Enhancing Governance in Public Finance: The Role of Data and Technology




Understand the use of technology by fiscal institutions to enhance governance and reduce the risk of misappropriation of public funds.


Topic Overview

With governments focusing on good governance and the fight against corruption, it has never been more important to make use of digital technology to “follow the money” in real time as resources flow through banks or other intermediaries to the ultimate beneficiaries. Digital technology and innovation can be powerful tools to reduce the opportunities for corruption and increase the risk of getting caught.


Digital technology also offers the prospect of greater oversight of government and stakeholders entrusted with a public office. In particular, potential solutions to tackle fiscal related corruption vulnerabilities could be considered around the following technological developments:

* Distributed ledger technologies, of which Blockchain is one example, when properly designed and governed, can store user identity and transaction information securely and openly. They have the potential to increase accountability and reduce vulnerabilities to corruption in government operations by enhancing data record integrity and the credibility of publicly available information. The immutable trail of transactions can also be used by government auditors and facilitate enforcement of regulations.


* Open data or big data. A growing number of countries provide open access to data from governments/public institutions in a machine-readable format that allows users to explore, analyze and reuse the data. It can increase transparency and accountability, for example by showing where and how public money is spent. ‘Big data’-sets can also be analyzed to help identify patterns of potentially corrupt practices.


* Machine learning and artificial intelligence (AI) can reveal patterns and practices that are too complex for humans to detect. AI can process large amounts of data and quickly detect pat­terns that could indicate potentially corrupt behaviors.


Areas for proposal submission:

* How can the above technologies be used by fiscal institutions to enhance governance and reduce the scope for misappropriation of public funds? (footnote 1) What is the basic Financial Management Information System (FMIS) needed to implement these new technologies?


* What lessons can be drawn from the use of these technologies in different countries and how can these lessons help government agencies address standardization, security, and legislative/regulatory issues regarding these technologies? How can countries address the legal and other issues associated with transparency and accessibility of information (for example, the question of increased transparency vs. privacy of information, or the issue of the quality of the information and data disclosed)?


* What are other aspects of technology and transparency related to PFM (for example, citizens and NGOs participating in the budget process), what are the legal issues associated with those, and how can they be addressed?


*What are the real benefits of blockchain for PFM? How can blockchain improve various aspects of PFM, such as contract design on tendering and payout processes in the implementation of a project by line ministries? How can blockchain result in better citizen experience and service delivery? (footnote 2)


Footnote 1:  Fiscal Institutions include revenue authorities, government treasuries, procurement agencies, and supreme audit institutions.

Footnote 2: This could cover both broader topics and selected specific matters, dissecting the broader topics (e.g. procurement, certain categories of expenditures)