Identify ways in which to measure the impact of PFM reforms on service delivery performance.
At present there are no reliable, accurate tools that isolate and assess the impact of Public Financial Management (PFM) reforms on service delivery performance. This is due to the complex and indirect relationship between PFM systems and service delivery. A number of factors intervene in the relationship including local incentives and funding channelled outside of PFM systems. Evidence suggests that in contexts where there have been improvements in service delivery this has not correlated with PFM improvements, suggesting they were instead driven by factors other than PFM improvements.
The literature suggests that good PFM systems are a necessary but not sufficient precondition for good service delivery performance, whereas poor PFM systems are sufficient to result in poor service delivery performance. Even where PFM systems are strong a number of factors can result in poor performance. For example, irregular salary payments can result in worker absenteeism whereas regular salary payments may not be sufficient to ensure presence at work where there are other factors that discourage attendance. PFM reforms are thus only likely to impact service delivery in a limited number of cases where PFM can address specific governance constraints or blockages that undermine performance. This would relate to a certain number of service sectors, such as labour-intensive sectors, where the service delivery mechanism is dependent on PFM systems, for example to ensure regular payment of salaries and wages.
There have been no significant attempts to isolate and assess the direct impact of PFM reforms on service delivery. Consequently, the second part of this report highlights some of the most prominent public administration assessment tools, from which it may be possible to identify relevant indicators that assess and monitor changes in the quality of PFM systems and service delivery performance. In a context where a clear causal link has been established between a set of PFM reforms and performance improvements in a specific sector, it may be possible to construct a type of assessment that illustrates the impact of PFM reforms on service delivery performance.
Rao, S. Measuring the impact of PFM reforms on service delivery (GSDRC Helpdesk Research Report 946). Governance and Social Development Resource Centre, University of Birmingham, Birmingham, UK (2013) 9 pp.