Twenty-five years after the publication of the field-defining Public Expenditure Management Handbook, the World Bank is leading a global process to review, rethink, and update approaches to public finance and public financial management reform¡ªthe Reimagining Public Finance initiative, supported by the Financial Management Umbrella Program. The initiative is taking a fresh look at the approach that has evolved in practice over those 25 years, considering the ways in which the context has changed and the lessons that have been learned.
The initiative defines public finance as the combination of fiscal policies¡ªwhat governments intend to do through the raising and spending of public resources¡ªand PFM systems¡ªhow governments manage these resources through different processes and mechanisms. Rather than start from a focus on the quality of public financial management systems and expect that related improvements will bring about positive outcomes, the initiative focuses on identifying and addressing the key obstacles and bottlenecks in both fiscal policies and PFM systems that prevent governments from more effectively pursuing development outcomes.
The initiative seeks to influence and shift the way different actors and stakeholders¡ªfrom governments to donors, and from oversight actors to citizens¡ªthink about the management of public resources. It also seeks to propose ways to improve the support that the World Bank and other international actors provide to governments in this area.
Work on the first phase of the Reimagining Public Finance initiative is expected to be completed by the end of 2025, and will define what products and processes are needed to guide public finance interventions into the future.
Research and a Global Conversation Are Underway
At the heart of the project is a set of stakeholder conversations to gather feedback on the proposed approach and promote an open discussion on the broader state of public finance reforms. Meanwhile, outcome-based research is being conducted on the role of public finance in economic resilience, the energy transition, basic education, gender-based violence, and universal healthcare. A global report is being drafted in preparation for a global conference in September 2025 on the future of public finance, where the results of the exercise will be presented and discussed.
The global conversation on Reimagining Public Finance will culminate with the global conference. By then, more than 25 consultations will have been conducted, reaching over 700 people either face to face or online. The consultations have engaged a wide variety of stakeholders across all the regions in the world, including practitioners, government officials, finance ministers, donors, international organizations, academics, think tank scholars, civil society organizations, and parliamentarian networks, among others. These consultations have made it possible to discuss the lessons learned in regard to the last 25 years in public finance reforms, as well as to reflect on the questions of what is the role of public finance in relation to development goals and what are the main bottlenecks for this, and finally, on the way forward, provide inputs in regard to the robustness, clarity and relevance of the proposed analytical framework.
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If you¡¯d like to know more about the Reimaging Public Finance initiative, please contact us.