Table 2.7 Potential constraints to PFM reform
| Constraint | Manifestation | Potential impact | Risk (high, medium, low, or variable) | Mitigation strategy |
|---|---|---|---|---|
| Political environment | Senior politicians or senior bureaucrats are not willing to support reform implementation. |
Critical: Ability to implement effectively or to embed reform is lacking. Critical: Key stakeholders either do not cooperate or resist reform. Moderate: Adherence to new processes and procedures |
High: Few reforms will be successful without the commitment of senior levels of government. |
Seek the endorsement of political leadership Raise awareness of the benefits of reform If endorsement is not achieved, consider deferring reform and pursuing other priorities that are endorsed and supported by government |
| Government and development partner engagement | Reform design is not internally driven. | Critical: Reform design is undertaken by development partners and reflects their priorities rather than those of the government. |
Variable:The risk depends on the extent of commitment and engagement of the government: the less engagement, the higher the risk that development partners will engage in technical assistance that does not reflect the government’s priorities |
Tailor reform initiatives to the specific administrative and political circumstances of a country |
| Technical capacity | Staff lack specific competencies to develop or support implementation. | Significant: Lack of capacity has both short- and longer-term impact on the ability to implement reform | High: An understanding of the reform and its application is essential. | Undertake capacity development |
| Institutional environment | Institutions or organizational structures are not sufficient or appropriate for supporting reform implementation. | Significant: Supervision and workflow management and monitoring are inadequate. | Moderate: It may be possible to establish alternative management and workflow arrangements. | Undertake organizational restructuring to support the reform initiative |
| Capacity of information and communication technology systems | The administration lacks system hardware and software to support the reform initiative. | Moderate: Some reforms require more advanced systems and software (for example, financial management information systems). | Moderate: Manual processes and procedures can be used pending the acquisition of software and systems. | Seek development partner support and technical assistance |
