PEM PAL, the Public Expenditure Management Peer-Assisted Learning network, represents a multilateral effort to develop capacity and share reform experiences among countries in Central Asia and Central and Eastern Europe. As the concept note for PEM PAL observes, the initiative, initially conceptualized in 2005 by the World Bank and the United Kingdom’s Department for International Development, responds to a concern that many governments are not spending their resources as effectively and transparently as they might and that institutional controls on public expenditures have room for improvement. PEM PAL is thus designed to support the enhancement of domestic capacity in public expenditure and financial management, to play a catalytic role in scaling up aid, and to strengthen institutions and policies.
PEM PAL has several innovative features as well as some interesting challenges. For example, rather than focusing on capacity building within single countries and bilateral relations between donors and governments, PEM PAL represents a regional approach involving more than a dozen countries in a shared effort to improve the management of public expenditures. Likewise, rather than emphasizing a traditional model that relies on technical assistance provided by expatriate consultants, PEM PAL’s success depends on demand-driven “communities of practice” in which officials from different countries but with similar responsibilities develop much of their own agenda and decide how best to share experiences among themselves using networking, electronic learning, and face-to-face meetings. This is regarded as an appealing approach in a region that is in transition, with rapidly declining donor funding and with an increasing number of countries that join the EU or are graduating to IBRD status.
The diversity in PEM PAL’s membership is one of the key challenges to success. The participants do not share a common language, and relations between some countries have not always been benign. To date, three communities of practice, for budgeting, treasury, and internal audits, have been formed, which bring together practitioners at the most senior levels in these specific fields of public finance (typically up to the level of deputy minister).
