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Getting the PFM Basics Right: Insights from a New Study
A broad approach is required for establishing the causes of poor public financial management performance in developing countries revealed in PEFA assessment reports
The PEFA program provides a framework for assessing and reporting the strengths and weaknesses of a country's PFM system. The methodology currently used in PEFA assessments was introduced in 2016, replacing the previous 2011 methodology.
The PFMConnect study concentrates on the analysis of D scores at the dimension level, the lowest level used in the PEFA framework and the level at which problems and improvements can be most usefully assessed. D scores represent 32% of all dimension scores in the 2016 framework evaluations for 63 countries. The results suggest that most D scores can be explained by the absence of 'Management Effectiveness' and 'Integrity'.
The PFMConnect study also analysed the D scores reported in a sample of 45 countries that have undertaken at least one PEFA evaluation under both 2011 and 2016 frameworks. This dual framework study enabled a country's performance to be compared over a five-year period and revealed a generally deteriorating performance with most dimensions exhibiting a greater number of D scores in the later evaluations.
When two evaluations for the same country were compared it was noted that most countries recorded a high proportion of D scores for the same dimension in both evaluations demonstrating a reasonably consistent poor performance.
PFMConnect suggests that country-specific studies should be undertaken (2016 framework studies for the full 94 dimensions and dual studies where the data are available) examining D scores at a dimension level to establish potential causes of poor PFM performance and identify ways in which performance might be improved. Issues to explore with respect to areas of poor PFM performance are outlined in the report.
Groups of countries or subnational bodies may wish to collaborate in review and development exercises enabling challenges and learning to be shared and systems of mutual support developed. PFMConnect is ready to support such work if required.
Browse the full report at https://blog-
About PFMConnect. PFMConnect is a consultancy providing online support in the fields of public finance and digital communication. PFM directors, David Fellows and John Leonardo, have extensive PFM consulting experience and have undertaken PFM assignments in Africa, Asia, the Caribbean, the Pacific and the United Kingdom.