In post decentralization Indonesia, the responsibility to deliver services falls largely at the hands of the local government. So, too, does the management of public money. Local governments currently manage about half of Indonesia’s public finances. Transfers to the regions increased by more than threefold in real terms since the onset of decentralization.
However, with few improvements in health and education indicators, the results of these increased transfers are not encouraging.
public finance management
The invitation for new SAFE Trust Fund applications is now open until 7 March 2016
What is SAFE?
Photo credit: Jbdodane
When Governor Adams Oshiomhole took office in Edo State, Nigeria, in November 2008, it was on the back of a protracted battle to retrieve his mandate through the electoral courts and through fractious politicking by labour and civil society groups.
After a scale of violence in the summer of 2009, across the oil-rich Niger Delta region, oilfields shut down and 200,000 people were displaced.
The public expected that Oshiomhole would deliver on his promise of “a citizens' government," but “quick wins” would be a challenge. After years of neglect, inaction and patronage politics, the state’s administration was untrusted, mired in dysfunction, fiscal uncertainty and debt.
By 2012, the governor had returned for a second term with an increased majority in an election widely touted as relatively free and fair. No small part of this success is due to signature efforts in ramping up capital spending, especially around roads and civil infrastructure.
Building trust between citizens and governments is crucial to successfully address, in a collaborative and engaged manner, many of the issues that affect the everyday lives of citizens, like corruption, government inefficiency and lack of service delivery.
Recent data, however, has shown that .
In fact the 2015 Edelman Trust Barometer stated that the number of “truster countries” are at an all-time low, reflecting a general decline of people’s trust in institutions of governments, NGOs, business and media.
Two decades ago, when I interned at the French Embassy’s economic mission in Moscow, I was asked to look into bankruptcy laws and their implementation. The Embassy wanted to advise French companies on how to get business done in the new Russia—we are talking mid-1990s—when there were no reliable guidebooks on how to navigate the transition to a market economy.
So I was asked to read recently approved, Western-inspired bankruptcy laws, given a phone book and asked to find two dozen companies around Moscow. I was to meet with their CEOs and find out how insolvency and bankruptcy procedures actually worked in practice.
I came away with one key finding: In fact, the distortions brought about by hyperinflation, bartering and the transition from Soviet to Western accounting meant the liquidity and solvency ratios that underpinned the institution of bankruptcy had essentially become meaningless.
In the last ten years, China’s public procurement market has grown tenfold reaching an estimated $270 billion in 2013. Such significant growth has made the improvement of the public procurement system an imperative for the Chinese Government.
In the context of China’s commitment to enhance its procurement system, it is also seeking to accede the World Trade Organization’s Government Procurement Agreement (WTO GPA). As China looks to necessary procurement reforms, the World Bank has partnered with the Ministry of Finance to support these efforts, which have the potential to have transformational impact.
Myanmar is embarking on a triple transition: from an authoritarian military system to democratic governance; from a centrally directed economy to market oriented reforms; and from several decades of conflict to peace.
Since 2011, leaving behind decades of isolation, fragility and conflict, a reformist government has steered unprecedented political and economic reforms intended to open Myanmar to the global economy, boost growth, and reduce poverty.
As part of its economic reforms, and has taken a series of actions including the issuance of two Presidential Instructions and two directives on Public Procurement to establish the basis for an open and competitive public procurement system.
Reforms of public financial management (PFM) systems – pursued by many countries and supported by development partners -- have attracted quite a bit of debate and analysis in recent years. Significant variation in progress achieved and lack of broad-based and sustained improvements in metrics of PFM performance, as reflected in CPIA ratings and PEFA scores, suggest to many observers that outcomes have not matched reform efforts and expectations.
This has led to a search for better solutions in two directions. First, grounding reform efforts in stronger problem analysis, and based on this, developing a better fit of reform approaches to specific country circumstances. Second, seeking a better understanding of non-technical aspects and, in particular, the role of political economy drivers in influencing which PFM reforms are pursued where and with what degree of success. ‘Doing things differently’ along these lines sounds promising – but reformers and development partners may well question whether we know enough to pursue such alternative approaches on a wider scale.
The SAFE Trust Fund application (Word document) is now open until 27 February 2015.
What is SAFE?
SAFE means Strengthening Accountability and the Fiduciary Environment. It is a Trust Fund group administered by the World Bank and established by the Swiss State Secretariat for Economic Affairs (SECO) and the European Commission with the aim of improving public financial management in the Europe and Central Asia region. This Trust Fund group provides support for activities to assess public financial management (PFM) performance, identify and implement actions to achieve improvements and share knowledge and good practices across countries in the region.
- public finance management
- public finance
- world bank
- Public Sector and Governance
- Private Sector Development
- Financial Sector
- Europe and Central Asia
- Macedonia, former Yugoslav Republic of
- Kyrgyz Republic
- Bosnia and Herzegovina
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On a hot dry day in June, a woman in her early 40s is getting ready for journey to a nearby town. She is excited even though she will walk more than three hours on foot—she is going to meet with a government loan officer to try to get the money she needs to buy fertilizer and other supplies for her farm. She needs to grow and sell enough crops to pay for her son to continue school for the next year.
She gets a mug of water from a bucket to put out the open wood fire that she uses to cook meals for her family. Then she pulls her slippers from the thatched roof and leaves her hut.
As she walks, she feels hopeful. She believes this loan will change her family’s future. For the past 6 months, she has made numerous trips to this office because the government official had told her that before her application could be considered, the paperwork must be accurate and complete.