Public Financial Management and Fiscal Performance: Evidence from Panel Data Analyses

This paper attempts to assess the impact of the practical public financial management (PFM) dimensions on fiscal performance in 86 countries observed between 2005 and 2019. Based on augmented panel data models, we conclude that internal audit and the availability of information on resources received...

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Bibliographic Details
Published in:	Applied economics letters 2022-11, Vol.29 (19), p.1784-1790
Main Author:	Gui-Diby, Steve Loris
Format:	Article
Language:	eng
Subjects:	budget Economic analysis Economic theory Economics Financial management Fiscal performance Internal auditing Longitudinal studies Panel data Public finance public financial management Transparency
Online Access:	Get full text
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Summary:	This paper attempts to assess the impact of the practical public financial management (PFM) dimensions on fiscal performance in 86 countries observed between 2005 and 2019. Based on augmented panel data models, we conclude that internal audit and the availability of information on resources received by service delivery units contribute to improve fiscal performance, proxied by the primary fiscal balance. These results are confirmed by instrumental variable (IV) estimations. Additional analyses show that an increase in the quality of the classification of the budget and the transparency of inter-governmental fiscal relations do significantly improve the overall fiscal balance. These findings strengthen the need for PFM reforms to restore fiscal sustainability.
ISSN:	1350-4851 1466-4291