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PEFA, Public Financial Management, and Good Governance (English)

The research is based on the PEFA framework and methodology for assessing public financial management performance and the data set that is generated from the PEFA assessments. The research quantified PEFA scores and aggregated them into overall scores which required developing assumptions on weighting scores, measures, and assessments. The research acknowledges methodological limitations of using the PEFA data set, including the assumptions. In general, the research follows the approach taken by previous researchers who have used PEFA data for quantitative analysis, but this does not eliminate the challenges that persist in transforming grades to numerical values and aggregating them. The time inconsistency issues and the limited number of observations also influenced the regression analysis using the PEFA data set. The team acknowledges that the PEFA data set was not designed for statistical analysis and that using it in quantitative regressions presents a series of econometric issues that cannot be fully resolved in this book, or in other papers which apply a similar approach. The research report builds on general recognition that PFM is important for development and recognizes that there is limited evidence based on the nontechnical determinants of PFM performance, as well as the outcomes of a good PFM system. The report therefore aims to bridge some of this gap between theory and practice using data on PFM performance from PEFA assessments. The report undertakes a closer examination of the key debates on what constitutes a good PFM system by providing an overview of the PEFA framework, and the data set that is generated through PEFA assessments, including its strengths and weaknesses. This was done to enable the research team to undertake quantitative analysis of the relationship between PFM performance and other governance indicators and outcomes.


  • Author

    Mustapha, Shakira, Long, Cathal, Löffler, Gundula, Mills,Zachary

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  • Document Type

    Working Paper

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  • Region

    The World Region, Other,

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  • Doc Name

    PEFA, Public Financial Management, and Good Governance

  • Keywords

    Public Financial Management; Swiss State Secretariat for Economic Affairs; overseas development institute; French Ministry of Foreign Affairs; perception of corruption; penalties for noncompliance; small island developing states; strategic allocation of resources; public expenditure tracking survey; preparation of budget submissions; indebted poor country; public financial management system; efficient delivery of services; domestic resource mobilization; control of corruption; annual budget cycle; aggregate fiscal discipline; fragile states; annual budget process; opportunities for corruption; gross domestic product; corruption perception index; program of support; overseas development assistance; sovereign credit rating; measure of corruption; political institution; diagnostic tool; accounting and reporting; budget execution reporting; frequently asked question; Public Expenditure Management; international development partner; government fiscal policy; level of compliance; Health Service Delivery; public expenditure system; operation and management; macroeconomic and fiscal; efficient resource allocation; Political Economy Analysis; performance measurement framework; capacity development programs; International Finance Institution; upstream expenditure; Social Safety Nets; flow of fund; Public Expenditure Policy; Public Sector Governance; Creditor Reporting System; public sector accounting; budget execution indicator; indicators of governance; public sector reform; composition of expenditure; budget circular; fiscal outcome; quantitative analysis; literature review; Fragile Countries; revenue administration; public finance; budget support; empirical literature; fiduciary risk; electoral system; governance initiatives; public fund; public resource; political parties; political party; Tax Administration; tax performance; budget credibility; measurement error; operational efficiency; allocative efficiency



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Mustapha, Shakira Long, Cathal Löffler, Gundula Mills,Zachary

PEFA, Public Financial Management, and Good Governance (English). Washington, D.C. : World Bank Group.