IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/6297.html
   My bibliography  Save this paper

Capacity constraints and public financial management in small Pacific Island countries

Author

Listed:
  • Haque, Tobias A.
  • Knight, David S.
  • Jayasuriya, Dinuk S.

Abstract

Drawing on Public Expenditure and Financial Accountability assessment scores from 118 countries, this paper provides the first comparative analysis of public financial management performance in small Pacific Island Countries (PICs). It applies a Tobit regression model across the full cross-country sample of Public Expenditure and Financial Accountability scores and country variables to identify potential causes for the observed underperformance of Pacific Island countries relative to other countries of similar income. First, the analysis finds small population size to be negatively correlated with Public Expenditure and Financial Accountability scores, with the"population penalty"faced by small Pacific Island countries sufficient to explain observed underperformance. Second, through application of a new capacity index of Public Expenditure and Financial Accountability dimensions, it finds strong evidence in support of the hypothesis that small population size impacts scores through the imposition of capacity constraints: with a limited pool of human capital, small countries face severe and permanent challenges in accessing an adequate range and depth of technical skills to fulfill all functions assessed through the Public Expenditure and Financial Accountability framework. These findings suggest that approaches to strengthening public financial management in small Pacific Island countries should involve: i) careful prioritization of public financial management capacity toward areas that represent binding constraints to development; ii) adoption of public financial management systems that can function within inherent and binding capacity constraints, rather than wholesale adoption of"best practice"imported systems; and iii) consideration of options for accessing external capacity to support public financial management systems on a long-term basis, from regional agencies, the private sector, or donors.

Suggested Citation

  • Haque, Tobias A. & Knight, David S. & Jayasuriya, Dinuk S., 2012. "Capacity constraints and public financial management in small Pacific Island countries," Policy Research Working Paper Series 6297, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6297
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/03/11/000158349_20130311162423/Rendered/PDF/wps6297.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert H. Bates, 2006. "Institutions and Development," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(1), pages 10-61, April.
    2. Easterly, William & Kraay, Aart, 2000. "Small States, Small Problems? Income, Growth, and Volatility in Small States," World Development, Elsevier, vol. 28(11), pages 2013-2027, November.
    3. Alan Winters, L. & Martins, Pedro M. G., 2004. "When comparative advantage is not enough: business costs in small remote economies," World Trade Review, Cambridge University Press, vol. 3(3), pages 347-383, November.
    4. Matt Andrews, 2010. "How Far Have Public Financial Management Reforms Come in Africa?," CID Working Papers 208, Center for International Development at Harvard University.
    5. Bates, Robert H., 2006. "Institutions and Development," Scholarly Articles 37093808, Harvard Kennedy School of Government.
    6. Andrews, Matthew R., 2009. "Isomorphism and the Limits to African Public Financial Management Reform," Scholarly Articles 4415942, Harvard Kennedy School of Government.
    7. Read, Robert, 2004. "The Implications of Increasing Globalization and Regionalism for the Economic Growth of Small Island States," World Development, Elsevier, vol. 32(2), pages 365-378, February.
    8. Andrews, Matt, 2010. "How Far Have Public Financial Management Reforms Come in Africa?," Working Paper Series rwp10-018, Harvard University, John F. Kennedy School of Government.
    9. Andrews, Matthew R., 2010. "How Far Have Public Financial Management Reforms Come in Africa?," Scholarly Articles 4448885, Harvard Kennedy School of Government.
    10. Andrews, Matt, 2009. "Isomorphism and the Limits to African Public Financial Management Reform," Working Paper Series rwp09-012, Harvard University, John F. Kennedy School of Government.
    11. Srinivasan, T N, 1986. "The Costs and Benefits of Being a Small, Remote, Island, Landlocked, or Ministate Economy," The World Bank Research Observer, World Bank Group, vol. 1(2), pages 205-218, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matthew Dornan & Tess Newton Cain, 2014. "Regional Service Delivery among Pacific Island Countries: An Assessment," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(3), pages 541-560, September.
    2. Devendra Kumar Jain & Rup Singh & Henali Kumar & Nikeel Kumar & Arvind Patel, 2022. "Why does currency denomination in external liabilities of small island developing states matter? Evidence from Fiji," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 9(3), pages 447-464, September.
    3. Devendra Kumar Jain & Asif Chida & R. D. Pathak & Raghbendra Jha & Stephanie Russell, 2022. "Climate risk insurance in Pacific Small Island Developing States: possibilities, challenges and vulnerabilities—a comprehensive review," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 27(3), pages 1-21, March.
    4. Ezequiel Cabezon & Ms. Patrizia Tumbarello & Mr. Yiqun Wu, 2015. "Strengthening Fiscal Frameworks and Improving the Spending Mix in Small States," IMF Working Papers 2015/124, International Monetary Fund.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fritz, Verena & Sweet, Stephanie & Verhoeven, Marijn, 2014. "Strengthening public financial management : exploring drivers and effects," Policy Research Working Paper Series 7084, The World Bank.
    2. Yongzheng Yang & Hong Chen & Shiu raj Singh & Baljeet Singh, 2013. "The Pacific Speed of Growth: How Fast Can It Be and What Determines It?," IMF Working Papers 2013/104, International Monetary Fund.
    3. Fritz, Verena & Hedger, Edward & Lopes, Ana Paula Fialho, 2011. "Strengthening Public Financial Management in Postconflict Countries," World Bank - Economic Premise, The World Bank, issue 54, pages 1-7, April.
    4. Lassou, Philippe Jacques Codjo & Hopper, Trevor, 2016. "Government accounting reform in an ex-French African colony: The political economy of neocolonialism," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 36(C), pages 39-57.
    5. Rinaldo Brau & Alessandro Lanza & Francesco Pigliaru, 2007. "How Fast are Small Tourism Countries Growing? Evidence from the Data for 1980–2003," Tourism Economics, , vol. 13(4), pages 603-613, December.
    6. Srivastava, Vivek & Larizza, Marco, 2012. "Working with the grain for reforming the public service : a live example from Sierra Leone," Policy Research Working Paper Series 6152, The World Bank.
    7. Andrews, Matt, 2015. "Has Sweden Injected Realism into Public Financial Management Reforms in Partner Countries?," Working Paper Series 15-063, Harvard University, John F. Kennedy School of Government.
    8. Matt Andrews & Tim McNaught & Salimah Samji, 2018. "Opening Adaptation Windows onto Public Financial Management Reform Gaps in Mozambique," CID Working Papers 341, Center for International Development at Harvard University.
    9. Verena Fritz & Edward Hedger & Ana Paula Fialho Lopes, 2011. "Strengthening Public Financial Management in Postconflict Countries," World Bank Publications - Reports 10097, The World Bank Group.
    10. Tavakoli, Heidi & Cessay, Ismaila & Cole, Winston, 2014. "Success when stars align: Public financial management reforms in Sierra Leone," WIDER Working Paper Series 081, World Institute for Development Economic Research (UNU-WIDER).
    11. Matt Andrews, 2013. "Explaining Positive Deviance in Public Sector Reforms in Development," CID Working Papers 267, Center for International Development at Harvard University.
    12. Lledó, Victor & Poplawski-Ribeiro, Marcos, 2013. "Fiscal Policy Implementation in Sub-Saharan Africa," World Development, Elsevier, vol. 46(C), pages 79-91.
    13. Matt Andrews, 2013. "Explaining Positive Deviance in Public Sector Reforms in Development," WIDER Working Paper Series wp-2013-117, World Institute for Development Economic Research (UNU-WIDER).
    14. Jayasinghe, Kelum & Adhikari, Pawan & Soobaroyen, Teerooven & Wynne, Andy & Malagila, John & Abdurafiu, Noah, 2021. "Government accounting reforms in Sub-Saharan African countries and the selective ignorance of the epistemic community: A competing logics perspective," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 78(C).
    15. Era Dabla-Norris & Jim Brumby & Annette Kyobe & Zac Mills & Chris Papageorgiou, 2012. "Investing in public investment: an index of public investment efficiency," Journal of Economic Growth, Springer, vol. 17(3), pages 235-266, September.
    16. Boräng, Frida & Jagers, Sverker C. & Povitkina, Marina, 2016. "Political determinants of electricity provision in small island developing states," Energy Policy, Elsevier, vol. 98(C), pages 725-734.
    17. Andrews, Matt, 2013. "Explaining Positive Deviance in Public Sector Reforms in Development," WIDER Working Paper Series 117, World Institute for Development Economic Research (UNU-WIDER).
    18. Badru Bukenya & Sam Hickey, 2019. "The shifting fortunes of the economic technocracy in Uganda: Caught between state-building and regime survival?," Global Development Institute Working Paper Series esid-121-19, GDI, The University of Manchester.
    19. Andrews, Matt, 2014. "Why Distributed End Users Often Limit Public Financial Management Reform Success," Working Paper Series rwp14-026, Harvard University, John F. Kennedy School of Government.
    20. Matt Andrews, 2015. "Has Sweden Injected Realism into Public Financial Management Reforms in Partner Countries?," CID Working Papers 303, Center for International Development at Harvard University.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:6297. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.