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.
The ODI guide focuses on PFM in developing countries, and covers the main phases of the budget cycle from budget formulation, budget execution, accounting and reporting to external oversight. The guide also has a very interesting section on budget reform strategies and diagnostic tools. A slight criticism might be that fiscal management and institutions are somewhat neglected. It is also noteworthy that all the PFM handbooks recommended (my favorite is the ADB’s by Schiavo-Campo and Tommasi) have been produced more than ten years ago. The field has developed quite a bit since then, and the grapevine has it that several new handbooks are in production. All in all, the guide is a very useful document for government officials, PFM practitioners and development specialists to immerse themselves in the international PFM literature. After reading the 75 or so recommended documents, one will surely be able to talk the talk in PFM.
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.