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Public Financial Management Reform in the Middle East and North Africa : An Overview of Regional Experience - Mark E. Ahern

Public Financial Management Reform in the Middle East and North Africa

An Overview of Regional Experience

Paperback Published: 25th May 2012
ISBN: 9780821395295
Number Of Pages: 201

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One of the most important functions governments perform is that of mobilizing and deploying financial resources to achieve their objectives. According to the most recent World Bank data, governments throughout the Middle East and North Africa (MENA) region spent approximately $407 billion dollars in 2007 in delivering their policy, regulatory and service functions. The way in which this money is spent has huge implications for their broader development trajectory. For governments to perform their spending function well, their PFM practices should meet certain well-established criteria. Government spending should be affordable, in that it takes place within a framework that ensures expenditure is consistent with monetary and fiscal policy objectives and sustainable in the long term. Governments should optimize the allocation of public resources between different sectors and expenditure categories in a way that reflects their policy priorities, including sustainable growth as well as human and social development. Such expenditure should be efficient, in that it maximizes output for a given set of inputs, and effective, in that it supports the successful realization of the government's goals. It should also be transparent; conducted in accordance with the relevant laws and regulations; and undertaken with appropriate checks and balances to ensure financial probity.In many MENA countries, PFM reforms have been on the agenda for a decade or more. This study surveys these reforms across ten Arab countries-Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco, Syria, Tunisia, the West Bank and Gaza and Yemen-using a combination of case studies and the Public Expenditure and Financial Accountability (PEFA) framework. PEFA is a set of twenty eight (28) high level indicators measures performance against best practice in developed and developing countries. The indicators analyze performance in the six core areas of public financial management: (1) credibility of the budget; (2) comprehensiveness and transparency; (3) policy-based budgeting; (4) predictability and control in budget execution; (5) accounting, recording, and reporting; and (6) external audit. At an aggregate level, MENA's PFM systems are roughly comparable to those of other countries at similar income levels. As a whole, the region tends to fare a bit better on accounting, recording and reporting and a bit worse on credibility of the budget. In terms of average scores for the six main categories, the tightest scores (i.e. the lowest standard deviation) were around credibility of the budget, indicating commonality among MENA countries on this dimension, whereas the largest discrepancies were found in the area of budget comprehensiveness and transparency. The PFM reforms that have been particularly successful in MENA fall into two types: efforts to improve budget transparency and classification, and the reform of revenues, particularly tax and customs. Ironically, these represent two very different reforms. The first are relatively straightforward and technocratic in nature.

Acknowledgmentsp. ix
About the Authorsp. xi
Acronyms and Abbreviationsp. xv
Overview and Summaryp. 1
Executive Summaryp. 3
Introductionp. 3
MENA PFM Practices Compared Against Global Averagesp. 5
The Substantive Reform Agendap. 6
Implementing Public Financial Management Reforms in MENA: An Emerging Set of Promising Practices?p. 10
Introduction: Public Financial Management Reform in MENA and Beyondp. 19
The Importance of Public Financial Managementp. 19
Beyond MENA: The Lessons from Global Experiencep. 20
What Is "MENA"? Selecting the Economies for This Studyp. 22
Using the PEFA Ranking to Evaluate PFM in MENAp. 23
Where MENA Has Ranked Consistently Higherp. 26
Where MENA Has Ranked Consistently Lowerp. 27
MENA Economy Templates and Case Studies on PFM Reformp. 28
The Substance of Public Financial Management Reform: What Reforms Are Needed and Which Are Working?p. 30
Strategic Budgetingp. 31
Budget Preparationp. 35
Resource Managementp. 38
Internal Control and Auditp. 43
Accounting and Reportingp. 46
External Accountabilityp. 50
Implementing Reforms in Public Financial Management: An Emerging Set of Promising Practices in MENA?p. 53
How Important Is Implementation to the Success of MENA's PFM Reforms?p. 53
Lesson 1: Know the Value-and Limitations-of Political Economy Analysisp. 56
Lesson 2: PFM Reform as Means and Not Endsp. 58
Lesson 3: Context Matters, So Swim with the Currentp. 59
Lesson 4: The Wisdom of "Muddling Through" - Grand Strategy versus Incremental Changep. 60
Lesson 5: Establish Basic Systems before Contemplating More Advanced Reformsp. 62
Lesson 6: When Possible, Keep Reforms Quick, Simple and Mutually Reinforcingp. 64
Lesson 7: Be Wary of Large Financial Management Information Systemsp. 66
Lesson 8: Internal Challenges: Leadership, Coordination, Skills, and Incentivesp. 68
Lesson 9: External Stakeholders-Useful, but Don't Count on Themp. 72
Lesson 10: Lessons for Donors: Be More Strategic, Selective, Modest, and Flexiblep. 74
Individual Economy Casesp. 79
Overview and Description of Economy Templatesp. 81
General Overviewp. 81
Substantive Reform Agendap. 82
Implementation Strategies for Reformp. 82
Political Economy of Reformp. 83
Algeriap. 84
General Overviewp. 84
Substantive Reform Agendap. 86
Implementation Strategies for Reformp. 90
Political Economy of Reformp. 92
Key Conclusionsp. 93
The Arab Republic of Egyptp. 94
General Overviewp. 94
Substantive Reform Agendap. 95
Institutional Arrangements for PFM Reformp. 99
Key Conclusionsp. 100
Iraqp. ?
General Overviewp. 101
Substantive Reform Agendap. 102
Implementation Strategies for Reformp. 108
Political Economy of Reformp. 109
Key Conclusionsp. 111
Annex: Iraq PEFA Assessmentp. 112
Jordanp. 114
General Overviewp. 114
Substantive Reform Agendap. 115
Implementation Strategies for Reformp. 119
Political Economy of Reformp. 122
Key Conclusionsp. 123
Annex: Jordan PEFA Assessmentp. 124
Lebanonp. 126
General Overviewp. 126
Substantive Reform Agendap. 127
Implementation Strategies for Reformp. 132
Political Economy of Reformp. 133
Key Conclusionsp. 134
Moroccop. 135
General Overviewp. 135
Substantive Reform Agendap. 136
Implementation Strategies for Reformp. 143
Political Economy of Reformp. 144
Key Conclusionsp. 144
Annex: Morocco PEFA Assessmentp. 145
The Syrian Arab Republicp. 146
General Overviewp. 146
Substantive Reform Agendap. 147
Implementation Strategies for Reformp. 149
Political Economy of Reformp. 150
Key Conclusionsp. 151
Annex: Syrian Arab Republic PEFA Assessmentp. 152
Tunisiap. 153
General Overviewp. 153
Substantive Reform Agendap. 156
Implementation Strategies for Reformp. 161
Political Economy of Reformp. 163
Key Conclusionsp. 164
The West Bank and Gazap. 165
General Overviewp. 165
Substantive Reform Agendap. 166
Implementation Strategies for Reformp. 170
Political Economy of Reformp. 172
Key Conclusionsp. 173
Annex: West Bank and Gaza PEFA Assessmentp. 175
The Republic of Yemenp. 177
General Overviewp. 177
Substantive Reform Agendap. 178
Implementation Strategies for Reformp. 184
Political Economy of Reformp. 186
Key Conclusionsp. 186
Annex: The Republic of Yemen PEFA Assessmentp. 188
Appendixp. 191
Bibliographyp. 197
Boxes
Ten Principles of Implementation for PFM Reforms in MENAp. 11
Ten Principles of Implementation for PFM Reforms in MENAp. 56
History of the Iraq BFMIS Systemp. 67
The Iraq Financial Information Management Systemp. 105
Definition and Scope of the MTEFp. 117
MOF Strategy as of 2009p. 120
Figures
MENA PEFA Averages Compared to Global PEFA Averages for Comparable Lower-Middle-Income Economiesp. 5
Reforms at Different Stages of the Budget Cyclep. 6
MENA PEFA Averages Compared to Global PEFA Averages for Comparable Lower-Middle-Income Economiesp. 26
Reforms at Different Stages of the Budget Cyclep. 31
MENA PEFA Averages Compared with World Averages for Comparable Economiesp. 193
MENA Economy Scores on Individual PEFA Criteriap. 193
Tables
Breakdown of Successful and Challenging PFM Reforms in MENAp. 10
Basic Statistics on MENA Economies Selected for PFM Analysisp. 22
PEFA Scores for the MENA Economies in the Studyp. 25
Relevant PEFA Scores for Strategic Budgetingp. 31
Relevant PEFA Scores for Budget Preparationp. 35
Relevant PEFA Scores for Resource Managementp. 38
Relevant PEFA Scores for Scope of Budgetp. 43
Relevant PEFA Scores for Accounting and Reportingp. 46
Relevant PEFA Scores for External Accountabilityp. 50
Breakdown of Successful and Challenging PFM Reforms in MENAp. 54
Donor Support for PFM Reforms in MENAp. 75
Overview of the Performance Indicator Setp. 112
Summary of Jordan's PEFA Indicator Scoresp. 115
Overview of the Performance Indicator Setp. 124
Morocco Abbreviated Summary of PEFA Indicator Scoresp. 137
Overview of the Performance Indicator Setp. 147
Syrian Arab Republic Abbreviated Scoresp. 152
Overview of the Performance Indicator Setp. 156
Budget Execution Ratesp. 156
West Bank and Gaza Abbreviated Summary of PEFA Indicator Scoresp. 166
Overview of the Performance Indicator Setp. 175
The Republic of Yemen Abbreviated Summary of PEFA Indicator Scoresp. 178
Overview of the Performance Indicator Setp. 188
Table of Contents provided by Ingram. All Rights Reserved.

ISBN: 9780821395295
ISBN-10: 0821395297
Series: World Bank Studies
Audience: Professional
Format: Paperback
Language: English
Number Of Pages: 201
Published: 25th May 2012
Country of Publication: US
Dimensions (cm): 25.4 x 17.81  x 1.19
Weight (kg): 0.4

Earn 144 Qantas Points
on this Book