In response to the Paris Declaration (2005) and the Accra Agenda (2008) leading to commitments for donors to channel more of their aid to developing countries through country systems,The importance of Public Finance Management to Development Articles there has been a growing shift away from program and project aid – typically managed or overseen directly by the contributing development partner – to budget support where aid is channeled directly through the developing country treasury’s consolidated revenue fund account. As one might expect, as a consequence of this growing shift to budget support there has been a corresponding increase in donor focus on the performance of Public Finance Management in the countries that receive budget support. This is as should be, given the increased real or perceived fiduciary risks associated with the use of country systems to manage the hard earned taxes of the citizens of development partner countries.
But this is only one side of the story. Unfortunately there is not yet that much interest or appreciation in the other side of the story. On the other side of the story are the citizens of the developing countries who may suffer as a consequence of tinkering with Public Finance Management systems in the name of reform, which may only serve to undermine current weak systems and set them back even further. Public Finance Management seems inaccessible to most of us. Even where it is accessible to us we deem it to be boring,https://rozwijajfirme.pl/ inconsequential and something only dreary accountants and auditors need bother about. But think, Public Finance Management is about our money, it is about our children’s future, it is about our development.
The importance of Public Finance Management and its reform derives as a consequence of its direct role in implementing policy – be it about improving education, achieving better health care, promoting tourism, or increasing agricultural yields. With weak Public Finance Management systems, even where policy makers come up with sound policy, it may not be possible to implement such policy effectively. Further, quite uniquely Public Finance Management performance affects the performance of all other sectors – yes the macroeconomic environment and so private sector opportunity and the service delivery in agriculture, health, education, transport, energy, public safety and the list goes on. When it works, all other sectors have a chance of succeeding; but when Public Finance Management fails all other sectors fail.
We as citizens of developing countries ought to be more concerned about who drives the agenda for Public Finance Management reform. Is it the IMF, as it imposes Public Finance Management Reform conditionalities that are not just tied to strengthening or improving budgetary systems, but are tied specifically to the adoption of particular reform approaches – despite such approaches having in some instances failed in more than one country. Is it the World Bank as it makes the adoption of integrated financial management information systems (IFMIS) the basis for support in reforming the Public Finance Management systems? Or is it the result of wide internal debate and consideration by the country citizenry influencing their elected leaders to address the basic things that they know do not work using approaches that are within the reach of our capacity rather than adopt reform methods that may not yet be appropriate to our circumstances?