Public Finance Reviews (PFRs) are a core World Bank tool for analyzing the efficiency and effectiveness of a country’s public expenditure and for strengthening budget institutions. They also help countries build capacity to mobilize more domestic revenues in a way that enhances growth and equity. PFRs underpin World Bank engagements with governments and stakeholders and inform our lending.
Context
Mounting fiscal and debt challenges have led the World Bank to elevate PFRs to one of our core mandatory diagnostics, and we produce at least one for each country in its correspondent Country Partnership Framework cycle. To support countries’ domestic resource mobilization (DRM) efforts, the PFR includes a chapter on revenue alongside chapters/sections on macroeconomic trends and expenditure—which distinguishes the PFR from its predecessor, the Public Expenditure Review (PER).
PFRs offer policy recommendations along with impact assessment, helping country authorities identify and address critical fiscal policy challenges. These include those related to DRM, debt sustainability, resource allocation to facilitate public service delivery and support development goals, output stabilization, and sustainable and equitable growth that does not endanger fiscal sustainability. Although the main audience is usually officials in the Ministry of Finance (MOF), PFRs can support government-wide dialogue with line ministries and other relevant agencies.
A secondary objective is to inform the development community of the quality of the country’s macro-fiscal management and enhance the effectiveness of development financing in achieving clients’ development goals. Development partners, including the World Bank Group, can draw on PFRs to align lending with broader development objectives or coordinate assistance.
Recommended fiscal reforms and their implementation can be supported through policy-based lending and other types of WBG support. Other stakeholders, such as academia, think-tanks and other civil society organizations, also draw on PFRs to inform their activities.
Strategy
The World Bank has extensive experience delivering PFRs for Clients around the world. In the last decade, more than 215 PERs/PFRs were prepared for countries across all regions and income groups.
PFRs help ensure:
- Fiscal sustainability and efficiency, by identifying inefficiencies in public spending and revenue collection to promote better allocation and improve fiscal sustainability.
- Economic growth and development, by helping identify and prioritize investments in critical sectors, such as infrastructure, education, and healthcare.
- Transparency and accountability, by promoting transparency and accountability in the management of public funds.