pefa better understanding trends- wescott--eng

8/2/2019 PEFA Better Understanding Trends- Wescott--EnG

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Understanding trends in PFM

system performance

PEFA Open Forum

ICGFM Miami - May 2012Clay Wescott


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Positive results from Evaluation ofWorld Bank Support to PFM

Sharp increase in lending: number of operations withPFM components increased by half around 2005

Increase partly attributable to use of actionableindicators like PEFA, which generate a list of potentialprior actions and technical assistance needs

Positive results from Bank support: 62% of countriesimproved their PFM rating (CPIA) from 1999-2006,compared to only 25% who didnt receive Bank support

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Considerable challenges remain In 2010, average PFM score for the World Banks

client countries was less than 60% of the top rating.

PFM ratings are usually equal or better than for civilservice administration, but never by more than onegrade; civil servants are needed to implement PFM

Improved PFM takes a very long time to translate to

improve public services; in the 20th century, it tookthe fastest 20 reformers 20 years to achieve basictransformation of bureaucratic quality.

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Analysis of repeat PEFA assessments Results from 32 countries found better progress

on formal than functional PFM features

The difference is greatest where progress can beachieved working with one or a few agencies, incomparison with PFM features where manyagencies are involved.

Among the functional features, more scores are

increasing than decreasing, indicating thatreforms are attaining results even in the moredifficult areas.

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Country PFM Systems

overall performance changes

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Change in score Percentage of indicator

dimension ratings

"A" scores maintained 11%Increasing scores 20%

Maintained "B" or "C" scores 21%

Decreasing scores 8%

"D" scores maintained 10%

Incomparable scores

(no scores and other reasons) 12+18%


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Classifying PFM elementsFORMAL FEATURES FUNCTIONAL FEATURES

De jure

Legislation, intention

De facto

Implementation, compliance,

enforcement

Upstream in budget cycle

Planning, budgeting

Downstream in budget cycle

Cash management, accounting reporting

and audit

Actor concentrationCentral finance agencies only Actor deconcentrationMany government entities involved

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Performance change by feature Actor concentration showed much higher

performance improvements than actor

deconcentration

Upstream and downstream elements of the

budget cycle performed at equal rate

De jure elements performed moderately

better than de facto features

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Performance changes by feature

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0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

% increase

% decrease

Based on 33 repeatassessments


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Performance changesnetDe jure / facto Up/Downstream Concentration

Form 28% 21% 33%

Function 16% 21% 11%

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Conclusions:Much more progress on formal than on functional featuresGap is expanding between actor concentration and deconcentration


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Opportunities and Challenges of using

PEFA Data

PEFA indicators are actionable, so cangenerate a list of potential prior actions and

technical assistance needs

But, high PEFA scores dont necessarily meanfunctional performance has improved,

particularly in line ministries, agencies and

subnational units10


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Improving PFM knowledge sharingbetween practitioners and researchers

Networks, communities of practice,

publication in scholarly journals

Help practitioners apply more robust theory,

grounded in previous scholarship

Provide scholars with research opportunitiesleading to actionable recommendations

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Enhancing the role of local researchers

Local researchers have comparative advantage inunderstanding the subtle barriers to institutionalchange in their own countries;

Local researchers had pivotal role in designing andpromoting market-supportive reforms in Chile, China,Indonesia, South Korea, Taiwan

Likewise, they could be critical in designing and

advocating new PFM behaviors that will havetraction.

Need for outreach, mentoring, twinning to identifyand build up local PFM researchers

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