PFM reform will not succeed without a solid technical foundation. However, by the same token, technically sound reform initiatives will not succeed without adhering to the following principles:

▪ Understanding the important role of nontechnical factors (political economy, institutional structure, technology, and capacity) in the design of PFM reform

▪ Understanding the need to involve broader stakeholder groups before and during the design, implementation, and evaluation of reform

▪ Recognizing the importance of ongoing monitoring, learning, feedback, and adjustment during implementation of reform as key to countering unforeseen events and constraints or leveraging opportunities


Good PFM performance is determined by the ability of PFM systems to support the effective and efficient achievement of policy objectives while maintaining macro-fiscal control, as measured by the three main fiscal and budgetary outcomes: aggregate fiscal discipline, strategic allocation of resources, and efficient service delivery.1

Volume IV provides a practical guide to support the design of PFM reform initiatives and action plans informed by a PEFA assessment. Its objective is to support the development and implementation of PFM reform initiatives that:

▪ Have the commitment and ownership of government

▪ Are based on clearly stated desired PFM outcomes

▪ Consider and address potential constraints

▪ Reflect government priorities and capacities

▪ Are sequenced in accordance with the desired policy outcomes, government priorities, and potential constraints (including nontechnical constraints) to reform.

1Aggregate fiscal discipline requires effective control of the total budget and management of fiscal risks. Strategic resource allocation involves budget planning and execution in line with government priorities aimed at achieving policy objectives. Efficient service delivery requires using budgeted revenues to achieve the best levels of public services with the available resources