementation. PEM PAL is often cited internationally as a showcase for peer learning, given its innovative approach.

Continue reading "Addressing Challenges in Public Financial Management Reforms in the PEM-PAL Network - January 2011 Plenary Meeting on Managerial Accountability and Budget Execution" »

Back to top of page
©2007 IMF. All Rights Reserved. About Us | Terms of Use