Strengthening the Links between PFM and Service Delivery in Sectors
Public Financial Management (PFM) matters for service delivery, as it can enable implementation of governments’ key policy objectives for better service delivery (SD), and implementation of the Sustainable Development Goals (SDGs). PFM is only one of the many factors affecting the quality of public services delivered. Therefore, it has been difficult to isolate PFM effects from broader institutional and public sector management issues in the literature.
Assessing PFM performance at the SD level comes with significant challenges, due to variations in the level of centralization/decentralization of PFM functions to line ministries, different funding models, delivery arrangements, etc. Some countries allocate resources through the budget; some rely on insurance (e.g., health, employment); some countries channel resources from development partners; some use a mix of public and private finance, while others rely on local governments as delivery agents. As a result, there is no single PFM model of service delivery.
Strengthening the links between PFM and SD is an issue of increasing interest and importance. Several organizations are heavily engaged in research on the topic and in some cases provide technical assistance to member countries – including the World Bank (WB), the World Health Organization (WHO), the Gates Foundation, United Nations International Children's Emergency Fund (UNICEF), etc.
The Paper “Strengthening the Links between PFM and Service Delivery in Sectors” reveals the key messages from the two Global Virtual Roundtables organized by the PEFA Secretariat on May 25 and 27, 2021.