Service Delivery & PFM Series · MDB Reform Monitor · March 2026
PEFA at the Crossroads: Service Delivery, Core Controls, and the Cost of Losing the Thread
The question that motivated the creation of the PEFA framework was simple: is public money reaching the people it was allocated to serve? Twenty years later, the Secretariat is promoting PEFA Climate, PEFA Gender, PEFA++, and PEFA SDGs. The average PEFA score for Sub-Saharan Africa remains at 2.2 out of 4.0 — the adequate performance threshold is 2.8. Every one of Schick’s seven foundational indicators is below that threshold. The framework has lost the thread. This note attempts to find it again.
Part I — How the PEFA Secretariat Lost Its Way
The original PEFA framework was built on a disciplined logic. Thirty-one indicators. Seven pillars. A complete diagnostic of the public financial management cycle from budget preparation to external audit. Every indicator was selected on a single criterion: does weakness here result in public money failing to reach its intended destination?
That discipline is being systematically eroded by donor-driven framework expansion.
The Product Range Today
Who Is Driving This
Look at the PEFA Secretariat’s partner list: European Commission, IMF, World Bank, France, Luxembourg, Norway, Slovak Republic, Switzerland. These are the donors whose parliamentary accountability frameworks require visible, reportable outputs on climate, gender, and the SDGs. PEFA Climate generates exactly the kind of diagnostic engagement that satisfies European parliamentary scrutiny. The fact that the country’s cash management predictability score remains at 2.2 — meaning that district health officers receive their budget allocations unpredictably and late — does not appear in any donor’s parliamentary report.
The Three Costs of Framework Expansion
First, it dilutes attention. A Finance Ministry completing a PEFA national assessment, a PEFA Climate annex, and a PEFA Gender annex simultaneously is devoting its most capable officials to three diagnostic exercises. Those officials are not available to implement the recommendations of the previous assessment. In smaller ministries, the diagnostic exercise is itself a capacity drain.
Second, it creates perverse incentives. A government that scores poorly on core PEFA indicators but enthusiastically adopts PEFA Climate can present a mixed picture to donors. The supplementary framework becomes a reputational hedge against poor performance on the foundational indicators.
Third, it sends the wrong signal. When the Secretariat promotes PEFA Climate with the same homepage prominence as the original 31 indicators, it tells Finance Ministries that climate responsiveness is as important as cash management. For a government with limited PFM capacity, this is exactly the wrong message.
Part II — What Schick Said: The Foundational Seven and the Data
Allen Schick’s foundational contribution — set out most accessibly in “Why Most Developing Countries Should Not Try New Zealand’s Reforms” (1998) — rests on a hierarchy that is violated every time a donor pushes an advanced module into a country that has not secured the foundations. Governments must master internal control before they exercise managerial discretion. They must operate reliable cash-based accounting before transitioning to integrated PFM frameworks. They must budget effectively for inputs before budgeting for outputs or outcomes.
| PEFA Indicator | What It Measures | SSA Average | Threshold (C) | Verdict |
|---|---|---|---|---|
| PI-01: Budget Reliability | Does the approved budget match what is executed? | 2.4/4.0 | 2.5 | FAILING |
| PI-21: Cash Management | Does cash reach service delivery points predictably? | 2.2/4.0 | 2.5 | CRITICAL |
| PI-23: Payroll Controls | Is the wage bill free of ghost workers? | 2.3/4.0 | 2.5 | FAILING |
| PI-24: Procurement | Are contracts awarded transparently? | 2.1/4.0 | 2.5 | CRITICAL |
| PI-27: Financial Data Integrity | Are bank accounts reconciled daily? | 2.0/4.0 | 2.5 | CRITICAL |
| PI-29: Basic Accounting | Are timely cash-basis financial statements produced? | 2.1/4.0 | 2.5 | CRITICAL |
| PI-30: External Audit | Is there an independent auditor holding the executive to account? | 1.9/4.0 | 2.5 | CRITICAL — LOWEST |
The Form vs. Function Gap
What has improved in twenty years? The Form indicators — budget documentation (PI-6 at 3.2), legal frameworks, published circulars. Countries can produce documents. What has not improved: the Function indicators — cash management, payroll, procurement, external audit. PI-30 External Audit scores 1.9/4.0 — 80% of SSA countries at D or below. Of 31 countries with repeat assessments, 23 showed zero change on PI-23 Payroll Controls. The ghost workers are still there.
The contrast that lands the argument: PI-25 (Tax Revenue Administration) scores 3.05 — the highest of all 31 indicators. PI-30 (External Audit) scores 1.9 — the lowest. The average assessed country collects taxes competently. It audits them almost not at all.
Part III — The SDI Bridge: Connecting PFM Failure to Service Delivery Reality
The World Bank’s Service Delivery Indicators (SDI), developed from 2010 onwards, represent exactly the “basics first” measurement architecture that the PEFA programme should be anchored to. Where PEFA measures the system, SDI measures the outcome — what actually happens when public money reaches the point of citizen contact.
In Nigeria’s SDI health surveys, significant gaps in medicine availability and provider knowledge scores were documented across sampled states. In Tanzania, repeated SDI rounds showed that teacher absence and knowledge deficits persisted even as aggregate education spending increased. These are not edge cases. They are the modal condition across a large share of the countries that both AFRITAC and the PEFA Secretariat serve.
The PEFA-SDI Mapping
| SDI Finding | PFM Failure Mode | PEFA Indicator | Schick Criterion |
|---|---|---|---|
| Provider absence | Salary paid; worker not present | PI-23: Payroll Controls | Operational efficiency |
| Medicine stockout | Procurement failure; cash not released | PI-24 + PI-21 | Operational efficiency |
| Diagnostic knowledge gap | Training budgets not executed | PI-21: Cash Management | Allocative efficiency |
| Infrastructure unavailability | Capital maintenance not funded | PI-27: Financial Data Integrity | Aggregate fiscal discipline |
| Teacher absence | Payroll not linked to deployment | PI-23: Payroll Controls | Operational efficiency |
| Textbook shortage | Procurement and cash management failure | PI-24: Procurement | Operational efficiency |
| Poor learning outcomes | All of the above, compounding | All foundational indicators | All three Schick criteria |
Part IV — A Personal Note: Tanzania, 2006, and the Work That Has Not Been Done
I was involved in the design of the PEFA indicators in 2003 and 2004. The team was small. Five or six. The premise of that work was straightforward: we were building a tool that would allow us to measure, with internationally comparable scores, whether the PFM system of a developing country was functioning well enough to deliver services to citizens.
That premise has not changed. The problem it was designed to address has not changed. What has changed is the Secretariat’s direction of travel.
The foundational indicators we designed — cash management, payroll controls, procurement integrity, external audit — are the same indicators that remain below the adequate performance threshold in Sub-Saharan Africa today. Twenty years of assessments. Hundreds of TA missions. Billions of dollars in donor support for PFM reform. And the score at the bottom of the table — external audit, PI-30, at 1.9 out of 4.0 — has barely moved.
That is the accountability gap. Not the absence of a climate budget tag. The absence of an auditor who can hold the executive to account for how money was spent. The work that was started in Tanzania in 2006 has not been completed. It has been displaced — by donor agendas, by framework expansion, by the institutional logic of an organisation that needs to demonstrate relevance to the funders who keep it running.
Recommendations
Conclusion
The PEFA framework was designed to answer one question: is the public financial management system of this country working well enough for public money to reach the people it was allocated to serve? The SDI framework provides the ground truth against which that question can be evaluated. The Schick sequencing principle provides the analytical framework for understanding what must happen first.
Together, they point to the same conclusion: the basics are not in place. The external audit score is 1.9 out of 4.0. The cash management score is 2.2. The procurement score is 2.1. The teacher is absent. The medicine is not on the shelf. The child is not learning.
No climate budget tag will fix this. No gender-responsive budgeting annex will fix this. No five-framework simultaneous assessment will fix this. What will fix this is the same thing that was identified in Tanzania in 2006: functional cash management. Clean payrolls. Transparent procurement. An auditor with teeth.