Keywords
Budget Execution
Development Budget.
Categories
How to Cite
Abstract
This paper examines the impact of public financial management (PFM) reforms on executing Afghanistan’s development budget. The key reforms analyzed include the AFMIS, TSA, MTBF, PBB, Public Investment Management Framework (PIMF), budget decentralization, centralized reporting systems, development budget framework, procurement process reforms, and cash management practices reform. The study is grounded in principal-agent, New Public Management (NPM), and institutional theory and employed an ex post facto descriptive, mixed-methods research design. The findings reveal a statistically positive relationship between PFM reforms and the development budget execution rate. Nonetheless, major challenges such as political and security instability, limited institutional capacity, and corruption hinder progress. Low execution rates of the development budget are further affected by line ministries' limited absorption capacity, delayed donor disbursements, and overly optimistic budget projections.
The study emphasizes the need for capacity building, improved coordination, and stronger oversight mechanisms to achieve PFM reform objectives, such as fiscal discipline, efficient resource allocation, and enhanced service delivery.
References
Allen, R., & Tommasi, D. (2001). Managing public ex-penditure: A reference book for transition countries. OECD.
Allen, R. (2020). Advice, money, results: Rethinking inter-national support for managing public finance. Interna-tional Public Management Review, 20(1), 50–55.
Andrews, M. (2010). Good government means different things in different countries. Governance, 23(1), 7–35.
Andrews, M. (2010). How far have public financial man-agement reforms come in Africa? HKS Faculty Research Working Paper Series, RWP10-018.
Andrews, M., Pritchett, L., & Woolcock, M. (2017). Build-ing state capability: Evidence, analysis, and action. Ox-ford University Press.
Ashraf Ghani, Minister of Finance of Afghanistan. (2003, March). National development budget SY1382-84. Af-ghanistan Development Forum.
Azeem, M., & Khan, K. (2019). Low execution rate of developmental budget in sectoral ministries of Afghani-stan: Causes and remedies. Kardan Journal of Economics and Management Sciences, 2(1), 35–47.
Byrd, W. A. (2018). Improving Afghanistan’s public fi-nances in 2017–2019: Raising revenue and reforming the budget.
Byrd, B., & Clark, K. (2017, December 5). The 2018 Af-ghan national budget: Confronting hard realities by accel-erating reforms. Afghanistan Analysts Network.
Fritz, V. (2012). Strengthening PFM in post-conflict coun-tries. https://openknowledge.worldbank.org/handle/10986/29694
Fritz, V., Verhoeven, M., & Avenia, A. (2017). The political economy of public financial management reforms: Expe-riences and implications for dialogue and operational engagement. World Bank Group.
Geofrey Abwao Magani, G., & Mwangi Gichure, J. (2018). Influence of public financial management reforms on budget implementation by Kenyan city counties. Interna-tional Journal of Law and Society, 1(2), 46. https://doi.org/10.11648/j.ijls.20180102.11
Hood, C. (1991). A public management system for all seasons? Public Administration, 69(1), 3–19.
Institute for State Effectiveness. (2019). Budget reforms in Afghanistan A practitioner’s perspective. https://effectivestates.org/wp-content/uploads/2019/02/ise-dpn-budget.pdf
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305–360.
Jensen, P., & Eckardt, S. (2010). Afghanistan public ex-penditure review. DFID.
Khan, A., & Hildreth, W. B. (Eds.). (2002). Budget theory in the public sector. Quorum.
Meyer, J. W., & Rowan, B. (1977). Institutionalized organ-izations: Formal structure as myth and ceremony. Ameri-can Journal of Sociology, 83(2), 340–363.
North, D. C. (1990). Institutions, institutional change, and economic performance. Cambridge University Press.
Paul Davis. (2012, July). Budget execution reform in Af-ghanistan.
Ruhani, M. A., & Khan, K. (2019). Low execution rate of developmental budget in sectoral ministries of Afghani-stan: Causes and remedies. Kardan Journal of Economics and Management Sciences, 1. https://doi.org/10.31841/KJEMS.2021.62
Schick, A. (1998). Why most developing countries should not try New Zealand's reforms. The World Bank Research Observer, 13(1), 123–131.
Shah, A., & Weltbank (Eds.). (2007). Budgeting and budg-etary institutions. World Bank.
Shah, M. Q. (2022). The conundrum of policy stability: The case of Afghanistan’s centralized planning and budg-eting policies. Asian Journal of Peacebuilding, 10(1), 159–183. https://doi.org/10.18588/202204.00a239
World Bank. (1998). Public expenditure management handbook. The World Bank.
World Bank. (2019, July 29). Afghanistan: Public expendi-ture update. http://documents.worldbank.org/curated/en/696491564082281122/pdf/Afghanistan-Public-Expenditure-Update.pdf
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Copyright (c) 2025 South India Journal of Social Sciences