The quality control mechanisms for standardized assessment overviews, involving both donors and recipient governments, perhaps using QAG as a basis for conducting quality reviews.

NOTES

1. Despite the questionable need for them, three new instruments have recently been proposed. The first is an IMF Fiscal Management Assessment that would focus on emerging economies and that has already been piloted in Turkey. The second is a country-led peer review mechanism under the New Partnership for Africas Development (NEPAD), which is to cover all aspects of governance. In addition, the World Bank is piloting a Fiduciary Review that focuses on corruption in Bank-financed projects but also overlaps with CFAAs, CPARs, and Institutional and Governance Reviews (IGRs).

2. See http: wbln1023.worldbank.org/Caw/CawCover.nsf/homepage? OpenForm.

3. An agreement between multilateral development banks to use CPAR as the basic tool for conducting assessments is contained in World Bank

2002c.

4. There are a few exceptions. For example, the IMF-World Bank Financial Sector Assessment Program (FSAP) was created after the East Asian financial crisis in the late 1990s. The program conducts financial sector assessments using joint teams and producing joint reports. HIPC expenditure tracking is another example of successful IMF-Bank collaboration, though on a more modest scale. Another is Bank-IMF collaboration on Poverty Reduction Strategy Papers.

5. In the World Bank, Core Economic and Sector Work is the primary country-based analytic and advisory work, and includes the three instruments under discussion (PER, CFAA, and CPAR). See the World Banks Operational Manual online at: http: wbln0018.worldbank.org/institutional/ manuals/opmanual.nsf/textonly. The integration of fiduciary assessments is also enunciated in the Country Financial Accountability Assessment: Guidelines to Staff. Operations Policy Core Services Network, Financial Management Sector Board (Washington, D.C.: The World Bank, May 27,

2003).

6. Figure 2 shows the programmatic/modular approach as a linear structure, running neatly from bottom to top. In practice the process of assess-

ment and reform is repetitive and interactive, with multiple feedback loops and iterations between the government, donors, and other stakeholders. Assessment work and related technical assistance and capacity building are generally not carried out as single blocks of activity, but rather in stages- sometimes within a coherent overall reform strategy and work program that build on and reinforce each other through dialogue between government and donors. The circle around figure 2 illustrates this point.

A Concluding Word

This study and its findings and recommendations are intended to set in motion a debate between the partners in the PEFA program, other development agencies and international organizations, client governments, and other stakeholders. Because a well-managed budget process is essential for the efficient use of public resources, effective delivery of public services, and reduction of poverty, the views of all stakeholders should be taken into account at an early stage.

If the studys findings and recommendations are accepted, there will be a need to translate them into changes in the operational rules, practices, and procedures of the agencies concerned. Organizational structures, management processes, staffing requirements, training mechanisms, budget allocations and internal incentives will need to be reviewed, as will arrangements for increasing cooperation and coordination between development agencies, governments, and other stakeholders. As noted, some potentially important reforms in these areas are already being considered by the World Bank, IMF, and other agencies-including proposals for enhanced collaboration between the World Bank and IMF on public expenditure work, reform of the Banks procurement assessment function, and stronger collaboration between the Bank and the European Commission on CFAAs and compliance tests. It is hoped that this study will make a useful contribution to these and other emerging reforms.