Joint response to the PEFA consultation: we need a stronger summary assessment

Philipp Krause, Sierd Hadley, Edward Hedger, Paolo de Renzio, Simon Gill, Matt Andrews
31 October 2014

The Public Expenditure and Financial Accountability (PEFA) indicators are undergoing the first major revision since their launch in 2005. These indicators cover the full budget cycle, from preparation to audit, and have become the most widely used measure of the quality of public finance management (PFM) systems. The PEFA framework is under the custody of the PEFA Secretariat and Steering Committee, comprising representatives from the World Bank, IMF, the European Commission, UK, Norway and France.

In a joint submission, PFM experts – including several ODI researchers – call on the PEFA Secretariat to do more to regulate the misuse of its indicator framework. All too often PEFA assessments are used formulaically to develop best-practice reform plans and justify overly ambitious interventions. In this way they contribute to superficial and ultimately unsuccessful PFM reforms, often changing how the system looks rather than how well it actually performs.

To help change this practice, the Secretariat should require assessments to offer a proper analysis of what PEFA scores mean in context, and which scores matter for reform. We believe that this will yield much greater long term benefits than scrutinising the specific indicators one by one.

The joint submission has been signed by:

Alta Fölscher, Principal Consultant, Mokoro Limited

Andrew Lawson, Director, Fiscus

Carole Pretorius, PFM consultant

Edward Hedger, Director, Centre for Aid and Public Expenditure, ODI

John Wiggins, PFM Consultant

Matt Andrews, Associate Professor of Public Policy, Harvard Kennedy School of Government

Mary Betley, PFM consultant

Neil Cole, Executive Secretary, Collaborative Africa Budget Reform Initiative (CABRI)

Paolo de Renzio, Research Associate, ODI

Philipp Krause, Head of Research, Budget Strengthening Initiative, ODI

Ranjan Ganguli, Financial Management Consultant

Sierd Hadley, Research Officer, ODI

Simon Gill, Project Director, Budget Strengthening Initiative, ODI

Stephen Lister, Principal Consultant, Mokoro Limited

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