4.3. PFM strengths and weaknesses
This subsection analyzes the extent to which the performance of the assessed PFM system appears to be supporting or affecting the overall achievement of three main fiscal and budgetary outcomes, i.e.
- aggregate fiscal discipline
- strategic allocation of resources and
- efficient use of resources for service delivery
It builds on the strengths and weaknesses identified in each PFM functional area (subsection 4.1 of the PEFA report) and the extent of effectiveness found for various internal control components (subsection 4.2 of the PEFA report). It also identifies the links between the performance of those sub-systems and the ability to deliver the three main outcomes. This subsection explains why the weaknesses identified in PFM performance of sub-systems would be a concern for the government by drawing into the analysis the specific country characteristics and policy objectives that are relevant to the three main outcomes.
The analysis is organized along the three main fiscal and budgetary outcomes. However, the assessment does not examine the extent to which the intended outcomes are achieved, for example, whether revenue measures and expenditures incurred through the budget have their desired effect on spurring economic growth, reducing poverty, or achieving other policy objectives. Rather it assesses the extent to which the PFM system constitutes an enabling factor for achieving the planned fiscal and budgetary outcomes.
This analysis integrates PFM system performance measured by the performance indicators, information on relevant economic country features, the government’s fiscal policy objectives, the structure of the public sector and characteristics of the PFM system (subsection 2.1 through 2.5 of the PEFA report), as well as any other factors which have an impact on PFM performance.
In sum, the analysis provides a story line, concluded by highlighting the three or four main weaknesses of the PFM system that appear to be the most important to address in order to support the government’s pursuit of its fiscal and budgetary objectives.
4.4 Performance changes since a previous assessment
This section introduces a dynamic perspective on PFM performance and its impact on achieving the three fiscal/budgetary outcomes. It is relevant only to successive assessments. Separate guidance is provided for previous assessments that used a different version of PEFA.
It draws on the description of change in performance included in the analysis of each indicator and the overview of performance changes provided section 3 and the summary table in Annex 1.
An assessment of how the changes since the previous assessment are likely to strengthen the ability to achieve of the three fiscal and budgetary outcomes and address the main weaknesses in this respect marks the conclusion of this subsection.
