Public Financial Management for PRSP - Deutsches Institut für ...
Public Financial Management for PRSP - Deutsches Institut für ...
Public Financial Management for PRSP - Deutsches Institut für ...
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<strong>Public</strong> <strong>Financial</strong> <strong>Management</strong> <strong>for</strong> <strong>PRSP</strong> Implementation in Malawi<br />
Donor impact on PFM<br />
One of the most critical factors contributing to the high degree of uncertainty<br />
in Malawi’s PFM is the lack of predictability of donor funds, which includes<br />
actual amounts, time of disbursement and possible reductions. If donor commitments<br />
are not well coordinated with the Malawian budget process, this<br />
might cause delays or additional financial resources after the budget has been<br />
approved. If no supplementary budget is set up, both cases lead to increased<br />
ad hoc planning and budgeting.<br />
The MoF tends to send out the budget ceilings to sector ministries and local<br />
government bodies late if donors are also late in confirming their contributions<br />
to the GoM. This delay then propagates throughout the budget process<br />
and leads to sometimes hectic ad hoc planning and budgeting activities at<br />
both levels of government. Again, this increases the likeliness of using in<strong>for</strong>mal<br />
practices instead of the <strong>for</strong>mal procedures and in the end increases<br />
uncertainty throughout the system.<br />
If donors do not adequately support the introduction of new PFM instruments,<br />
such as the MTEF, it will only increase the use of ad hoc mode of<br />
planning and budgeting and other in<strong>for</strong>mal practices. Re<strong>for</strong>ms are then only<br />
introduced superficially instead of embedding them systematically and in a<br />
sustainable manner in the entire PFM system.<br />
Coordination<br />
Missing or insufficient coordination between the numerous actors involved in<br />
PFM increases uncertainty substantially, in particular so when in<strong>for</strong>mal and<br />
intransparent communication channels are used instead of <strong>for</strong>mal coordination<br />
mechanisms. Although this might sometimes be more efficient, it usually<br />
does not strengthen but often undermines the <strong>for</strong>mal institutional and legal<br />
infrastructure. In<strong>for</strong>mation is thus not distributed systematically and evenly to<br />
all relevant actors in the system but rather selectively according to personal<br />
relations. This adds to uncertainty <strong>for</strong> all actors involved.<br />
Commitment<br />
Lack of political commitment to sound PFM is another critical source <strong>for</strong><br />
uncertainty in PFM processes in developing countries. This applies to uncertainty<br />
about the validity of <strong>for</strong>mal rules as well as to the question as to<br />
German Development <strong>Institut</strong>e 139