Andrew Lawson 2012 : 7 Evaluation of Public Financial Management Reform

Where and why do Public Financial Management (PFM) reforms succeed? Where and how does donor support to PFM reform contribute most effectively to results? This report summarises the findings and conclusions of an evaluation based on studies of the PFM reforms in Burkina Faso, Ghana and Malawi. The evaluation also draws on a global quantitative review. It is found that results tend to be good when there is a strong commitment at both political and technical levels, when reform designs and implementation models are well tailored to the context and when strong, government-led coordination arrangements are in place to monitor and guide reforms. Donor funding for PFM reform has been effective in countries where the context and mechanisms were right for success, and where external funding was focused on the Government’s own reform programme. The willingness of some Governments to fund PFM reforms directly shows that external funding may not be the deciding factor, however. Donor pressure to develop comprehensive PFM reform plans and monitoring frameworks can be a positive influence but attempts to overtly influence either the pace or the content of PFM reforms were found to be ineffective and often counter-productive. Key lessons for donor agencies are thus to focus on countries where the right preconditions exist, to align to government programmes and, under all circumstances, to ensure that aid works in favour of the PFM system and not against it. The evaluation has been commissioned jointly by the African Development Bank (AfDB), the Swedish International Development Cooperation Agency (Sida) and the Danish International Development Assistance (DANIDA). Evuation of P ublic Fincial M aagem nt R eorm