Abstract:

Since 2010, there has been growing interest in understanding how reforms to public financial management (PFM) systems can support improvements in spending on basic services. This paper takes stock of the emerging agenda on PFM and service delivery by asking what’s new, what’s missing and what (should be) next?

What’s new? This emerging agenda has offered important new insights into the way PFM systems are operating, particularly in the health sector. It has raised the importance of understanding the trade-offs between the various objectives of PFM, and of the need to look beyond ministries of finance to understand how budgets are allocated and spent to support service delivery.

What’s missing? Debates often oversimplify the relationship between PFM and service delivery and consequently risk overstating what can be achieved solely by PFM reform to improve public spending. There is too little discussion of the links between the budget cycle and other public sector systems; limited attention is paid to the political factors that shape spending on basic services; and the continuing focus on models of good practice ignores the diversity of government systems for providing basic services.

What’s next? The next phase of the agenda should take a broader ‘public finance’ perspective that draws into the debate a wider set of professions, disciplines and country voices to explore the complex challenges involved in improving spending on public services. This will require greater examination of how institutions work in different countries, rather than relying on good practices drawn from just a handful of international experiences, and on drawing lessons from similar issues and systems across sectors.