Effective institutions: developing countries’ systems are strengthened and used

Partner Country Performance

Serial Country Policy and Institutional Assessment (CPIA) data published by the World Bank for 23 of the 24 participating countries show no change in the soundness of the public financial management systems from an average score of 3.17 in 2005 to 3.26 in 2013. (No CPIA scores are published for El Salvador). In 2013, twelve participating countries were assessed as having sufficiently robust public financial management systems with CPIA score greater than or equal to 3.5.

Development Partner Performance

While there was no decline in the financial management systems of partner countries, they were only used to manage 43% of development partner funds in the 12 countries with CPIA scores > 3.5. Of these, for eight countries with serial data, the use of national public financial systems by development partners dropped to a low 41% in 2013, from 65% in 2010/11 and 42% in 2005/07 (Figure 23) 1

Aggregate performance data mask substantial variation among development partners (Figure 24). Some development partners, for example the EC, Netherlands and Spain, consistently used at least two of the three national financial management procedures. Many others, including some of the largest contributors such as the Global Fund and USAID, used national systems for less than 20% of their contributions.

1 It is important to note that DP data in those countries with PFM CPIA scores of less than 3.5 were not counted. Whilst this is consistent with previous IHP+R reporting, it discounts instances where DPs are using the PFM system in spite of relative weakness of the PFM system. This for example applies to Germany in Nepal, the World Bank and Belgium in Uganda where the PFM systems have a CPIA score of less than 3.5 but where these DPs have still reported that they use the PFM system. We cannot generalise about the effect of this methodological approach – in some cases it may reduce the aggregate DP performance on use of PFM systems, in others it may improve the aggregate DP performance. For more details see the IHP+R 2014 methodology annex.