CONTEXT
Good financial governance (GFG) is now an established concept in German development cooperation. Its importance is also increasingly recognised in the partner countries of German development cooperation. The relationship between government revenue and the use thereof is becoming more transparent: the development of financial relations between different levels of government, controls on the use of public funds, and transparency within the public finance system are playing a crucial role in ensuring that more public funding is made available and can be used to combat poverty more effectively and efficiently. Internationally, good governance is now a significant factor in key development debates such as the 2030 Agenda for Sustainable Development and development financing. However, the reform approaches discussed at the international level, which are often grouped together under the heading of public financial management (PFM), provide little insight into how good governance can be achieved in the partner countries. Good governance has both a normative and a politico-economic dimension. As such, the approach focuses on the one hand on values – in other words, applied methods and objectives, including human rights and gender neutrality – and on the other on the reform of public finances. However, the implementation capacity of German development cooperation in the field of good financial governance is still lacking.
OBJECTIVE
The implementation capacity of German development cooperation in the field of good financial governance has improved.
APPROACH
The project focuses on four areas:
1) International policy-making
2) Support for the implementation of international agreements
3) GFG and innovation
4) International Tax Compact (ITC) platform
The project addresses current issues relating to GFG in the international development debate. It advises BMZ on Germany’s position on these issues.
RESULTS
In the previous promotion period, the project mainly supported BMZ Division 301 – Sectoral and thematic policies; governance, democracy; rule of law; freedom of speech and of the press – in delivering its various contributions to GFG within BMZ, in the context of national development cooperation and in international processes. The project was instrumental in disseminating BMZ’s Sector Strategy on Good Financial Governance in German Development Cooperation. It also supported the development and use of the new Tax Administration Diagnostic Assessment Tool (TADAT) in the field of German development cooperation and accompanied the establishment of the Open Contracting Partnership (OCP). A manual on GFG in various areas paved the way for the dissemination of GFG in sectors such as health and the environment.