Public Financial Management Key to Overcoming the Financial Crisis

ICGFM surveys delegates at conferences to determine the state of public financial management. The surveys at the 23rd Annual ICGFM Conference presented interesting evidence of a renewed focus on public financial management reform because of the financial crisis. PFM professionals from over 40 countries participated in the Miami conference. The largest contingent of delegates came from Africa.

Most of the participants are public servants from emerging countries. These participants believe that public financial management reform has become more critical because of the crisis. The surveys suggest that many countries are facing similar challenges and can learn from each other. Most use the ICGFM and other PFM conferences to learn and execute good practices (63%). The lack of political will was noted in numerous polls as the first or second most important barrier for reform. Nevertheless, the majority of delegates come from countries with formal PFM reform programs (68%).

Icgfm Conference Polls

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Important Role of Public Financial Management Reform in the Financial Crisis
ICGFM delegates believe that government financial experts have an important role in identifying financial issues (92%). The delegates believe that the G20 can do more to overcome the financial crisis (70%).

The majority of countries represented at the conference have formal PFM reform programs (68%). Increased transparency (30%), improved budget expenditure (26%) and improved accountability (24%) were cited as major factors encouraging reform.

The most important resources needed by countries for PFM reform include employee training (32%) and automated financial management systems (24%). When asked to determine the most important type of technical assistance required, the implementation of an Integrated Financial Management Information System received twice as many votes (33%) as the number two choice, from 10 choices.

PEFA assessments have been carried out in many of the countries represented at the conference. Most respondents (72%) believe that PEFA assessments can improve PFM reform.

International Changes Required
The emphasis should be on green growth (70%) according to the majority of delegates at the conference. Somewhat more than half believe that the IMF and World Bank need to undergo reform as well as countries (57%). Many believe that there should be an international regulator (56%), but most believe that national governments will be reluctant to allow this (70%).

Common Problems and Solutions
ICGFM delegates believe that the financial crisis will continue for two years or more (77%). Most indicated that their country faces similar challenges as the United States (72%). Most have a local banking crisis (59%) that is reducing domestic financing for infrastructure (68%). Most countries represented (60%) have developed a stimulus program.

Public Private Partnerships were discussed as a solution to find more financing (40%), although many (23%) thought that PPPs are created for political reasons.

Some countries are seeing a reduction in donor funds since the financial crisis (39%). Most agree that there is poor aid coordination (68%).

Country legislative branches require more budget expertise (60%) according to delegates.

Transparency and Accountability
Transparency and accountability issues were discussed. Most delegates believe that their government does not adequately communicate with the local media (67%). More believe that the local media does not adequately report local economic events (74%).

More than half of delegates say that governments do not effectively inform the public about public spending (55%). This lack of effectiveness is attributed, most often, to a lack of political will (62%). Yet, transparency and accountability represents 2 of the 3 leading motivators for PFM reform, according to delegates.