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| Public Expenditure and Financial Accountability (PEFA) | |
|---|---|
| Name | Public Expenditure and Financial Accountability (PEFA) |
| Type | Multilateral assessment framework |
| Founded | 2001 |
| Founders | World Bank; International Monetary Fund; Organisation for Economic Co-operation and Development |
| Headquarters | Geneva |
| Area served | International |
Public Expenditure and Financial Accountability (PEFA) PEFA is a standardized assessment framework used to evaluate public financial management systems across countries. It provides a common language and comparative metrics for donors, World Bank, International Monetary Fund, Organisation for Economic Co-operation and Development, African Development Bank, and Asian Development Bank to inform IMF programs, World Bank lending, EU assistance, and bilateral grants. PEFA assessments support reforms connected to institutions such as the HM Treasury, United States Department of the Treasury, Government of India, and Government of South Africa by benchmarking against international practices like those in the United Kingdom Public Accounts Committee, European Court of Auditors, and United States Government Accountability Office.
PEFA offers a harmonized framework for appraising public financial management systems used by stakeholders including the World Bank Group, International Monetary Fund, Asian Development Bank, African Development Bank, European Commission, United Nations Development Programme, and bilateral partners like United States Agency for International Development, Department for International Development (UK), and Agence française de développement. Assessments yield diagnostic reports that inform policy dialogue among actors such as the Ministry of Finance (Japan), Ministry of Finance (Brazil), Office of the Auditor General (Canada), and audit institutions like the Comptroller and Auditor General (India). PEFA’s indicators align with standards from institutions like the International Organization of Supreme Audit Institutions, International Monetary Fund Fiscal Affairs Department, and the Organisation for Economic Co-operation and Development Development Assistance Committee.
The PEFA framework comprises indicators that measure dimensions of public financial management used by analysts from the World Bank Treasury, IMF Fiscal Affairs Department, OECD Development Centre, and researchers at universities such as London School of Economics, Harvard Kennedy School, University of Oxford, and Stanford University. Indicators cover areas comparable to criteria in the Public Expenditure Review and tools employed by the International Budget Partnership and Global Initiative for Fiscal Transparency. The methodology specifies data collection, scoring, and aggregation procedures analogous to approaches used by the Global Financial Integrity and the Transparency International assessments; it references practices from the UK Public Sector Internal Audit Standards and the International Public Sector Accounting Standards Board.
PEFA assessments are typically commissioned by ministries or partners like the DG NEAR, Asian Development Bank country operations, or Inter-American Development Bank missions and executed by teams comprising experts from institutions such as the World Bank Institute, IMF Institute, and consulting firms active in public financial management. The process involves evidence collection from bodies like the Ministry of Finance (France), central banks including the European Central Bank, national audit offices like the National Audit Office (UK), and legislative budget committees akin to the United States Congress Budget Committee. Implementation support often intersects with programs run by the United Nations Development Programme, Bill & Melinda Gates Foundation-funded initiatives, and capacity building by regional entities such as the African Union and ASEAN Secretariat.
PEFA reports inform policy dialogue, reform design, and resource allocation decisions by entities like the World Bank Board of Executive Directors, IMF Executive Board, European Investment Bank, and donor consortia including HIPC partners. Governments such as the Republic of Kenya, Republic of Philippines, Republic of Indonesia, and Federative Republic of Brazil have used PEFA findings to prioritize reforms in areas overseen by institutions like the Treasury Board of Canada Secretariat, Ministry of Finance (Italy), and central procurement agencies. Multilateral projects by the World Bank Country Partnership Framework and IMF Program often reference PEFA-derived baselines for monitoring progress alongside indicators from the Sustainable Development Goals reporting processes.
Critiques of PEFA have been raised by academics at University of Cambridge, London School of Economics, and policy groups such as the Overseas Development Institute and International Budget Partnership, focusing on issues also debated in contexts like the Washington Consensus and Paris Declaration on Aid Effectiveness. Common concerns address comparability problems noted by analysts at the European Bank for Reconstruction and Development, potential bias towards capacity in line ministries like Ministry of Finance (Germany), and limitations highlighted in studies by the Brookings Institution and Center for Global Development. Other critiques point to challenges similar to those discussed around the IMF conditionality and the World Bank structural adjustment era, including data availability constraints and the risk of emphasizing form over fiscal outcomes noted by the United Nations Economic Commission for Africa.
PEFA was initiated in 2001 through a partnership among the World Bank, International Monetary Fund, and Organisation for Economic Co-operation and Development, with governance later broadened to include development partners such as the European Commission, United Nations Development Programme, African Development Bank, Asian Development Bank, and Inter-American Development Bank. Its governance structure involves steering committees and technical working groups drawing experts from institutions like the International Monetary Fund Fiscal Affairs Department, World Bank Governance Global Practice, and research bodies at the University of Manchester and Columbia University. The evolution of PEFA mirrors international initiatives such as the Accra Agenda for Action and the Busan Partnership for Effective Development Co-operation in efforts to harmonize assessment tools across multilateral actors.