Historical Overview
PEFA was established as a means to reduce the duplication and costs of multiple assessments and to facilitate dialogue between government and others about how to improve the effectiveness of fiscal policies. PEFA was also aimed at improving the results of development cooperation as part of the global aid effectiveness agenda. It provided support for the Strengthening Approach established in 2005 through the Paris Declaration, then further developed in the Accra Agenda for Action in 2008, and the Busan Partnership for Effective Development Cooperation in 2011.
Effective institutions and systems of public financial management (PFM) play a crucial role in the implementation of national policies concerning development and poverty reduction. Good PFM is the linchpin that ties together available resources, delivery of services, and achievement of government policy objectives. If it is done well, PFM ensures that revenue is collected efficiently and used appropriately and sustainably.
PEFA introduced a standard methodology and reference tool for PFM diagnostic assessments. It was extensively discussed and tested between 2001 and 2005 with the aim of harmonizing the needs of government and their development partners for a common analytical tool and shared data. The first publicly available version of PEFA Framework was launched in 2005 and reports for Afghanistan and Zambia were produced in that year.
There were two main updates of the Framework in 2011 and 2016. The 2011 Framework is characterized with clarifying indicator definitions, strengthening scoring guidance, and improving consistency across assessments, without changing the structure of the Guidance. In 2016 there was a major update of the Framework with increased number of indicators and dimensions, grouped in seven pillars. It has become the acknowledged standard for PFM assessments.
The frameworks have been applied at national level and adjusted by subnational governments for subnational level, that led to the development of special Guidance for Subnational PEFA Assessments to supplement the main framework. This guidance was developed and published in 2016 and revised in 2021.
AgilePEFA, PEFA Gender and PEFA Climate are supplementary guidance developed in the period 2020-2024. AgilePEFA is an alternative that looks for efficiencies in time and resources for countries in certain circumstances, while PEFA Gender and PEFA Climate are thematic extensions of the main framework and assess the extent to which countries’ public financial management (PFM) systems respond and are ready to support and foster the implementation of government gender and climate change policies, i.e. “gender responsive” and respectively “climate responsive”.
Since the early assessments in 2005 PEFA has been used more than 800 times in 155 countries. It has become a golden standard for PFM assessments and has amassed a pool of data.
25 Years Timeline
PEFA Program was Established by Seven Partners
Stage 1
Development
was primarily concerned with creating a consensus on the most appropriate approach to supporting PFM systems. It focused on development of the PEFA performance measurement framework.
2001
PEFA program established by the seven partners
Stage 2
Dissemination
was concerned with supporting users of PEFA during early implementation and establishing systems for monitoring its use.
2005
The 'Strengthened Approach' established through the Paris declaration
Stage 3
Integration
involved creation and use of a pool of information on PFM performance from PEFA assessments. The program focused on improving the quality of assessments and monitoring changes over time.
2005
First publicly available version of the PEFA framework launched
2005
First PEFA reports completed for Afghanistan and Zambia
2008
Accra agenda for action approved
Stage 4
Global Public Good
involved a doubling of the number of new and successive assessments by central and subnational governments. The assessment methodology was substantially upgraded. It was also strengthened through the introduction of PEFA Check process quality arrangements. The PFM performance information data base was expanded and knowledge dissemination was increased. PEFA was used by many governments and development institutions for examining and planning PFM reform initiatives and strategies.
2011
Busan Partnership for Cooperative Development approved
2011
Second version of the PEFA framework published with some minor amendments to three performance indicators
2016
A major upgrade of the framework, PEFA 2016 is publicly launched following extensive testing
Stage 5
PEFA and PFM Reform
built on the previous four phases. It took into consideration the changes in the PFM policy and analysis landscape. There was an increasing focus on using assessments for elaboration of PFM reform programs, thorough updating of all guidance for the program, creating new supplementary frameworks (PEFA Gender and PEFA Climate), and establishing an AgilePEFA approach and guidance on how to use PEFA for fiduciary assessments. PEFA data was promoted through created Research Program, Global Report on PFM and SDG Project, increasing the voice of additional stakeholders, quality assurance was strengthened with the new PEFA check requirements, and the idea of a PEFA Advisory Board was piloted. An online e-learning course was launched on two platforms: on OLC and on the edX platform.
Slovakia and Luxembourg became the new PEFA partners.
During this phase COVID-19 happened and increased PEFA online activities: trainings, conferences, consultations and learning.
2018
PEFA as part of UN SDG initiative with the Budget Credibility Data Collection Project.
2019
PEFA Program welcomes the Slovak Republic and The Grand-Duchy of Luxembourg as its new partners.
2019
An analytical study is being undertaken for the PEFA Steering Committee that examined options for the future of the PEFA program.
2020
PEFA Gender Responsive Public Financial management Framework (PEFA Gender) was launched.
2021-2022
An online e-learning course was launched on OLC and edX platform.
Phase 6
PEFA as a Gold Standard and Preferred Diagnostic Tool
building on the achievement of the program in previous phases, PEFA’s role during Phase 6 is focused on maintaining its relevance and increasing its impact in different conditions, while strengthening the ownership of its client governments over PFM reform.
The maintenance of and guidance on the strengthened PEFA assessment framework will continue to be at the center of the PEFA Program, as well as consolidating and mainstreaming the products added in the last five years. The four new areas are: support the strengthening of country ownership of PFM reforms; use of PEFA to promote higher transparency and accountability; facilitation of better access to relevant PFM knowledge to help PEFA users in their PFM activities; strengthening of links between PEFA and service delivery in sectors.
An AI Chatbot was created to easily find information on the PEFA Website; PEFA e-learning on PEFA Gender and PEFA Climate are under development; a PEFA assessors training program is being set up; and the Advisory Board was created after piloting in the previous phase.
The Asian Development Bank (ADB) was added as a new member of the PEFA Steering Committee.
2024
PEFA Climate Responsive Public Financial management Framework (PEFA Climate) was launched.
2025
PEFA Program welcomes Asian Development Bank as its new partner.
2026
PEFA Advisory Board is officially announced, after piloting 2024-2026.
