Sustainable Infrastructure Development in the Pacific Islands

Posted by Lorena Estigarribia, Roland Rajah, and Richard Neves[1]

Infrastructure, whether delivered or owned by the public or private sector is critical for sustainable economic and social development. This is especially so for Pacific island countries, whose remoteness, vulnerability to natural disasters, and highly dispersed population make the need for enhanced connectivity through transport and ICT networks particularly urgent. Making infrastructure development sustainable in the long term remains a perennial challenge throughout the region.

Development partners have been helping Pacific countries build infrastructure for decades. During the 1960s and 1970s, governments in the region constructed many new infrastructure projects such as water treatment plants, sewerage systems, roads, airports, and ports.

Yet most assets were not properly maintained due to weak governance, excessive reliance on donor funds to fill in the gaps, and political economy challenges. Funding for ongoing maintenance was hindered by competing expenditure priorities. The lack of maintenance not only constrained the expansion of existing projects and popular access to even basic infrastructure, but also made the assets extremely vulnerable to climatic threats.

Tilting the Balance towards Quality Infrastructure in Developing Countries

Posted by Taz Chaponda[1]

At a recent international conference[2] on “Quality infrastructure and the Multilateral Development Banks”, the Director General of the Japanese Ministry of Economy Trade and Industry (METI) issued a stark reminder of the potential costs of “poor” infrastructure. He cited the Kobe highway disaster, when in 1995 a major highway in Japan collapsed following an earthquake.  The Director-General explained that the highway was built in a rush and the poor construction works resulted in its collapse several decades later.  He went on to discuss the expansion of power generation in the country’s early years of development through high-polluting plants that were subsequently phased out due to the negative impact on local populations.

Such examples remind us that even the richest nations went through a period of development where low quality infrastructure was pervasive, with very negative social and environmental consequences. Such issues are still common in many developing countries. This motivated the conference to explore what exactly is meant by “quality infrastructure”.  Do countries really need this type or level of infrastructure, and if so, how should it be procured and paid for?

Sharing Resource Revenues: Common Mistakes and How to Get it Right

Posted by Andrew Bauer and Sofi Halling[1]

In nearly every country, subnational governments receive public funds, either through direct tax collection or intergovernmental transfers. But in more than 30 countries—from Bolivia to Canada to DRC to Indonesia—policymakers have chosen to create a special revenue sharing system to distribute non-renewable natural resource revenues (see map below). A recently published report by the Natural Resource Governance Institute (NRGI) and the United Nations Development Programme (UNDP) examines this important topic (NRGI link to report; UNDP link to report).

In most of these countries, oil-, gas- or mineral-producing regions receive a percentage share of the production value extracted from their territory. In a subset of these countries—including Ecuador, Mongolia and Uganda—resource revenues are pooled separately from other fiscal revenues and distributed according to a unique formula that includes, for example, poverty and population indicators. Every year, hundreds of billions of dollars are distributed through these systems.

How National Audit Offices Can Support Implementation of the SDGs

Posted by Gijs de Vries [1]

The 17 Sustainable Development Goals (SDGs) provide an ambitious roadmap to a fairer and more equitable world. To turn these goals into reality governments across the world will have to put them at the heart of their action. Governments will also have to put their money where their mouth is. National budgets need to be adapted to the task: revenue and expenditure will have to be managed more effectively and transparently. And national accountability institutions will have to step up to the plate.

Funding the SDGs will be costly, with incremental financing needs in low- and lower-middle-income countries estimated at $1.4 trillion. Much of this money will have to come from the public sector, whether through official development assistance (ODA) or via domestic resource mobilization in developing countries, where governments will have to collect more and spend better. Many countries suffer from weak public financial management (PFM) and inadequate public service delivery.  

IMF-USAID Cooperation: PFM Training

Posted by David Gentry[1]

In August 2015, the IMF and the United States Agency for International Development (USAID) signed a 5-year Memorandum of Understanding (MOU) to enhance cooperation and collaboration between the two organizations in pursuit of common objectives and further strengthening the effectiveness of their respective activities. The MOU covers IMF training for USAID staff; strengthening the capacity of development partner government officials; co-organizing events with the aim of supporting capacity development of their partner government officials; promoting representation by both organizations at meetings of common interest; and enhancing the exchange of information and knowledge sharing.

Article by CABRI on the Use of Country PFM Systems in Africa

Posted by PFM Blog Administrator

A recent blog post by Neil Cole of CABRI discusses the use of country systems in Africa. The post outlines several cases where development objectives are being achieved using local country systems, and how to strengthen these systems to make more efficient use of aid resources. The increased use of country systems has raised the capacity of governments in areas such as PFM, cross-governmental organization, and the management of donor programs.

CABRI is the Collaborative Africa Budget Reform Initiative and a peer-learning and exchange network for senior budget officials working in African Ministries of Finance/Planning.

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.

 

Upgrading Infrastructure Projects through IISS

Posted by Christophe Dossarps[1]

Transparency. Efficiency. Quality. If you work with infrastructure projects, these are words you will hear all the time. Unfortunately, these concepts are familiar only because so many projects lack them. These “lessons learned” are often discussed during workshops and evaluation sessions focused on what not to do next time.

But with the newly launched International Infrastructure Support System (IISS) at the Inter-American Development Bank on Wednesday, January 27th in the presence of the global community of multilateral development banks, the IMF, the World Economic Forum and a series of key private sector organizations - a digital platform that supports project preparation - achieving transparency, efficiency and quality in infrastructure PPPs, and traditional procurement, is within our reach. 

Sector Ministries: As Important as the Finance Ministry for Good PFM!

Posted by Lena de Stigter[1] and Jennifer Moreau[2]

Post Addis Ababa, the debate on development finance focuses in large part on the generation of the necessary additional resources to support the Sustainable Development Goals (SDGs). Improving tax systems and compliance is an important element in this regard and strongly supported by the German Development Cooperation agency GIZ. Yet, taxation is only one side of the coin. Sound public financial management (PFM), especially at the level of sector ministries, should be the other. The generation of savings through more effective and efficient budgeting and expenditure policies in sectors may be as important for countries as resource mobilization through taxes. For instance, the IMF has recently shown that there is much to gain by reducing the inefficiencies around public investment management (IMF, 06/2015, Making Public Investment more Efficient). Moreover, the Collaborative Budget Reform Initiative (CABRI), through its sector dialogues, has done important work on highlighting the possible gains of improving value-for-money in program expenditure in key parts of the public sector. Sound investment policies and development-oriented public expenditure will enhance trust of citizens in their government and increase their willingness to pay taxes. Moreover, it will have a positive impact on the socio-economic environment of a country and generally, serve as a catalyst for development. 

JICA’s Technical Cooperation in PFM: Key Principles

Posted by Tomoaki Tanaka[1]

The Japanese International Cooperation Agency (JICA) is the world’s largest bilateral development institution, with a budget in 2013 of more than one trillion yen. Out of this budget, 177 billion yen was disbursed on technical cooperation (TC), the remainder on overseas development loans and grants.[2] JICA’s operations cover a variety of sectors, such as Planning and Public Administration, Public Works (infrastructure), Agriculture, Education, Health & Medical Care, and Energy, Commerce & Tourism. JICA is represented in over 150 countries and regions, and has more than 100 overseas offices. Much of JICA’s TC is focused on South and South-Eastern Asia, but other regions where it is active include the Pacific, Latin America, the Middle East, Africa, and Eastern Europe.

Public financial management (PFM) has become one of JICA’s most important areas of TC. In JICA’s view, effective PFM systems are fundamental to the development process. If such systems are not in place, the flow and control of financing for key development projects may be jeopardized.

Digitization of Payments in Mexico Saves Billions

Posted by Ruth Goodwin-Groen[1]

The Mexican government is saving an estimated US$ 1.27 billion per year, or 3.3 percent of its total expenditure, on wages, pensions and social transfers. How? By digitizing and centralizing its payments.

The Mexican government’s reform is the story of a sustained effort over time driven by successive, committed Ministers of Finance and Treasurers who were sure of the ultimate benefits of electronic payments systems. This process and the resulting lessons have been examined by the Better Than Cash Alliance in an in-depth case study entitled, Sustained Effort, Saving Billions: Lessons from the Mexican Government’s Shift to Electronic Payments.[2]

The Better Than Cash Alliance is a partnership whose members are committed to moving away from cash to digital payments. Housed at the United Nations Capital Development Fund (UNCDF), the Alliance is uniquely positioned to bring together a broad cross section of governments, multilateral and bilateral donors, UN Agencies, international NGOs and companies. The Alliance is funded by the Bill & Melinda Gates Foundation, Citi, the Ford Foundation, the Omidyar Network, USAID and Visa Inc. It operates both globally and in country, providing diagnostics, toolkits, technical support and case studies, like the present example from Mexico.

Sharing Success in Asia through PEMNA

Posted by Miki Matsuura, Shabih Ali Mohib, Catherine Yang^[1]

For decades, development partners have provided assistance and advice on economic development to countries across the globe, resulting in many success stories. Yet, lessons from the successes are not always widely shared in a way that those coming up a path can benefit from others who went before. Both developed and developing countries thirst for knowledge from beyond their borders in search for better ways to reach their goals. They know that each country can help the other on the ladder of success.

 

Politics Matter…But PFM Reforms Do Too.

Posted by Carlos Scartascini*

The recent CAPE 2013 conference organized by ODI provided a forum for discussing where PFM is and where it is going. While many interesting issues arose from the discussions, one theme was ever present: namely, the importance of considering PFM as much more than a purely technocratic process. Politics matter, and they tend to determine the way reforms are implemented, and their probability of success. In this note, I highlight the reasons why politics matter for the budget process and how this issue can be dealt with.

Is There a “New Consensus” on PFM Reform?

Posted by Richard Allen

The Overseas Development Institute’s annual CAPE Conference (the eighth in the series) on Budgeting in the Real World took place in London from November 13–14, 2013. The Conference attracted an impressive group of 110 national and international public servants, consultants and academics who work on budget institutions. For many practitioners, CAPE is the definitive PFM event of the year. The keynote speech, which was featured in a recent blog post, was given by Antoinette Sayeh, Director of the IMF’s Africa Department. Other notable presentations were made by Matt Andrews of the Harvard Kennedy School, and Allen Schick of the Brookings Institution and University of Maryland.

The Conference included sessions on the form and functionality of budget systems, what constitutes a capable ministry of finance, how reform can deliver change in the budget process, and how improved budget systems impact on development outcomes. Much of this is familiar ground and there was a sense of déjà vu in some of the presentations. One participant asked rhetorically why there were no feedback loops in our profession, why the same messages kept on being repeated from one year to the next, and why PFM practitioners appeared to learn so little and did not change their attitudes or behavior. Nevertheless, while the agenda had a familiar look on the surface, there were encouraging signs that an important if uncomfortable truth about the nature of budget reform is beginning to sink in to the collective mind of the PFM community. Indeed, the Conference may prove to be a watershed in the development of thinking on PFM reform, though much work remains to be done to flesh out the details of the new approach—an emerging “New PFM Consensus”—and put it into practice.

Online PFM Conference: ODI Event Being Streamed Live this Week

Posted by Ryan Flynn

The Overseas Development Institute (ODI) is one of the UK's leading independent think tanks on international development and humanitarian issues. It is organizing a major conference this week: the 2013 CAPE Conference: budgeting in the real world. CAPE stands for Centre for Aid and Public Expenditure, which is hosted by ODI. It aims to shape and drive the agenda for international development assistance, as well as efficient and effective public spending for development at the country level.

The conference will focus on PFM and budgeting in developing countries. The whole two-days (13 & 14 November) will be streamed live online, and questions fielded through social media (#CAPE2013) will be answered by speakers and panellist. You can register to attend here.

FOTEGAL: Sharing Experiences of Treasury Management in Latin America

Posted by Israel Fainboim

Latin American budget officials are members of an association (Asociacion Internacional de Presupuesto Público—ASIP) which delivers an annual international seminar and regional seminars and publishes its own journal. Recently, the countries of the region together with two multilateral donors (the Inter American Development Bank and the World Bank) joined forces with the Fiscal Affairs Department (FAD) of the IMF to set up a similar organization for state treasurers.

That is how the Government Treasury Forum of Latin American (FOTEGAL) was born in 2010. The organization was formalized in a document named the Lima Declaration and through the approval of its own statutes. A total of 16 countries are currently members of FOTEGAL (Argentina, Bolivia, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, and Uruguay) and an invitation has been extended to Brazil to join (this country has participated in several of the annual seminars). The Government of Japan (JSA) has also been a key financial supporter of the activities of FOTEGAL. In addition, the IDB is supporting the development of FOTEGAL’s website. A link to this network and many of the documents and presentations made for FOTEGAL already exists within the website of one of the government treasuries, and a separate web page is under construction.

PFM Innovations: ICGFM Issues Call for Speakers at its Upcoming Conferences

Posted by David Nummy, ICGFM Vice-President for Programs

One outcome of the global financial crisis has been recognition that Public Financial Management is critical to management of the fallout as well as to prevent future crises.   With greater attention, new approaches to the core elements of the PFM cycle have been employed and interest has grown in the experience of countries around the world in meeting the challenges of effectively managing resources in a manner that is transparent.   ICGFM will explore the innovations in PFM that have emerged as well as practices that are recognized as effective.

The International Consortium on Governmental Financial Management (ICGFM) has issued a call for speakers, panels, and presentations that address good practices in public financial management. As this topic will cover both of its upcoming conferences, proposals are solicited for both the winter conference in Washington, DC from December 9-11, 2013, and the 28^th Annual International Training Conference in Miami in May 2014.  The Winter Conference will be held at the International Monetary Fund and is conducted in partnership with the Fiscal Affairs Department (FAD).

Keeping Reform in the DRC on Track

Posted by Oscar Melhado Orellana

In this third article on the blog in which IMF area department staff express their views on PFM reforms in “their” country, Fiscal Affairs Department technical assistance advisor, Jean Pierre Nguenang, speaks with IMF Resident Representative for the Democratic Republic of Congo (DRC), Oscar Melhado Orellana, about the importance of PFM technical assistance in keeping the IMF program on track.

What contribution are reforms of PFM, revenue administration and tax policy expected to make to improved economic and fiscal performance in the DRC?

The DRC is one of the poorest countries in the world in terms of nominal GDP, despite being considered one of the richest countries in terms of natural resources. It has more than 30 percent of the world’s diamond reserves and 70 percent of the world’s coltan. The DRC is also one of the lowest-ranked countries in the international Corruption Perception Index. The government is still struggling to bring order to the eastern part of the country where recurrent attacks on citizens are perpetrated by armed groups opposed to the regime.

Successful International PFM Workshop for IFMIS Coordinators at IDB

Posted by Carlos Pimenta[1]

This event, which took place in Washington, DC from May 15-17, discussed the PFM challenges faced in modernizing Integrated Financial Management Information Systems (IFMIS), as they relate to technology, public accounting, treasury and budget. The workshop was attended by about 120 participants, including IFMIS coordinators from 17 countries in Latin America and the Caribbean, private consulting firms, international experts and staff from IDB, IMF and World Bank.

The agenda of the event included topics such as: (1) How to measure progress in efficiency and quality of PFM reforms and systems? (2) The role of IFMIS in cost systems and result-based management, (3) Technological advances in IFMIS development, (4) Budget transparency and accountability, (5) Definitions, techniques and regulatory framework for interoperability and its impact on IFMIS context, (6) Change management and IFMIS implementation, and (7) Service management, maintenance and support for IFMIS.

All presentations, speakers and other information can be reached using the links in the Final Report attached below (in English and Spanish) or here. 

Treasury Community of Practice Debates Internal Control Issues in Kiev

Posted by Mark Silins

The Treasury Community of Practice (TCOP) of PEMPAL[1] conducted a highly participative three-day workshop entitled “Internal Control and the Role of a Modern Treasury” from April 24–26, 2013.  Over 60 officials, including treasury managers and specialists from 18 TCOP-member countries, as well as representatives of the Ministries of Finance of the Netherlands and Ireland, took part in the workshop held in Kiev, Ukraine. The workshop was also supported by experts from the World Bank, OECD, and the Slovenian Centre of Excellence in Finance.

The general objective of the Kiev event was to provide an opportunity for TCOP members to exchange experiences and take stock of the steps taken to date in implementing internal controls in each country and what, if any, steps remained. The workshop discussed both the role of a treasury in terms of managing internal controls within its own operations along with the broader role of the treasury as a key player within the overall public internal control framework in government. Prior to the workshop, participant countries responded to a 40-question survey to ascertain the status of their internal controls in relation to both of these two roles. Responses to the surveys proved extremely useful in designing an agenda relevant to participating countries.

Japan Approves Continued Funding for IMF Technical Assistance to South Eastern Europe

Posted by Rocio Sarmiento[1]

Since 2009, the Fiscal Affairs Department (FAD) of the IMF has been providing considerable technical assistance (TA) to South East European (SEE) countries through a Regional Program that is sponsored by the Japanese Government, and is implemented in close cooperation with the Center for Excellence in Finance (CEF), based in Ljubljana, Slovenia. The overarching objective of the Program is to strengthen fiscal management capacity to ensure that all SEE countries—EU member and non-EU member countries alike—have the necessary capacity to design and implement measures to support fiscal consolidation and long-term fiscal sustainability.

The fiscal consolidation efforts of SEE governments have been supported by strengthening fiscal controls, improving the allocation of budgetary resources and more cost-effective service delivery, while efforts to protect revenue through more efficient revenue administration have focused on facilitating reform efforts that over time should bring the region’s tax administrations on par with modern European counterparts, and achieve consistency in the application of tax administration practices throughout the region.

Twenty-one Countries Meet in Albania to Discuss Program Budgeting Reforms

Posted by Gelardina Prodani, Ministry of Finance, Albania and Konstantin Krityan, Ministry of Finance Armenia

As Chair and Deputy Chair of the Public Expenditure Management Peer Assisted Learning (PEMPAL)[1] Budget Community of Practice (BCOP), we would like to inform you about an exciting meeting that was held recently in Tirana, Albania on program budgeting.

From February 25^th to 28^th 2013, the Ministry of Finance of Albania hosted 81 participants from 21 PEMPAL member countries from across Europe and Central Asia (ECA). As suggested by our BCOP members from last year’s plenary meeting,[2] the agenda focused on technical aspects of program budgeting and performance measurement. The three main sessions of the meeting covered international approaches and country cases in (i) design of programs and performance measures, (ii) budget documentation, and (iii) performance monitoring and evaluation.

Представители двадцати одной страны встретились в Албании, чтобы обсудить переход на программное бюджетирование

Авторы: Джеральдина Продани, Министерство финансов, Албания, и Константин Критян, Министерство финансов, Армения

В качестве председателя и заместителя председателя Практикующего сообщества по бюджету (В СоР) Сети по взаимному обучению и обмену опытом в управлении государственными финансами (PEMPAL)[1] мы хотели бы проинформировать вас о встрече, которая недавно состоялась в Тиране, (Албания), по теме программного бюджетирования.

С 25 по 28 февраля 2013 года Министерство финансов Албании приняло в общей сложности 81 участника из 21 страны-члена PEMPAL из Европы и Центральной Азии (ЕЦА).  Как и было предложено членами нашего Практикующего сообщества по бюджету (BCOP) на пленарном заседании в прошлом году,[2] повестка дня фокусировалась на технических аспектах бюджетного финансирования программ и на оценке эффективности работы.  Три основных сессии заседания были посвящены международным подходам и практическим примерам стран в следующих областях: (i) дизайн программ и критерии эффективности работы, (ii) бюджетная документация, и (iii) мониторинг и оценка эффективности программ.

How Can the Pace of Budget Transparency Be Increased? Examining the Results of the Open Budget Survey 2012

Posted by Vivek Ramkumar

The International Budget Partnership (IBP) and the World Bank Institute (WBI) are pleased to invite you to join practitioners in the fields of development and fiscal management in a discussion on how to increase budget transparency and participation around the world. The discussion will include a presentation of the results of the IBP’s latest round of the Open Budget Survey and then focus on indentifying innovative and practical suggestions for rapidly improving country performance on the Survey.

Date: 5 February 2013
Time: 9.30-11 am (Breakfast will be served from 9 am)
Venue: IFC Auditorium, 2121 Pennsylvania Avenue, Washington D.C.

There is growing interest in the role of open budgeting systems in development. An increasing body of evidence shows that the best way to manage public funds efficiently and equitably is through budget systems that are transparent, inclusive, and monitored through independent oversight institutions. Recent research studies also show that transparency can help to attract easier and cheaper international credit and thereby increase public revenues. On the other hand, lack of fiscal transparency can undermine fiscal discipline,increase borrowing costs, and promote opportunities for corruption and other leakages.

Following the Money: Examining the Evidence on Pro-poor Budgeting

Posted by Rebecca Simson[1]

ODI’s Centre for Aid and Public Expenditure has recently initiated a work stream on pro-poor budgeting to investigate how governments choose to spend public funds and what this tells us about allocative efficiency.  In 2001 Adrian Fozzard published a paper on this topic, which presented approaches to resource allocation in the public sector and their implications for pro-poor budgeting. A decade on, and after billions of dollars spent to further pro-poor priorities in developing countries, have we learnt anything new about how to allocate public funds?

Our first background paper, Following the money: examining the evidence on pro-poor budgeting, explores what we do know about the influence of the poverty reduction agenda on resource allocation in developing countries. The paper goes on to propose some possible research topics that could begin to evaluate whether spending patterns have in fact changed in systematic ways in response to the high growth and falling poverty experienced over the past 15 years.

Towards Better Public Expenditure Management: Experience Across Asia

Posted by Suhas Joshi  and Greg Smith

Despite heavy snowfall, government officials from mostly warm countries landed in Seoul for a high-level conference on how to improve public expenditure management (PEM) in the region. The event convened member nations of the Public Expenditure Management Network in Asia (PEMNA). The network, launched in June 2012 in Bangkok, provides opportunities for practitioners across the region to share knowledge and experiences in implementing PEM reforms. PEMNA is modeled on the PEMPAL network that has been operating successfully in central and eastern Europe for several years.

PEMNA comprises two communities of practice (CoPs). The budget CoP is managed by the World Bank, and the Treasury CoP by the IMF. PEMNA’s Steering Committee provides strategic oversight and governance. The Korea Institute of Public Finance (KIPF), a research and training institute associated with the Korean Ministry of Strategy and Finance, provides the secretariat for PEMNA and the two CoPs, and is supported in its work by development partners including the World Bank, AusAID, the IMF, and the OECD.

The demand-driven nature of the network allows members to focus dialogue on solving practical implementation issues.  By sharing common experiences and benchmarking performance with peers, members are able to deepen their understanding of the reform process. Across the budget and treasury areas members recognize that they cannot rely on theory alone and that the cross-fertilization of ideas is essential for the successful design and implementation of reform.

The Importance of Strengthening PFM at the Sub-National Level in Sub-Saharan Africa

Posted by Stephan Klingebiel and Timo Mahn[1]

The ongoing trend of decentralizing governance responsibilities to the sub-national level in many countries in sub-Saharan Africa (SSA) is likely to continue in the near future. In order to achieve its objectives, it will be crucial that this transfer of responsibilities will be matched by equal efforts to increase sub-national Public Financial Management (PFM) capacity.

As a cross-cutting issue of domestic accountability systems and of development policy, PFM lies at the heart of countries’ governance systems. It therefore comes as no surprise that PFM systems at the level of the central state have become one of the key reform areas in developing countries in SSA. At the same time, however, the capacity of, and the conditions for PFM at the sub-national tiers of government to date have received much less attention. While there are signs of a growing demand for sub-national PFM approaches, development partners so far have not fully come to terms with the implications of this trend in designing their technical and financial support programs.

The sequencing debate is over… or is it?

Posted by Philipp Krause*

There seems to be an emerging consensus that advanced budget reforms should not be attempted in developing countries before budgetary basics have been soundly established. In many countries, this may well mean a focus on budgetary basics for the foreseeable future, consigning more advanced techniques to the inbox of another generation of budget officials.

It has not always been so. It has been 15 years since Allen Schick first warned practitioners to “look before they leapfrog”. It shouldn’t be forgotten that his warning came in response to widespread enthusiasm for adopting New Public Management reforms the world over. An often overlooked feature of Schick’s work is his emphasis on the external factors that function as preconditions for advanced budget systems to become viable. For instance, Schick noted that New-Zealand-style contractualism in the public sector only becomes viable in countries where informality has been firmly overcome in private sector practices.

A few weeks ago, Colin Talbot noted that Britain is another example for just such a co-evolution of public sector and private sector practice: in the mid-19th century, private sector property rights, democratic accountability and the professionalization of the civil service all proceeded in lockstep over the course of several decades. One might also add that the formal budget process was only established towards the end of this evolution, in the 1860s. Talbot’s key point is about co-evolution: large-scale societal changes depend on one another as they develop, and such developments are at best measured in decades and possibly a lot longer.

Public Financial Management Information System in Georgia

Posted by Nino Tchelishvili, Deputy Head of State Treasury, Ministry of Finance, Georgia  

After the Rose Revolution (2003) the new government of Georgia undertook a large number of reform initiatives targeted at strengthening PFM. MoF focused on further developing the institutional framework of the budget process in order to improve its credibility and the effective allocation of public resources. An FAD mission visited Georgia twice in 2004 and assisted the MoF in formulating its strategy for treasury reforms. An FAD technical expert was assigned to help implement the reform measures in the areas of: Treasury Single Account, Budget Classification, Commitment Control, Accounting Reforms, and Cash Planning and Management.

In parallel with developing the PFM institutional framework, including basic components of a modern treasury system, MoF and the State Treasury started considering measures for reforming the then rudimentary and fragmented treasury information system. The decision to introduce integrated information systems was taken in 2006. Development Partners (WB, SIDA, Netherlands and DFID) provided funds for the Public Finance Management Information System (PFMS) implementation project and MoF embarked on this long and exciting journey in 2007. External technical experts recommended procuring commercial off-the-shelf (COTS) packages and customizing them to local context.

Job Offer: Position in the INTOSAI-Donor Secretariat, INTOSAI Development Initiative (IDI)

The IDI announces a new position in the Secretariat for the INTOSAI-Donor Cooperation. The position is temporary until end of 2015 with the possibility of an extension. 

Background

The INTOSAI-Donor Cooperation was established in 2009 by INTOSAI (the International Organization of Supreme Audit Institutions) and 15 Donors to intensify and strengthen work to support to Supreme Audit Institutions (SAIs) in developing countries. This entails a more strategic approach to capacity building of SAIs, improving the coordination and increasing the levels of support to SAIs from development partners.

The INTOSAI-Donor Cooperation is governed by a Steering Committee comprising representatives of INTOSAI and the Donor community. The Steering Committee decided in February 2010 that the IDI, located in Oslo, Norway, should host the INTOSAI-Donor Secretariat. The INTOSAI-Donor Secretariat is funded by Austria, Ireland and Norway and currently staffed with four positions/3,5 full time equivalents (one of whom is provided through a rolling secondment arrangement with the Office of the Auditor General of Norway). In February 2012 the IDI, in collaboration with its funding donors, decided to recruit one additional full time international staff member.

Job Offer: Campaign Coordinator, Global Movement for Budget Transparency and Accountability

The government’s budget affects the life of every citizen, especially those that are poor or marginalized. Yet, in many countries citizens have very little access to information about how the government plans to raise and spend public resources, let alone how effectively they have been used. For this reason, civil society organizations from over 50 countries recently came together to launch an international advocacy initiative and sign a Declaration of Principles to secure greater access to information and accountability for public funds (see www.Makebudgetspublic.org).

The Steering Committee of this nascent global movement, currently based at the International Budget Partnership, is looking to recruit a Campaign Coordinator to shape and lead a global campaign to secure greater public access to budget information and accountability for public funds.  This is an exciting opportunity for an experienced civil society advocate to play a formative role in developing and leading a global campaign to open budgets to public scrutiny and transform the lives of citizens throughout the world.

Accrual Accounting Essential for Government Transparency and Accountability!

Posted by Ian Ball [1]

In this post Ian Ball, CEO, International Federation of Accountants, argues that it is time for governments to take their accounting responsibilities seriously and to modernise their financial management practices. The eurozone debt crisis has highlighted widespread financial reporting failures and must lead to extensive reform, including adoption of accrual accounting and budgeting practices. Politicians and Ministries of Finance must be pressured to implement these reforms before the next crisis hits.  

The sovereign debt crisis has emphasised the seriousness of the results of poor financial management and financial reporting. Obviously, government actions to limit the impact of the global crisis have exacerbated their financial positions, as many governments acquired significant assets and liabilities, gave guarantees of various kinds, and engaged in massive fiscal stimulus programmes. But the situation now would not be as dire if so many governments had not already made commitments that they did not account for properly, and may not be able to meet.

Governments in general are clearly accounting very poorly for their financial performance and position. This could, and should, lead to significant reform. We saw how financial reporting failure in the private sector a decade or so earlier led to dramatic action, including the passage of the Sarbanes-Oxley Act 2002 in the United States, and the creation of regulatory bodies for private sector audits in most major countries.

IMF and CEF Strengthening Cooperation on Fiscal Management in South East Europe

Posted by Brian Olden and Norman Gillanders

Given the challenging international economic environment, the IMF and the Center of Excellence in Finance (CEF),[1] based in Ljubljana, Slovenia, are intensifying their cooperation. The global economic and financial crisis has contributed to an increase in the level of demand in South East Europe (SEE) region for technical assistance and cooperation in the public financial management and revenue administration areas. The IMF has been providing technical assistance through a Japanese Government funded program for some years. The program recognizes that measures to mitigate the impact of the crisis, and promote fiscal consolidation, should be anchored in sustainable medium-term fiscal policies. While the key priority has been to support longer term institutional reform, it has been necessary also to assist the authorities in some shorter-term measures to mitigate the immediate impact of the crisis. Many countries in the region are candidates or potential candidates for membership of the EU, and implementing reforms aimed at improving institutional capacity is an important element of the EU accession process.

Working with the CEF - Why it makes sense

In 2011 the IMF’s regional PFM and Revenue Administration advisors, located at the CEF in Ljubljana, had a mixed agenda with a number of requests to assist with specific weaknesses in institutional or management capacity that the economic crisis has highlighted, coupled with ongoing reform agendas to strengthen institutional capacity over the longer term. Technical assistance was delivered through a mixture of short individual missions, longer missions with teams bolstered by IMF headquarters staff and regional experts, targeted short-term experts visits and ad hoc desk-based research and reviews. A significant segment of the work also consisted of identifying training needs in the SEE region and, in close cooperation with the CEF, delivering workshops and seminars. This combination of CEF training and IMF technical assistance creates synergies and increases the impact of capacity development efforts in CEF member countries.[2]

How to Become a PFM Specialist – ODI to the Rescue!

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.

Country PFM Systems That Donors Can Believe In – A Glass Half Full

Posted by Camille Karamaga

As many participants and stakeholders in developing country budget processes have recognized, channeling external aid through country systems has helped to strengthen institutional and individual capacities, enhance domestic accountability for resources, improve expenditure prioritization, and, ultimately, contribute to more sustainable economic development. However, a recent OECD report on “Aid Effectiveness 2005-10” indicates that, while some progress has been made, donors and developing countries have fallen well short of the goals that they set themselves in the 2005 Paris Declaration on use of country PFM systems.

The findings from the 2011 OCED survey on aid effectiveness-covering 78 countries- provided significant input into the Fourth High Level Forum held in Busan, South Korea on November 29^th to December 1st, 2011. This forum acted as a platform for renewed impetus for creating stronger, collective and inclusive global partnership in the final push to meet the Millennium Development Goals (MDGs) by 2015.

Fiscal Consolidation Plans in OECD Countries: What Do They Mean for the Role of the State?

Posted by Natalia Nolan Flecha[1]

Times are challenging and “austerity” is the watchword. After all, the pressure is on- with the OECD estimating that, on average, a total fiscal surplus of nearly 4% of potential GDP will be needed over the next 15 years just to stabilise public debt levels. Nearly 7.5% will be needed over the same period to reduce debt-to-GDP ratios to the Maastricht-approved level of 60% of GDP.

With their backs against the wall, what choices are governments making regarding their (current and future) obligations to citizens and firms? Where are governments holding their ground, and where are they willing to retreat and make more room for other service providers? Choices taken now could be telling and, to those looking for signs of what’s to come, may even provide some clues into the changing role of the State in a post-crisis world.

A 2011 survey of OECD member countries’ fiscal consolidation plans shows some interesting trends. Noteworthy was that, on average, more than two-thirds of planned retrenchment efforts will take the form of spending cuts (as opposed to revenue raising measures). Operational cuts were a staple of all countries surveyed; on average making up 27% of countries’ total retrenchment efforts. These included across-the-board reductions and/or freezes on such line items as staff wages, IT, procurement, as well as expected efficiency gains from mergers and restructuring of public sector organisations. Second, “big ticket items” also emerged as important targets of finance ministries. As of the end of 2010, 20 of the 30 OECD countries who participated in the study had announced cuts to social protection spending (e.g., pensions, unemployment and other social benefits). Health was next in line, with 15 countries reporting planned reductions here. In total, these two government functions accounted for about half of total general government spending in pre-crisis times.

Fixing the Foundations: A Global Call to Action on PFM!

Posted by Steve Freer[1]

CIPFA – the UK-based Chartered Institute of Public Finance and Accountancy – is inviting organisations which share its passion for Public Financial Management (PFM) to come together and deliver a quantum leap in the quality of governments’ accounting, auditing and financial management practices. Steve Freer, Chief Executive of CIPFA explains why the present may be the best time for action……

Readers of this blog will know – better than anyone - the value of sound, effective PFM. You’ll also be aware of the potentially dire consequences of getting it wrong. Sadly, shortcomings in governments’ financial management practices are all too common in many jurisdictions around the world.

Many of our weaknesses have been exposed by the current sovereign debt crisis. Markets depend upon certainty and confidence. But what could be more uncertain than government accounts prepared on a cash basis without full balance sheet disclosure of assets and liabilities? How can that inspire confidence when governments are at the same time entering into complex guarantees to shore up ailing financial institutions?

Liberia Budget Reflection Workshop: Laying the Foundation for a Medium-Term Budget Framework

Posted by Kubai Khasiani, Steve Gurr, and Florence Kuteesa

Liberia is set to introduce a medium-term budget framework starting July 2012. The government of Liberia—with support of a joint team of IMF staff and the UK ODI’s Budget Strengthening Initiative—conducted a workshop in August 2011 to discuss implementation issues and challenges, chart a way forward, and obtain commitment from the various government institutions and stakeholders. The workshop was attended by officials from a wide variety of government institutions and generated lively debates as participants came together and candidly shared their experience. A set of recommendations was agreed at the end of the workshop, which would enhance cooperation and political commitment from all parties and facilitate the consultative process.

The introduction of a medium-term budget framework (MTBF)[1] by the government of Liberia, starting in the fiscal year 2012/13 budget, is stipulated in the 2009 Public Financial Management Act. The provisions of the Act set new challenges for the Ministry of Finance (MoF), line ministries, and development partners. The reform implication(s)—such as mandates and responsibilities of the various actors, and coordination perspectives—formed the focus of a five-day budget process reflection workshop held in Monrovia during August 29 and September 2, 2011. The workshop, organised by the MoF and facilitated by a joint IMF /ODI[2] technical assistance team, allowed an exchange of views between representatives of the ministries responsible for finance and planning on the one hand, and spending agencies on the other, on the potential challenges and prerequisites for a sustained reform implementation. The workshop was attended by 175 officials from the MoF, the Ministry of Planning and Economic Affairs (MoPEA), as well as line ministries and agencies across the government of Liberia.

The Political Economy of Budget Reforms in Aid-Dependent Countries: Domestic and External Factors Shaping Success

Posted by Paolo de Renzio, Senior Research Fellow, International Budget Partnership and Research Associate, Global Economic Governance Programme, University of Oxford

The quality of governance and institutions is increasingly seen as a fundamental factor in shaping the development prospects of poor countries. As a consequence, donor agencies have increasingly allocated resources to providing support for improving governance standards in such countries. Their interventions are based on the assumption that, through a combination of financial and technical assistance, they can provide better incentives for reform and affect the quality of institutions in positive ways. Despite this existing consensus, research on how institutions develop and change over time is still incipient, especially in developing countries. Research on how donors’ influence affects governance trajectories and processes of institutional change in aid-dependent countries is even more scarce.

A paper recently published by the Global Economic Governance Programme at the University of Oxford investigates the domestic and external factors affecting the outcomes of reforms aimed at improving the quality of government budget institutions across a group of 16 aid-dependent countries. Government budgets are a key area of government action, through which policy objectives are chosen and acted upon, and the necessary resources are collected, allocated and spent. They have also become a crucial area being promoted by donors, backed by an increase in funding for technical assistance from US$ 170 million in 1997 to US$ 1.6 billion in 2007), covering a range of initiatives aimed at strengthening the rules and procedures which underpin budget processes. How has such external assistance worked? Were donors able to ‘buy’ better governance? What other factors shaped the outcomes of budget reforms? These are the key questions that the paper seeks to answer.

Parliamentary Powers and Capacities

Posted by Mohamed Moindze, international consultant

The budget is the instrument used to implement the most important public policies. It affects the lives of all citizens. However, the budgetary process has for many years been under the exclusive control of government. Yet there is no way to achieve good governance of public finances (needed to implement public policies) without effective external control of public finances. In the past, the public’s involvement in the budgetary process (as well as the involvement of parliaments) was not considered useful. Some suggested that such participation could be dangerous since it might undermine a country’s budgetary stability by sacrificing the macroeconomic equilibria.

Increasingly over the last twenty years or so, the developing countries have been undertaking courageous reforms to allow national parliaments to play the eminent role that constitutions grant them in the management of public affairs. This transition is occurring in the context of a general trend toward democratization and good governance. This increased role of parliaments consists of debating the broad outlines of the course that countries wish to take, thus helping to define them, to enact laws, to allocate resources to government for implementing policies, and to control their application.

Note de présentation du document sur le contrôle parlementaire

Affiché par Mohamed Moindze, consultant international

Le budget est l’instrument de mise en œuvre des politiques publiques le plus important. Il affecte la vie de tous les citoyens. Pourtant, le processus budgétaire a été, pendant très longtemps, sous le contrôle exclusif du gouvernement. Or, il ne saurait y avoir de bonne gouvernance des finances publiques (qui est nécessaire pour la mise en œuvre des politiques publiques) sans contrôle externe efficace des finances publiques. L’implication du public dans le processus budgétaire (et même des parlements) n’était, dans le passé, pas considérée comme utile. Certains avançaient qu’une telle participation pouvait être dangereuse puisqu’elle pouvait saper la stabilité budgétaire d’un pays en sacrifiant les équilibres macroéconomiques.

Depuis près de vingt ans, et de façon croissante, les pays en voie de développement engagent des réformes courageuses pour permettre aux parlements nationaux de jouer le rôle éminent que les constitutions leur accordent dans la gestion des affaires publiques. Ce mouvement se place dans le cadre d’une tendance générale à la démocratisation et à la bonne gouvernance. Ce rôle accrû des parlements consiste à débattre des grandes orientations des pays et à contribuer ainsi à les définir, à adopter les lois, à allouer des ressources aux gouvernements pour la mise en œuvre des politiques, et en contrôler l’application.

Burkina Faso and Mali: Developing Program Budgeting While Getting the Basics Right

Posted by Benoit Taiclet and Lewis Murara

Program-based budgeting (PBB) is considered an important tool for developing countries to channel more efficiently their resources to achieving their development goals. However, PBB is also a rather sophisticated PFM reform, especially when certain public finance management (PFM) basics still need to be improved. Burkina Faso and Mali offer interesting examples of low-income countries whose reforms started at different stages, but finally made good progress both in program budgeting and more general improvement of their respective PFM systems. This success –although it must be stressed that PPB is not yet fully functional - mostly relies on the countries’ own determined pursuit of reform. However it has been facilitated by the synergy built between several stakeholders, the IMF and its Regional Center AFRITAC West, the UNDP and its regional pole in Dakar, as well as bilateral partners such as the Belgian, German and Japanese governments.

Gradual reform or a more risky Big Bang approach?

Both countries chose at an early stage a similar, cautious multi-step scheme for reform. The first step was to ensure a strong state commitment and civil society backing, then to develop costing of policy expenditures and medium term expenditures frameworks. In this scheme PBB was planned to be developed alongside the usual input budget prior to its full implementation. So far Mali has - and Burkina Faso intends to - set up a comprehensive PBB budget as an appendix of the draft budget bill. But still this appendix remains an information tool and to some extent a planning tool only, for the Executive, Parliament and the donor community; it has, however, not yet been considered an appropriate tool to actually manage government financial resources and to monitor the performance of the services.

Reforming PFM Country Systems: The Benefits from a Governance Perspective

Posted by Dr. Stephan Klingebiel, Director, and Timo Mahn, of the KfW Bank office in Rwanda

The road to the 4^th High Level Forum on Aid Effectiveness in Busan later this month is paved with many reports, declarations and surveys. One of the key inputs for Busan is the OECD-DAC survey on monitoring the implementation of the 2005 Paris Declaration. Alas, the results of this third and final survey round, which were published a few weeks ago, show that overall progress has been dismal since 2005. While this does not come entirely unexpected, there has been a vibrant debate about the reasons for this outcome. Since the publication of the survey, several contributors suggested that, going forward, one key element that is required to make progress on the aid effectiveness agenda is to pay more attention to the governance dimensions of aid reforms.

In a paper published at the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), we have argued that reforms of Public Financial Management (PFM) systems should have a key part in this. One of the challenges for development practitioners in the field of PFM is that often times, PFM reforms are still not seen as reform programs in their own right, but rather from the narrow angle of improving technical efficiency of financial management systems, processes and procedures. For PFM reforms to succeed, however, it is vital that their effects on governance are recognized and taken into account.

PEMPAL Treasury Community of Practice Workshop on Use of Information Technologies in Treasury Systems

Posted by Deanna Aubrey, PEMPAL Community Facilitator

On September 27-29, 2011, PEMPAL[1] Treasury Community of Practice (TCOP) held a workshop in Astana, Kazakhstan. Astana provided a spectacular backdrop for the meeting with the modern capital, only established some 14 years ago, preparing for events to celebrate Kazakhstan’s 20 years of independence.

Most countries participating in the TCOP from the Europe and Central Asia (ECA) region are in the process of modernizing or developing their Treasury information systems and many of them are either considering or already moving towards expanding system functionality and creating integrated Financial Management Information Systems (FMIS).  Given the importance of this theme to TCOP PEMPAL members, PEMPAL already organized previous meetings, including on the use of digital signatures in treasury operations, and more are planned for the future. The Astana meeting focused on the development and application of FMIS solutions, as well as the effective utilization of such web-based platforms for the public financial management needs of decentralized budget institutions and their spending units, in support of various reforms such as improvements in accounting and reporting and strengthening internal control frameworks.

République Démocratique du Congo: Conférence sur les Reformes Budgétaires

Affiché par Ian Lienert

Une conférence sur les réformes budgétaires en République Démocratique du Congo (RDC) a été organisée les 3 et 4 octobre 2011 à Kinshasa, par le Comité d’Orientation de la Réforme des Finances Publiques (COREF).[1]  Plus de 150 personnes étaient présentes, avec une participation importante des ministres provinciaux du budget et des finances, ainsi qu’une représentation des ministères centraux (Plan, Budget et Finances) et sectoriels et de l’Assemblée nationale et du Sénat. Le Ministre du Budget a ouvert la conférence.

A l’issue des discussions, les participants ont validé l’idée d’une approche priorisée des  réformes des finances publiques. La première priorité est de restaurer la crédibilité de la loi des finances. Pour les représentants des provinces, une grande importance est attachée à la mise en œuvre de la Constitution de 2006, notamment en ce qui concerne l’allocation aux provinces de 40 % des recettes à caractère national.

Democratic Republic of the Congo: Conference on Fiscal Reform

Posted by Ian Lienert

A conference on budget reforms in the Democratic Republic of the Congo (DRC) was organized in Kinshasa on October 3 and 4, 2011 by the Committee for Public Finance Reform(COREF).[1] Over 150 persons took part, including provincial ministers of budget or finance, and representatives of the central ministries (Planning, Budget and Finance) and sectoral ministries, as well as the National Assembly and the Senate. The (national) Minister of Budget opened the conference.

At the conclusion of the discussions, the participants validated a prioritized approach to public finance reform. The first priority is to restore the credibility of the annual budget law. The provincial representatives emphasized the need to implement the 2006 Constitution, particularly the provisions on the allocation of 40 percent of national revenues to the provinces.

IFAC Urges G-20 to Pursue Coordinated, Long-Term Approaches to Global Economic Stability and Fiscal Sustainability

International Federation of Accountants Calls for Institutional Change in Public Sector Financial Management, Adoption and Implementation of Global Standards, Support for Integrated Reporting

(New York/October 11, 2011) – In a letter submitted this week, the International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 125 countries, urged the G-20 leaders at their November 3-4, 2011 meeting in Cannes, France, to focus on three long-term initiatives aimed at promoting global economic stability and greater fiscal sustainability: 1) public sector financial reporting and management reforms; 2) global regulatory convergence; and 3) development of integrated reporting.

Address Public Sector Debt Problems: Encourage Review of Institutional Changes in Public Sector Financial Management and Adoption of Accrual-Based Accounting

In order to address the sovereign debt crisis, IFAC recommends that the G-20 commission the Financial Stability Board (FSB) to consider the institutional changes that are needed in public sector financial management to protect investors in government bonds, as well as the public. Further, the G-20 should actively encourage the adoption of accrual-based accounting and budgeting by governments and public sector institutions, which will promote greater transparency and accountability in public sector finances and allow for monitoring of government debt and liabilities for their true economic implications. IFAC also encourages the adoption and implementation of International Public Sector Accounting Standards (IPSASs).

Job Offer: IDI Seeking Consultants for SAI Capacity Development (Framework Agreement)

The IDI is looking for several consultants experienced in providing capacity development to Supreme Audit Institutions. Candidates should have experience of working with and for SAIs, and implementing SAI capacity development initiatives in a variety of developing countries. A number of consultants will be awarded a place on the framework agreement, to provide IDI with access to consultants with working level proficiency across the INTOSAI languages (Arabic, English, French, German and Spanish) as well as Russian and Portuguese. Applications, based on the terms of reference below, should be received by October 31, 2011.

The opportunity is also advertised on the IDI website

The IDI is a non-profit organisation that aims to enhance the institutional capacity of Supreme Audit Institutions in developing countries through needs-based, collaborative and sustainable development programmes in INTOSAI regions and groups of SAIs to meet the existing and emerging needs of stakeholders.

Transparency and Participation in Public Financial Management: What Do Budget Laws Say?

Posted by Paolo de Renzio, International Budget Partnership, and Verena Kroth, London School of Economics

An increasing number of governments, as well as international and civil society organizations, are promoting the public disclosure of budgetary information, and calling for greater citizen involvement in budget processes. Most agree that fiscal transparency generates significant benefits, as it is an important precondition for better governance, improved economic performance and prudent fiscal policy, resulting in lower deficits and debt accumulation. Moreover, transparency functions as a political expression of democratic governance, giving citizens and taxpayers information that they are entitled to, and that they can use to hold their governments accountable.

Given its increasing importance, how can transparency and participation in public financial management be promoted or improved? As a possible avenue, it is interesting to look at the role of legislation in promoting both disclosure of budgetary information and opportunities for citizen engagement in the budget process. Key questions then are: (a) to what extent does budget legislation in different countries cover issues related to budget transparency and participation, and in what level of detail? and (b) does the degree to which legislation covers issues related to public disclosure of budget information seem to affect the actual level of budget transparency in different countries?

Budget Institutions Supporting Fiscal Consolidation

Posted by David Nummy

Countries around the world are struggling to devise the policies that will best address the challenges resulting from the financial crisis. In a book to be issued by the Fiscal Affairs Department of the International Monetary Fund, the case is made that key budget institutions will be necessary to both devise and execute those policies.

Previewing the book that will be issued later this year, Marco Cangiano kicked off the International Consortium on Governmental Financial Management (ICGFM) fall season by presenting on Budget Institutions for the 21^st Century at the monthly DC Forum held at the Carnegie Endowment for Peace in Washington, DC on September 7, 2011. Mr. Cangiano, an Assistant Director of the IMF Fiscal Affairs Department, outlined ten budget institutions that will be key to countries around the world in addressing the challenges of dealing with the post-financial crisis environment in the three typical phases of a fiscal consolidation (but the same would apply in designing a stimulus package): understanding the fiscal challenge; developing a strategy; and implementation of the strategy though the budget process.

"The Overall Evaluation of the Performance of the PEFA Programme is a Resoundingly Positive One"

Posted by Michel Lazare

"The overall evaluation of the performance of the PEFA programme is a resoundingly positive one" is the first sentence in the main findings section of executive summary of the recently published independent evaluation report of the PEFA programme.

In November 2010, the Steering Committee launched an independent evaluation of the  PEFA Program, covering the period 2004 to 2010. The evaluation was undertaken by a team of consultants led by Andrew Lawson, and the final report has now been completed and is available on the PEFA website (www.pefa.org) or clicking on the following link: Download PEFAEvaluationRevisedFinalReportJuly2011[1].

The report notes a number of markedly positive achievements of the PEFA programme. Lets just mention the following three: (a) "Across the world 90 per cent of low income, 75 per cent of middle income and 8 per cent of high income countries had been assessed, were in the process of assessment or were going to be assessed by October 2010;" (b) "The PEFA Programme has succeeded in creating a credible framework for the assessment of PFM functionality, which manages to be comprehensive in its coverage and yet sufficiently simple for the non-technical user to understand;" and (c) "The PEFA assessment framework is now used by all major development agencies working with PFM systems, either as a tool to support the design and monitoring of PFM reforms or as a key element of fiduciary risk assessment processes."