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

Stefan Leiderer et al.
the PRSP approach had been integrated into domestic institutional structures.
These improvements occurred where leadership and commitment were strong
and good starting conditions existed. In most cases, however, achievements
have been more tentative and incremental. An IMF evaluation even concludes
that the PRS approach has “acted more as a distraction from strengthening
the domestic policy framework” (IMF / IEO 2004, 5) in countries
where it had been externally imposed and where it was an isolated exercise.
With regard to the implementation of PRS through the PFM system, the IMF
evaluation team concludes:
“Budgetary processes are weak, and the linkages between the PRSP, medium-term
expenditure frameworks, and the budgets are generally poor. In
particular, public expenditure management (PEM) systems are generally
too weak to allow the PRSP to play a central role in implementing expenditure
priorities or modifying them on the basis of feedback on actual costs
and outcomes. Strengthening PEM has been recognized as central to the
success of the initiative” (IMF / IEO 2004, 4).
These findings, together with the fact that many donors are increasingly turning
towards supporting PRSP implementation through budget support operations
and other forms of PBAs, lead donor agencies to shift their focus from
thematic sector questions to institutional, administrative and procedural issues.
This shift is increasingly affecting the quality of financial governance,
i.e. planning capacities, budget transparency, fiscal discipline, or accountability,
etc. Consequently, instruments promoted by the Wolrd Bank and the IMF
in the second half of the 1990 such as Medium Term Expenditure Frameworks
(MTEFs) are becoming more and more important.
2.1.2 Decentralisation in developing countries
Decentralisation is one of the most prominent reform approaches in developing
countries, strongly supported by donors. International development agencies
highly value decentralisation and attach a number of expectations to,
such as increased efficiency in public service delivery, local consolidation of
democratic principles and more effective poverty reduction. There have been
several waves of decentralisation in most developing countries (Manor 1999:
part II), including sub-Saharan Africa (Ribot 2002, 4–7; Mawhood 1993).
With the end of the Cold War, the approach experienced a revival triggered
by the failure of centralised systems to deliver poverty reduction and overall
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