Taking stock 1: Themes across PFM process areas
Three key themes emerge in the analysis of African Public Financial Management (PFM) systems: first, budgets tend to be more effectively planned than implemented; second, there is a noticeable gap between the establishment of processes and laws and their practical application; and third, the concentration of key actors within the system yields positive outcomes.
In African countries, budget preparation processes are notably more robust than those for budget execution and oversight, highlighting a significant disparity in public financial management This phenomenon is often referred to in public finance management terminology as the strength of upstream processes overshadowing that of downstream processes.
African public financial management (PFM) systems face a significant implementation deficit, where existing laws and processes rarely translate into actual practices This highlights a critical distinction between de jure reforms, which are legally established, and de facto reforms, which are effectively realized As noted in a recent diagnostic, while legislation and procedures have seen improvements, successful implementation remains elusive.
The third theme emphasizes that processes are more effective when they involve a focused group of key actors during implementation In contrast, processes tend to be less effective when multiple participants are involved, particularly those outside of central public financial management entities such as the budget department or treasury.
The analysis reveals significant themes based on statistical data and experiential descriptions, illustrated in Figure E1, which presents average scores across various PEFA dimensions The weakest dimensions, with an average score of 1.9 out of 4 across 31 countries, include downstream aspects like budget execution and oversight, practice-oriented approaches, and those involving de-concentrated actors In contrast, the strongest dimensions, averaging over 2.5, encompass upstream factors such as budget preparation, process-oriented methods, and concentrated actor involvement.
Fig E1 Different strengths of different process types, by theme
Taking stock 2: Themes across countries
Figure E1 highlights the general differences in dimension strengths without considering inter-country variations However, significant disparities in dimension strength across countries suggest the existence of distinct 'PFM performance leagues.' These leagues are empirically identified using PEFA scores and contrasting descriptions of country performance Figures E2 and E3 demonstrate that countries in the top leagues (4 and 5) exhibit stronger processes and outcomes compared to those in the lower leagues (1, 2, and 3).
Fig E2 PFM process strength differs by performance league
Figure E3 PFM outcomes also differ by league
Countries across different leagues exhibit significant disparities in their public financial management (PFM) dimensions Lower league countries consistently demonstrate weak characteristics across all categories—both de jure and de facto, as well as concentrated and de-concentrated dimensions In contrast, league 3 countries, while sharing weaknesses in downstream, de facto, and de-concentrated areas with lower league nations, are actively enhancing their upstream, de jure dimensions through focused engagement with concentrated actor sets Similarly, league 5 countries show improvements in upstream, de jure, and concentrated PFM aspects, yet they face challenges in strengthening their downstream, de facto, and de-concentrated dimensions.
Various themes emerge when analyzing why countries are categorized into different leagues, with multiple factors influencing the effectiveness of Public Financial Management (PFM) systems and their outcomes These influences can be summarized into five key themes.
• Growing economies have stronger PFM.
• Stability delivers PFM progress, although there may be a peculiar ‘starting from scratch’ dividend for countries enjoying post conflict stability.
• States with larger domestic, non-mineral income sources have stronger PFM.
• Longer periods of broad reform commitment foster PFM progress And,
The themes presented are supported by both quantitative and qualitative evidence, though various explanations could suggest different causal directions It is evident that these thematic influences are interconnected, potentially indicating an unidentified underlying factor For instance, higher growth states may generate greater domestic revenues, exhibit more political stability, and allow for more reform opportunities This concept is illustrated in Figure E4, which highlights the countries exhibiting these characteristics.
The article analyzes the positive aspects of four themes related to Public Financial Management (PFM) performance, ranked from weakest to strongest across five leagues Countries are identified by numbers to maintain confidentiality in their PEFA assessments The findings indicate that nations with higher scores exhibit more favorable conditions for PFM reform, leading to enhanced overall PFM performance Most of these countries fall within the top league, highlighting the correlation between positive indicators and successful financial management practices.
5, which also has higher PFM system quality and outcomes.
Fig E4 Country characteristics combine to impede, facilitate PFM across leagues
Understanding the quality of Public Financial Management (PFM) systems is heavily influenced by the characteristics of individual countries Some nations excel in PFM performance, ranking among Africa's leaders due to their positive alignment with key themes, while others face significant challenges that hinder their progress, placing them in the lower tiers of PFM effectiveness This disparity highlights crucial considerations for reformers, particularly the need to seriously consider contextual factors in the design of reform initiatives.
Strategy: Themes from past reforms, thoughts for the future
Examining PFM systems in Africa
15 Recent papers cite the ubiquitous nature of public sector reform in the developing world The World Bank’s Independent Evaluation Group (IEG) cites particularly high engagement in the last ten years This period has seen increased lending to such initiatives by organizations like the World Bank, with governance and public sector reform leading many country assistance strategies Wescott notes similarly in regard to public financial management (PFM), “a sharp increase in [World Bank] PFM diagnostic work and lending since 2000.” 1 What has this work achieved? What does past experience suggest for future reform? What, in particular, can we learn about the potential role of Civil Society Organization’s in PFM?
16 These are the questions underlying the current research, which aims to identify themes emerging from efforts to improve PFM systems in Africa The themes were identified through comparative analysis of PFM characteristics and experience in a sample of African countries The analysis was predominantly based on statistical manipulation of quantitative data emerging from 31 recent PEFA PFM performance assessments This analysis was supplemented by the review of documentary discussions of the same systems and countries (PFM-PRs) Qualitative examination of these documents, using content analysis, allows triangulation of evidence to enhance the validity of themes
17 The PEFA Public Financial Management Performance Measurement Framework allows assessment of PFM system quality in respect of 31 indicators, most ‘scored’ with reference to multiple dimensions 73 independently assessed dimensions constitute the full PEFA framework, with each dimension assessed on a four point ordinal scale from A to D, against detailed criteria that require evidence- based argument In enumerating PEFA’s ordinal symbols, the current research looks with interest at which dimensions scored 4 (A), 3 (B), 2 (C) and 1 (D) based on the idea that the higher the score, the more like “international good practice” Table 1 lists the 31 countries in the sample Readers will identify a good mix of Anglophone, Francophone and Lusophone countries and of income per capita levels in the group
Table 1 Countries in the PEFA dataset, in African and Non-African group
The African group consists of 31 countries, including Benin, Burkina Faso, Cameroon, Central African Republic, Comoros, Congo, Côte d'Ivoire, Democratic Republic of the Congo, Ethiopia, Gabon, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Nigeria, Rwanda, Senegal, Sierra Leone, and São Tomé and Príncipe.
Swaziland, Tanzania, Togo, Uganda and Zambia
18 To allow easy theme identification, the dimensions were at times organized into clusters reflecting PFM process areas These build on the ‘budget cycle’ categories in the PEFA framework, locating dimensions in 18 process areas shown in Figure 1 Even when clustered in this way, individual dimensions are generally
1 Wescott, C.G (2008) “World Bank Support for Public Financial Management: Conceptual Roots and
The World Bank Independent Evaluation Working Group has published a working paper titled "Evidence of Impact," which analyzes various factors independently and aggregates them into 'process indexes' when relevant This approach emphasizes key points while ensuring that all 18 index variables demonstrate acceptable levels of internal consistency.
19 The search for a story-line begins with Figure 2, which compares the average African score on each PEFA dimension with the average score in the 42 non-African countries, and three other ‘performance levels’—the “international good practice” 4 score (an A), 3 (a B) and 2 (a C) It shows that African averages are always below
Africa generally scores between 2 and 3 in 57% of dimensions, indicating a significant lag behind other countries, with 81% of dimension scores falling short of "international good practice." This raises questions about the reasons for Africa's underperformance and whether "international good practice" serves as a suitable benchmark for assessing progress.
Fig.2 Benchmarking African PFM; climbing the PFM performance ladder?
2 Andrews, M 2007 “What would an ideal PFM system look like?” in Shah, A (ed) Budgeting and Budgetary Institutions Washington, D.C.: World Bank, 359-383 Available at: http://siteresources.worldbank.org/PSGLP/Resources/BudgetingandBudgetaryInstitutions.pdf
See also the description at http://siteresources.worldbank.org/INTPRS1/Resources/383606-
20 Answers to the questions suggest the importance of context in understanding PEFA scores African scores lag the other group on the PEFA dimensions and income per capita measures, with the latter being a notable and significant determinant of PEFA performance Country wealth, or development status, is also a major predictor on attainment of the “international good practice” score (4) Countries with income per capita exceeding $4,000 are more than twice as likely to score a 4 over the entire set of dimensions 4 There are obviously many explanations of this, 5 but attaining
"Good international practice" closely aligns with achieving high levels of development, though it's important to recognize that country-specific contexts can influence the applicability of these practices For instance, Norway justifies certain sub-4 PEFA scores as suitable for its unique circumstances.
21 Given the apparent correlation between PEFA scores and level of development, Figure 2 proposes potential ‘developmental’ benchmarks for the African group The 2 and 3 scores equate with C and B symbols and appear as second and third rungs on the short ladder to the ultimate 4 These are useful comparisons for countries still climbing the ladder They imply the 4 score as a generally worthy end goal, not necessarily a hard “good practice”, and allow perspective on country progress towards the top rungs Assessed against these two ladder benchmarks, the African group can best be described by words in Uganda’s most recent report: “Still in progress and yet to achieve the desired level of success.” The description reflects these total numbers: 35 % of African PEFA dimension scores (800) suggest PFM process and practice areas are still on the bottom run of the ladder (a 1 or D); 29 %
The eight countries in this category represent 10% of the total sample yet contribute to 22.5% of the scores On average, these countries achieve 25 "good practice" scores, significantly surpassing the 10.5 average observed in other nations.
The findings indicate that there is no definitive causality between wealthier economies and stronger Public Financial Management (PFM) It is plausible that affluent economies establish environments conducive to robust PFM, or conversely, a dedication to effective PFM may drive economic wealth accumulation.
Norway's PEFA assessment, accessible at http://www.norad.no/default.asp?V_ITEM_ID361, highlights that C and D scores in areas such as medium-term budgeting, internal audit, and decentralized public financial management may be indicative of the unique Norwegian context rather than a necessity for reform Further insights can be found in the presentation available at http://www.oecd.org/dataoecd/28/25/41084040.ppt#275,7,Conclusions.
(669) are on the second rung up (2 or C); 20 % (445) are on the third rung up (3 or B); and 12.3 % (284) are at the top (4 or A)
22 The picture is also of a continent with variation in experience, which Figure 2 shows nicely across the 74 PEFA dimensions Why do African means on some PEFA dimensions, and thus PFM practices, place the continent at the bottom rung (on average) while showing it on the third rung for others? This variation is not only shown in mean scores across PFM dimensions, however, but also in variation within the dimensions Figure 3 illustrates this, showing both the mean and standard deviation for the African group in regard to all dimensions Why do scores vary within dimensions, and why is there inter country variation reflected in standard deviations above 0.7 in all cases?
Fig.3 Noting variation in African PEFA PFM dimension scores
Themes from stories across PFM processes
24 The search for themes to explain varying scores on PEFA’s dimensions centered on three issues: differences in process type itself, different challenges in process areas, and different actor combinations involved in meeting challenges.Research into these yields the following themes: (i) Budgets are made better than they are executed; (ii) Practice lags behind the creation of processes and laws; and (iii)Actor concentration pays.
Budgets are made better than they are executed
In public financial management (PFM), upstream processes refer to budget planning and preparation, while downstream processes encompass resource management, execution, accounting, and external accountability Figure 4 illustrates the variation in scores across non-outcome PEFA dimensions, organized into process area clusters, highlighting the differences in performance as one transitions from upstream to downstream activities.
Note: Stratbud = strategic budgeting; Budprep = Budget preparation; Legbud= Legislative budget analysis;
Effective financial management encompasses various critical components, including tax management, debt management, and donor engagement It also involves cash management, procurement, and human resources and payroll management Internal controls and audits play a vital role in maintaining oversight, complemented by monitoring, accounts reconciliation, and in-year reporting Annual and special reporting, along with external audits and legislative audit analysis, ensure compliance and transparency in financial operations.
Figure 4 indicates that average dimensions are generally higher upstream compared to downstream In simpler terms, African countries often excel in budget planning but struggle with execution This observation aligns with findings noted by de Renzio.
Research indicates that average scores decline as one progresses through the budget cycle, from formulation to execution, reporting, and scrutiny The Open Budget Initiative highlights that transparency is generally greater during the budget preparation phases of the public financial management (PFM) process compared to execution and external accountability stages The disparity between upstream and downstream scores is approximately 0.25, with a notable increase in countries receiving a score of D in downstream dimensions (11) compared to upstream processes (6.9) Data illustrated in Figure 5 reveals the averages across each process index, showcasing the strongest and weakest areas of the budget cycle.
Fig 5 Variation across the PFM system, by process area index scores
The analysis reveals that the highest index scores in African countries are associated with budget preparation, particularly in areas such as the presence of a formal budget calendar and legislative involvement Conversely, the lowest scores are found in downstream reporting and external accountability, highlighting weaknesses in internal controls, internal audits, monitoring, payroll, and procurement Notably, the gap between budget preparation and special reporting indexes is minimal, indicating that while the average African country is relatively competent in budget formulation, it struggles significantly with reporting arrears and extra-budgetary expenditures.
8 See the 2008 Open Budget Initiative Report: openbudgetindex.org/files/FinalFullReportEnglish1.pdf.
The upstream process areas, which include funded projects and activities in public enterprises and sub-national governments, show a notable contrast in effectiveness compared to downstream activities A significant statistic reveals a -0.69 difference between legislative practices in budget preparation and those in audit analysis This indicates that while the same entity oversees both areas, its upstream activities are substantially more robust than its downstream counterparts.
The theme of "stronger upstream" is evident in the introductory and summary sections of PFM-PR documents, with 13 out of 31 documents addressing the disparity between budget preparation and execution This trend is consistent across various countries, indicating that budgets are often better planned than implemented Factors contributing to this gap include donor emphasis on budget reforms and varying resource allocation to budget offices This raises important questions about the role of civil society organizations (CSOs) in bridging the upstream-downstream divide, particularly through advocacy for improved downstream processes and capacity building.
Evidence of civil society organization (CSO) engagement was primarily found through personal correspondence with specific groups in various countries, rather than in World Bank analytical products This information was supported by published references to civil society involvement in the media and relevant literature from development organizations For further details, references can be provided by the author.
Civil society engagements play a crucial role in enhancing demand and supply within public financial management (PFM) downstream Since 2000, Kenyan civil society has actively participated in various PFM areas, including budget hearings and tender board negotiations, and has recently contributed to the creation of public expenditure tracking surveys (PETS) Similarly, in Sierra Leone, civil society monitors government spending through district-level budget oversight committees, which facilitate extensive community sensitization meetings on budgetary and public financial issues.
Gabon faces significant challenges with weak reporting streams and non-transparent spending However, the PFM-PR highlights that initiatives to comply with the Extractive Industries Transparency Initiative (EITI) have prompted the government to appoint a special auditor to track oil-related revenues and expenditures, which could enhance transparency Driven by international development organizations and civil society organizations (CSOs), EITI is fostering a growing demand for better transparency in budget reporting and accountability mechanisms.
EITI is recognized by 18 countries as a key driver for enhancing downstream processes, especially in reporting and auditing Civil society organizations (CSOs) collaborate with the government within a National Stakeholder’s Working Group to evaluate audit reports This partnership is fostering greater budget literacy among CSOs, leading to a heightened demand for audits and an increasing focus on the quality of reporting.
Zambia's Public Financial Management and Public Resource Management (PFM-PR) highlights a critical need for increased accountability and civil society engagement It emphasizes that public scrutiny and pressure on the government to fulfill reform commitments must be enhanced, with civil society organizations (CSOs) playing a vital role in promoting effective PFM While organizations like the Civil Society for Poverty Reduction (CSPR) focus on the budget's alignment with poverty reduction strategies, they tend to neglect monitoring actual spending downstream Additionally, legislative initiatives often prioritize budget reviews over audit assessments, as seen in Lesotho Therefore, robust CSO involvement in both watchdog and advocacy roles is essential to bridge the gap between the upstream and downstream processes in public financial management.
Practice lags behind the creation of processes and laws
The second theme of the PFM process focuses on the depth of challenges reflected in different PEFA dimensions, with some emphasizing legislation or procedural development, allowing countries to achieve C and B scores primarily through de jure measures In contrast, other dimensions require actual implementation and ongoing activity, necessitating that countries navigate de facto challenges to score similarly For instance, a government can attain a C in budget preparation with a basic legal framework, despite implementation delays, while a C in strategic budgeting demands concrete evidence of practice, such as developing economic forecasts over a rolling two-year period.
Systematic differences in government responses to challenges reveal a significant theme: practice often lags behind the establishment of processes and laws This highlights a new institutional differentiation between de jure and de facto institutions, where the former are easier to adopt and modify compared to the latter For instance, the comparison between the de jure budget preparation and the de facto strategic budgeting shows a stark contrast, with double the number of D scores (10) in strategic budgeting versus only 5 Ds in budget preparation Similar trends emerge when analyzing other dimensions in these areas, particularly when categorized as 'de jure' (easier to achieve) or 'de facto' (requiring more implementation) A blind coding by three independent evaluators revealed 26 dimensions as de jure and 38 as de facto, with 10 indicators related to outcomes and donor engagements excluded from the analysis Table 2 illustrates the differences in averages and D scores across these categories.
Table 2 Comparing scores in de jure and de facto dimension categories
Countries scoring D in all dimensions (average) Mean for de jure dimensions
D in de jure dimensions (average)
Mean for de facto dimensions
Countries scoring D in de facto dimensions (average)
The average scores of de jure and de facto dimensions reveal a significant difference, with de jure dimensions averaging 2.33, nearly half a point higher than the de facto dimensions, which stand at 1.91 Additionally, a greater number of countries receive a score of D in the de facto category.
12 Governments can even score a B with “some delays”, suggesting a low de facto hurdle even at this level
An A requires that the budget calendar is adhered to, reflecting a significant de facto hurdle
The benchmark of 13 C highlights a significant distinction between stronger and weaker dimensions, with an average of 13.5 countries falling into this category compared to just 6.57 for de jure dimensions The notable differences in means and the number of countries scoring D are statistically significant at the 1% level, underscoring the theme's robustness Interestingly, 75% of all D scores across the 64 dimension sample are found in the de facto category, indicating that African systems exhibit stronger de jure dimensions than de facto ones on average This suggests that African Public Financial Management (PFM) practices are lagging behind the establishment of processes and laws, as illustrated by Figures 6 and 7, which show higher averages in de jure dimensions and a greater number of D scores in de facto dimensions.
Fig 6 Average scores on dimensions : Separating de jure and de facto dimensions
Figure 7 Countries scoring D on dimensions : Separating de jure and de facto dimensions
A ve ra ge s co re de jure de facto
C ou ntr ie s s co rin g D o n e ac h i nd ic ato r de jure de facto
32 Qualitative evidence speaks to this theme as well The content of all 31 PFM-
An analysis of PR documents revealed that explicit references to implementation deficits were found in the introductory and analytical sections, with keywords such as "implementation," "practice," and "adherence" noted in 15% of dimension scores, equating to approximately nine and a half dimensions per country Additionally, a detailed examination of six PFM-PRs uncovered less explicit references to this issue, identifying 27 extra dimension areas that demonstrated a gap between established laws and their practical application, averaging four and a half dimensions per country When combined with the explicit references, this indicates that, on average, 14 dimension scores per country highlight the disparity between legal frameworks and actual practice, representing a 22% frequency.
The PFM-PRs highlight significant de jure weaknesses, particularly in medium-term budgeting, internal and external audits, and legislative scrutiny, with many references found in Francophone countries These documents call for legal and procedural reforms to address these deficiencies, which have initiated reform efforts in various nations However, it is important to recognize that some perceived weaknesses are simply variations in legal practices among OECD countries, where legislative approaches to the role of the legislature and auditing differ, and many do not mandate multi-year budgeting, even for capital expenditures.
Effective public financial management (PFM) is contextually defined and varies across different settings, particularly in Africa, where many existing laws and procedures are not implemented Emphasizing de jure solutions may be misleading, as deficits often stem from diverse governing heritages, cultures, and varying levels of political fragility The primary challenge lies in ensuring that laws are enforced and that new procedures are introduced with targeted strategies to influence behavior Key reasons for the lack of implementation include the novelty of de jure structures, absence of secondary regulations, coordination issues, capacity constraints, lack of acceptance, insufficient incentives, and a deficit in political will While some argue that time is needed to bridge the gap between practice and newly introduced laws, this perspective oversimplifies the issue; effective use of time is critical, and the outlined challenges significantly hinder progress.
Civil society organizations (CSOs) play a crucial role in bridging significant gaps within communities, highlighting the potential for impactful engagements These gaps not only present challenges but also create unique opportunities for CSOs to contribute meaningfully to societal development.
Actor concentration pays (at least to date)
Themes from stories across countries
43 The themes identified thus far help to understand why different PFM dimensions and process areas appear to ‘perform’ differently in Africa Performance varies across African countries in the sample as well This is explored in the current section, which shows how the PEFA data shows countries falling into different
‘leagues’ and then explores five country characteristics to better understand why: (i)Income and income growth; (ii) Country fragility; (iii) Revenue source and dependence; (iv) General reform commitment; (v) Colonial legacy.
Countries are in different PFM performance leagues
The introductory sections of the PFM-PRs indicate significant disparities in the quality of public financial management systems across various countries, akin to the differences observed among sports teams in different leagues For instance, the PFM-PR for country 5 highlights these variations in system effectiveness.
The context of dysfunction in public financial management contrasts sharply with the assertion that Benin's PFM system creates essential conditions for the success of its poverty reduction strategy In comparison, Mauritius exemplifies effective public financial management, highlighting the significant role that robust financial systems play in fostering economic growth and alleviating poverty.
The Mauritian Government has effectively enhanced its Public Financial Management (PFM) platform and is now focused on aligning with international standards and best practices in PFM According to PEFA data illustrated in Figure 11, the average scores across 64 dimensions reveal significant variations among countries, with some countries anonymized due to confidentiality concerns regarding their PEFA reports.
Fig 11 The average PEFA score, for all 31 countries (over 64 dimensions)
The analysis identifies distinct performance leagues in Public Financial Management (PFM), organized into five categories for optimal differentiation The top league includes Mauritius, Mozambique, Burkina Faso, Tanzania, Ethiopia, and a notable country, referred to as Country 11, which stands out with a higher average dimension score of 2.67 This score significantly exceeds that of Country 12, which holds the highest position in the lower league with an average score of 1.54 Country 11 also demonstrates a greater proportion of higher scores, indicating its superior performance compared to the next league.
Countries such as Uganda, Zambia, Sierra Leone, Kenya, Madagascar, Ghana, Ethiopia, Tanzania, Burkina Faso, and Zimbabwe are committed to developing space for Public Financial Management (PFM) reforms These reforms aim to enhance transparency and accountability in PFM systems, which are often closed and non-transparent.
Score differences in the 5 leagues are shown further in Figures 12 and 13 Figure 12 illustrates differences in the 18 process indexes introduced in Figure 1 while Figure
The analysis reveals distinct differences in Public Financial Management (PFM) performance across various leagues, highlighting that countries fall into different categories similar to sports leagues, where competitors exhibit varying characteristics and outcomes The most pronounced disparities are observed when contrasting the top and bottom leagues, with league 1 trailing league 5 by over one point in 17 instances.
18 process areas (and in outcomes)
Fig.12 Process index scores by league
Fig.13 Outcome scores by league
46 Figure 14 shows how different leagues vary in the way they perform on the process types introduced earlier—upstream, downstream, de facto, de jure,
The outcome index evaluates aggregate expenditure and revenue, expenditure composition, and arrears size, yielding a score out of 4 for each country, which is then averaged for league comparisons Statistical analysis reveals that League 5 dimensions outperform those in Leagues 1 and 2 across five out of six thematic areas, with the exception of concentrated dimensions where scores do not differ significantly Additionally, League 5 averages surpass those of League 3 in all categories, though this advantage is statistically significant in only three areas: downstream, de facto, and de-concentrated dimensions Conversely, League 3 countries demonstrate stronger performance than those in Leagues 1 and 2, particularly in upstream and de jure dimensions.
Fig 14 Fleshing out the differences between leagues, by theme
47 Figure 15 sums the story of PFM leagues in Africa, showing what seems to differentiate lower from mid and mid from top league countries
Fig.15 Summing up the differences between leagues
48 Figure 15 illustrates the following: Lower league countries (1 and 2) have weak dimensions no matter how these are categorized; de jure and de facto are weak,
De facto: Weak Concentrated: Strengthening De-concentrated: Weak
League 3 countries are enhancing their public financial management (PFM) dimensions, particularly in the upstream, de jure areas, by engaging concentrated actor sets, while also facing weaknesses in downstream, de facto, and de-concentrated dimensions shared with lower league countries Conversely, League 5 countries exhibit strengthened upstream, de jure, and concentrated PFM areas alongside League 3, yet they are currently struggling to improve their downstream, de facto, and de-concentrated dimensions.
Evidence indicates that African countries exhibit varying strengths in their Public Financial Management (PFM) systems, along with distinct challenges However, this data does not clarify the reasons behind these disparities or the contextual factors that affect PFM system strength Insights derived from both quantitative and qualitative data reveal that several factors influence these variations, including income and growth, social and political fragility, revenue sources, the duration of uninterrupted national reform, and colonial legacies.
Growing economies have stronger PFM
A comparison of PEFA dimensions between African and non-African countries revealed that Africa generally lags behind in most areas However, this assessment may be skewed due to the differing wealth profiles of the countries involved, as non-African nations typically have higher per capita incomes This disparity in wealth is likely a contributing factor to the significantly higher PEFA scores observed in the non-African group, a conclusion that aligns with findings from de Renzio's recent study utilizing similar data.
Income per capita is anticipated to impact PEFA performance across Africa, with higher-income countries likely to rank in the top league and lower-income countries positioned in the lower league.
The evidence challenges the expectation that higher income per capita correlates with better public financial management (PFM) performance Among the six league 5 countries, Ethiopia and another country rank among the lowest in income, while eight of the top twelve PEFA performers have per capita incomes at or below $1,000 Conversely, five of the ten countries with incomes over $1,500 are in the bottom two leagues This discrepancy highlights the limited income variation within the African sample Although the broader PEFA sample includes countries with incomes exceeding $4,000, only two are present in the current sample Notably, Mauritius stands out as a positive outlier, significantly outperforming other nations in PFM quality If more higher-income countries in Africa resembled Mauritius, a positive correlation between wealth and PFM quality might emerge Nonetheless, the presence of lower-income countries in the top leagues underscores that low income does not preclude significant reform progress.
The strong performance of lower per capita countries in Africa can be attributed to targeted interventions, particularly the Highly Indebted Poor Countries (HIPC) initiative, which provided debt relief and heightened pressure for public financial management (PFM) reforms Countries such as Benin, Burkina Faso, Ghana, and others benefited from this initiative, which not only facilitated early PFM assessments but also created fiscal space for reform Many nations recognize HIPC and the Poverty Reduction Strategy Papers (PRSP) as crucial in shaping their PFM reform agendas, with fourteen out of thirty-one countries reporting positive impacts from the debt relief and technical assistance linked to these programs.
Over the past decade, HIPC beneficiaries have experienced substantial economic growth, which significantly influences Public Financial Management (PFM) performance This growth in per capita income enhances fiscal and reform capabilities, as well as domestic and international demand for reform Evidence indicates that economies with robust growth tend to exhibit stronger PFM outcomes Notably, three of the top five PEFA performers and eight of the top twelve recorded over 20% per capita economic growth from 1996 to 2006, while five of the bottom six countries experienced negative growth The disparity in growth rates between the highest and lowest PFM performers is evident, with lower growth countries lagging in 84% of PEFA dimensions, and 22% of these differences being statistically significant.
Fig 16 Per capita GDP growth rates (96-06) for weakest to strongest PFM performers
This paper does not delve into the complex relationship between economic growth and the strengthening of Public Financial Management (PFM) Various perspectives exist on this interaction, with some arguing that economic growth drives the demand for better governance and skilled personnel, while others believe that commitments to governance reforms can stimulate economic growth, potentially serving as a strategy for political leaders to attract foreign direct investment (FDI) Additionally, some theories suggest that a cultural shift, originating from either the private or public sectors, may enhance both governance and economic growth Future research is essential to clarify the connection between PFM reform and the realities of economic development, providing valuable insights for policymakers.
This paper identifies key areas of the Public Financial Management (PFM) process that are significantly influenced by economic growth, highlighting notable differences in index scores between fast and slow growth countries The most impacted areas include upstream strategic budgeting, legislative budget review, competition in procurement, cash management, and internal auditing Figure 17 illustrates these differences, with dark arrows indicating significant variations at the 0.01 level and lighter arrows at the 0.05 level, showcasing the contrasting average process index scores between lower and higher growth country groups.
Note: The dark arrows indicate statistical significance of the difference in means at 0.01; lighter arrows indicate statistical significance of the difference in means at 0.05.
Over the past decade, debt relief initiatives like HIPC, combined with sustained economic growth, have fostered improvements in Public Financial Management (PFM) across several African nations, paving the way for innovative ideas and approaches Notably, civil society organizations (CSOs) in countries such as Ghana and Mozambique have emerged in response to the growing private business sector, advocating for tax accountability and responsible resource management Despite these advancements, CSOs encounter challenges due to the increasing complexity of the economies they operate in However, there are also opportunities for these organizations to strengthen their capacity and support one another in navigating these evolving landscapes.
Stability delivers PFM progress
Economic growth is significantly impacted by political and social conditions, where instability can hinder development and government systems In the African context, a study reveals that five of the six weakest PEFA performers, all categorized in league 1 and deemed 'fragile' by IMF standards, experienced negative growth rates from 1996 to 2006 Similarly, three countries in league 2 are also classified as fragile Notably, Sierra Leone is the only country outside the bottom two leagues identified as fragile.
Fig 18 Fragility, growth, and the African leagues of nations
Fragility significantly undermines Public Financial Management (PFM) system performance, with fragile countries scoring lower than their non-fragile counterparts in 98% of the PEFA dimensions The mean differences exceed 0.75 and are statistically significant for over half of these dimensions Notably, legislative aspects are particularly weak in fragile nations, alongside critical areas such as strategic budgeting, budget preparation, budget transparency, and essential downstream processes like cash management.
17 These are countries 2, 5, 12 and 15 The ‘fragile’ classification is made according to the IMF’s 2007 Regional Economic Outlook for Sub-Saharan Africa IMF 2007 Regional Economic Outlook: Sub- Saharan Africa IMF: Washington, D.C.
20 33 differences in means exceed 0.75; 35 differences in means are statistically significant at 0.05 or better.
All seven dimensions of public financial management (PFM) show significant lag, with differences exceeding 0.75, and six of these differences are statistically significant at the 0.01 level Notably, fragile states perform relatively better in specific PFM areas, such as budget management, treasury, and revenue management, compared to other dimensions This suggests that despite facing political and social challenges, some fragile states manage to sustain small, focused teams in key sectors like budget offices or treasuries.
Figure 19 illustrates the significant disparities in aggregated dimension scores between fragile and stable countries, with eight out of eighteen differences showing statistical significance at the 0.01 level and six at the 0.05 level Notably, the relatively high scores in financial reporting processes indicate the robust nature of concentrated treasuries in certain countries.
Fig 19 Comparing average process index scores, in fragile and stable country groups
Note: The dark arrows indicate statistical significance of the difference in means at 0.01; lighter arrows indicate statistical significance of the difference in means at 0.05.
Fragile countries face significant challenges in public financial management (PFM) due to the costs of conflict on development For instance, Country 2 experiences a pervasive climate of insecurity that adversely affects economic growth and living conditions Similarly, ongoing conflict in Country 15 has led to a weakened economy, described as dull and vulnerable, while also degrading the state's financial standing In Country 5, the PFM assessment highlights that continuous political crises and conflicts since 1998 have severely disrupted economic stability, resulting in difficulties in public finance management and delays in the adoption of critical financial legislation.
2001 and 2002, the absence of a budget in 2003 and the recourse to exceptional budget execution procedures.”
22 In all of these areas every single dimension is more than 0.75 points weaker in fragile countries, and in all cases these differences are statistically significant (at 0.05 or better).
Fragile countries exhibit PFM weaknesses that are significantly more pronounced than in other nations, characterized by a near-total absence of capacity in many areas and pervasive informality in government processes This informality stems from a lack of formal mechanisms, as seen in the inability to produce budgets in Country 5 Additionally, the political landscape is dominated by conflict, undermining the political will necessary for public value creation Ultimately, these nations require a foundation of political legitimacy before any effective technical interventions in PFM can take place.
Fragile states significantly lag behind other countries in key political aspects of the budgetary process, averaging about one point lower in legislative engagement This disparity is statistically significant across all evaluated areas, particularly in political involvement during budget preparation, where the average difference is 1.24 points, indicating a substantial gap Moreover, fragile states consistently score poorly in legislative budget approval, multi-year fiscal forecasting, and the development of costed sector strategies, with every fragile state receiving a D grade in producing multi-year sectoral strategies Given these findings, it is not surprising that countries experiencing political turmoil perform poorly compared to their more stable African counterparts in these critical political and policy dimensions.
The PEFA dimensions raise important questions regarding their relevance in various contexts, prompting a critical evaluation of their applicability Stakeholders assert that the indicators serve as "objective measures of performance," highlighting the need for a closer examination of their effectiveness across different settings.
“generally accepted as ‘best practice.’” 23 One has to ask, “Best practice for whom?” (A question frequently raised in the general critique of best practice literature itself.)
Focusing on multi-year budgeting in countries that have struggled with annual budgets may not be appropriate or effective The push for political consensus and medium-term budget control through top-down mechanisms, such as ceilings and multi-year projections, is not universally accepted as best practice in emerging democracies In public financial management, it is crucial to recognize that varying political cultures and levels of maturity necessitate tailored solutions The mechanisms outlined in the PEFA dimensions may be suitable for stable nations like Norway but could be less effective in post-conflict states.
While fragility negatively affects Public Financial Management (PFM) systems and highlights the adverse implications of weak political structures on governance, it is important to recognize the positive aspect: over two-thirds of African countries are stable and thriving.
23 PEFA Secretariat 2008 PFM Performance Measurement Framework Monitoring Report 2007 p.27.
Recent OECD studies indicate that certain leading countries utilize alternative political mechanisms for consensus and reliable funding in policy areas, rather than relying on ceilings Notably, Norway's recent Public Financial Management Performance Report (PFM-PR) received a low score for multi-year forecasting and budgeting Evidence suggests that stability is key to advancing public financial management (PFM), as exemplified by Sierra Leone, which has transitioned from fragility to a relatively strong PFM system within five years since the end of its civil war in 2002 The rebuilding of Sierra Leone's Ministry of Finance, destroyed during the conflict, highlights the significance of political stability and economic growth in this transformation.
2002 seem to have accommodated major PFM progress One has to ask, “Is there a peculiar reform dividend post conflict countries can benefit from?”
Can post-fragility yield reform dividends?
Country 11, similar to Sierra Leone, demonstrates a unique post-conflict reform dividend, having developed a strong African Public Financial Management (PFM) system after emerging from civil unrest in the mid-1990s Countries achieving stability post-fragility, like Mozambique and Madagascar, often find opportunities to rebuild effectively However, Mozambique's reforms, influenced by the inherited Portuguese system, face challenges due to entrenched mindsets The PFM-PR highlights the necessity of moving away from outdated practices to ensure sustainable reforms Brinkerhoff and Goldsmith's concept of "institutional dualism" illustrates how well-intentioned changes can create superficial governance structures that fail to alter the underlying decision-making processes, allowing old practices to persist.
Country 11 and Sierra Leone have managed to navigate the dualism problem less severely than others by viewing their emergence from fragility as a chance to modernize With no pre-existing systems or norms, they built their frameworks from scratch, offering a comparative advantage for fragile states This situation highlights the significant role that Civil Society Organizations (CSOs) can play in Public Financial Management (PFM) development, potentially allowing for more innovative and unrestricted contributions than in more stable environments In fragile countries, CSOs and NGOs are increasingly involved in sectoral projects, filling roles that were previously unavailable to them, as illustrated in Box 4, which outlines opportunities for CSOs in the PFM sector.
25 Brinkerhoff, D and A Goldsmith 2005 “Institutional Dualism and International Development: A Revisionist Interpretation of Good Governance” Administration & Society, Vol 37, pp.199-200 cited.
Evidence of civil society organization (CSO) engagement was primarily found through personal communications with local groups rather than in World Bank analytical products This information was supported by published references from media sources and literature from development organizations, where available.
Fiscal states have stronger PFM systems
The Extractive Industries Transparency Initiative (EITI) highlights the significant reliance of numerous African nations on revenues generated from extractive industries This dependence raises questions about whether Public Financial Management (PFM) practices differ in these countries The relationship between extractive industries and various economic and social factors remains a prominent area of research, prompting ongoing discussions among experts in the field.
Box 4 – Different countries, different CSO opportunities and roles
Economic growth and democratic reforms in Africa have intensified the demand for government accountability, with civil society organizations (CSOs) playing a crucial role in this advocacy Initiatives like the Extractive Industries Transparency Initiative (EITI) and Revenue Watch have empowered CSOs in countries such as Nigeria, Gabon, and Ghana to hold their governments accountable In Ghana, the Integrated Social Development Center (ISODEC) actively monitors government revenue reporting and tax regulations Additionally, vibrant business coalitions are emerging in growing economies, exemplified by Ghana’s Business Sector Advocacy Challenge Fund (BUSAC), which offers policy analysis and advocacy for businesses Furthermore, some CSOs in Ghana and Burkina Faso are adapting to represent the interests of marginalized groups, such as Burkina Faso’s Action for Development of Rural Women (GRADE-FRB), which promotes citizen participation in government decision-making processes.
Economic growth is fostering increased market and governance sophistication in various countries, presenting both opportunities and challenges for Civil Society Organizations (CSOs) To effectively engage in this evolving landscape, CSOs must enhance their own capacities and sophistication A recent UNDP report on CSOs in Mozambique highlights the significance of "quality" in their engagement, showcasing the Fundaỗóo para o Dseenvolvimento da Comunidade (FDC) as a key player in mapping CSOs and building their capacity for meaningful participation.
Economic growth and governance reform significantly enhance Civil Society Organizations' (CSOs) opportunities for engagement in Public Financial Management (PFM) According to the 2008 CIVICUS Civil Society Index, Ghana's rapid growth prompts inquiries into CSO participation in the budget process and government monitoring, yielding detailed responses of 936 and 843 words, respectively This underscores the critical role of CSOs in fostering transparency and accountability in financial governance.
In Sierra Leone, per capita incomes have increased over the past decade, yet this growth follows a significant decline in the preceding ten years As a result, the country's income levels remain below those recorded in 1990.
Since 1990, Togo's per capita income has shown a continuous decline, decreasing by 4% over the past decade Additionally, the limited engagement of Civil Society Organizations (CSOs) in budget and monitoring activities is evident, as documented in the CIVICUS database, which contains only 65 and 92 words on these topics, respectively.
Togo's civil society organizations (CSOs) face unique challenges in a fragile state, impacting their engagement and the country's economic growth Unlike stable economies, CSOs in fragile contexts prioritize building organizational frameworks and facilitating political dialogue over holding the government accountable The roles of CSOs can vary significantly based on historical societal tensions, with Togo's representatives noting that the government views civil society as opposition and treats its budget as a private matter, which restricts engagement opportunities In contrast, Rwanda's government is perceived as more open to dialogue with civil society, highlighting the diverse landscapes of CSO engagement across different nations.
Civil society organizations (CSOs) play a crucial role in Cote d'Ivoire, particularly through the local branch of CARE, which manages the Global Fund HIV project targeting interventions in rebel-controlled areas where government presence is lacking This initiative strengthens the decentralized capacities of local entities by developing vital supply chain and procurement processes, as well as planning and monitoring mechanisms that could enhance future financial management in the health sector Additionally, the 'resource curse' linked to abundant natural resource deposits significantly impacts economic growth and governance fragility, with some experts suggesting that reliance on these resources diminishes public financial management (PFM) and governance reform efforts The fiscal sociology literature further distinguishes between fiscal states, which primarily collect revenues from citizens, and rentier states, which depend on external revenue sources, highlighting the negative implications of non-citizen revenue collection on governance quality.
The study identifies four countries as oil-rich according to IMF classification, while nineteen are categorized as rentier states, relying on non-domestic sources for over half of their government revenues, primarily from trade fees and taxes Figure 20 illustrates the classification of countries into fragile, rentier, and resource-rich (oil-rich rentier) categories.
Fig.20 Where are the rentier, oil-rich resource states?
None of the oil-rich resource states are classified as fragile; however, a significant number of governments in the lowest tiers of stability are rentier states, relying heavily on external revenue sources Specifically, eleven out of twelve governments in the bottom leagues and all six in league 1 fall into this category Notably, three of the four oil-rich rentier states are situated in these lower leagues.
5 In contrast, four of the five league 1 countries are more ‘fiscal’ in nature 29 Four of the top twelve countries are rentier states and four countries outside of leagues 1 and
2 (with weaker PFM systems) are fiscal states.
27 Congo, Gabon and countries 18 and 20 IMF 2007 Regional Economic Outlook: Sub-Saharan Africa IMF: Washington, D.C.
28 Country 29 is the only fiscal state in these lower leagues.
29 Although two of these are severely dependent on aid sources they were classified as fiscal because of growing domestic revenue collections in recent years.
Research indicates that while there is a clear correlation between rentier states and weaker public financial management (PFM) systems, fiscal states tend to exhibit stronger systems Comparative analysis of PEFA dimension scores reveals that rentier states, including the nineteen broadly defined nations, consistently underperform against fiscal states in 63 instances Additionally, oil-rich countries, identified separately, further illustrate these disparities in financial governance.
In a study examining 64 dimensions, it was found that 22 differences in means are statistically significant, revealing that oil-rich rentier states score lower than fiscal states in 57 of these dimensions, with 18 being statistically significant Notably, many of the lagging dimensions for rentier states pertain to monitoring, reporting, and accountability mechanisms, which are critical elements of the Extractive Industries Transparency Initiative (EITI) The analysis highlights significant deficiencies in budget execution controls and formal budget preparation processes within the oil-rich states, as detailed in Table 4.
Table 4 Dimensions in which rentier states and oil-rich rentier states lag fiscal states
Oil-rich rentier states exhibit significant lagging performance compared to other nations across various statistical measures These countries, heavily reliant on oil revenues, face challenges that hinder their development and economic diversification, ultimately affecting their overall progress.
• Reporting on receipts from donors
• Monitoring of AGAs and PEs
• Monitoring and control of sub-nationals
• Penalties for tax non-compliance
• Authority to change HR records and payroll
• Use of open competition in procurement
• Process for resolving procurement complaints
• Degree of compliance with internal controls
• Frequency and coverage of internal audit reports
• Management response to internal audit findings
• Scope of in-year budget reports
• Quality of information in in-year budget reports
• Follow-up on external audit recommendations
• Monitoring of AGAs and PEs
• Monitoring and control of sub-nationals
• Existence and adherence to budget calendar
• Clarity of political guidance in budget preparation (through formal mechanisms)
• Management response to internal audit findings
• Information provided on resources received by service delivery units
• Timeliness of submission of annual budget reports
• Timeliness of submission of audit reports to legislature
The evidence presented in this paper suggests a thematic relationship between a country's characteristics and the quality of Public Financial Management (PFM), indicating that fiscal states tend to have stronger PFM systems While it is acknowledged that the relationship does not clarify causality, some argue that the source of revenue influences PFM quality Conversely, it is possible that rentier states experience low domestic revenue due to weak governance structures Regardless of the causal direction, there is a notable connection between the characteristics of rentier or fiscal states and the quality of their PFM systems This relationship is further supported by qualitative references in the PFM-Performance Reports of sixteen out of nineteen rentier governments, highlighting significant challenges related to reliability, accountability, and transparency.
Longer periods of reform commitment foster PFM progress
Rentier states tend to exhibit shorter and less impactful legacies of widespread national reform However, evidence indicates that extended periods of commitment to broad reform, as seen in the duration since the implementation of the first Poverty Reduction Strategy Paper (PRSP), contribute to advancements in Public Financial Management (PFM).
The PRSP serves as a key indicator of a country's commitment to comprehensive reform, frequently highlighted in Public Financial Management Performance Reports (PFM-PRs) as a significant factor influencing PFM reform Notably, excluding Mauritius from this analysis, due to its lack of participation in PRSP discussions, reveals important insights.
Countries with Poverty Reduction Strategy Papers (PRSPs) older than three years exhibit higher performance in 61 out of 64 PEFA dimensions compared to those with newer PRSPs, with 24 of these differences being statistically significant Additionally, when comparing countries with PRSPs older than three years to those without PRSPs during the PEFA assessment, 62 dimensions are found to lag in the latter group, with 37 differences also statistically significant Figure 21 illustrates the clustering of these dimensions into process indexes and highlights the average differences between the two groups.
Fig.21 Comparing average process index scores, in country groups with different PRSP histories
Note: The dark arrows indicate statistical significance of the difference in means at 0.01; lighter arrows indicate statistical significance of the difference in means at 0.05.
73 The country group with PRSPs in place for 4 years or more yield significantly higher averages in 17 of 18 process areas Fourteen of these differences in means are
At the time of the PFM-PR writing, 21 out of 31 countries had Poverty Reduction Strategy Papers (PRSPs) in place, with all acknowledging the PRSP positively; 17 of these countries integrated Public Financial Management (PFM) reforms within the PRSP framework Five countries, lacking PRSPs during this period, were either considering developing one or finalizing an equivalent, viewing the PRSP as a crucial catalyst for PFM reform Notably, countries with a longer history of PRSP-driven reforms scored significantly higher in 16 process areas, particularly excelling in in-year financial reporting and internal audit The disparity in performance between newer and non-PRSP countries highlights the detrimental impact of fragility on PFM system quality, raising questions about the underlying reasons for these differences.
Figure 22 illustrates the intricate dynamics among lower league countries, which are predominantly fragile and lack a Poverty Reduction Strategy Paper (PRSP) These nations also generally experience low economic growth Consequently, while it is possible to identify a PRSP theme separately from issues of fragility or economic growth, it becomes evident that these three themes are interconnected.
Fig 22 Years since PRSP, fragility, growth and league position
The interplay of three reinforcing themes suggests they reflect intrinsic country characteristics that remain largely unrecognized, potentially linked to leadership that effectively seizes opportunities like HIPC or PRSP The positive impact of a PRSP on public financial management (PFM) quality indicates a sustained governmental commitment to reform rather than the mere presence of the PRSP itself Unlike many developed nations that lack PRSPs or similar long-term plans, which often derive their policy frameworks from established political processes, the critical issue lies in the government's capacity to maintain a consistent reform agenda While the PRSP serves as a valuable proxy for reform engagement, its success hinges on the practical application of the opportunities it presents As Country 6 embarks on its second PRSP, it remains to be seen whether its leaders will effectively harness the initiative's potential this time.
The Poverty Reduction Strategy Paper (PRSP) opened avenues for Civil Society Organizations (CSOs) to engage in policy development and monitoring within public financial management (PFM) While the level of CSO involvement often fell short of expectations, countries like Uganda and Mozambique witnessed the emergence of umbrella CSOs, spurred by their experiences in these processes It is crucial for CSOs to seize such opportunities to enhance their impact and effectiveness.
Evidence of civil society organization (CSO) engagement was primarily found through personal correspondence with these groups in specific countries, rather than in World Bank analytical products This correspondence was supported by published references regarding civil society involvement in the media and relevant literature from development organizations For further details, references are available from the author.
Box 5 - CSOs as vehicles for engagement: Opportunities that must be appropriated
The PRSP has created opportunities for Civil Society Organizations (CSOs) to engage in policy development and monitoring, although initial low levels of engagement led to disappointment among some in the CSO community Over time, particularly in countries where the PRSP has persisted, a more nuanced perspective has emerged For instance, a 2003 assessment of Mozambique's PARPA highlighted that the initial participation did not meet the expected standards, emphasizing that perceptions of consultation vary widely However, by 2008, examples of active CSO engagement in Mozambique illustrate significant progress The experiences gained from the PRSP, both positive and negative, have contributed to the formation of umbrella organizations like LINK and underscored the importance of CSO capacity building While the PRSP may not have delivered immediate results, it has served as a crucial platform for CSOs to learn and evolve.
The EITI presents potential opportunities for civil society organizations (CSOs), despite likely leading to more frustration than tangible results for many In 2006, Publish What You Pay (PWYP) highlighted key issues with EITI, such as the failure of endorsing governments to acknowledge the vital role of CSOs and the intimidation faced by civil society activists Nevertheless, examples exist of CSOs operating within the EITI framework, even under oppressive governments like in Gabon, indicating that organizations like PWYP are adapting to leverage the initiative as a strategic tool in various contexts.
In 2004, Warren Krafchick from the International Budget Partnership highlighted decentralization as a significant opportunity for civil society organizations (CSOs), emphasizing the need for proactive engagement He noted that the current trend of decentralization, often implemented without proper planning, creates a vital space for civil society to enhance public participation and monitor government actions While the intention behind decentralization is to improve service quality for impoverished regions, the allocation of funds often remains centralized, allowing governments to evade critical social service issues Although participatory budgeting has shown success at the municipal level, such as in Porto Alegre, it has yet to be effectively implemented at national or regional levels In India, effective citizen participation practices have emerged, where the auditor general collaborates with villagers to review budgets in detail at the end of each fiscal year Krafchick remarked that increasing government awareness of CSO efforts is leading to greater accountability and responsiveness.
Colonial heritage matters (maybe)
In analyzing the relationship between colonial heritage and governance quality, it's noteworthy that two of the four countries with six years of Poverty Reduction Strategy Papers (PRSP) experience are from Francophone Africa, while the other two are Anglophone Among the ten countries lacking PRSP history, seven are Francophone, raising questions about the influence of colonial backgrounds on reform tendencies and the development of robust public financial management (PFM) systems Figure 22 illustrates this dynamic, revealing that Francophone countries (depicted as black triangles) are overrepresented in the lower performance leagues, particularly league 5, while their presence in league 1 is minimal This suggests a general trend of poorer performance among these nations, yet the existence of four countries performing above average indicates that colonial legacy may not be the sole factor influencing governance outcomes.
Fig.22 League locations of Francophone (in black) and non-Francophone countries
Data analysis reveals significant disparities between Francophone and Anglophone countries regarding PEFA's 64 non-outcome and non-donor process dimensions French heritage countries underperform in 45 areas, with eight showing statistically significant differences Key lagging dimensions include public access to fiscal information, adherence to budget timelines, internal audit coverage, and the prompt submission of audit reports Francophone countries also demonstrate lower external accountability, with scores ranging from 0.84 to 1.47 less than their Anglophone counterparts Notably, legislative hearings reflect a stark contrast, with English heritage countries averaging 2.7 compared to just 1.3 for French and Belgian heritage nations.
League 5League 1 showing how Francophone countries compare with Anglophone countries and those of Portuguese heritage
Francophone countries exhibit significant deficiencies in external accountability, particularly in external and legislative audit reviews, as highlighted by the accompanying figure Despite performing relatively well on the legislative budget review index, these nations struggle in other areas, suggesting that their colonial heritage plays a crucial role in shaping their audit processes Over the past decade, all Francophone countries have faced challenges in establishing or reforming their external audit functions, which do not align with the standards set by PEFA or international audit practices.
Fig 23 Comparing average process index scores, in country groups, by colonial heritage
Note: The dark arrows indicate statistical significance of the difference in means at 0.01; lighter arrows indicate statistical significance of the difference in means at 0.05.
80 The French system itself varies quite substantially from many of the
The French legislature exhibits notably lower engagement compared to other nations, as evidenced by recent assessments While some Public Financial Management Performance Reports (PFM-PRs) address these disparities, Country 20's PFM-PR stands out with a two-page note discussing the debates surrounding the draft of the PEFA report This note highlights the challenges in interpreting the internal and external audit and control functions within the country, particularly in relation to the PEFA guidelines.
32 And French countries mostly have to ensure their systems harmonize with the West African Economic and Monetary Union’s (WAEMU) texts on public finance.
33 See Andrews, M (2008) Good Government Means Different Things to Different Countries Paper presented at 2008 American Political Science Association, Boston, MA
Donor comments responding to this discussion criticize the ‘mechanical approach’ of the PEFA methodology and its imposition of a standard not fitting with the context.
Francophone countries, such as Country 11, have actively embraced external audit and legislative engagements similar to those outlined in the PEFA framework However, the relevance of certain PEFA aspects may be limited for strong Westminster democracies, which traditionally exhibit weaker legislative engagement compared to countries like France This suggests that the historical, cultural, and political contexts of political engagement, oversight, and control may not be adequately addressed by PEFA or similar indicators Consequently, this could account for the slower internal audit development seen in countries like Belgium, which may not be solely attributed to colonial legacies, as weaker Francophone nations often face more significant political challenges, including low PRSP adoption and fragility.
Summing the country-specific themes
Themes from past reforms, ideas for the future
85 This query raises its own secondary questions: What kinds of reforms have countries pursued in the past decade (or more)? Where have reform ideas come from? What lessons can be learned from past approaches? What are the current challenges and how well do existing reform approaches address these? These questions drive this final section, which discusses themes emerging in reform experience across the 31 African countries The discussion has four major parts to it: The first two tell a story of interventions in which similarities belie country differences and where reforms do deliver better law and stronger central agencies, and lessons across leagues The third part argues that existing reforms may fail to deliver more than legal and concentrated gains, however—particularly failing to meet current challenges The fourth argues that adjustments are needed to meet emerging challenges.
Reform similarities belie country differences
The primary method for analyzing Public Financial Management (PFM) reform experiences across 31 countries was content analysis, guided by PFM-PRs The analysis utilized Country Financial Accountability Assessments (CFAAs), project documents, and IMF Country Reports Key terms and acronyms such as Medium-Term Expenditure Framework (MTEF), program budgets, Classifications of the Functions of Government (COFOG), Government Financial Statistics (GFS), budget ceilings, Treasury Single Accounts (TSA), Financial Management Information Systems (FMIS), commitment controls, and International Public Sector Accounting Standards (IPSAS) were integral to the study, reflecting essential technical PFM standards.
87 The content analysis shows them as standards in the African reform agendas:
A significant majority of countries, with 28 out of 31, are implementing Medium-Term Expenditure Frameworks (MTEFs), while 25 are adopting various forms of program, performance, or activity-based budgeting All nations are making strides towards integrating Government Finance Statistics (GFS) and Classification of the Functions of Government (COFOG) schemes, with 26 utilizing budget preparation ceilings Furthermore, there is a collective movement towards establishing Treasury Single Accounts (TSAs) or consolidated public accounts structures Notably, 20 countries are actively employing Financial Management Information Systems (FMIS) or Integrated Financial Management Systems (IFMS) for budget execution, with an additional 10 recognizing the necessity for such systems All countries are also focused on commitment controls and adhering to International Public Sector Accounting Standards (IPSAS) or similar accounting frameworks, particularly among Francophone nations.
Internal and external audits, procurement, payroll controls, and legislative issues consistently appear on the reform agenda across diverse countries, indicating the influence of a globally imposed model This widespread implementation of mechanisms like Medium-Term Expenditure Frameworks (MTEF) reflects the development community's approach to public finance reform Analysis shows that at least 60% of the experiences align with a common model, although variations exist in the focus and execution of these interventions across different nations.
Fig 25 A stylized version of common reform elements across the 31 country sample
The comparison of agendas in league 1 and league 5 countries reveals a striking similarity in their reform initiatives, despite their previously noted differences As detailed in Table 5, both leagues have implemented four key interventions: Public Financial Management (PFM) Laws, Medium-Term Expenditure Frameworks (MTEF), Treasury Systems (TS), and Central Treasuries (CT) This evidence underscores the common reform strategies adopted by these countries.
Table 5 Different leagues, similar reforms
• Mauritius [PFM Laws; MTEF; TS; CT]
• Burkina Faso [PFM Laws; MTEF; TS; CT]
• Ethiopia [PFM Laws; MTEF; TS; CT]
• Mozambique [PFM Laws; MTEF; TS; CT]
• Country 11 [PFM Laws; MTEF; TS; CT]
• Country 15 [PFM Laws; MTEF; TS; CT]
• Gabon [PFM Laws; MTEF; TS; CT]
• Country 5 [PFM Laws; TS; CT]
• Country 6 [PFM Laws; MTEF; TS; CT]
• Country 2 [PFM Laws; MTEF; TS; CT]
Existing reforms can deliver better law, stronger central agencies
Public Financial Management (PFM) reforms across various countries have consistently emphasized formalizing processes through new laws and procedures, as well as strengthening central entities such as treasuries and budget departments These reforms have led to notable improvements in performance, indicating a positive impact of the changes implemented.
The analysis of documented reform descriptions across 31 countries reveals a strong focus on procedural interventions involving specific, concentrated groups of actors This emphasis on concentrated entities and procedural reforms is reflected in the system strengths identified in previous analyses Figure 26 illustrates the average scores of League 1, 3, and 5 countries across four types of Public Financial Management (PFM) dimensions: de jure concentrated, de jure de-concentrated, de-facto concentrated, and de-facto de-concentrated.
Fig.26 How three leagues perform on different PFM dimension types
Dimensions involving concentrated role players yield the highest averages across all three leagues, particularly when the budget department, treasury, and revenue regulatory agency are directly engaged Notably, even the de-facto concentrated scores remain high for all groups, indicating that the implementation gap may be bridged when a concentrated actor is responsible While a direct correlation between reforms and average scores cannot be established due to the absence of prior state data, it can be inferred that common strengths across settings highlight areas where reforms succeed, while weaknesses indicate limitations The effectiveness of reforms is linked to their design, focusing on concentrated groups that demonstrate optimal results, particularly in legal and procedural changes, which are positively reflected in the strength of these dimensions, especially in leagues 3 and 5.
Can countries learn from each other about strengthening dimensions?
The data in Figure 26 highlights the tendency of countries to enhance their reform agendas by strengthening laws and central agencies, revealing that some nations have made more significant advancements in public financial management (PFM) than others Notably, countries in League 5 consistently achieve higher scores across all PFM dimensions compared to those in League 3, which in turn outperforms League 1 in every category This raises the question of whether higher-ranking countries can provide valuable insights and lessons to lower-ranking nations on how to advance their PFM development.
Higher leagues demonstrate a greater average score across various dimensions of the PFM development ladder Specifically, League 5 countries achieve scores between 2.5 and 4 in 57 out of 64 dimensions, while League 3 countries score between 1.5 and 2.5 in 56 dimensions, and League 1 countries average between 1 and 1.5 in 52 dimensions This suggests that League 1 could benefit from the strategies employed by League 3 countries to improve their scores, while League 3 could adopt practices from League 5 countries to enhance their performance further.
Fig.27 How leagues perform on the PFM development ladder
PFM development ladder rung League 1 rung location
(dimensions, out of 64) League 3 rung location
(dimensions, out of 64) League 5 rung location
Insights from a PEFA-like database focus on cross-sectional differences among countries and groups rather than historical narratives explaining those differences The primary emphasis is on strategies to enhance PEFA scores, as illustrated in Figure 27, rather than directly improving Public Financial Management (PFM) practices.
The lessons focus on a benchmarking approach that highlights the opportunities and challenges faced by lower league countries in reforming individual Public Financial Management (PFM) dimensions In certain areas, the average scores of lower leagues are comparable to those of higher leagues, as seen in the similarities between leagues 1 and 3 in PI-21.i and PI-21.ii Furthermore, some lower league countries achieve scores that match those of higher league countries, indicating a statistically insignificant difference in means, as evidenced by the absence of a significant distinction between league averages.
Fig 28 How differences in league performance can point to reform opportunities
The dimensions of the PFM development ladder present opportunities for lower league countries to enhance their standings, yet a stark contrast remains as their averages significantly lag behind those of higher leagues For instance, leagues 1 and 3 show notable discrepancies in PI-20.i, while leagues 3 and 5 reveal similar gaps in PI-21.i Consequently, only a handful of lower league countries achieve scores that approach those of their higher league counterparts.
In League 1 countries, the average score for PI-20.i, which measures the existence and effectiveness of commitment controls, is just above 1, suggesting that these nations often lack robust commitment control systems or frequently violate them In contrast, League 3 countries have an average score just above 2, reflecting that while their expenditure commitment control procedures are partially effective, they may not fully encompass all expenditures and could be subject to occasional violations.
Five countries maintain an average score of 3, indicating that they have effective expenditure commitment controls that align spending with actual cash availability and approved budget allocations, with only a few minor exceptions On average, League 3 countries score 0.98 points higher than those in League 1, highlighting a statistically significant difference, suggesting that the majority of League 1 countries do not implement these controls as effectively.
PI-20.1 PI-20.ii PI-20.i ii PI-21.i PI-21.ii PI-21.iii
Av er ag e sc or e on PE FA di m en sio n
Countries in League 1, League 3, and League 5 exhibit a statistically significant difference in key dimensions, as indicated by the strong correlations between their averages Consequently, lower league countries are likely to face increased challenges in bridging the gap with their higher league counterparts in these areas.
This strategy helps reformers distinguish between the 'lower hanging' and 'higher hanging' opportunities for improvement in leagues 1 and 3 As illustrated in Figure 29, league 3's low hanging fruit is highlighted in green, while the higher hanging fruit is marked in yellow Additionally, pink indicates dimensions where league 3 meets or exceeds the averages of league 5.
Figure 28 Opportunities league 3 countries have of improving to league 5 standards
Note: Green highlights denote low hanging fruit reform options, given smaller differences between league
The analysis reveals three scores and five league scores, with yellow indicating higher-priority reform options due to significant differences between league 3 and league 5 scores In contrast, pink highlights dimensions where league 3 scores align with those of league 5.
The 33 low-hanging fruit reform options for league 3 countries can be categorized based on their lag behind league 5 and their position on the Public Financial Management (PFM) development ladder These options range from basic improvements to more advanced reforms Table 6 highlights the ten dimensions with the smallest gaps between leagues 3 and 5, indicating the specific 'rungs' that league 3 countries need to master for progress Countries in league 3 are driven to enhance their scores, particularly in areas where they currently trail behind league 3 standards, while league 5 countries maintain a significant lead, scoring 0.86 higher.
In a comparison of countries across different league categories, the scoring on various dimensions reveals that four out of six league 5 countries and five out of seven league 3 countries achieve similar scores, predominantly around 3 Notably, while some countries have reached higher scores, others like Malawi, Uganda, and Benin remain at a PEFA C rating with scores of 2 In the case of PI-12.iii, Malawi and Congo fall significantly behind with low scores of 1, while Cameroon and Senegal score slightly better at 2 These four countries can find motivation in the fact that three of their league peers are achieving higher scores of 3, which aligns closely with the average score of league 5.
Table 6 Potential low hanging fruit areas of reform for league 3 countries
Dimension number and description of current status in most league 3 countries Which rung do league 3 countries need to reach next, and how is this described in PEFA?
PI-13.i Clarity and comprehensiveness of tax liabilities
3 (PEFA B): Legislation and procedures for most, but not necessarily all, major taxes are comprehensive and clear, with fairly limited discretionary powers of the government entities involved.
PI-12.iii Existence of sector strategies with multi-year costing of recurrent and investment expenditure.
2.5 (Between a PEFA C and B): Statements of sector strategies exist for between 25% and 75% of primary expenditures, with increasing levels of costing (full costing required for a B)
PI-11.ii Clarity/comprehensiveness of and political involvement in the guidance on the preparation of budget submissions
Getting past reform limits: Some theory and ideas
Can league 3 countries successfully navigate reform limitations to enhance downstream, de facto, and de-concentrated aspects? Insights from higher league nations, such as Madagascar, highlight similar challenges, revealing disparities between the effectiveness of upstream and downstream processes and the gap between significant legal reforms and their practical implementation For instance, Madagascar, classified as a league 4 country, has recently made substantial strides in improving its public financial management by revising all relevant legal texts.
The results of these reforms are however mitigated.” The pressing question is whether the prevailing reform approach, focused on a fairly common model shown in Figure
Madagascar aims to tackle its challenges and achieve tangible benefits through decentralized entities However, it's important to note that some countries in lower leagues do not share Madagascar's circumstances and may encounter different obstacles.
National and Sectoral Policy Review and Development Process
(policy -budget connection, resource envelope, ceilings)
Financial resources (revenue, customs, debt, cash), procurement, personnel and capital management
4 Internal Controls, Internal Audit and Monitoring
Lg 1 Lg 3 Lg 5 Executive process 1.87 2.40 3.00
Lg 1 Lg 3 Lg 5 Taxation 2.04 2.22 2.78 Debt 1.42 2.57 3.00 Donors 1.15 1.69 2.60
Internal control, audit and monitoring
Lg 1 Lg 3 Lg 5 External audit 1.50 1.52 2.50
Lg 1 Lg 3 Lg 5 1.25 2.32 2.25 very different challenges: Will the current reform approach help meet the PFM challenges in league 1 and league 3 countries as well?
This section raises concerns about the adoption of common Public Financial Management (PFM) models in Africa, suggesting a tendency towards negative outcomes Organizations often imitate effective characteristics, a phenomenon known as isomorphism, which assumes that common reforms lead to organizational legitimacy Terms like 'best practice' and 'international standards' are linked to this belief In Africa, coercive, mimetic, and normative pressures significantly influence central actors who are more connected to donors and external ideas This raises a critical question: if actors in less concentrated settings are less affected by these pressures, will they still adopt these reforms?
Research investigates the impact of external isomorphic influences on organizational operations, with Hannan and Freeman suggesting that while such pressures can modify an organization's periphery—comprising laws, regulations, structures, and processes—they often leave the core, which embodies the organization's identity and values, largely unchanged They likely contend that externally imposed Public Financial Management (PFM) models in Africa may primarily lead to superficial legal and procedural changes rather than genuine transformations in core behavior.
Figure 32 highlights the contrasting impacts of external reform ideas on centralized versus decentralized entities Centralized organizations are more likely to embrace these reforms, integrating them into both their core and peripheral operations due to a strong normative affinity Treasury directors, for instance, are expected to implement new accounting standards in theory and practice In contrast, decentralized entities experience limited influence from coercive, mimetic, and normative pressures, resulting in a weaker adoption of these ideas When decentralized entities do adopt these reforms, the process is less straightforward and often less effective.
37 Meyer, J and B Rowan 1991 “Institutionalized Organizations: Formal Structure as Myth and
Ceremony.” In DiMaggio, P and W Powell (eds) The New Institutionalism in Organizational Analysis P J. Chicago, University of Chicago Press, 340-363; citation from page 340.
38 Isomorphism is increasingly used as a theoretical approach to explain development in the accounting profession For a recent example, see Lima Rodrigues, Lúcia and Russell Craig 2007 Critical
Perspectives on Accounting, Volume 18, Issue 6, pp 739-757 Olowo-Okere and Tomkins (1998) also reference isomorphism in their effort to describe the path towards controls adoption in Nigeria.
39 Hannan, M T., and J Freeman 1984 Structural inertia and organizational change American
Sociological Review 49:149–64.Reference to page 155. it is likely more on the periphery than in the core The top de jure dimensions rather than the bottom de facto dimensions) 40
Fig 32 Limits of the current reform model
External reform ideas, embodied in
‘model’, and transferred via coercive, mimetic and normative pressures
De Jure : Organizational periphery changes
De Jure : Organizational periphery changes Central, concentrated entities
The analogy of a soccer game illustrates the challenge of implementing new rules in a context where players are accustomed to old conventions A focused group of referees introduces updated regulations, yet the players struggle to understand and accept these changes, often relying on their familiar informal practices This scenario reflects the concept of 'institutional dualism,' highlighting that the difficulty of reform arises when trying to replace established norms with new ideas Consequently, while the game may superficially incorporate new concepts, it ultimately continues to operate under outdated rules.
Figure 32 illustrates the challenges faced by reformers, highlighting that only 25 out of the total dimensions of Public Expenditure and Financial Accountability (PEFA) are associated with concentrated entities, where reform efforts are most successful In contrast, nearly half of the 64 dimensions pertain to the “core” engagements of de-concentrated actors, which represent the weakest impact of current reform strategies Consequently, existing reforms are unlikely to yield positive outcomes in these areas.
Reform adjustments are needed to meet looming challenges
Concerns arise regarding the limitations of current reform modalities, prompting the need for adjustments to address imminent challenges Some argue that the transition from theoretical frameworks to practical implementation, as well as from centralized to decentralized systems, may simply require more time than has been allocated thus far Proponents of this view often cite various governments that have successfully adopted these reform ideas, referencing countries that inspired these concepts However, while these claims cannot be outright dismissed, available evidence indicates that they may be only partially valid.
In a study of 40 dimensions related to de-concentrated actor sets, the average scores for league 5, 3, and 1 countries were 2.8, 2.3, and 1.6, respectively, when examining de-jure issues at the periphery, such as the formal introduction of the 'internal auditor' role and the generation of nominal internal audit reports In contrast, the averages for de-concentrated dimensions influencing de facto organizational behavior were lower, at 2.4, 1.7, and 1.3, highlighting a significant gap between the formal practices and the actual utilization of internal audit reports within organizations.
Time has not proven the simple solution with MTEF reform in countries whose reforms date back ten years, for example Ghana, Tanzania and country 6 still score
The progress of Cs and Ds on MTEF-related dimensions highlights the need for concentrated engagement in accounting, audit, and other reforms, rather than relying on de-concentrated actor groups Claims that other countries have seamlessly adopted innovations are often overstated, as successful adopters demonstrate diverse modernization trajectories The insights gained from these varying paths underscore the critical adjustments required for effective reform in Africa.
Across countries like Australia, the United States, the United Kingdom, and various Western European and Scandinavian nations, there is a noticeable trend of laws, processes, and standards evolving gradually over time, influenced by domestic development paths This progressive journey within the normative "core" has facilitated adjustments in "peripheral" practices For instance, the establishment of accounting professions often occurred two to three decades prior to the modernization of Public Financial Management (PFM) systems, reflecting a societal demand for rational and accountable governance that drives the supply of such frameworks, alongside social norms that influence legal advancements.
The events leading up to the 1920s in the United States set the stage for significant legal and structural reforms, indicating that the groundwork for these changes was laid well in advance It is unlikely that the 1921 Budget and Accounting Act would have come to fruition without the prior developments in the accounting profession, business sector, and government.
Salvatore Schiavo-Campo emphasized that public management innovations cannot be directly applied to different institutional settings and must be implemented gradually over time A critical insight is that the most effective reforms often originate from within the local context For instance, while external accounting practices were introduced in the United States from the United Kingdom, they were tailored and adapted to fit the unique governmental landscape before their implementation.
In 2008, Schiavo-Campo presented a paper titled "Of Mountains and Molehills: The Medium-Term Expenditure Framework" at a conference focused on sustainability and efficiency in public expenditure management, organized by the East-West Center and the Korea Development Institute in Honolulu, Hawaii.
Box 6 – Are PFM reforms 21 st century plants in nineteenth century soil?
Many trace the beginnings of modern PFM in the United States to the 1921 Budget and Accounting Act
The origins of accounting can be traced back to the 18th century, but this overview focuses on 1887, when the American Association of Public Accountants (AAPA) was established, prior to New York's 1896 state law that officially recognized the profession By 1900, there were only 250 Certified Public Accountants in the United States, and despite some colleges offering bookkeeping courses in the 19th century, accounting was not yet recognized as a major field of study in American higher education.
1900 But the profession was growing, as referenced in an Editorial in the 1900 Public Accountant:
Between 1900 and 1920, the profession made significant strides, establishing its rightful position among other fields By 1920, more than 5,000 original certificates had been issued, highlighting the rapid growth and recognition of the profession during this period.
In 1917, accountants established professional associations, culminating in the formation of the American Institute of Accounting The concentration of these professionals in New York contributed to the establishment of the Bureau of Municipal Research in 1906, which pioneered the scientific accounting approach, launched an administration school, and published foundational texts These advancements, alongside similar private sector developments, influenced the Taft Commission Report of 1912, advocating for a formal federal budgeting process This era also marked the transition to a domestic income tax in 1913, increasing reliance on domestic revenue, while various states began modernizing their budgeting systems from 1911 onward.
In 1911, California and Wisconsin became the pioneers in enacting budget laws, leading to a wave of similar legislation across the United States By 1915, seven additional states joined the movement, and by 1919, a total of forty-four states had established budget laws, with Arkansas, Ohio, and Oregon among the early adopters.
1916 four, in 1917 seven, in 1918 six, and in 1919 fifteen states adopted budgetary control.”
The experiences of various Congressmen led to a push for reforming the federal budgeting system, resulting in the 1921 Budget and Accounting Act This legislation centralized budgeting within the executive branch, specifically through the Bureau of the Budget This marked the beginning of a Public Financial Management (PFM) era, often referred to as the control phase, which lasted from 1920 to 1935 and reflected significant policy values.
The Progressive Era marked a significant shift towards accountability, executive leadership, and professionalism in government, with the Bureau of the Budget (BoB) primarily staffed by accountants focused on maximizing efficiency and economy This period also saw the establishment of a Supreme Audit Institution, which clarified the responsibilities of budget heads within agencies and reinforced the critical role of the single appropriations committee in Congress.
African nations today mirror the United States during the early 1900s, particularly in their accounting sectors Rwanda established its Institute of Certified Public Accountants in 2008, while Benin's OECCA, founded in 2006, has 45 members Burkina Faso's ONECCA, created in 1996, boasts 54 members, and Ghana has over 1,000 professional accountants striving for legitimacy These countries also share challenges such as reliance on trade taxes and rapid urbanization To address these issues, African nations are encouraged to adopt advanced accounting reforms and systems, including Medium-Term Expenditure Frameworks (MTEFs), as seen in the U.S and other developed regions However, questions remain about the feasibility of implementing these systems in less developed environments.
The long-standing normative approval of their value has created a 'space' for reform in Africa However, the question remains whether this space is adequate for the effective implementation of new reforms Focusing on the accounting aspect, it is essential to examine the environment in which Africa's Public Financial Management (PFM) reforms are being integrated, particularly regarding the adoption of advanced accounting practices.
Reforms need less similarity, more context-appropriateness
Conclusion
This paper aims to provide an overview of Public Financial Management (PFM) in Africa, exploring its current strength and effectiveness It identifies key themes in the continent's recent PFM developments and examines the role of Civil Society Organizations (CSOs) in these processes The paper also discusses the involvement of CSOs in shaping the narrative of African PFM and considers opportunities for their increased participation in the future.
Recent analysis of quantitative and qualitative data on public financial management (PFM) systems in 31 African governments reveals three main themes: first, those related to PFM processes; second, those that span across countries; and third, themes associated with reform initiatives This exploration highlights both current and future challenges facing public financial management in Africa.
Three key themes emerge from an analysis of African Public Financial Management (PFM) systems: first, budget preparation is generally more robust than budget execution and oversight; second, there exists an implementation deficit where established laws and processes fail to influence actual behavior; and third, the effectiveness of PFM processes improves when a concentrated group of actors is involved, while involving multiple players, particularly those outside central PFM entities, tends to weaken these processes.
The analysis reveals significant disparities in public financial management (PFM) performance across countries, categorized into distinct leagues based on their PEFA scores Lower league countries consistently exhibit weaknesses across all dimensions, including both de jure and de facto aspects, as well as concentrated and de-concentrated processes In contrast, league 3 countries, while sharing some weaknesses with lower league nations, are actively improving their upstream and de jure dimensions, focusing on concentrated actor engagement Meanwhile, league 5 countries, which demonstrate strengths in upstream, de jure, and concentrated areas, are also addressing challenges in downstream, de facto, and de-concentrated dimensions to enhance their overall PFM performance.
141 Themes also arise in explaining why countries fall into different leagues A range of factors are seen to influence the quality of PFM systems and outcomes,