The Evolving Functions and Organization of Finance Ministries
IMF Working Papers, November 9, 2015
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- The Evolving Functions and Organization of Finance Ministries
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Bibliographic details
- Authors: Richard I Allen, Yasemin Hurcan, Peter Murphy, Maximilien Queyranne, Sami Yläoutinen
- Published: November 9, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513543895.001
Summary
- There is relatively little literature that analyses the role, functions, and organization of finance ministries.
- Purpose: review international experiences to formulate guiding principles of organizational design and the allocation of functions, while recognizing the crucial importance of each country’s history and institutional context.
- Observed shift over the past 30 years from a “traditional” to an “emerging” model of organizational design characterized by:
- greater openness and transparency;
- more flexible management practices;
- a broader focus on strategic policy issues.
- Many operational functions have been devolved to arm’s–length agencies or line ministries.
- The paper describes challenges facing developing countries in strengthening their finance ministries, and the principles, approaches, and strategies that can be applied.
Key findings and thematic observations
- Transition in finance ministry models:
- “Traditional” model (historical baseline) versus “emerging” model (current trend over past 30 years).
- Organizational design features associated with the emerging model:
- Openness and transparency.
- Flexible management practices.
- Broader focus on strategic policy issues.
- Functional reallocation:
- Devolution of many operational functions to arm’s–length agencies or line ministries.
Challenges identified for developing countries
- Strengthening finance ministries amid institutional and historical constraints.
- Need for approaches tailored to country-specific history and institutional context.
Principles, approaches, and strategies (as described)
- Formulate guiding principles of organizational design and allocation of functions grounded in international experience.
- Recognize and integrate the crucial importance of each country’s history and institutional context when applying reforms.
- Consider devolution of operational functions where appropriate to arm’s–length agencies or line ministries.
- Emphasize openness, transparency, flexible management, and strategic policy focus in organizational reforms.
Subject coverage and keywords
- Subject areas:
- Budget planning and preparation
- Fiscal accounting and reporting
- Fiscal policy
- Macroeconomic and fiscal forecasts
- Public financial management (PFM)
- Keywords:
- Africa, Budget planning and preparation, business process, finance function, finance ministries transfer responsibility, finance ministry, Fiscal accounting and reporting, Global, line ministry, Macroeconomic and fiscal forecasts, Public administration, public finance, public financial management, WP