5. Government PFM reform process

This section aims to describe the overall efforts made by the government to improve PFM performance and to provide a forward-looking perspective on the factors that are likely to affect future reform planning, implementation and monitoring.

The indicative length of this section is three to five pages.

5.1. Approach to PFM reforms

The government’s overall approach to PFM reform is described including the existence, origins and structure of a PFM reform program or any alternative approach used such as several parallel, independent, or institution-specific reform and capacity development initiatives.

It describes how the PFM reform program is linked to the overall policy and planning of government reforms, for example, through an overall national development plan, strategic planning arrangements, medium-term expenditure frameworks, etc. Relationships with other administrative reforms of the public sector are highlighted, including technical links and interdependencies, as well as planning and management coordination.

Any recent external reviews or independent evaluations of the PFM reform program(s) are mentioned, including their main conclusions.

5.2. Recent and on-going reform actions

The most important recent and ongoing reforms are briefly summarized to give an overview of the progress made by government in strengthening the PFM system.

This subsection highlights the extent to which ongoing reforms are targeting the PFM areas with the most important weaknesses identified in section 4 of the report.

5.3. Institutional considerations

This part of the report provides a forward-looking perspective of the extent to which institutional factors are likely to support the reform planning and implementation process.

The following identifies several factors that are likely to be relevant in supporting an effective reform process in many country contexts. In each case, this part of the PEFA report takes into account recent and ongoing reform experiences and identifies, where appropriate, any other country specific factors in addition to those suggested below.

•  Government leadership and ownership is likely to contribute to a more effective PFM reform process by setting the objectives, direction, and pace of reforms, clarifying organizational responsibilities for the reform process, and addressing, in a timely manner, any resistance to change. Consideration may be given to the specific drivers or incentives for administrative reform, for example, based on information from section 2.1. Other drivers could include the extent of political engagement in the reform process, whether the government articulates a compelling case for PFM reforms, the dissemination of the government vision in public documents such as national development programs, specific PFM strategy or action plans, and the provision of resources by government for PFM reforms. Cross reference to information on whether the reform process is progressing according to government plans can be included.
• Coordination across government is likely to contribute to a more prioritized and sequenced reform agenda, as existing capacities of different entities and levels of government are taken into account in planning and implementing reforms. In assessing the extent to which arrangements for coordination are in place, consideration may be given to the contribution of relevant entities, especially line ministries, which are associated in the reform decision making process. Consideration