Lessons from Public Financial Management (PFM) Reforms After a Financial Crisis

Abstract

This Helpdesk report reviews the literature from academic, policy, and knowledge institution sources on the different forms of Public Finance Management (PFM) reforms introduced in developing countries after a financial crisis. It focuses on financial crises which mostly affected resource-endowed developing countries such as the Asian Financial Crisis (1997-1998), the Global Financial Crisis (2007-2008) and the commodity price crisis in 2014-2015. It describes the kinds of PFM reforms instituted in developing countries and the lessons learned from them as mentioned in Wendling et al. (2020), separating reforms in the design, implementation, and oversight phases of the PFM cycle. The report also provides an overview of the general lessons learned from instituting PFM reforms as can be found in the literature on PFM reforms. Altogether, this report concludes that PFM reforms have indeed played a notable role in establishing effective, efficient, and transparent fiscal stimulus packages (e.g. cash transfers, public work programmes) measures in the course of and after a financial crisis.