Haque, Tobias A.Knight, David S.Jayasuriya, Dinuk S.2013-01-292013-01-292012-12https://hdl.handle.net/10986/12207Drawing on Public Expenditure and Financial Accountability assessment scores from 118 countries, this paper provides the first comparative analysis of public financial management performance in small Pacific Island Countries (PICs). It applies a Tobit regression model across the full cross-country sample of Public Expenditure and Financial Accountability scores and country variables to identify potential causes for the observed underperformance of Pacific Island countries relative to other countries of similar income. First, the analysis finds small population size to be negatively correlated with Public Expenditure and Financial Accountability scores, with the "population penalty" faced by small Pacific Island countries sufficient to explain observed underperformance. Second, through application of a new capacity index of Public Expenditure and Financial Accountability dimensions, it finds strong evidence in support of the hypothesis that small population size impacts scores through the imposition of capacity constraints: with a limited pool of human capital, small countries face severe and permanent challenges in accessing an adequate range and depth of technical skills to fulfill all functions assessed through the Public Expenditure and Financial Accountability framework. These findings suggest that approaches to strengthening public financial management in small Pacific Island countries should involve: i) careful prioritization of public financial management capacity toward areas that represent binding constraints to development; ii) adoption of public financial management systems that can function within inherent and binding capacity constraints, rather than wholesale adoption of "best practice" imported systems; and iii) consideration of options for accessing external capacity to support public financial management systems on a long-term basis, from regional agencies, the private sector, or donors.en-USCC BY 3.0 IGOACCESS TO INFORMATIONACCOUNTABILITY FRAMEWORKACCOUNTINGACCOUNTING STANDARDSAGGREGATE EXPENDITUREAGGREGATE FISCALAGGREGATE REVENUEANNUAL REPORTINGARREARSAUDIT OFFICEAVAILABILITY OF DATABEST PRACTICEBINDING CONSTRAINTBLUEPRINTBOOKMARKBRAIN DRAINBUDGET ALLOCATIONSBUDGET CIRCULARBUDGET COMPREHENSIVENESSBUDGET DOCUMENTATIONBUDGET ESTIMATESBUDGET EXECUTIONBUDGET PREPARATIONBUDGET PROPOSALSBUDGET SUPPORTBUDGET SYSTEMSBUDGETARY EXPENDITUREBUDGETARY INSTITUTIONSBUDGETINGCAPACITY BUILDINGCAPACITY CONSTRAINTSCAPACITY INDICATORSCAPITAL SHORTAGESCASH BALANCESCASH FLOWSCENTRAL AGENCIESCENTRAL GOVERNMENTCITIZENSCOMPETITIVE PROCUREMENTCUSTOMSDEBTDEBT DATADEBT SUSTAINABILITYDEVELOPING COUNTRIESDEVELOPMENT ASSISTANCEDEVELOPMENT BANKDEVELOPMENT GOALSDEVELOPMENT OBJECTIVESDEVELOPMENT POLICYDISBURSEMENTSDONOR AGENCIESDONOR FLOWSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC PERFORMANCEECONOMIC REFORMECONOMIES OF SCALEEXTERNAL ACCOUNTABILITYEXTERNAL ASSISTANCEFINANCE MINISTRIESFINANCIAL ACCOUNTABILITYFINANCIAL MANAGEMENT CAPACITYFINANCIAL RESOURCESFINANCIAL STATEMENTSFISCAL DATAFISCAL FORECASTSFISCAL INFORMATIONFISCAL OUTTURNSFISCAL POSITIONFISCAL YEARSFRAUDFUNCTIONALITYFUTURESGLOBALIZATIONGOOD GOVERNANCEHUMAN CAPITALHUMAN RESOURCESIMPACT OF POPULATIONIMPACTS OF POPULATIONINCOME LEVELINCOME LEVELSINFRASTRUCTURE PROJECTSINSTITUTIONAL DEVELOPMENTINTERNAL AUDITINTERNAL AUDIT FINDINGSINTERNAL AUDIT FUNCTIONINTERNAL CONTROLINTERNAL CONTROLSINTERNATIONAL BANKINTERNATIONAL CAPACITYINTERNATIONAL COMPARISONSINVESTINGINVESTMENT EXPENDITUREISSUANCEISSUANCE OF GUARANTEESJOB OPPORTUNITIESJOB TRAININGLABOR MARKETLABOR MARKETSLEGISLATIVE BUDGETLOCAL CAPACITYMACROECONOMIC MANAGEMENTMACROECONOMIC VOLATILITYMANAGEMENT SYSTEMSMARGINAL EFFECTSMARKETABLE SKILLSMIGRANTMIGRATIONMIGRATION DATAMIGRATION FLOWSMINISTRIES OF FINANCEMINISTRY OF FINANCEMISSING DATAMULTIVARIATE REGRESSION ANALYSISNATIONAL DEVELOPMENTNATIONAL GOVERNMENTNATIONAL GOVERNMENTSNUMBER OF MIGRANTSNUMBER OF PEOPLEOPEN ACCESSOUTSOURCINGPERFORMANCE INDICATORSPERFORMANCE MEASUREMENTPERFORMANCESPOLICY DISCUSSIONSPOLICY IMPLICATIONSPOLICY RESEARCHPOLICY RESEARCH WORKING PAPERPOLITICAL ECONOMYPOPULATION DATAPOPULATION EFFECTPOPULATION SIZEPOPULATION VARIABLEPORTFOLIOPOST-CONFLICT SETTINGSPOVERTY REDUCTIONPRACTITIONERSPREPARATION OF BUDGET SUBMISSIONSPRIVATE SECTORPRIVATE SECTOR DEVELOPMENTPROCUREMENT FUNCTIONPROCUREMENT PROCESSESPROFESSIONAL STAFFPROGRAMSPROGRESSPUBLICPUBLIC ADMINISTRATIONPUBLIC ENTITIESPUBLIC EXPENDITUREPUBLIC EXPENDITURE MANAGEMENTPUBLIC FINANCEPUBLIC FINANCESPUBLIC FINANCIAL MANAGEMENTPUBLIC FINANCIAL MANAGEMENT SYSTEMPUBLIC FINANCIAL MANAGEMENT SYSTEMSPUBLIC SECTORPUBLIC SECTOR REFORMPUBLIC SERVANTSPUBLIC SERVICEPUBLIC SERVICESREFORM EFFORTSREFORM OBJECTIVESREFORM PROGRAMSREGIONAL DUMMIESREGISTRATION SYSTEMRELATIONSHIP BETWEEN POPULATIONRELIABILITYREMITTANCESRESOURCE ALLOCATIONRESOURCE MANAGEMENTRESOURCE USERESULTRESULTSRETENTIONRETURNREVENUE COLLECTIONRICHER COUNTRIESSERVICE DELIVERYSKILLED STAFFSMALL COUNTRIESSUB-NATIONAL GOVERNMENTSSUSTAINABILITY ANALYSISTARGETSTAXTAX ASSESSMENTTAX COLLECTIONSTECHNICAL ASSISTANCETECHNICAL CAPACITIESTECHNICAL CAPACITYTECHNICAL REQUIREMENTSTECHNICAL SKILLSTECHNICAL STAFFTERTIARY EDUCATIONTOTAL EXPENDITURETRANSPARENCYTREASURYTRUST FUNDSTURNOVERUNITED NATIONS POPULATION DIVISIONWEBWORLD POPULATIONWorld Bank10.1596/1813-9450-6297