Public Financial Management and Fiscal Performance - Evidence from Panel Data Analyses - Submitted Manuscript

Q: What is the main research question of this manuscript?

How practical public financial management dimensions influence fiscal performance across 86 countries from 2005 to 2019.

Q: Which PFM dimensions are found to improve fiscal performance?

Internal audit and information availability on resources received by service delivery units, improving the primary fiscal balance.

Q: How are the results validated beyond standard panel models?

The manuscript confirms the findings using instrumental variable (IV) estimations and reports robustness through additional analyses.

Jul 19, 2026

Upload by Ivy

The paper evaluates how practical public financial management (PFM) dimensions affect fiscal performance in 86 countries over 2005–2019. Using augmented panel data models, it finds that internal audit and greater availability of information on resources received by service delivery units improve fiscal performance, measured by the primary fiscal balance. Instrumental variable estimations confirm these findings. Additional results indicate that higher budget classification quality and transparency in inter-governmental fiscal relations significantly raise the overall fiscal balance, supporting PFM reforms to restore fiscal sustainability.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages15

Reading Time38 min

Abstract

Introduction

Research motivation and gaps

Approach and identification strategy

Public Disclosure Authorized Public Disclosure Authorized Submitted Manuscript Public Financial Management and Fiscal Performance: Evidence from Panel Data Analyses | Journal: | Applied Economics | | --- | --- | | Manuscript ID | AEL-2021-0278.R1 | | Journal Selection: | Applied Economics Letters incorporating Applied Financial Economics Letters | | Date Submitted by the Author: | 18-Jul-2021 | | Complete List of Authors: | Gui-Diby, Steve; World Bank; Universite Grenoble Alpes, CREG | | JEL Code: | H61-Budget|Budget Systems < H6-National Budget, Deficit, and Debt < H-Public Economics, H62-Deficit|Surplus < H6-National Budget, Deficit, and Debt < H-Public Economics, H83-Public Administration < H8-Miscellaneous Issues < H-Public Economics | | Keywords: | Fiscal Performance, Panel Data, Public Financial Management, Budget | | | | URL: [https://mc.manuscriptcentral.com/ape](https://mc.manuscriptcentral.com/ape) Page 1 of 14 Submitted Manuscript 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Public Financial Management and Fiscal Performance: Evidence from Panel Data Analyses Steve Loris Gui-Diby1,2 Abstract This paper attempts to assess the impact of the practical public financial management (PFM) dimensions on fiscal performance in 86 countries observed between 2005 and 2019. Based on augmented panel data models, we conclude that internal audit and the availability of information on resources received by service delivery units contribute to improve fiscal performance, proxied by the primary fiscal balance. These results are confirmed by instrumental variable (IV) estimations. Additional analyses show that an increase in the quality of the classification of the budget and the transparency of inter-governmental fiscal relations do significantly improve the overall fiscal balance. These findings strengthen the need for PFM reforms to restore fiscal sustainability. Keywords: Fiscal Performance, Panel Data, Public Financial Management, Budget JEL Classification Codes: H61, H62, H83, E61, E62 1 E-mail address: [sguidiby@worldbank.org](sguidiby@worldbank.org. World)[. World](sguidiby@worldbank.org. World) Bank, Macroeconomics, Trade and Investment Global Practice, 1818 H Street NW, Washington DC, 20433, USA. The views expressed in this paper are personal to the author and do not necessarily represent those of the World Bank Group management and Board. 2 Non-Resident Fellow, Univ. Grenoble Alpes, CREG, France. 1 URL: [https://mc.manuscriptcentral.com/ape](https://mc.manuscriptcentral.com/ape) Submitted Manuscript Page 2 of 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 1. Introduction The COVID-19 pandemic, that spread across the world in 2020 and 2021, has resulted into substantial health, social and economic consequences. Over the past 150 years, this pandemic caused a global recession (-4.3 percent in 2020) that ranks just after the ones recorded during the two World Wars, and the Great Depression. While emerging and developing economies faced an economic recession, they were also left with substantial macroeconomic imbalances and limited fiscal spaces. With the COVID-19 still spreading in countries despite some medical progress, countries should prepare recovery plan, and the latter will certainly include the restoration of fiscal sustainability. Among the instruments that policy makers can use to restore fiscal sustainability, public financial management (PFM) reforms could be instrumental to create the fiscal space and achieve

FAQs

What is the main research question of this manuscript?

How practical public financial management dimensions influence fiscal performance across 86 countries from 2005 to 2019.

Which PFM dimensions are found to improve fiscal performance?

Internal audit and information availability on resources received by service delivery units, improving the primary fiscal balance.

How are the results validated beyond standard panel models?

The manuscript confirms the findings using instrumental variable (IV) estimations and reports robustness through additional analyses.

Jul 19, 2026

Upload by Ivy