PFM Blog

January 02, 2014

Top Ten Posts for 2013

Posted by Richard Allen, Holger van Eden, and Sasha Pitrof

Fireworks
The Top Ten posts for 2013 listed below display the continued diversity and versatility of the blog. The number of “hits” passed the one million mark during the year, and readership has maintained its high level. Readers clearly value the blog for keeping them up to date with new publications and events, as well as challenging them with original ideas and perspectives on PFM. Half of the Top Ten features reviews of two important new handbooks on PFM published in 2013, new technical notes on cash management and treasury issues, and the results of the Open Budget Survey for 2013. Other articles focus on keynote topics such as fiscal transparency, budget documentation, performance budgeting, and the challenges of reforming PFM in developing countries. Top author is Maarten de Jong of the Netherlands Ministry of Finance. Congratulations to him and all others who contributed excellent material to the blog in 2013! Looking forward to the New Year, the editors would welcome contributions from authors old and new, on topics both familiar and off-beat.

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December 23, 2013

Strengthening the Capacity of Parliaments in the Budget Process

Posted by Carlos Santiso and Marco Varea*

In the past decade, parliaments in many parts of the world have flexed their muscles by demanding more information about the government’s performance in managing public resources. In the Latin America and the Caribbean region, however, the capacity of the parliament to influence budgetary matters—and more generally fiscal policy and public financial management— is hindered not only by the centralized nature of the budget process, but also by the legislature’s lack of technical and institutional capacity.

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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.

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November 26, 2013

New Blood for FAD

Torben Hansen (below left), formerly the Deputy Permanent Secretary responsible for the budget at the Ministry of Finance in Denmark, has recently joined the Fiscal Affairs Department of the IMF as a Deputy Division Chief responsible for public financial management. Torben was interviewed by the PFM Blog about his career and what he expects to bring to the new position.

  Torben 2  Richard 2

Q: Why did you decide to join FAD? You have had a varied career working in the Danish finance ministry and elsewhere. What skills, experience and ideas do you expect to bring to the new job?

After working more than 20 years in the Danish finance ministry, the decision to join FAD is a unique opportunity to move my career forward in an international setting. I felt the time was right to seek new challenges, and the new position is a perfect match in terms of both my competencies and professional interests. What I can bring to the new job is first and foremost the practical experience of working with politicians and senior officials in a finance ministry and being at the core of the decision-making processes of government. Setting up the right procedures, institutions and incentives are crucial elements in maintaining a well functioning PFM system. I also hope to bring some knowledge and understanding of change management processes, and not least how difficult these are. At the end of the day, change is about people. And governmental organizations are world champions in avoiding, even opposing, change. Finance ministries have to learn how to work around these obstacles.

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November 20, 2013

Crowd Sourcing Request: A List of All International Comparative PFM Data!

Posted by David Gentry

Database
Public Financial Management (PFM) data sources are rapidly increasing in number and quality. In the last dozen years several new major data sets have been established, such as the PEFA (Public Expenditure and Financial Accountability) Secretariat’s listing of country assessments, the Open Budget Initiative’s Open Budget Survey results, and the IMF’s Fiscal Rules Dataset. Data sets increasingly are well defined, standardized, updated regularly, and often aligned with key analytical issues. They cover at least a large subset of countries worldwide.

An initial list of PFM data sources is shown below. Readers of the PFM Blog are invited to suggest additions, keeping in mind the criteria of useful data described in the opening paragraph above. An updated list, based on reader submissions, will appear in the Blog in the near future.  

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November 08, 2013

Update on Sukuk Financing

Posted by Yasemin Hurcan

In a speech in the World Islamic Economic Forum on October 29, 2013, UK Prime Minister David Cameron announced that the UK would like to become the first country outside of the Islamic world to issue an Islamic bond. He stated that the Treasury was working on the practicalities of issuing a bond-like sukuk instrument worth around £200 million, which it is hoped to launch as early as next year.

In addition, the London Stock Exchange is creating a new way of identifying Islamic finance opportunities by launching a world-leading Islamic Market Index. As was discussed in the blog posted on May 30, 2013, this development suggests that the use of sukuk instruments for sovereign borrowing is likely to increase in coming years. It supports the case for developing international norms on the accounting and reporting of sukuk-related transactions in PFM.

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June 03, 2013

Kenya’s Bold Course in PFM Reform

Posted by Ragnar Gudmundsson[1]

Note: This is the first in a new series of articles on the blog about PFM reforms in selected countries. Each article will be written by the IMF’s mission chief or resident representative in the country concerned, thus casting a fresh light on the reforms and their relationship to the Fund’s surveillance work.

Gudmundsson
Kenya is going through a huge set of political reforms, including a new Constitution.  What issues in public finance and PFM has this created? 

Kenya’s ambitious new Constitution was promulgated in August 2010, and one of its eighteen chapters is devoted to Public Finance. Key provisions in this chapter relate to devolution and the process of fiscal decentralization to the 47 newly created counties. Devolution was considered by the drafters of the Constitution as a way to promote political stability by ensuring adequate representation and the participation of all Kenyans in the running of the country. In this context, fiscal decentralization was perceived as a mechanism to enhance the delivery of social services on the ground and to promote enhanced accountability from State Officers. Moreover, a central objective of the Constitution is to promote good governance in PFM through the establishment of a sound institutional and regulatory environment at both national and county level.

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April 11, 2013

Austria – From an Incremental Improver to a Comprehensive Reformer

Posted by Johann Seiwald[1]

From the mid 1990s on, Austria has steadily improved its framework for fiscal policy and budgeting. With Austria’s accession to the European Union and the corresponding need to meet the Maastricht debt and deficit requirements, in 1996 a top-down approach replaced a “demand-driven” budgeting model in which fiscal discipline was not enforced and line ministries had little incentives for structural changes. Since 2000, the use of lump-sum budgets and performance budgeting has been piloted in more than 20 government agencies, including prisons, a printing office and the police academy. The implementation of a new cost accounting system for all federal ministries, as well as projects aimed at improving performance management, and introducing product definitions for public services and performance indicators in several line ministries, has steadily enriched the financial management framework.

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