The document summarizes a discussion at an international conference on obstacles to public financial management (PFM) reform. Participants identified the greatest obstacles as lack of institutional capacity, human and financial resources, unclear objectives, and lack of political leadership and accountability. Key elements needed before beginning reforms include political support, stability, clear objectives, and good management. The sequence of reforms depends on the country-specific priorities but generally involves establishing political will, leadership, diagnostic studies, legal frameworks, and action plans. Benefits of PFM reform are difficult to measure and depend on the country context.

1. International Consortium on Governmental Financial Management (ICGFM) 2008 Washington Conference PARTICIPANT WORKSHOP SESSION Presenters: Ivan Maicic, Serbia Eddy Galele, Papua New Guinea C.A. Singh, India

2. Questions for Discussion: - What are the greatest obstacles to PFM Reform success? - What key elements must be in place before you begin reforms? - Is there a preferable sequence of reforms? - How do you measure the benefits of PFM reform? Participant Workshop Group 3

3. What are the greatest obstacles to PFM Reform success? -Institutional capacity -Human Resources -Financial Resources -Organizational structure -Unclear objectives and priorities -Unanticipated events -Man-Made, e.g, economic -Natural disasters - Participant Workshop Group 3

4. What are the greatest obstacles to PFM Reform success? -Turnover in leadership and staff -Absence of political leadership and champion -Sometimes management must create leadership -Absence of accountability -Unclear objectives -Responsibility for objectives -Absence of buy-n throughout the organization Participant Workshop Group 3

5. What are the greatest obstacles to PFM Reform success? -Antiquated legal framework -Failure to consider political cycle -Donor conditionality Participant Workshop Group 3

6. What key elements must be in place before you begin reforms? - Political Support and institutional willingness - Political + Economical Stability - Clear Objectives - Good Management + Ownership Participant Workshop Group 3

7. Is there a preferable sequence of reforms? 1 - Political Will 2 – Need to identify leadership team and build capacity 3 – Conduct a diagnostic study 4 – Is there a need for reform? 5 – Identify the objectives of the reform effort? 6 – Create the legal framework 7 - Develop an action plan on country-by-country basis including - authority - funding - tools You can’t use a forced recipe, the order depends on the priorities identified in steps 1 – 6. Participant Workshop Group 3

8. How do you measure the benefits of PFM reform? Participant Workshop Group 3