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 />
Summary<br />
Recent years have seen a number of fundamental and far-reaching reorientations<br />
in the debate on international development policy and cooperation; <strong>for</strong><br />
one, Poverty Reduction Strategies (PRS) – initially <strong>for</strong>mulated as a prerequisite<br />
<strong>for</strong> debt relief under the HIPC initiative – have become widely accepted<br />
as comprehensive strategic frameworks <strong>for</strong> many developing countries’<br />
ef<strong>for</strong>ts to reach the Millennium Development Goals by 2015. Prepared<br />
through a participatory process, PRS Papers (<strong>PRSP</strong>s) are meant to describe a<br />
country's macroeconomic, structural and social policies and programmes to<br />
promote growth and reduce poverty as well as associated external financing<br />
needs.<br />
International donors in turn have committed themselves to align their support<br />
to developing countries’ own strategic policies and to rely increasingly on the<br />
recipient countries’ own administrative systems and procedures to manage<br />
donor contributions. Consequently, <strong>PRSP</strong>s have also become central to the<br />
provision of development assistance in terms of both grants and loans as they<br />
represent the key reference document <strong>for</strong> support from bi- and multilateral<br />
donor agencies through Programme-based Approaches (PBAs), including<br />
general and sector budget support.<br />
At the implementation stage, <strong>PRSP</strong>s have to be translated into medium-term<br />
policies and programmes, which in turn have to be implemented through<br />
annual budgets. Accordingly, the debate on <strong>PRSP</strong> implementation and direct<br />
budget support increasingly focuses on the quality of public financial management<br />
(PFM).<br />
Another important topical issue in the international development policy debate<br />
is the continued drive <strong>for</strong> decentralisation in developing countries. By<br />
moving decision-making closer to the grassroots and thereby strengthening<br />
the political participation and representation of the poor, the effectiveness and<br />
efficiency of public service delivery <strong>for</strong> poverty reduction, or so it is hoped,<br />
can be improved. At the same time, however, decentralization renders the<br />
processes of budget planning, execution and control significantly more complex,<br />
multiplying coordination requirements and possibly overtaxing scarce<br />
human and technical capacities in developing countries.<br />
German Development <strong>Institut</strong>e 1