| Summary: | The research is based on the PEFA
framework and methodology for assessing public financial
management performance and the data set that is generated
from the PEFA assessments. The research quantified PEFA
scores and aggregated them into overall scores which
required developing assumptions on weighting scores,
measures, and assessments. The research acknowledges
methodological limitations of using the PEFA data set,
including the assumptions. In general, the research follows
the approach taken by previous researchers who have used
PEFA data for quantitative analysis, but this does not
eliminate the challenges that persist in transforming grades
to numerical values and aggregating them. The time
inconsistency issues and the limited number of observations
also influenced the regression analysis using the PEFA data
set. The team acknowledges that the PEFA data set was not
designed for statistical analysis and that using it in
quantitative regressions presents a series of econometric
issues that cannot be fully resolved in this book, or in
other papers which apply a similar approach. The research
report builds on general recognition that PFM is important
for development and recognizes that there is limited
evidence based on the nontechnical determinants of PFM
performance, as well as the outcomes of a good PFM system.
The report therefore aims to bridge some of this gap between
theory and practice using data on PFM performance from PEFA
assessments. The report undertakes a closer examination of
the key debates on what constitutes a good PFM system by
providing an overview of the PEFA framework, and the data
set that is generated through PEFA assessments, including
its strengths and weaknesses. This was done to enable the
research team to undertake quantitative analysis of the
relationship between PFM performance and other governance
indicators and outcomes.
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