Public Finance and Service Delivery
Managing Public Finances for Service Delivery in Intergovernmental Context
Part of the NYU Wagner team built on the main Advice, Money, Results report in partnership with the Overseas Development Institute (ODI) by examining in greater depth the nexus of public finance, public financial management (PFM), and decentralization/intergovernmental relations in public service delivery. This work was supported with funding from the Bill and Melinda Gates Foundation.
ODI hosted a conference on Public Financial Management for Better Service Delivery at their London headquarters in February 2020 to consider how policy makers can bridge the relatively fragmented approaches that have commonly been pursued to improve the performance of these two inherently integrated aspects of public sector operations. The conference and further work formed the basis for an ODI framing paper: Public Finance and Service Delivery: What’s New, What’s Missing, What’s Next?
Subsequent joint NYU-ODI efforts focused on the neglected topic of how sector finances for service delivery are managed in multilevel government systems. This work resulted in a joint paper, An Intergovernmental Perspective on Managing Public Finances for Service Delivery: Assessing Neglected Challenges in the Health Sector and Beyond. (A shorter overview of the paper is also available).
Intergovernmental considerations are important because decentralization has occurred to varying degrees in many countries in recent decades with the expectation that subnational governments can--under appropriate conditions—help to improve the use of public resources for service delivery. Even in relatively centralized countries, many public services are delivered locally using varied institutional and financial arrangements.
The paper reviews challenges that can arise in managing public finances for service delivery in multi-level systems and applies an intergovernmental lens to health sector financing in four African countries—Ethiopia, Kenya, South Africa, and Uganda. Generalization is elusive due to variations in government systems, but the paper demonstrates the value of more purposefully incorporating intergovernmental structures and dynamics into the analysis of service delivery finances. An exploratory analytical framework is proposed as a means of building knowledge and generating practical ideas for reform. The paper concludes with an agenda for further work on the intersection of public finance/financial management, sector finance, and intergovernmental relations.