Under the Public Expenditure and Accountability (PEFA) Program, the public financial management (PFM) Performance Measurement Framework (PMF) (or PEFA Framework) has been developed as a contribution to the collective efforts of many stakeholders to assess whether a country has the tools to deliver three main budgetary outcomes:
aggregate fiscal discipline
strategic resource allocation
efficient use of resources for service delivery
The objectives of the Framework are to:
provide reliable information on the performance of Public Financial Management (PFM) systems, processes and institutions over time;
contribute to the government reform process by determining the extent to which reforms are yielding improved performance and by increasing the ability to identify and learn from reform success;
facilitate harmonization of the dialogue on PFM performance, reform needs and donor support between government and donors around a common PFM performance assessment and therefore contribute to reduce transaction costs for country governments.
By providing a common pool of information for measurement and monitoring of PFM performance progress, and a common platform for dialogue about PFM reform, it aims to contribute to the development of effective country-owned PFM systems.
The PEFA Framework was created as a high level analytical instrument which consists of a set of 31 indicators and a supporting PFM Performance Report, providing an overview of the performance of a country’s PFM system. Drawing on the established international standards and codes, and other commonly recognized good practices in PFM, it forms part of the strengthened Approach to supporting PFM reform, which emphasizes country-led reform, donor harmonization and alignment around the country strategy, and a focus on monitoring results. This approach seeks to mainstream the PFM best practices that are already being applied in some countries.
Through repeat assessments in a country, it is capable of demonstrating performance changes over time. The Framework was launched in June 2005 and updated in January 2011, covers the entire financial management cycle focuses on the central government. However, the application of the Framework at sub-national government level has become widespread and guidelines were developed in 2008.
In what way can PEFA help interested countries?
The assessments conducted have produced the following benefits to country partners:
Delivering a credible, comprehensive and evidence-based diagnostic that can be compared over time and serve as a basis to monitor the results of Public Financial Management PFM reform efforts, through repeat assessments and/or by building PEFA indicators into a country’s own Monitoring & Evaluation mechanism.
Enabling country governments to lead PFM assessments or actively engaged in work led by external agencies, through a clear and specific assessment framework with objective rating criteria.
Providing harmonization and standardization of the information requested by external agencies using a common assessment tool.
Providing a common platform for stakeholder dialogue on PFM reforms by facilitating priority setting and defining key entry-points for PFM reform plans.
Strengthening country capacities to promote alignmen