Successful public sector reform is rare in Africa. Over 12 years,Ethiopia transformed its public financial management (PFM) tointernational standards and now has the third best system in Africa thatis managing the largest aid flows to the continent. This articlepresents a framework for understanding PFM reform based on the Ethiopianexperience. Reforms succeed when they are aligned with the four driversof public sector reform: context, ownership, purpose, and strategy. PFMis a core function of the state and its sovereignty, and it is not anappropriate arena for foreign aid intervention—governments must fullyown it, which was a key to the success of Ethiopia’s reform. The purposeof PFM reform should be building stable and sustainable “plateaus” ofPFM that are appropriate to the local context, and they should not beabout risky and irrelevant “summits” of international best practice.Plateaus, not summits, are needed in Africa. Finally, a strategy ofreform has four tasks: recognize, improve, change, and sustain. Ethiopiasucceeded because it implemented a recognize–improve–sustain strategyto support the government policy of rapid decentralization. All toooften, much of the PFM reform in Africa is about the change task andclimbing financial summits.
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