PFM Reform

Public Finance Management (PFM) Reform


Fundamental goal of public finance management is effective use of available public resources. To achieve this goal fiscal policy is directed towards strategic allocation of public finance; this implies effective direction of public finances to the state’s priorities and creation of long-term stable funding package to finance these priorities.

Transition from annual to long-term planning is crucial for increasing effectiveness of the public finance management. This change will facilitate long-term planning and reliable financing of medium-term public priorities.

Improvement of the public finance management implies transition to outcome-oriented budgeting process; this means that budgetary resources will be allocated to finance activities to be implemented within the program framework and to achieve goals set in the program framework.

One of the central parts of the state finance management is development of effective accountability system that will evaluate real results achieved within the fiscal policy and compare them with planned (expected) results.

Effective public finance management serves the improvement of macroeconomic stability of the country.

Strategic budgeting will support improvement of discipline in the budgetary sector.

Main goals of the public sector finance management reform are:

  • Maintaining of fiscal discipline, macroeconomic stability and forecasting of the budgetary system
  • Directing of resources to political and strategic priorities by stimulation of strategic approach
  • Maximum effective and efficient use of resources
  • Ensure accountability and control on use of public resources

Important components of the reform implementation:

  • Effective coordination of the reform plan
  • Comprehensive and integrated approach to the reform
  • Meaningful and technical consistency in developing activities necessary for the reform
  • Appropriate course of the implementation