Problem-driven diagnostics: the case for financial bottleneck analysis

In recent years there has been an increasing drive for public financial management (PFM) to transcend its traditional role of financial control and function to a greater extent as an enabler of service delivery. However, there is continuing difficulty in prioritising PFM reforms based on a systematically derived link between budgetary systems and service delivery. Recently, links between PFM and service delivery have been explored in diagnostic studies that seek to identify financial bottlenecks which inhibit or undermine service delivery.

A recent example is a piece of work undertaken by OPM in Myanmar in the education sector, commissioned by the World Bank and the EU. Based on the methodology adopted for the study, this paper outlines the concept of the financial bottleneck and the value of ‘debottlenecking’ analyses in the ongoing discussion around the role of PFM systems in improving service delivery. The note seeks to develop both a working definition and a practical approach to support future diagnostic work in this area, as well as determining where such methodologies fit within the broader suite of PFM diagnostic tools currently available.