What is the appropriate role of line items in a performance budgeting system? How should the budget classification relate to the chart of accounts? What should be the role of the functional classification of expenditure? These are examples of questions that are made harder to answer – and which give rise to unnecessary confusion – […]
In my recent technical note Top-Down Budgeting Today, I set out a clear alternative to the failed hard ministry ceilings doctrine. The HCM doctrine, which has become PFM conventional wisdom, asserts that governments should set expenditure ceilings for ministries during the initial (strategic) phase of the budget preparation process. Ministries should then prepare their budget […]
The Reimagining Public Finance (RPF) team has put forward for discussion a thoughtful set of proposals intended to improve technical work in public financial management (PFM) and public finances more generally. These proposals are designed to address the problem of PFM advice that is dominated by a best practice mentality and that sees PFM reforms […]
Reimagining Public Finance (RPF) is an initiative by a committed group within the World Bank to address a significant problem that affects public financial management (PFM) and public finance reform practice. The problem is that too much PFM technical work is driven by a best practice mentality. When operating in best practice mode, analysts don’t […]
Many governments have invested large sums of money in the development of accrual accounting. Unfortunately, for most of these governments this has to date been a poor investment. Why? Because many are making little or no use of all the information that has been produced. This is a regrettable situation, to say the least. This […]
Evaluation should be a key source of information for budget decision-makers. In practice, however, it has had surprisingly little impact on decisions about what to fund and by how much. This raises the question: what can be done to realize the true potential of evaluation to improve budgeting? The failure of evaluation to contribute much […]
Contemporary public financial management (PFM) is, according to an emerging school of thought, in a parlous condition and needs a complete rebuild. I disagree. An influential recent formulation of the views of this school of thought can be found in the 2020 report Advice, Money, Results (AMR). This report issues a challenge to contemporary PFM […]
What opportunities does digitalization offer for better measures of output quality in the public sector? This question is the focus of what follows – the second in a series examining the extent to which digitalization can improve performance measurement in government. Let’s first recap the discussion so far. Digitalization means the use of digital tools […]
Yet another call for governments to abandon debt limits and focus instead on net worth! This time it’s in the United Kingdom, where an influential think tank, the Resolution Foundation, has proposed the replacement of the country’s debt rules with “a target to see net worth improving.” This is a bad idea that must be […]
Expenditure ceilings are a key instrument for achieving the objectives of medium-term budgeting. This is why the question of how to set appropriate and workable expenditure ceilings has been a major focus of public financial management over the past two decades. Erroneous notions as to what constitutes best practice in ceiling-setting have, however, been a […]