Where and Why do PFM Reform Efforts Succeed?

Posted by Joanne Asquith

Over the last decade or so, donor support for activities in public sector financial management (PFM) has grown more than ten fold, from US$85.1 million in 1995 to US$930.6 million in 2007.  Nevertheless, surprisingly little evidence and analysis exists on the comparative performance of PFM systems across countries and over time, on the factors that underpin successful PFM reforms, and the role that donor agencies play in the reform process.

To help to fill this gap, an analytical study of quantitative cross-country evidence on public finance management in developing countries was undertaken by a team of researchers at the Overseas Development Institute. The study is part of a broader evaluation of PFM reforms in developing countries initiated by the evaluation departments of DANIDA, SIDA, DFID and the AFDB.

A number of findings from the cross-country analysis are of relevance to donor approaches and policies on PFM reforms:

At the same time, these results suffer from a number of serious limitations and challenges, including the following:

These limitations and challenges point to the need to interpret the results of the analysis presented in the paper with caution. Moreover, they highlight the need to complement the quantitative findings with in-depth qualitative research at country level, explaining not only if and when donor PFM support has had an impact on PFM systems, but also why and how it did.  

The next stage of the evaluation is a series of country case studies starting shortly in Burkina Faso, Malawi and Ghana.   

Download PFM Quant Study

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