The importance of Public Finance Management and its reform derives as a consequence of its direct role in implementing policy – be it about improving education, achieving better health care, promoting tourism, or increasing agricultural yields. With weak Public Finance Management systems, even where policy makers come up with sound policy, it may not be possible to implement such policy effectively. Further, quite uniquely Public Finance Management performance affects the performance of all other sectors – yes the macroeconomic environment and so private sector opportunity and the service delivery in agriculture, health, education, transport, energy, public safety and the list goes on. When it works, all other sectors have a chance of succeeding; but when Public Finance Management fails all other sectors fail.
We as citizens of developing countries ought to be more concerned about who drives the agenda for Public Finance Management reform. Is it the IMF, as it imposes Public Finance Management Reform conditionalities that are not just tied to strengthening or improving budgetary systems, but are tied specifically to the adoption of particular reform approaches – despite such approaches having in some instances failed in more than one country. Is it the World Bank as it makes the adoption of integrated financial management information systems (IFMIS) the basis for support in reforming the Public Finance Management systems? Or is it the result of wide internal debate and consideration by the country citizenry influencing their elected leaders to address the basic things that they know do not work using approaches that are within the reach of our capacity rather than adopt reform methods that may not yet be appropriate to our circumstances?
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