Public Financial Management In Resource Rich Countries Essentials For Economists And Public Finance Professionals

The extractive industries (EI) sector occupies an outsize space in the economies of many developing countries. Policy makers, economists, and public finance professionals working in such countries are frequently confronted with issues that require an in-depth understanding of the sector, its economics, governance, and policy challenges, as well as the implications of natural resource wealth for fiscal and public financial management. The objective of the two-volume Essentials for Economists, Public Finance Professionals, and Policy Makers, published in the World Bank Studies series, is to provide a concise overview of the EI-related topics these professionals are likely to encounter. This second volume, Fiscal Management in Resource-Rich Countries, addresses critical fiscal challenges typically associated with large revenue flows from the EI sector. The volume discusses fiscal policy across four related dimensions: short-run stabilization, the management of fiscal risks and vulnerabilities, the promotion of long-term sustainability, and the importance of good public financial management and public investment management systems. The volume subsequently examines several institutional mechanisms used to aid fiscal management, including medium-term expenditure frameworks, resource funds, fiscal rules, and fiscal councils. The volume also discusses the earmarking of revenue, resource revenue projections as applied to the government budget, and fiscal transparency, and outlines several fiscal indicators used to assess the fiscal stance of resource-rich countries. The authors hope that economists, public finance professionals, and policy makers working in resource-rich countries—including decision makers in ministries of finance, international organizations, and other relevant entities—will find the volume useful to their understanding and analysis of fiscal management in resource-rich countries.

This volume addresses the need for improved public financial management in resource-rich countries, and discusses how this can be achieved. The volume takes as a point of departure the political economy constraints that can frequently be expected in resource-rich countries. The topics discussed include financial compliance, and the special problems that it faces in developing countries; strengthening of key compliance agencies, and reform strategies for compliance. The application of medium term budget and fiscal planning in resource-rich countries is discussed, with a focus on resource-specific aspects and reform strategy. Improvement of public investment management, a fundamental challenge in many resource-rich countries, is discussed, as are transparency aspects of PFM and PIM. The three volumes of the report are mutually supportive, but can also be read independently.

Le secteur des industries extractives (IE) occupe une place démesurée dans les économies de nombreux pays en développement. Les économistes et les spécialistes des finances publiques qui y travaillent sont fréquemment confrontés à des problèmes qui requièrent une connaissance approfondie du secteur, de son économie, de sa gouvernance, de ses enjeux stratégiques, et une idée précise de ce que la richesse en ressources naturelles suppose en termes de gestion du budget et des finances publiques. L'ouvrage en trois volumes Points essentiels à l'intention des économistes et des spécialistes des finances publiques, publié dans la série des Études de la Banque mondiale, a pour objet de donner un bref aperçu des problèmes associés aux IE que ces spécialistes sont susceptibles de rencontrer.Ce premier volume, Le secteur des industries extractives, dresse une synthèse des aspects fondamentaux de l'économie des IE, analyse les principales composantes des cadres stratégiques, institutionnels et de gouvernance du secteur, et définit les obligations de financement du secteur public dans ce domaine. Son analyse des aspects économiques des IE couvre l'évaluation des gisements de sous-sol, l'interprétation économique donnée au minerai, et la structure des marchés de l'énergie et des produits minéraux. Il définit les responsabilités des entités publiques compétentes, et présente les caractéristiques des cadres juridique et réglementaire du secteur. Il analyse brièvement ses fonctions essentielles et particulières, ainsi que les structures financières qui soutiennent les mesures de sauvegarde environnementale et sociale, l'investissement des recettes publiques provenant de l'exploitation des ressources pétrolières, gazières ou minières, et la diversification économique à partir des industries extractives. Les auteurs espèrent que les économistes et les spécialistes des finances publiques qui travaillent dans les pays riches en ressources naturelles - y compris les décideurs au sein des ministères des finances, des organisations internationales, et autres entités compétentes -- jugeront cet ouvrage utile à leur compréhension et à leur analyse du secteur des IE.

The Handbook is a virtual encyclopedia of public financial management, written by topmost experts, many with a background in the IMF and World Bank. It provides the first comprehensive guide to the subject that has been published in more than ten years. The book is aimed at a broad audience of academics/students, government officials, development agencies and practitioners. It covers both bread-and-butter topics such as the macroeconomic and legal framework for budgeting, budget preparation and execution, procurement, accounting, reporting, audit and oversight, as well as specialist subjects such as government payroll systems, local government finance, fiscal transparency, the management of fiscal risks, sovereign wealth funds, the management of state-owned enterprises, and political economy aspects of budgeting. The book sets out numerous examples and case studies describing good practice in public financial management, and is highly relevant for use in both advanced and developing countries.

The efficiency, effectiveness, and transparency of public financial management in Latin America is critical for the supervision of public resources, fiscal stability, and sustainable economic development. In recent years, the countries of Latin America have embraced reforms in public financial management and have made many important advances; however, many challenges remain. This book brings together the knowledge and experiences of IMF and IDB staff and representatives from 16 governments in the region to document these reforms, and examines the experiences and lessons learned. It is a valuable resource for those looking at issues in public financial management.

This working paper overviews the challenges posed by resource revenues management and the policy prescriptions to meet them, and focuses on the Public Financial Management (PFM) framework and reforms that resource-producing countries should adopt. The paper outlines a PFM framework and reform path that take into account the institutional diversity of resource-producing countries. In the short term, the proposed reforms highlights the tools that could be implemented even where the PFM system is rather basic, while over the medium and long term they aim at converging with best international PFM practices.

The paper discusses reform in public financial management in small, resource-constrained economies such as the Pacific island countries (PICs). It describes the efforts undertaken by PICs in the past and assesses their results. A principal conclusion is that reform in public financial management needs to be defined against the capacity of countries to sustain it at the national level. This requires a careful definition of priorities for action and the determination of appropriate pacing and sequencing of reform. In this decision, achievement of the imperatives of expenditure control and sustainability of deficits is typically more important than exploitation of the scope for efficiency gains promised by "cutting edge" public financial management systems.

Applied Economics: Public Financial Management and Development is focused on economics applied to public financial management and development. It charts over 50 years of the author’s practical experience of economics and public policy in 60 countries on five continents, from Afghanistan to Zimbabwe. The book’s main focal point is on central and local government budgeting, tracing the progress of revenue aspects and expenditure allocation over time from inputs alone to matching these inputs to achieving and measuring service delivery in programmes. It also presents the assessment instruments that measure public financial management strength and weakness, with real-life illustrations of their application. All of these instruments use examples from the countries that the author has worked in, demonstrating the conditions faced – mostly stable economic environments, but at times during periods of conflict and insecurity, as well as neighbouring geopolitical tension.These experiences have been gained from the author’s resident assignments and short-term visits (mainly multiple over many years) as a consultant for the IMF, World Bank, and bilateral development programmes as well as academic research.