Globalization, Governance and Public Financial Management
Public Financial Management Reform Needed for Economic Recovery
The current financial crisis is global. The consequences could be dire. The theme of the 23rd Annual ICGFM Conference in Miami, May 18 to 23, was “Country Perspective on Public Financial Management during Global Economic Uncertainty. “ There was certainty by the end of the conference: a common solution for all countries is renewed public financial management reform.
The opening keynote speech by former U.S. Government Comptroller General, David M. Walker, set the stage. Mr. Walker described the systemic financial governance problems in the American government. The Wednesday keynote presentation by Kevin Page, the Parliament Budget Officer in Canada, described the challenges in legislative budget oversight. Speakers from developed countries were frank about oversight, accountability and transparency problems in their countries. This was not an event where emerging country representatives were patronized or lectured by experts.
By the time the conference was over, the theme appeared to be “The Financial Crisis, we are all in it together and good governance can pull us out.” Speaker after speaker concluded that the current economic crisis has revealed government governance gaps. This realization emphasizes the need for robust public financial management reform in all countries. The case study on procurement reform in Chile by Jorge Claro, President and CEO of the International Procurement Institute, highlighted the many political challenges for PFM reform.
The conference was not without controversy. A debate was sparked by Andy Wynne, editor of the International Journal on Governmental Financial Management, and Filip Drapak of the World Bank, about the utility of Public Private Partnerships (PPP). Mr. Drapak believes that the financial crisis has changed the PPP market. Mr. Wynne believes that PPPs do not provide value for money.
Representatives from the Government of Honduras objected to their classification by the Open Budget Index. This atmosphere created open discussions and sharing of good practices. The Public Expenditure Financial Accountability (PEFA) workshop was described as having high value by ICGFM participants.