Twenty-five years after the publication of the field-defining Public Expenditure Management Handbook, the World Bank is leading a global process to review, rethink, and update approaches to public finance and public financial management reform¡ªthe Reimagining Public Finance initiative, supported by the Financial Management Umbrella Program. The initiative is taking a fresh look at the approach that has evolved in practice over those 25 years, considering the ways in which the context has changed and the lessons that have been learned.
The initiative defines public finance as the combination of fiscal policies¡ªwhat governments intend to do through the raising and spending of public resources¡ªand PFM systems¡ªhow governments manage these resources through different processes and mechanisms. Rather than start from a focus on the quality of public financial management systems and expect that related improvements will bring about positive outcomes, the initiative focuses on identifying and addressing the key obstacles and bottlenecks in both fiscal policies and PFM systems that prevent governments from more effectively pursuing development outcomes.
The initiative seeks to influence and shift the way different actors and stakeholders¡ªfrom governments to donors, and from oversight actors to citizens¡ªthink about the management of public resources. It also seeks to propose ways to improve the support that the World Bank and other international actors provide to governments in this area.
Work on the first phase of the Reimagining Public Finance initiative is expected to be completed by the end of 2024, and will define what products and processes are needed to guide public finance interventions into the future.
A Global Conversation is Underway
At the heart of the project is a set of stakeholder conversations to gather feedback on the proposed approach and promote an open discussion on the broader state of public finance reforms. Meanwhile, both sector-specific and thematic research is being conducted, and a global report will be developed in preparation for a global conference on the future of public finance, where the results of the exercise will be presented and discussed.
Reimagining Public Finance kicked off with a half-day workshop hosted by the Overseas Development Institute (ODI) in London in September 2023, involving practitioners, finance ministers, donors, academics, and think tank scholars. In November 2023 in Istanbul, the team conducted stakeholder dialogues on the margins of a global conference on ¡°Public Finance and Sustainable Development,¡± which provided a forum for over 100 officials from ministries of finance, parliaments, tax administrators, civil society, and international partners. In Washington in December 2023, further consultations were held involving key development partners. And in March 2024, a consultation with finance and sector officials from MENA was held in Cairo. Going forward, the conversations will continue with a set of regional and thematic consultations, culminating in the global conference.
The second phase of the initiative foresees the preparation of guidance documents, training materials and other tools to facilitate the operational implementation of the new approach.
Join the Conversation
If you¡¯d like to know more about the Reimaging Public Finance initiative, please contact us.