Building more capable bureaucracies

Understanding what makes finance ministries effective, and how donors can help governments manage public spending better.
Provincial Health Services Department , Kegalle, Sri Lanka, 2009. Photo: Simone D. McCourtie/World Bank, CC BY-NC-ND 2.0

Budgeting lies at the very heart of the state. It communicates government policy, shapes the economy and public services, and provides an anchor for democratic accountability.

International donors provide significant technical assistance to reform budget institutions in low- and middle-income countries. However, critics claim that the reforms pursued by donors rely too heavily on a small menu of good practices, drawn from the experiences of a few advanced economies.

The result is often a gap between the formal laws and how well these are being followed, at a time when public spending is becoming a larger share of funding for services.

ODI’s research is responding to this challenge by building up knowledge and understanding of how reforms to fiscal institutions can be better tailored to context. We draw extensively from our own technical advisory work, with a focus on fragile and low-income countries.

Key aims:

  • Influencing the good practices and popular diagnostic frameworks for public financial management;
  • Supporting countries to find ‘better fit’ reforms by building a broader menu of options for officials to draw from;
  • Building an understanding around the similarities and differences of finance ministries in different countries;
  • Documenting lessons from ODI’s own technical advisory work with finance ministries on budgeting and fiscal decentralisation.