1. Ivor Beazley, World Bank
PFM Strengthened Approach and PFM Measurement Framework: Operational Issues
Ivor Beazley, World Bank
January 2007

2. Overview
Applying the Strengthened Approach and PFM Measurement Framework in country operational work
1. Why are we doing this?
2. Analytic Work Packaging
3. PFM Measurement framework application – Key issues and considerations

3. Why are we doing this?

4. Why are we doing this?
To help develop country capacity and improve PFM performance
PFM Performance Assessment and other analytic/diagnostic work continues to be important…
… but this is not the principal focus of our engagement
judge success by the extent to which we have helped the country to advance its PFM performance and reforms
requires a change in mindset
Key word: “Implementation”

5. Supporting PFM Reforms : Crucial elements
Country ownership and commitment is the most crucial element
Country-specificity : tailor the agenda to each country’s needs and circumstances at that point in time
prioritization and sequencing of reforms
multi-year perspective
in line with country’s agenda and its choices
realism – factor in country’s capacity and current performance level
political economy and institutional dimensions
Appropriate entry points
need to build awareness, foster ownership, and generate a momentum for changes.
the traditional “analytic work – strategy – action plan – actions” sequence does not always work.
Use the range of instruments
policy dialogue, analytic work, technical assistance, investment lending, IDF grants, development policy lending, training, cofinancing

6. PFM: A Strengthened Approach
A country-led and owned PFM reform agenda
A donor coordinated program of support – coordinated, coherent, multi-year program of PFM work that supports and is aligned with the government’s PFM strategy
A shared information pool – a common framework and information set for measuring and monitoring results over time
and
www1.worldbank.org/publicsector/pe/StrengthenedApproach/

7. Operationalizing in the World Bank – Some Key Messages
Developing country capacity and improving PFM performance is the principal focus of the Bank’s PFM work.
Base PFM analytic work on country-specific circumstances and requirements
The PFM indicators and performance measurement framework are strongly encouraged.
Collaborate and coordinated closely with other donors working to support the country’s reform program
Ensure that PFM issues and work programs are well reflected in Country Assistance Strategy and Annual Country Work Programs
One “Country PFM team” within the World Bank

8. Analytic Work Packaging

9. More responsive PFM analytic work
PFM analytic work based on country-specific circumstances and requirements
In determining scope and nature of PFM analytic work, take into account: (i) needs of the country’s reform program, and our fiduciary needs; (ii) available knowledge from other donors and country, and work already done by the Bank
Mandatory requirement to prepare CFAAs, CPARs, PERs every few years removed.

10. What happens to current products (CFAAs, CPARs, PEMFAR, CIFA, etc)?
May continue as needed but not mandatory any more.
Range of possible products
e.g., (i) “PFM Performance Report”; or (ii) “just-in-time” policy notes on specific aspects of PFM system; or (iii) some of the current products (CFAA, CPAR, PER) or an integrated form of all of these
Since we have detailed fairly recent CFAAs and CPARs, the expectation is that numbers will be significantly lower than in recent years
Integrated products covering the entire PFM cycle will increasingly be the norm
The use of the PFM indicators are strongly encouraged for incorporation into PFM analytic work.
PFM Performance Report and/or indicators will help to serve as a “light update” of more detailed products.
Detailed products may be done over a longer-time time horizon.

11. Considerations in Applying the PFM Measurement Framework

12. Important Operational Considerations
Options for packaging PEFA assessments with other and sequencing issues
standalone PFM-PR
“dual products”
integration of the indicators into other products
extent of any recommendations in any component of such a package
Role of various parties in conducting the assessments
government self-assessments with external validation,
assessments done by external partners with government collaboration
Financial and personnel resources required
The time for finalization of reports (taking into account the need to ensure client understanding and ownership)
Internal QA arrangements
Report disclosure arrangements

13. Important Operational Considerations (cont’d)
No standard answers to these questions:
Needs to be decided at individual country level based on country circumstances
All stakeholders need to consider and agree on these issues, an early stage in the planning process
“Donor Reference Group” in collaboration with government

14. Collaborative process
Establish purpose and objectives of the assessment – to define stakeholders (internal and external) support the dialogue on the PFM reform process between the donors and the government and to contribute effectively to donor
Identify the expertise required and the stakeholders within the Bank.
Define the external stakeholders and consultation processes - to allow wide recognition of the assessment while allowing a cost-effective assessment process.
Agree a common timetable for the assessment– to meet both the needs of the group as a whole and avoid operational requirements of individual donors driving the repetition of the assessment. Factor in Bank requirements.

15. Updating the assessment
Frequency discussed by Franck
Interim monitoring can be built in to other processes
DPL
TA/IDF supervision
CPIA ratings
Focus monitoring of progress on the implementation of reform measures.
Yearly monitoring of a selected number of indicators (e.g. focus on the indicators that are most likely to be impacted by on-going reforms).

16. PFM Indicators – Need to Ensure Quality
Quality of indicator scoring is very important
Correct scoring of indicators in line with performance and scoring criteria
Presentation of Evidence in the report

17. Concluding thoughts …
Need for managerial attention and “push”, and leadership of senior staff
much of the Strengthened Approach is not new or novel…
… the major change required is in our own behaviors

18. Q&A
and Discussion