Public financial management and accountability

This topic guide provides an introduction to Public Financial Management and Accountability (PFMA). PFMA encompasses government capacity to raise revenues, set spending priorities, allocate resources and to effectively manage the delivery of those resources. Effective public financial management is therefore central to governments' ability to deliver services to their citizens and to alleviate poverty. Public financial management can also be a key area of civil society and citizen involvement, whether in participatory budgeting or in expenditure monitoring.

PFMA is central to the concerns of donors, since good quality financial reporting is crucial for the effective implementation of development programmes and for accountability in the use of aid. Donors have therefore developed several diagnostic tools to measure a country’s effectiveness in PFMA and have begun to look at the social and political contexts of budgeting and financial management more generally. With more countries adopting poverty reduction strategies and with donors committing to providing more aid through budget support mechanisms, both have a shared interest in developing effective public financial management systems.

Users of this guide may also find it helpful to refer to on the GSDRC topic guide on aid instruments. In addition, the decentralisation topic guide has information on Fiscal decentralisation.

This guide was prepared by Nicholas Nisbett. The GSDRC appreciates the contributions of Simon De-Lay, International Development Department, University of Birmingham, and of Carlos Santiso and Gerard Howe, DFID.  Comments, questions or documents for consideration should be sent to Huma Haider

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