Public Financial Management and the Digitalization of Payments
- Marco Cangiano, Alan Gelb, Ruth Goodwin-Groen
- Jun 2019
- Overseas Developemnt Institute (ODI), Better than Cash Alliance, Centre for Global Development (CGD)
- International
This paper seeks to explains why digitalization of payments should become an integral component of any modern PFM system. It first defines digitalization of payments and notes, its main objectives. It then considers how digitalization and PFM are—or should be— complementary. The paper then offers a cautionary example of the challenges of developing a financial management information system (FMIS), demonstrating that technology alone cannot be a solution by itself, and presents case studies from Estonia, Ghana, India, and Mexico. Though varied, the cases show that successful digitalization of payments and PFM bring significant benefits; however, the transition often faces opposition from entrenched interests. The final section of this paper sets out some important lessons.
