Publication: PEFA, Public Financial Management, and Good Governance
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Date
2019-10-11
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2019-10-11
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This project, based on the Public Expenditure and Financial Accountability (PEFA) data set, researched how PEFA can be used to shape policy development in public financial management (PFM) and other major relevant policy areas such as anticorruption, revenue mobilization, political economy analysis, and fragile states. The report explores what shapes the PFM system in low- and middle-income countries by examining the relationship between political institutions and the quality of the PFM system. Although the report finds some evidence that multiple political parties in control of the legislature is associated with better PFM performance, the report finds the need to further refine and test the theories on the relationship between political institutions and PFM. The report addresses the question of the outcomes of PFM systems, distinguishing between fragile and nonfragile states. It finds that better PFM performance is associated with more reliable budgets in terms of expenditure composition in fragile states, but not aggregate budget credibility. Moreover, in contrast to existing studies, it finds no evidence that PFM quality matters for deficit and debt ratios, irrespective of whether a country is fragile or not. The report also explores the relationship between perceptions of corruption and PFM performance. It finds strong evidence of a relationship between better PFM performance and improvements in perceptions of corruption. It also finds that PFM reforms associated with better controls have a stronger relationship with improvements in perceptions of corruption compared to PFM reforms associated with more transparency. The last chapter looks at the relationship between PEFA indicators for revenue administration and domestic resource mobilization. It focuses on the credible use of penalties for noncompliance as a proxy for the type of political commitment required to improve tax performance. The analysis shows that countries that credibly enforce penalties for noncompliance collect more taxes on average.
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“Kristensen, Jens Kromann; Bowen, Martin; Long, Cathal; Mustapha, Shakira; Zrinski, Urška. 2019. PEFA, Public Financial Management, and Good Governance. International Development in Focus;. © World Bank. http://hdl.handle.net/10986/32526 License: CC BY 3.0 IGO.”
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The government proposes to grow at 6 percent. This report discusses policy measures needed to ensure success of government programs. Following the introduction, chapter 2 discusses past performance and provides a brief discussion of recent economic and social developments. Chapter 3 discusses future challenges, analyzes the main sources of fiscal pressure on Mongolia's budget, and proposes a sustainable macroeconomic reform path. Chapter 4 evaluates budget execution processes. Chapter 5 discusses the impact of intergovernmental fiscal relations on fiscal balances, and service delivery. Chapter 6 discusses governance. Chapter 7 analyzes budget formulation and policy coordination processes. Chapter 8 discuses public sector resource allocations, with particular emphasis on education, health, and the environment sectors. 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Arrangements are in place for the effective internal audit of treasury and revenue operations of government, but capacity for internal audit in the line ministries is still very weak.Publication Zambia - Public Expenditure Management and Financial Accountability Review : Country Financial Accountability Assessment, Annex, Volume 2(Washington, DC, 2003-11)The challenges faced by Zambia in public expenditure management (PEM) have been longstanding, and will require targeted efforts, as well as a strong degree of political will to address. The recently launched constitutional review, which includes issues of public finance, the anti-corruption campaign of the new Government, and the renewed interest by Parliament in governance issues, and accountability have all been encouraging steps. Nevertheless, for Zambia to assure that public accountability is enduring, and not dependent upon the Government of the day, it must take steps to strengthen institutions of the State that can provide public oversight, and that promote basic checks and balances. This report provides a very detailed analysis of the country's PEM, and accountability processes. Yet, many of the recommendations are not new, but have been cited in previous reports of the Bank, and/or other donors. Effective implementation of public sector reforms will likely remain a challenge in Zambia. The limited capacity of Government suggests the need to target a few major aspects of public finance, and to address them persistently: improving compliance with existing regulations; strengthening the oversight institutions of the State; promoting public access to information; and, rebuilding information management, and reporting systems. 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