Public Financial Management for PRSP - Deutsches Institut für ...

More documents

Recommendations

Info

Stefan Leiderer et al. tion of the poor. At the same time, however, decentralization renders the processes of budget planning, execution and control significantly more complex, multiplying coordination requirements and possibly overtaxing scarce human and technical capacities in developing countries. None the less, most work on PFM systems and reform focuses almost exclusively on PFM at the central level of government, neglecting that many developing countries – strongly supported by international donors – are increasingly delegating political decision-making powers and financial responsibilities to sub-national levels of government. To make matters worse, most analytical work on PFM in any particular country’s circumstances focuses mainly on assessing formal institutions and processes governing the management of public finances. And although most authors recognise that PFM systems in most developing countries are largely characterised by informal practices and procedures, the underlying mechanisms leading to these informal practices are rarely examined in detail. Instead, neo-patrimonial structures and a lack of commitment by political leaders to sound PFM and poverty reduction are readily blamed for consistent non-adherence to formal rules and procedures in the management of public finances. This study, however, argues that there are a number of important influencing factors that lead to persistent non-adherence to formal rules and regulations other than “cultural” ones. These factors leading to informal PFM practices are in part the result of modern but poorly adapted formal PFM rules as well as inadequate sequencing of reforms, and not least donor behaviour. This study examines how the PRSP approach and decentralisation efforts interact with each other by studying their impact on the PFM system in Malawi. It is precisely the PFM system where PRSP implementation and decentralisation need to be linked and reconciled with each other. The research focus of this study is thus on the implications of a decentralising PFM system for PRSP implementation. The following section presents the main research question of the case study for this report in detail in the following section. It goes on to provide some background information on the issues being addressed. The section then briefly introduces the research approach and ends with an overview of the structure of this report. 16 German Development Institute
Public Financial Management for PRSP Implementation in Malawi Background and main research question In the late 1990s, PRSPs were introduced as a pre-requisite for debt relief under the Heavily Indebted Poor Countries (HIPC) initiative. The intention was to provide poor developing countries with tailor-made national mediumterm strategies for poverty reduction and sustainable development. Since then, PRSPs have evolved into key reference documents for international development cooperation. However, implementing PRSPs is more difficult than formulating them. This is the reason why Public Financial Management (PFM) and particularly budgeting in developing countries has become a focal point of the international discussion in recent years. Also in the 1990s, donors began to complement the much criticised project-based approach to development cooperation with programme-based approaches (PBAs). This shift towards PBAs introduced new planning and coordination frameworks such as Sector-Wide Approaches (SWAps) in international development cooperation. This also refocused attention on somewhat older instruments such as Medium Term Expenditure Frameworks (MTEFs). The modes of aid delivery were adapted too. Traditional project funding was to some degree replaced and complemented by basket funding and budget support. The quality of national PFM systems is an important factor for the success of these approaches. Donors therefore also have an interest in PFM in developing countries. Decentralisation is a second topic that has gained prominence in the international development debate and policy practice in recent years. A number of different objectives and hopes are usually connected with decentralisation. One objective is more effective poverty reduction, which is hoped to be achieved by moving decision-making closer to the grassroots and thereby strengthening the political participation and representation of the poor. Unlike the PRSP approach, decentralisation has already been around in the development debate for some time. It was already on the agenda in the 1970s and 1980s but has become increasingly important in the 1990s. A strategy of decentralisation covers the fields of politics, administration and finances, and therefore implies the fundamental redistribution of power, responsibilities and resources and a reorganisation of the way the state works within a particular country. PFM on the other hand is a relatively new issue in international development cooperation. The IMF and the World Bank have always taken interest in singular questions related to the performance of national PFM systems during the structural adjustment period. However, the necessity for comprehensive German Development Institute 17
Page 3 and 4: Public Financial Management for PRS
Page 5 and 6: Studies Deutsches Institut für Ent
Page 7: Preface The present study on ‘Pub
Page 10 and 11: 4 The Case of Malawi 44 4.1 Why Mal
Page 12 and 13: Bibliography 151 Annexes 157 Tables
Page 14 and 15: Boxes and Tables in the Annexes Box
Page 16 and 17: DS EHP ESAF EU GBS GDP GoM GRF GTZ
Page 18 and 19: TOR UDF UNCDF UNDP UNV USAID VAP VD
Page 20 and 21: Stefan Leiderer et al. PRSP impleme
Page 22 and 23: Stefan Leiderer et al. A particular
Page 24 and 25: Stefan Leiderer et al. come to vary
Page 26 and 27: Stefan Leiderer et al. Particularly
Page 28 and 29: Stefan Leiderer et al. donors are s
Page 30 and 31: Stefan Leiderer et al. - Improved c
Page 32 and 33: Stefan Leiderer et al. medium- to l
Page 36 and 37: Stefan Leiderer et al. and systemat
Page 38 and 39: Stefan Leiderer et al. The methods
Page 40 and 41: Stefan Leiderer et al. Part I: Conc
Page 42 and 43: Stefan Leiderer et al. the PRSP app
Page 44 and 45: Stefan Leiderer et al. Those arguin
Page 46 and 47: Stefan Leiderer et al. accounts, bu
Page 48 and 49: Stefan Leiderer et al. It must be n
Page 50 and 51: Stefan Leiderer et al. The typical
Page 52 and 53: Stefan Leiderer et al. Administrati
Page 54 and 55: Stefan Leiderer et al. Figure 2: Le
Page 56 and 57: Stefan Leiderer et al. ety may have
Page 58 and 59: Stefan Leiderer et al. 9. Transpare
Page 60 and 61: Stefan Leiderer et al. The main res
Page 62 and 63: Stefan Leiderer et al. 3.3 Structur
Page 64 and 65: Stefan Leiderer et al. never gained
Page 66 and 67: Stefan Leiderer et al. its relevanc
Page 68 and 69: Stefan Leiderer et al. pronounced i
Page 70 and 71: Stefan Leiderer et al. — Several
Page 72 and 73: Stefan Leiderer et al. Table 1: Pop
Page 74 and 75: Stefan Leiderer et al. more by info
Page 76 and 77: Stefan Leiderer et al. tion of the
Page 78 and 79: Stefan Leiderer et al. Table 2: The
Page 80 and 81: Stefan Leiderer et al. ing due to o
Page 82 and 83: Stefan Leiderer et al. authorised t
Page 84 and 85:
Stefan Leiderer et al. (in particul
Page 86 and 87:
Stefan Leiderer et al. Figure 3: In
Page 89 and 90:
Public Financial Management for PRS
Page 91 and 92:
Page 93 and 94:
Figure 5: Institutional Setup of Ma
Page 95 and 96:
Page 97 and 98:
Box 10: The formal and informal ins
Page 99 and 100:
MTEF Stage 6 MoF holds consultation
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Table 6: GRF Allocations Approved e
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Figure 10: PFM under uncertainty Ca
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175:
Annexes
Page 178 and 179:
Stefan Leiderer et al. are employed
Page 180 and 181:
Stefan Leiderer et al. During the f
Page 182 and 183:
Stefan Leiderer et al. Box A 1: Tri
Page 184 and 185:
Stefan Leiderer et al. The politica
Page 186 and 187:
Stefan Leiderer et al. Annex 2 Tabl
Page 188 and 189:
Stefan Leiderer et al. Mayesa, Mr.
Page 190 and 191:
Stefan Leiderer et al. Thole, Pamel
Page 192 and 193:
Stefan Leiderer et al. 6 Committee
Page 194 and 195:
Stefan Leiderer et al. Chanza, Bill
Page 196 and 197:
Stefan Leiderer et al. Full Assembl
Page 198 and 199:
Stefan Leiderer et al. owned busine
Page 201 and 202:
Publications of the German Developm
Page 203 and 204:
Discussion Paper 16/2007 Schirm, St
show all

Public Financial Management for PRSP - Deutsches Institut für ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?