The Practical Steps for Initiating a Successful PFM/IC Reform

Given the nature of the PFM/IC reform and the radical managerial changes that it requires, before embarking on the reform a country ought to be clear about the implications of the reform and consequently the impacts that it will have. A primary objective of PFM/IC is to facilitate the achievement of a government’s objectives and to improve the quality of public expenditure, that is enhance public value. It also has other benefits if properly implemented, including enhancing transparency and accountability. Change though has to occur and that change will be quite fundamental. All change has repercussions which may be unacceptable to some and therefore may be resisted. PFM/IC, if implemented properly, changes power structures and such changes can be an important source of resistance. Therefore an important first step before embarking upon the reform should be to carry out a series of tests to assess whether the reform is appropriate at this time, and whether the reform is possible given the scope of the changes that will be required. This chapter sets out those tests. Those advocating the reform should also recognise that this is not a ‘quick fix’ type of reform and that is the reason why wide support is essential.