Institutionalizing Improvements in Public Finance Management

Abstract

Abstract Given the complexity of an on-demand architecture for public financial management (PFM), how can governments effectively implement these changes? This chapter outlines four approaches that can enable changes in a decentralized manner, without forcing them from the top down. One, any changes to PFM must align with the incentives of individuals in the system. Two, the system should be modified with agile development in mind, using adaptive planning, fast delivery, constant learning and improvement, and rapid response to change. Three, asynchronous onboarding, or the idea that stakeholders can adopt and integrate with the overall PFM system in their own time, can make sure these changes work within India’s complex federal structure. Four and relatedly, we discuss how changes in PFM can be undertaken within the existing institutional structure. By following these approaches, governments can navigate the complexities of changes in architecture of PFM while fostering sustainable and scalable improvements in public service delivery.