Alternative Paths to Public Financial Management and Public Sector Reform

163 Pages·2017·2.25 MB·English

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INTERNATIONAL DEVELOPMENT IN FOCUS
Alternative Paths
to Public Financial
Management and
Public Sector Reform
Experiences from East Asia
Sokbunthoeun So, Michael Woolcock, Leah April,
Caroline Hughes, and Nicola Smithers, Editors
© 2018 International Bank for Reconstruction and Development / The World Bank
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Attribution—Please cite the work as follows: So, Sokbunthoeun, Michael Woolcock, Leah April, Caroline
Hughes, and Nicola Smithers. 2018. Alternative Paths to Public Financial Management and Public Sector
Reform: Experiences from East Asia. International Development in Focus. Washington, DC: World Bank.
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ISBN: 978-1-4648-1316-0
DOI: 10.1596/978-1-4648-1316-0
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Contents
Acknowledgments vii
List of Contributors ix
Abbreviations xi
CHAPTER 1: I ntroduction 1
Arraying “adaptive” approaches to public sector reform: a
framework 4
East asian experiences with public financial management and public
sector reform: an overview 8
Implications for reformers and development practitioners 11
Conclusion 16
Notes 16
Bibliography 17
CHAPTER 2: M alaysia 19
Introduction 19
Performance based budgeting 20
Public service delivery and public service transformation 28
Conclusion and lesson learned 36
Notes 37
Bibliography 38
CHAPTER 3: I ndonesia 41
Introduction 41
Public financial management reform 42
Civil service reform 48
Conclusion 56
Bibliography 57
CHAPTER 4: T hailand 59
Introduction 59
Strategic performance based budgeting system 60
Government fiscal management information system 63
Decentralization 65
Reflections on the approaches 69
Conclusion 69
Note 70
Bibliography 70
 iii
iv | ALTERNATIvE PATHS TO PUBLIC FINANCIAL MANAGEMENT AND PUBLIC SECTOR REFORM
CHAPTER 5: C ambodia 73
Introduction 73
Revenue mobilization 75
Improving budget execution through implementation of the financial
management information system 79
Program budgeting 83
Conclusion 86
Notes 87
Bibliography 87
CHAPTER 6: V ietnam 89
Introduction 89
Fiscal decentralization 90
Integrated treasury and budget management information
system 93
Public investment management 95
Approaches to reforms 99
Conclusion and lesson learned 100
Notes 102
Bibliography 102
CHAPTER 7: M yanmar 103
Introduction 103
Strengthening tax administration 105
Budget formulation process 108
Challenges, approaches to reform, and key lessons learned 111
Conclusion 114
Bibliography 114
CHAPTER 8: T he Lao People’s Democratic Republic 115
Introduction 115
Reform intervention 116
Results of first generation PFM reforms 118
The PFM reform process and approach 119
Conclusion and lessons learned 123
Notes 125
Bibliography 125
CHAPTER 9: P apua New Guinea 127
Introduction 127
Public financial management 127
Decentralization and subnational governance reform 133
Approach to reform: best practice versus best fit? 137
Summary and conclusions: using necessary “best fit” innovation to
achieve “best practice” outcomes in a difficult setting 141
Notes 142
Bibliography 143
Box
2.1 Urban transformation centers 33
Figures
2.1 Results framework and performance agreement under OBB 23
2.2 Budget building under OBB 23
2.3 Web page from the first My Results module 26
2.4 Alignment of PSO and OBB with agency’s transformation plan 31
3.1 SPAN project structure 45
5.1 Tax-to-GDP ratio: Cambodia versus peer countries 77
5.2 Tax revenue to GDP 78
6.1 Budgeting system in Vietnam 90
Contents | v
6.2 Vietnam’s state administrative structure 91
7.1 Tax revenue and GDP in Myanmar 107
7.2 Tax revenue to GDP ratio in Myanmar 107
8.1 Reform timeline in Lao PDR 120
Tables
1.1 Specific elements addressed in the eight country cases 7
1.2 Overview of country coverage and areas of reform explored 9
3.1 First and second waves of bureaucracy reform 50
3.2 Targets and achievements of bureaucracy reform, 2010–14 52
8.1 The Lao People’s Democratic Republic development indicators, 1999 116
9.1 Papua New Guinea PEFA scores, 2015 128
9.2 Acquittals of DSIP/PSIP grants, 2013–17 135

Acknowledgments
The editors and authors are grateful to James Brumby (Director, Governance
Global Practice, East Asia and Pacific, Latin America and the Caribbean, and
South Asia), Fily Sissoko (Practice Manager, Governance Global Practice,
Myanmar, Pacific, and Vietnam), Arturo Herrera Gutierrez (Practice Manager,
Governance Global Practice, China, Indonesia, and Singapore), George Addo
Larbi (Practice Manager, Governance Global Practice, Bangladesh and the
Philippines), and Robert Taliercio (Practice Manager, Governance Global
Practice, Latin America and the Caribbean, Public Sector and Institutions) for
their overall guidance in the development of specific chapters and this whole
edited volume. We also thank colleagues from the Global Delivery Initiative for
the inputs provided during the early phase of concept preparation. Our gratitude
also goes to all our government counterparts for their collaboration and contri-
bution to this book. We thank our peer reviewers Verena Maria Fritz (Senior
Public Sector Specialist) and Davide Zucchini (Senior Public Sector Specialist)
for all their useful comments for refining this report. We also thank Sodeth Ly for
his inputs into the Cambodian case study and Linna Ky for her excellent assis-
tance. The team is also grateful to numerous individuals whose names are not
mentioned here for their inputs into each case study.
This edited volume emerges from an international workshop on experimen-
tal approaches to Public Financial Management (PFM)/Public Sector Reform
for Sustainability of Results, held in Cambodia in September 2017. Our special
thanks go to the Cambodia Ministry of Economy and Finance for co-organizing
the workshop with the World Bank. A multidonor trust fund supported by
Australia, the European Union, and Sweden for the PFM reform program in
Cambodia, which financed the workshop and the documentation of these differ-
ent countries’ reform experiences, is gratefully acknowledged.
 vii