Public finance systems worldwide are under growing strain as governments confront climate shocks, rising inequality, and increasing demand for public services amid shrinking fiscal space and rising debt. While reform fatigue is widespread, recent experience shows that effective public finance reform is still possible—when it focuses less on new technical tools and more on how institutions work together.
Evidence from countries supported by UNDP demonstrates that reforms deliver results when they strengthen fiscal ecosystems rather than isolated institutions. Instead of layering new frameworks onto fragmented systems, successful reforms improve trust, coordination, and accountability across ministries, audit bodies, legislatures, and service providers.
In Angola, reforms supported through the EU-funded Pro PALOP–Timor-Leste programme strengthened the relationship between audit institutions, the Ministry of Finance, and Parliament. By making audit findings more timely and relevant to budget decisions, reforms were absorbed into existing systems rather than resisted, reinforcing fiscal discipline and service delivery.
In Armenia, UNDP-supported investments in digital forensic capacity enabled authorities to uncover over US$88 million in hidden turnover and nearly US$26 million in unpaid taxes. Beyond revenue gains, the reforms rebuilt trust in tax enforcement and strengthened cooperation between tax and law enforcement agencies.
Similar ecosystem-based approaches are showing results in Pacific Small Island Developing States, Sri Lanka, and Mexico, where reforms have focused on aligning institutions, clarifying roles, and linking national strategies with implementation. These efforts demonstrate that credibility, sequencing, and coherence matter more than speed or complexity.
As external financing becomes more uncertain, the ability of countries to make their fiscal systems function effectively will be critical to achieving the Sustainable Development Goals. While such reforms may be less visible than headline initiatives, they are more durable and impactful.
Public finance reform still warrants optimism—not because challenges are easing, but because experience shows that system-focused, trust-based reforms can deliver meaningful and lasting results.
