Public financial management capacity development within the context of the global development challenge

Abstract

Effective, efficient, transparent, accountable and predictable Public Financial Management (PFM) in developing countries is a prerequisite for long term and sustainable reduction of poverty and effective use of scarce financial resources. The HIPC2 Debt Initiative underscored the connection between the quality of PFM systems and poverty reduction several years ago. PFM is directly linked to opportunities for democratic governance, and the ability to fight corruption, and furthermore provides the opportunity for effective development cooperation. Over the last decade the development community has come to understand the importance of strong PFM (accountability) systems through which national policies are transformed into practice and which support the achievement of the MDGs.