Public Financial Management Reform in the Middle East and North Africa

One of the most important functions governments perform is that of mobilizing and deploying financial resources to achieve their objectives. According to the most recent World Bank data, governments throughout the Middle East and North Africa (MENA) region spent approximately $407 billion dollars in 2007 in delivering their policy, regulatory and service functions. The way in which this money is spent has huge implications for their broader development trajectory. For governments to perform their spending function well, their PFM practices should meet certain well-established criteria. Government spending should be affordable, in that it takes place within a framework that ensures expenditure is consistent with monetary and fiscal policy objectives and sustainable in the long term. Governments should optimize the allocation of public resources between different sectors and expenditure categories in a way that reflects their policy priorities, including sustainable growth as well as human and social development. Such expenditure should be efficient, in that it maximizes output for a given set of inputs, and effective, in that it supports the successful realization of the government’s goals. It should also be transparent; conducted in accordance with the relevant laws and regulations; and undertaken with appropriate checks and balances to ensure financial probity.In many MENA countries, PFM reforms have been on the agenda for a decade or more.