Premium
Public Financial Management Systems and Countries' Governance: A Cross‐Country Study
Author(s) -
Martí Caridad,
Kasperskaya Yulia
Publication year - 2015
Publication title -
public administration and development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.574
H-Index - 44
eISSN - 1099-162X
pISSN - 0271-2075
DOI - 10.1002/pad.1711
Subject(s) - corporate governance , accountability , transparency (behavior) , language change , accounting , audit , accrual , business , developing country , sample (material) , government (linguistics) , perception , good governance , economics , value (mathematics) , finance , economic growth , political science , art , philosophy , law , linguistics , chemistry , literature , computer science , biology , earnings , chromatography , machine learning , neuroscience
Summary The objective of this study is to explore whether a relationship exists between public financial management (PFM) systems and expert perceptions of countries' governance in an international cross‐country study. We examine the extent to which variations in accounting, budgeting and auditing practices are associated with governance in a sample of 97 countries that represent different levels of development, analysing the differences between countries classified into factor, efficiency and innovation‐driven economies. Our concept of governance perception includes three dimensions: accountability, government effectiveness and corruption. We find that countries with a higher level of economic development show, on average, more sophisticated PFM systems characterized by the presentation of accrual‐based financial statements, the application of value for money audits and higher budget transparency. When analysing the sub‐samples of countries according to the level of economic development, we find that countries with similar governance perception scores show different patterns of PFM practices, suggesting that there is no one‐size‐fits‐all approach. Copyright © 2015 John Wiley & Sons, Ltd.