State of public financial management reform in developing countries


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Surveys and polls from the 27th Annual International Consortium on Governmental Financial Management on PFM reform, donor support, and financial management systems in use in development countries. Includes: analysis of Exploring the Limits of Institutional Reform by Matt Andrews and other observations.

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State of public financial management reform in developing countries

  1. 1. Version 7 section• brief discussionState of Public Financial ManagementReform in Developing CountriesFreeBalance 2013Survey
  2. 2. Version 7 section• brief discussionVersion 7 section• FreeBalance conducted surveys at the 27th AnnualInternational Consortium on Governmental FinancialManagement (ICGFM) in Miami, the 3rd Week of May• Majority of participants were from developing countries• Some questions were asked at our booth usingSurveyMonkey while others used polling technologies• Main purpose of the poll was to identify patterns andimprove survey questionsOverview
  3. 3. Version 7 section• brief discussionVersion 7 section• FreeBalance is a global provider of Government ResourcePlanning (GRP) software and services based in Ottawa• There is significant anecdotal and academic evidencesuggesting that some conventional thinking about PublicFinancial Management (PFM) reform needs adjustment• An important impetus for the survey was: The Limits ofInstitutional Reform in Development by Professor MattAndrewsContext
  4. 4. Version 7 section• brief discussionVersion 7 section441. Exploring the Limits of Institutional Reform Thesis0%25%50%75%100%Transparency Not SignalingOGP Improves GovernanceBest Practices Speeds ReformObjectively PFM Best PracticesPFM Practice to Law GapBetter Laws Primary Needscores were rationalized as %inconsistent views on notionof PFM “best practices”informal practices &leadership seen as morecritical than legal reform,gaps between legal reform& practice observedgeneral view thattransparency initiativesimprove governance
  5. 5. Version 7 section• brief discussion5523%45%32%What is the gap between PFM laws and practice in yourcountry?Wide, procedures operatemuch differently thanstated by the lawSome gaps between lawsand practiceGaps are limited
  6. 6. Version 7 section• brief discussion669%63%28%What is the biggest issue inhibiting improved PFM in yourcountry?Better lawsBetter leadershipFocus on informalprocesses
  7. 7. Version 7 section• brief discussion775%49%46%Poll The Open Government Partnership (OGP)…Is designed to makegovernments look like theyhave better governancethan they doIs designed to improvegovernance throughtransparencyImproves transparency butmore is needed to improveaccountability
  8. 8. Version 7 section• brief discussion8836%64%Are government transparency initiatives in your countrydesigned toPromote your country bysignaling reform butdoesnt change muchDesigned to improvegovernance
  9. 9. Version 7 section• brief discussion9924%76%Do you believe there are PFM best practices…Best practices that shouldbe adopted by allgovernmentsGood practices wheresome are better based onthe country context
  10. 10. Version 7 section• brief discussion10100%25%50%75%100%Sustainable PFM ReformPFM Practice to Law GapPFM MomentumRealistic PFM BluprintUnderstand PFM Priorities2. Exploring the State of PFM Reform in Developing Countriesscores were rationalized as %inconsistency between PFMmomentum, understandingpriorities, realistic blueprintand sustainable reform
  11. 11. Version 7 section• brief discussion111126%60%14%Does your country have a realistic PFM reform roadmap?YesSomewhatNo
  12. 12. Version 7 section• brief discussion121255%42%3%Do you have a good sense of what your country should bedoing in PFM reform?YesSomewhatNo
  13. 13. Version 7 section• brief discussion13137%33%51%9%Is PFM reform momentum in your country moving?Too fastRight speedToo slowThere is no PFMmomentum
  14. 14. Version 7 section• brief discussion141459%24%18%Is PFM Reform momentum sustainable in your country?YesNoNo Opinion
  15. 15. Version 7 section• brief discussion151523%45%32%What is the gap between PFM laws and practice in yourcountry?Wide, procedures operatemuch differently thanstated by the lawSome gaps between lawsand practiceGaps are limited
  16. 16. Version 7 section• brief discussion16160%25%50%75%100%Consistency of PFM Advice Across DonorsPFM Advice Consistent with Donor RepsConsistency of PFM Advice Among ExpertsDonor ICT Advice SatisfactionRealistic Donor PFM AdviceDonors Best Technical Assistance3. Exploring the Quality & Consistency of PFM Technical Assistancesatisfaction of PFM & ICTadvice from donors differsdepending on the questionaskedgeneral lack ofconsistency of donoradvice, but higher from“experts”scores were rationalized as %
  17. 17. Version 7 section• brief discussion171733%33%15%18%Does your country get consistent advice from differentdonors?YesMostly the SameMostly DifferentCompletely Different
  18. 18. Version 7 section• brief discussion181825%62%13% 0%Donor technical assistance for ICT technologyIs very effectiveIs somewhat effectiveIs somewhat ineffectiveIs very ineffective
  19. 19. Version 7 section• brief discussion191936%15%32%17%Does PFM advice from donors change when donorrepresentatives change?YesMostly inconsistent adviceMostly consistent adviceNo
  20. 20. Version 7 section• brief discussion202066%12%22%I get better advice on PFM reform…At ICGFM and similarconferences andpresentationsFrom technical assistancesponsored by donorsFrom research and reading
  21. 21. Version 7 section• brief discussion212160%27%8%5%Does your country get consistent PFM advice fromexperts?YesMostly the SameMostly DifferentCompletely Different
  22. 22. Version 7 section• brief discussion222241%59%Have you found that donors request PFM processes thatareBetter than in manydeveloped countriesRealistic given the countrycontex
  23. 23. Version 7 section• brief discussion23234. Exploring the Satisfaction with FMIS Systems0%25%50%75%100%Would Select the Same FMISSelf-Sustaining FMISControlling FMIS CostsFMIS AutomationFinancially Sustainable FMISFMIS Helps Reformscores were rationalized as %inconsistent views on FMISsustainability, where costsconsidered high but systemsare financially sustainableyet only partly self-sustainingrelatively low FMISsatisfaction yet optimisticabout impact of FMISdespite low levels ofautomation
  24. 24. Version 7 section• brief discussion242433%26%16%23%If you had it to do over again, would you select the sameinformation systems in your country?YesMostly the SameMostly DifferentCompletely Different
  25. 25. Version 7 section• brief discussion252524%51%31%Our government FMIS systems…Are fully managed andsupported by governmentstaffAre managed andsupported by governmentstaff for normal situationsRequire a significantnumber of outsideconsultants to manage
  26. 26. Version 7 section• brief discussion262651%13%29%7%The costs to manage our government FMIS system are…Far more than they shouldbeAre a bit more than theyshould beAre about as expensive asthey should beAre less than expected
  27. 27. Version 7 section• brief discussion272711%57%33%The PFM processes in my country …Are mostly automatedSomewhat automatedMostly manual
  28. 28. Version 7 section• brief discussion282858%30%12%Is the FMIS system in use in your country financiallysustainable?YesNoNo Opinion
  29. 29. Version 7 section• brief discussion292982%5%13%In your experience do FMIS systemshelp accelerate PFM reformhave no impact on PFM reformmomentum after implementatioslow PFM reform
  30. 30. Version 7 section• brief discussionVersion 7 section• Very little consistency in views of whether PFM reformsequencing is or should be a science• General agreement that direct budgetary support reducescorruption• Diagnostic tools like PEFA help set some PFM reformactions• Sense that PFM reform could be accelerated30305. Exploring Other PFM Elements
  31. 31. Version 7 section• brief discussion313188%12%Will increasing Open Budgets IndexImprove the perception ofgovernance in yourcountryHave no effect onperception
  32. 32. Version 7 section• brief discussion323236%49%2%13%Is PEFA sufficient to help you map out PFM reform?YesHelps somewhatDoesnt HelpWhat is PEFA
  33. 33. Version 7 section• brief discussion333339%51%10%Do you believe that your country can leapfrog othercountries in PFM reform?YesIn some areasNo
  34. 34. Version 7 section• brief discussion343452%29%19%Direct budgetary support to your country will…Reduce corruption,improve capacity andresultsHave no significantgovernance impactIncrease corruption andmake developmentoutcomes poorer
  35. 35. Version 7 section• brief discussion353551%49%IS PFM reform sequencinga sciencean art form
  36. 36. Version 7 section• brief discussion363618%34%12%12%24%How accurate is PFM perception of the PFM quality inyour country? Very accurateSomewhat accurateSomewhat inaccurateQuite inaccurate55%45%Should PFM reform sequencing be…A scienceAn art form