Doing public finance differently: How the World Bank and FCDO are teaming up like never before
By Chigo M. Gelders, Team Leader, Public Financial Management & Macroeconomics, UK Foreign, Commonwealth & Development Office and Serdar Yilmaz, Manager, Public Finance and Procurement, World Bank
When public money is managed with purpose by linking budgets to risks, assets, climate priorities, and results, countries deliver better services faster, more fairly, and in ways that are resilient. In a world of overlapping crises--climate disruption, fiscal stress, democratic deficits--the effectiveness of public finance systems is paramount.
The World Bank and the UK Foreign, Commonwealth & Development Office (FCDO) have embarked on a refreshed partnership on Public Financial Management (PFM). This is more than a technical partnership. It is a shared bet: that public finance, if done differently, can deliver better outcomes, more sustainably.
A new approach to an old problem
At the heart of this partnership, underpinned by a concrete work program, is a shift from treating PFM as a compliance exercise to positioning it as a lever for development, inclusive growth, and resilience. This means rethinking how governments manage risk, plan investments, and align budgets with real-world results. Rather than one-size-fits-all reforms, the agenda is structured around five dynamic, interlocking areas:
- Reimagining public finance. Budgets track inputs rather than outcomes, so spending fails to translate reliably into learning, better healthcare, or climate resilience. We are building a new framework and toolkit with governments to link PFM and fiscal policy directly to service delivery and public policy outcomes. We are beginning with a global consensus conference in September 2025 and early pilots in Democratic Republic of Congo, Malawi, and Pakistan with training, coaching, and peer exchange, on how to use these toolkits to diagnose obstacles and redirect scarce public resources to what works.
- Balance Sheet Management and fiscal risks. Governments often manage liabilities but underuse public assets and overlook cross cutting fiscal risks. They also too often plan for what they owe but neglect what they own or could lose. We are developing a Balance Sheet Management toolkit to help ministries of finance and other key fiscal institutions track assets, liabilities, and fiscal risks in one place, aligned to the World Bank’s Fiscal Organization Assessment Framework (FOAF).
- Climate and nature financing and budgeting. Countries struggle to access and use climate and nature finance quickly, and weak PFM systems and complex rules slow disbursement and dilute impact. We are designing and will roll out a country-typology-based climate PFM diagnostic (covering FCV, SIDS, LICs, MICs) and will build attendant PFM system capacity at country and regional level. We will deepen collaboration with the Coalition of Finance Ministers for Climate Action, IMF, Regional Development Banks, and expand the evidence base on climate (and nature) budgeting. Through whole-of-government platforms, we will help to align development partners behind national climate priorities and budgeting systems and frameworks.
- Public Investment and infrastructure governance. Projects arrive late, cost more, and deliver less because planning, appraisal, and portfolio management remain fragmented. We will consolidate and fuse the best of existing tools like InfraGov 2.0, the PIM Reference Guide, and FCDO-supported ICRAT into a single, user-facing package for both demand (civic oversight) and supply (public sector capability), leveraging data and AI. We will apply and test the package in priority countries, expanding to a broader pool for user-facing products. This means governments that can not only spend, but spend wisely in delivering infrastructure that is cost-effective, timely, and aligned to national priorities.
- Fiscal transparency and accountability. Transparency reforms often falter when they ignore power, politics, and context. An evidence-led campaign rooted in political economy analysis, coalition-building, outcome-driven strategies will be launched in 2025, culminating in a global forum in 2026.
Why this matters now
This is a pivotal moment. Global debt is rising, fiscal space is shrinking, and trust in government is declining as citizens expect credible results on broader service delivery and climate and nature. Our renewed World Bank/FCDO PFM partnership converts that pressure into a positive force. Not just more diagnostics, but better ones. Not just tools, but politically informed approaches. Not just learning, but learning including through peer-to-peer partnerships that stick. This is what makes this partnership game-changing. It reflects a shift from fragmented technical reform to country-led, politically savvy change, anchored in real outcomes and built for enduring resilience.