State of public financial management reform in developing countries
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The document discusses a survey conducted by Freebalance on public financial management (PFM) reform in developing countries, highlighting that conventional views on PFM reform may need adjustment. It emphasizes the importance of understanding the gap between PFM laws and practice, the quality of donor technical assistance, and the effectiveness of financial management information systems (FMIS). The findings reveal inconsistencies in PFM advice and varying levels of satisfaction regarding FMIS and the overall momentum of PFM reform.
State of public financial management reform in developing countries
- 1. Version 7 section • brief discussion State of Public Financial Management Reform in Developing Countries FreeBalance 2013 Survey
- 2. Version 7 section • brief discussion Version 7 section • FreeBalance conducted surveys at the 27th Annual International Consortium on Governmental Financial Management (ICGFM) in Miami, the 3rd Week of May • Majority of participants were from developing countries • Some questions were asked at our booth using SurveyMonkey while others used polling technologies • Main purpose of the poll was to identify patterns and improve survey questions Overview
- 3. Version 7 section • brief discussion Version 7 section • FreeBalance is a global provider of Government Resource Planning (GRP) software and services based in Ottawa • There is significant anecdotal and academic evidence suggesting that some conventional thinking about Public Financial Management (PFM) reform needs adjustment • An important impetus for the survey was: The Limits of Institutional Reform in Development by Professor Matt Andrews Context
- 4. Version 7 section • brief discussion Version 7 section 44 1. Exploring the Limits of Institutional Reform Thesis 0% 25% 50% 75% 100% Transparency Not Signaling OGP Improves Governance Best Practices Speeds Reform Objectively PFM Best Practices PFM Practice to Law Gap Better Laws Primary Need scores were rationalized as % inconsistent views on notion of PFM “best practices” informal practices & leadership seen as more critical than legal reform, gaps between legal reform & practice observed general view that transparency initiatives improve governance
- 5. Version 7 section • brief discussion 55 23% 45% 32% What is the gap between PFM laws and practice in your country? Wide, procedures operate much differently than stated by the law Some gaps between laws and practice Gaps are limited
- 6. Version 7 section • brief discussion 66 9% 63% 28% What is the biggest issue inhibiting improved PFM in your country? Better laws Better leadership Focus on informal processes
- 7. Version 7 section • brief discussion 77 5% 49% 46% Poll The Open Government Partnership (OGP)… Is designed to make governments look like they have better governance than they do Is designed to improve governance through transparency Improves transparency but more is needed to improve accountability
- 8. Version 7 section • brief discussion 88 36% 64% Are government transparency initiatives in your country designed to Promote your country by signaling reform but doesn't change much Designed to improve governance
- 9. Version 7 section • brief discussion 99 24% 76% Do you believe there are PFM best practices… Best practices that should be adopted by all governments Good practices where some are better based on the country context
- 10. Version 7 section • brief discussion 1010 0% 25% 50% 75% 100% Sustainable PFM Reform PFM Practice to Law Gap PFM MomentumRealistic PFM Bluprint Understand PFM Priorities 2. Exploring the State of PFM Reform in Developing Countries scores were rationalized as % inconsistency between PFM momentum, understanding priorities, realistic blueprint and sustainable reform
- 11. Version 7 section • brief discussion 1111 26% 60% 14% Does your country have a realistic PFM reform roadmap? Yes Somewhat No
- 12. Version 7 section • brief discussion 1212 55% 42% 3% Do you have a good sense of what your country should be doing in PFM reform? Yes Somewhat No
- 13. Version 7 section • brief discussion 1313 7% 33% 51% 9% Is PFM reform momentum in your country moving? Too fast Right speed Too slow There is no PFM momentum
- 14. Version 7 section • brief discussion 1414 59%24% 18% Is PFM Reform momentum sustainable in your country? Yes No No Opinion
- 15. Version 7 section • brief discussion 1515 23% 45% 32% What is the gap between PFM laws and practice in your country? Wide, procedures operate much differently than stated by the law Some gaps between laws and practice Gaps are limited
- 16. Version 7 section • brief discussion 1616 0% 25% 50% 75% 100% Consistency of PFM Advice Across Donors PFM Advice Consistent with Donor Reps Consistency of PFM Advice Among Experts Donor ICT Advice Satisfaction Realistic Donor PFM Advice Donors Best Technical Assistance 3. Exploring the Quality & Consistency of PFM Technical Assistance satisfaction of PFM & ICT advice from donors differs depending on the question asked general lack of consistency of donor advice, but higher from “experts” scores were rationalized as %
- 17. Version 7 section • brief discussion 1717 33% 33% 15% 18% Does your country get consistent advice from different donors? Yes Mostly the Same Mostly Different Completely Different
- 18. Version 7 section • brief discussion 1818 25% 62% 13% 0% Donor technical assistance for ICT technology Is very effective Is somewhat effective Is somewhat ineffective Is very ineffective
- 19. Version 7 section • brief discussion 1919 36% 15% 32% 17% Does PFM advice from donors change when donor representatives change? Yes Mostly inconsistent advice Mostly consistent advice No
- 20. Version 7 section • brief discussion 2020 66% 12% 22% I get better advice on PFM reform… At ICGFM and similar conferences and presentations From technical assistance sponsored by donors From research and reading
- 21. Version 7 section • brief discussion 2121 60% 27% 8% 5% Does your country get consistent PFM advice from experts? Yes Mostly the Same Mostly Different Completely Different
- 22. Version 7 section • brief discussion 2222 41% 59% Have you found that donors request PFM processes that are Better than in many developed countries Realistic given the country contex
- 23. Version 7 section • brief discussion 2323 4. Exploring the Satisfaction with FMIS Systems 0% 25% 50% 75% 100% Would Select the Same FMIS Self-Sustaining FMIS Controlling FMIS Costs FMIS Automation Financially Sustainable FMIS FMIS Helps Reform scores were rationalized as % inconsistent views on FMIS sustainability, where costs considered high but systems are financially sustainable yet only partly self- sustaining relatively low FMIS satisfaction yet optimistic about impact of FMIS despite low levels of automation
- 24. Version 7 section • brief discussion 2424 33% 26% 16% 23% If you had it to do over again, would you select the same information systems in your country? Yes Mostly the Same Mostly Different Completely Different
- 25. Version 7 section • brief discussion 2525 24% 51% 31% Our government FMIS systems… Are fully managed and supported by government staff Are managed and supported by government staff for normal situations Require a significant number of outside consultants to manage
- 26. Version 7 section • brief discussion 2626 51% 13% 29% 7% The costs to manage our government FMIS system are… Far more than they should be Are a bit more than they should be Are about as expensive as they should be Are less than expected
- 27. Version 7 section • brief discussion 2727 11% 57% 33% The PFM processes in my country … Are mostly automated Somewhat automated Mostly manual
- 28. Version 7 section • brief discussion 2828 58% 30% 12% Is the FMIS system in use in your country financially sustainable? Yes No No Opinion
- 29. Version 7 section • brief discussion 2929 82% 5% 13% In your experience do FMIS systems help accelerate PFM reform have no impact on PFM reform momentum after implementatio slow PFM reform
- 30. Version 7 section • brief discussion Version 7 section• Very little consistency in views of whether PFM reform sequencing is or should be a science • General agreement that direct budgetary support reduces corruption • Diagnostic tools like PEFA help set some PFM reform actions • Sense that PFM reform could be accelerated 3030 5. Exploring Other PFM Elements
- 31. Version 7 section • brief discussion 3131 88% 12% Will increasing Open Budgets Index Improve the perception of governance in your country Have no effect on perception
- 32. Version 7 section • brief discussion 3232 36% 49% 2% 13% Is PEFA sufficient to help you map out PFM reform? Yes Helps somewhat Doesn't Help What is PEFA
- 33. Version 7 section • brief discussion 3333 39% 51% 10% Do you believe that your country can leapfrog other countries in PFM reform? Yes In some areas No
- 34. Version 7 section • brief discussion 3434 52% 29% 19% Direct budgetary support to your country will… Reduce corruption, improve capacity and results Have no significant governance impact Increase corruption and make development outcomes poorer
- 35. Version 7 section • brief discussion 3535 51%49% IS PFM reform sequencing a science an art form
- 36. Version 7 section • brief discussion 3636 18% 34% 12% 12% 24% How accurate is PFM perception of the PFM quality in your country? Very accurate Somewhat accurate Somewhat inaccurate Quite inaccurate 55% 45% Should PFM reform sequencing be… A science An art form