Managing Public Finance and Procurement in Fragile and Conflicted Settings

Discusses ways to enhance the incentives for elites to invest political capital in achieving (1) functional results through the formal public finance management (PFM) system; (2) the effectiveness of agencies responsible for services and regulating activities; and (3) better performance of civil service officials. Using the Public Expenditure and Financial Accountability (PEFA) Performance Measurement Framework, countries affected by conflict and fragility can be compared with non-fragile poor countries, and an international consensus among donors can be drawn on the immediate objectives of reform. Whole of government policy and financing relationships with fragile states lead to the goals of horizontal and vertical equity and distribution of wealth from natural and land assets to the poor. Resource sharing agreements can help build accountability, and local confidence while public procurement rules and processes can have far-reaching implications. Engaging leadership, coalition building, and change management can result in new institutions and ideas for institutional transformation.