Public finance

Public finance management (PFM) is the process by which governments translate public resources into public services. Effective PFM is therefore an essential element for well functioning and accountable governance, and a critical tool for the state to achieve policy objectives and development goals.

ODI is a leader in research into PFM in developing, transitional and fragile states, bringing cutting edge and evidence based thinking to bear on ongoing global debates. Our work emphasises:

• the importance of strengthening the budget process to facilitate turning domestic political priorities into public goods;
• the need for a more sophisticated understanding of budgetary and political processes and how to engage with them;
• that effective reforms are context specific and respond to national and local realities;
• that simple, sensible reforms are more likely to work and to last.

ODI’s work on public finance is led by the Centre for Aid and Public Expenditure (CAPE). A major strand of ODI’s work in this area is conducted by the Budget Strengthening Initiative (BSI), a project which focuses on improving transparency, accountability and effectiveness of PFM in fragile states.