New Public Financial Management: Past, Present and Future

PFM underlies all government activity. It encompasses the mobilization of revenue; the allocation of these funds to various activities; expenditure; and accounting for spent funds. While many developing countries have relatively robust PFM laws and regulations that conform to international standards, weak implementation is a common problem. This paper discusses literature, the theory and then different approaches that engage with the challenges of reforming a PFM system. It provides an overview of the budget cycle architecture and discusses PFM reform strategies, tools for measuring the strength of a PFM system, how such tools can help to inform reform efforts, and some recent evaluations of PFM reform progresses. With some practical examples, this paper discusses some issues regard to leading pack developed countries and challenges of reform in PFM for developing countries. It discusses that strengthening PFM causes to more development per dollar that the governments are spending. Considering high quality accounting by governments as a journey, questions like what is the destination of this journey; where we are now; who is in this journey with us; and what are the obstacles of the journey will be answered.