No Calm after the Storm: Retooling PFM in the Health Sector

Posted by Helene Barroy, Srinivas Gurazada, Moritz Piatti-Fünfkirchen, and Joseph Kutzin[1]

The country response to COVID-19 has been extensively studied from a fiscal perspective. The speed and effectiveness of each country’s health response has varied widely, often due to pre-existing weaknesses and bottlenecks in their public financial management (PFM) systems. To better understand how PFM processes supported the allocation and utilization of public funds for the health response, the World Health Organization (WHO) conducted a quick review of 183 countries. Five key learning points are emerging:

How PEFA can Help Countries Develop their PFM Reform Strategy

Posted by Julia Dhimitri and Martin Bowen[1]

The PEFA Secretariat has recently developed and pilot tested a new approach to preparing a country’s PFM reform strategy. The approach aims at assisting countries to identify, prioritize and sequence reform initiatives, and to take charge of their own reform agenda. Volume IV of the PEFA Handbook-Using PEFA to support PFM improvement provides guidance on the new approach.

Reallocating Aid Budgets to Respond to COVID-19

Posted by Mark Miller and Bryn Welham^[1]

Development agencies’ budgets are experiencing two shocks as a result of COVID-19.  First, there is extra demand to support countries’ response to the impacts of the pandemic.  Second, the supply of aid is also coming under pressure. Many donor countries are unfortunately opting to cut back aid spending at a moment when it is more needed than ever.  If you are a bureaucrat sitting in a development agency, what can be done to reallocate budgets to shifting priorities?

Open Budgets in the COVID-19 Era

Posted by Vivek Ramkumar and Paolo de Renzio[1]

We began writing the global report for our latest Open Budget Survey (OBS 2019) several months ago, amid a backdrop of mass demonstrations across the world. In France and Iraq, Chile and Lebanon, Haiti and Ecuador, people were mobilizing against the rising cost of living, cuts in public services and increasing taxes. This anger reflected broad concerns with growing inequality, exclusion, and lack of trust in government—all linked to how public resources are managed. We framed the need for open budgets as part of a broader call for economic and political renewal, and for reconnecting governments and their citizens.

PFM Actions by Indian States to Combat COVID-19

Posted by Ashok Rao[1]

The global pandemic is posing unprecedented challenges in fiscal management to governments across the world. Typical PFM responses from national governments have included increased spending on fiscal stimulus packages, deep spending cuts in other areas, reallocation of budgets to finance emergency spending, relaxation of internal controls and procurement laws, and decentralization of financial powers to facilitate quicker decision making.

IMF’s Popular PFM Online Course Relaunched for 2020-2021

Posted by Fabien Gonguet[1]

The Fiscal Affairs Department relaunched its online course on Public Financial Management (PFM) on May 1, 2020, to remain open year-round. In its three previous offerings, this free course has been taken by nearly 5,000 participants from virtually every country, with very high satisfaction rates. Developed and taught by more than 15 experts of the Fiscal Affairs Department, the course is open for government officials and staff of bilateral and multilateral development agencies, but also to civil society organizations, parliamentarians, academics and the general public, which represent 3 out of 10 active participants.

New in this 2020-2021 edition of the course is a page on “PFM and COVID-19” which will be updated periodically. And a brand-new video has been added to the course (see below).

Managing Public Investment Spending during the COVID-19 Crisis

Posted by Richard Allen and Eivind Tandberg[1]

A recently published IMF Note discusses the role public investment management can play in the fiscal response to the COVID-19 crisis. Public investment has several characteristics that makes it attractive for both spending cuts in the initial phase of the crisis and boosts to support economic recovery later. It is largely discretionary, lumpy with most spending concentrated over a few years, and it makes a substantial contribution to economic activity, especially in low-income countries.

COVID-19: New IMF Notes on Fiscal Issues (Batch 4)

The IMF published on May 13, 2020 the following notes in its Special Series on COVID-19. The notes discuss PFM issues and other fiscal topics. The Special Series notes are produced by IMF experts to help member countries address the economic effects of COVID-19.

Efficient Public Contracting for Emergency Responses

Posted by Lindsey Marchessault[1]

COVID-19 has ground the global economy to a halt. To address the crisis and help the recovery, governments must make the most out of limited public resources to effectively fight the virus, protect their populations, and rebuild their economies. With huge public spending being committed to fight the disease, it is more important than ever that public contracting delivers value for money.

Calculating Expenditure Baselines through ‘Pocket Problems’

Posted by Ronette Engela, Robert Clifton, Martin Johnson, and Nellie Coopoosamy [1]

Expenditure baselines may be defined as the cost of delivering public services consistent with the government’s policy mandates. Baselines are the starting point for developing forward estimates and managing the budget. Ministries can apply cost drivers to estimate changes in the baseline and focus attention on adjusting budgets in line with available fiscal space. In practice, budgets do not necessarily reflect the true cost of delivering mandated services. Baseline problems are reasonably well understood in advanced countries, where spending reviews regularly interrogate these baselines, but much less so in low-capacity countries. Once set, a baseline can ‘lock-in’ funding for mandates whether appropriate or not.

COVID-19: IMF Notes on Fiscal Issues

The IMF has published a series of notes in its Special Series on COVID-19. The notes discuss PFM issues and other fiscal topics. The Special Series notes are produced by IMF experts to help member countries address the economic effects of COVID-19.

 In addition, you can find all of the PFM Blog articles covering the COVID-19 crisis  on our PFM Blog Coronavirus Articles page.

Government Cash Management under Fiscal Stress

Posted by Richard Allen, Emre Balibek, Yasemin Hurcan and Sandeep Saxena[1]

Faced with decreasing revenues and constrained access to financial markets, governments need to address the challenge of meeting extended cash needs to finance COVID-19 related emergency spending. A recent FAD note recommends a multi-pronged approach to cash management to ensure that liquidity is adequate to satisfy the government’s payment obligations.

How Civil Society Can Make COVID-19 Responses More Transparent

Posted by Claude Wendling and Juan Pablo Guerrero[1]

In a recent note, the IMF’s Fiscal Affairs Department stressed the importance of fiscal transparency, public accountability and institutional legitimacy in the fiscal response to COVID-19. This blogpost drawing on the experience of the Global Initiative for Fiscal Transparency (GIFT) explores the role of civil society organizations (CSOs).

Fiscal Policies for the Recovery from COVID-19

Posted by Vitor Gaspar, W. Raphael Lam, and Mehdi Raissi

Fiscal policies have provided large emergency lifelines to people and firms during the COVID-19 pandemic. They are also invaluable to increase a country’s readiness to respond to a crisis and to help with the recovery and beyond.

Strengthening Public Investment Management in Benin

Posted by Gwénaëlle Suc, Onintsoa Raoilisoa, Pierre Roumégas, Philippe Lonné, Elvis Danhoumè, Firmin Aignon, and Serge Loupeda[1].

Public investment was one of the main drivers of growth in the last two years in Benin. The Beninese authorities requested in 2017 a Public Investment Management Assessment (PIMA)[2] to support the scaling-up of public investment. This assessment highlighted a strong institutional framework but with a low level of effectiveness. The main areas of weaknesses were in project selection processes and ex-ante appraisals, in the financial and physical follow-up of projects’ implementation, in post execution evaluations, and in the management of financial liabilities.

Renforcer la gestion des investissements publics au Bénin

par Gwénaëlle Suc, Onintsoa Raoilisoa, Pierre Roumégas, Philippe Lonné, Elvis Danhoumè, Firmin Aignon, et Serge Loupeda[1].

L’investissement public a été l’un des principaux moteurs de la croissance au cours des deux dernières années au Bénin. Les autorités béninoises ont demandé en 2017 la réalisation d’une évaluation de la gestion de l’investissement public (PIMA)[2], pour soutenir la montée en puissance de l’investissement. Cette évaluation a mis en lumière la robustesse du cadre institutionnel mais aussi son faible niveau de mise en œuvre effective. Les principales zones de faiblesses se situaient dans les procédures de sélection des projets et les évaluations ex ante, dans le suivi financier et physique de l’exécution des projets, dans les évaluations ex post, et dans la gestion des dettes financières.

PFM Solutions for Emergency Cash Transfers in Brazil

Posted by Felipe Bardella and Pedro Jucá Maciel[1]

According to the ILO,[2] current lockdown measures to fight the spread of COVID-19 have affected around 80 percent of the world’s workforce, hitting especially hard informal workers with no access to health and social protection services.

COVID-19: New IMF Notes on Fiscal Issues (Batch 3)

The IMF published on April 29, 2020 the following notes in its Special Series on COVID-19. The notes discuss PFM issues and other fiscal topics. The Special Series notes are produced by IMF experts to help member countries address the economic effects of COVID-19.