Economics, public finance, domestic revenue mobilisation & budget support

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20 February 2015 to 26 February 2015
in (XX)

Here Shanta's introduction to the conversation:

 "Since the purpose of good public financial management is to improve the
effectiveness of government, the discussion will focus at the other end,
namely the delivery of public services and ask, how--if at all--PFM can
improve their outcomes. First, I will question whether the activities that
governments actually spend on are those that they should spend on. Using a
simple, welfare-economics framework, I will show that most items in the
government budget do not pass the test. In this context, strengthening PFM is
like making the trains run the wrong station. Next, I will show
that, even those government interventions that meet the welfare test often
fail to deliver what they are supposed to because of (i) poor incentives in
the service delivery system; and (ii) capture of public funds by political
elites. In these cases, better PFM can help only if they change incentives in
the same direction as is necessary to improve service delivery. Specifically,
better monitoring of public expenditures can help if the information is
shared with people who can influence decisions about service delivery. If it
is shared with other government entities, it may increase their power over
service beneficiaries and reinforce elite capture. Finally, better PFM for
aid projects in an otherwise dysfunctional system rarely helps outcomes and
may make matters worse, by increasing government's accountability to donors
as opposed to its own citizens."

Come on line at
[1] and be part of the discussion.

Best, Mauro Napodano, PFM Board Founder.