Credit Nuthawut Somsuk/iStock
Credit Nuthawut Somsuk/iStock
Credit Nuthawut Somsuk/iStock
Credit Nuthawut Somsuk/iStock
In two posts on this blog dated February 2023 and January 2026, a team of World Bank specialists looked at data from PEFA assessments to see if “PFM performance” has been improving over the 20 years or so since the PEFA methodology was originally introduced.
For the PFM community — and for the broader audience interested in governance and institutional development — this is not a trivial question, given both the substantial investments that have gone into supporting PFM reforms and PEFA assessments across the world, and the importance of PFM systems in underpinning governments’ capacity to navigate an increasingly complex public finance context.
This is why we decided to take another look at the results presented. The original posts argue that PFM performance has been improving moderately since 2005, and that this improvement has continued in recent years. Yet, our analysis shows that the data do not clearly support this conclusion.
Looking at trends in yearly averages
Much of the original posts’ argument rests on graphs displaying the cross-country average of the average PEFA scores for all countries that had assessments done in each year. In their more recent post, the authors claim that “average PEFA scores increased moderately during the period 2005 to 2024”. The claim is based on the ever so slightly positively sloped linear trendline.
However, assessing trends in PFM performance in this way runs into several serious problems. In each year, only about 10-20 new national assessments are carried out on average. Furthermore, the number of national assessments varies a lot from year to year (see Figure 1). The two assessments done in 2005 (Zambia and Afghanistan) are doing as much work for the overall trend as the 26 assessments done in 2010. The average since 2020 has been about 12 per year, so annual averages are becoming less meaningful over time.
Figure 1: Number of National PEFA Assessments per Year 2005-2025
Source: authors [2]
There are several ways to reduce the small sample problem. One is to calculate rolling 3-year averages (see Figure 2). That raises the range of the observations considered, making it less likely that outliers and sample variance might be driving the results. With the random spikes thus smoothed out, the slope turns from very slightly positive to slightly negative.
Figure 2: National PEFA Scores, Rolling 3-Year Average 2007-2025
Source: authors
If there was any conclusion to be drawn from the two-decade trend, it would either be that PEFA scores never improved, or that they stalled and started to slowly decline about a decade ago. More appropriately, the conclusion should be that there is no meaningful trend over time. Mostcountry aggregates cluster in a very narrow band between 2.3 and 2.5, without much change.
Looking at repeat assessments
A more meaningful way to look at PFM improvements is to take individual countries that underwent repeat PEFA assessments and see how their average scores change over time. The original version of an online publication by the PEFA Secretariat (the “Global Report on PFM 2022”) did this, looking at repeat assessments done in 93 countries under the 2011 PEFA assessment framework. It showed that average scores improved in 53 countries between the first and last assessment, of which only 23 improved by more than 0.5 points. It also showed that they decreased in 30 countries, and that in 10 countries they stayed the same.[3]
Using the full dataset of all publicly available national assessments, we find a total of 94 countries with repeat assessments between 2005 and 2025. Out of these, 35 improved, 44 worsened, and 15remained the same. Among the improvers, only 12 countries achieved an average improvement of at least half a point, and just two countries improved by a full point — Georgia and the Kyrgyz Republic.
What do these observations tell us? Again, the answer seems there is no general trend of improvement. PEFA scores for most countries that undergo repeat assessments remain reasonably stable, with only a handful of countries seeing substantive improvements. This reinforces a familiar finding from the academic literature on fiscal institutions: that sustained institutional change is rare, slow and difficult.
More importantly, trying tomaintain the impression that global “PFM performance” is improving based on selected patterns in the PEFA data is not helping our understanding of PFM dynamics. A more interesting effort could be to better understand the details of substantial improvements or deteriorations in PEFA scores for specific countries over time. A more nuanced analysis might also reveal how some PFM areas are more amenable to reforms, a question dear to PFM reformers.
Hopefully this discussion will continue.
