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Started in the early 1990s Collapse of communism Over 20 countries need to transition from command economy to market economy
Coincides with predominant view that macroeconomic stability is paramount IMF need to grasp national accounts to support monetary stability World Bank determines lack of basic governance expertise is more urgent than traditional development focus
Focus on PFM and resources available to support reform efforts draws expertise Focus on PFM moves outside of eastern Europe and FSU Over 15 Years, a pattern of phases of PFM reform has evolved in numerous countries
Phase 1 -- How much money are we spending? Phase 2 -- What are we spending money on? Phase 3 -- Why are we spending money? Phase 4 -- How are we spending money?
Single Account Treasury Unified budget Eliminate extra-budgetary accounts Customs and tax Organic budget Law Commitment accounting
Macro-economic forecasting Multi-year budgeting Cash management Debt management MTEF Auditing
Program definition Further refinement of chart of accounts Development of analytical capacity Greater explanation of spending in public documents Performance budgeting Decentralization
Resistance to closing Ministry bank accounts Donors inability to provide timely and usable information on their activities Getting beyond cash rationing Performance measures
PFM Evolution