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October 05, 2011

PEFA NewsFlash - External Evaluation Report and Executive Summary

The PFM Blog is reproducing the following newsflash issued by the PEFA Secretariat

The evaluation report of the PEFA program 2004-2010 together with the management response have just been published...

Almost 10 years after it was launched by its seven partner agencies1 and as its third phase is coming to an end, the PEFA Program was evaluated by a team of independent consultants. The purpose was to assess the PEFA performance against its objectives and to present options for the possible continuation and scope of the Program beyond the completion of phase III.

Commissioned by the PEFA Steering Committee and based on document analysis, interviews with key stakeholders and country visits, this evaluation concludes that: “the performance of the PEFA programme is a resoundingly positive one”. It welcomes the establishment of a credible Performance Measurement Framework that has now been applied for over 220 assessments of PFM systems in more than 125 countries.

Findings

Assessing the overall performance of the PEFA Program Framework, the report confirms:

Firstly, its effectiveness in securing global adoption of the PEFA Framework, evidenced through both the coverage of the baseline assessments (about 90% of LICs and 75% of MICs) and subsequent repeat assessments (more than 50 completed). It shows the increase in Government ownership and commitment to make use of PEFA assessments to improve the design and the monitoring of PFM reforms. It notes good progress in the utilization of PEFA assessments by development stakeholders but also a low performance on final publication – currently only 60% of finalized assessment reports are published.

While it recognises the improvement of the quality of the PEFA assessments in general and the compliance with the PEFA methodology in particular (from 48% to 91% across all indicators between 2006 and 2009 alone), the evaluation indicates that quality remains a concern highlighted of some stakeholders, even if only a small number of reports is involved.

Secondly, it emphasizes its clear relevance, and the consistency of its implementation with the overall development strategies and policy priorities of the principal stakeholders. However, it still needs to promote stronger country ownership of PFM reform programs. A more collaborative approach by donor agencies around PEFA as a tool for government-led PFM reforms remains high on the agenda for broader donor harmonization and aid effectiveness. Building on the lessons learned over the last phase and the positive contribution to institutional development, emphasis should now be on government awareness of the scope and potential of the PEFA as a common instrument for the diagnosis of overall PFM functionality.

Thirdly, the evaluators conclude that despite its limited staff resources the PEFA program has achieved significant efficiency in the production of its expected outputs, i.e. assessment reviews, technical guidance and training. However, considering the value of the information pool on PFM performance generated by the PEFA assessments, dissemination and outreach to a wider network of users have to become a priority.

Finally, the emerging nature of the PEFA Framework as global public good triggers specific sustainability issues that have to be addressed. To that effect, a range of possible new governance arrangements outlined for the PEFA Program, involving the Secretariat and its Steering Committee, should be considered. Any new arrangement should reflect ongoing changes in the PFM constituency, broaden its consultative options, and maximise the opportunities for a greater impact in the next phase.

As the next steps, the evaluators recommend that future outputs focus on: Quality Assurance and the methodological refinement of the instrument; broader dissemination and networking; and the maintenance of an accessible PEFA data-base on PFM performance.

Management Response

In responding to these findings, the PEFA Steering Committee welcomes the recommendations and conclusions as well aligned with its own assessment and lessons learnt from program implementation. It concurs with the evaluators’ findings that the PEFA Framework has been consistent with the overall development strategies and policy priorities of its principal stakeholders and effective in building mutual trust leading to its global adoption by donors and partner countries.

The Steering Committee notes that the lack of awareness about PEFA occurs mostly in countries where the Framework has not yet been applied and recognises the need for wider and timelier dissemination of the assessments for the benefit of additional stakeholder groups beyond country central finance agencies and their international development partners. It is considering options for how to widen the voice to additional stakeholders without endangering the key benefits of the current governance arrangements.

It finds however that the report overstates concerns about the quality of PEFA assessments given the high and growing number of quality reviews undertaken by the Secretariat every year, but recognizes that a few bad apples pose an important reputational risk. Since PEFA implementation is decentralised, the Steering Committee considers that training and support in the application of the PEFA methodology are key factors to enhance quality in addition to quality reviews. It is nevertheless considering options for the reinforcement of current quality assurance arrangements.

The Steering Committee finds that the evaluators’ recommendation for fine-tuning the content of the PEFA Framework is too conservative and will be insufficient for the Framework to remain relevant in a dynamic world. Finally, the Steering Committee agrees with proposals for a modest increase of the Secretariat’s staff capacity to manage new and expanding tasks. However, it does not agree that research should constitute part of the Secretariat’s mandate as this function lends itself well to mainstreaming through existing research institutions.

What’s next?

The evaluation report and the Steering Committee’s management response mark the starting point for the preparation of a 4th phase of the PEFA program to be launched in 2012. The Secretariat invites Newsflash readers to contribute their views on the future direction of the program by writing to: services@pefa.org.

Read more as the full report and comments are available on www.pefa.org.

Download NewsFlash
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1 PEFA is a partnership program of the World Bank, the European Commission, the UK Department of International Development, the Swiss State Secretariat for Economic Affairs, the French Ministry of Foreign Affairs, the Norwegian Ministry of Foreign Affairs and the International Monetary Fund. Each is represented on the PEFA Steering Committee.

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.

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Comments

Well, it’s true that PEFA is a good tool for assessing the PFM. As a Macro-fiscal Economist who worked in several LDCs in the last couple of decades, I wish to share some of my observations:

1. Yes PEFA is implemented in several countries (Donor driven or Country driven?) and it raised awareness and enthusiasm.
2. The main problem that limits the outcome of the PEFA is the lack of information or data or reluctant to disclose due to political interference and so on. This is mostly sweeped under the carpet.
3. It's questionable whether the LDCs' really understood the PEFA and it's implications or it remains yet another consultant driven report?
4. Historically, we keep coining catchy phrases like zero based, performance based, program budgeting and so on and so forth. But most LDCs have been still sailing on the same old boat with little qualitative improvements
Finally, it would be better to evaluate the PEFA from the LDCs perspective with focus on all the above aspects. Failures are the first step towards success if we really learn from our failures. Lest, we will repeat the failures for ever.

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