Page 16 - CMA Journal (May-Jun 2026)

Focus Section
A r t ic les S ec t ion
Accountable Governance in Pakistan: Pillars,
Perils, and the Promise of Transparency
The double pillars of public sector accountability are terms: What makes the
nancial governance and transparency. This article path of nancial
combines theory with evidence from 142 countries to governance reforms to
examine the links between good public nance and real accountability and
better development outcomes in a comparative good public outcomes?
analysis of case studies. At the core of the article are the Theoretical
results from the Open Budget Survey 2025, the Fiscal
Monitor report of the IMF for 2025, the PEFA Foundations
assessments conducted by the World Bank, and data Three theoretical
from Transparency International, which illustrate traditions are relevant to
critical transparency de ciencies, examine the study of nancial
accountability mechanisms and processes at the governance. Principal Prof. Dr. Salman
institutional and digital levels, and provide a six-pillar -agent theory (Jensen & Masood Sheikh, FCMA
Dean, Faculty of Economics and
roadmap to guide transparency reform. Indeed, the Meckling, 1976) has two Commerce at The Superior University
number of infrastructure completion rates had approaches: the
increased by 34% and the number of reports of citizen-government relationship is one of delegated
procurement fraud decreased by 27% in countries that authority, and there is information asymmetry.
reported scores above 60 on the Open Budget Index, Financial reporting, auditing, and lawmaking are
to illustrate a democratic principle of transparency.
monitoring technologies that help ll these gaps.
Introduction Public delegation on three levels (citizen, minister, and
bureaucrat to contractor) exacerbates agency issues at
Ensuring the acceptance of the citizenry of the each level.
government's responsibility for public nances is the
core of the social contract between citizens and the Institutional economics (North, 1990) further asserts
government. There is an underlying assumption of that complementing forms of PFM rules (such as scal
good stewardship in all the tax levies, money responsibility laws, procurement, and audit laws) need
appropriated, and all the contracts that are issued. The informal norms and the enforcement capacity.
impact of lost promises – caused by misallocation, Andrews et al. (2017) captured this point under the
corruption, or intentional opacity – is quanti able in banner of 'isomorphic mimicry,' which denotes
incomplete treatment facilities, ghost workers on governments taking the 'forms' of 'best-practice'
payroll, and eroding public con dence.
institutions, but without the 'functional substance’. This
The scal expense is astounding. The Fiscal Monitor failure mode is present in the Fiscal Responsibility Act,
(2025) by the IMF states that scal mismanagement or which doesn't restrict spending, and in the Supreme
opacity directly costs government revenues 2-3% of Audit Institution, which never takes its recommended
GDP, or an entire health budget in the low-income measures into action. These are questions Open
countries. But the narrative of PFM reform is more Government Partnership (as there are 78 countries of
complex globally: although the public nance origin as of 2025) is posing to the governments: what is
landscape is the most transparent it has ever been,
with digital governance tools and open budget needed to allow citizens to exercise meaningful
platforms, as well as independent audit bodies, there is oversight? By de ning an agenda based on the
still a long way to go. Now the only thing that remains Movement for Open Government, transcending the
to be dealt with is data quality, political will, and citizen rules and regulations towards democratic
engagement. participation. (OGP, 2025). Indeed, these frameworks
emphasize a political and civil society basis and a
The theoretical analysis and empirical evidence,
together with policy prescriptions, presented here, demand necessary to achieve good performance of
discuss the question of nancial governance in these the PFM reform.
14 ICMA’s Chartered Management Accountant, May-Jun 2026
Transparency- Global Evidence 2022, respectively, was preceded by this same failure
This is a polarized world in which a global survey – the (IMF, 2025).
Open Budget Survey (OBS) 2025 – was carried out in
Institutional Accountability Mechanisms
125 countries. On average, the world rating for 1. Supreme Audit Institutions
transparency is 47/100, which highlights that some
capacity to allow the public to hold governments to
account is limited in most governments. Only 22 The rst line of defense against scal mismanagement
countries (principally Nordic) have scores above 75, is the Suppression Audit Institutions (SAIs). According
to the global assessment of INTOSAI (2025), 97% of 194
while 36% have scores below 31, considered as SAIs have formal audit mandates, 41% have
‘minimal or no’ scal information (IBP, 2025).
There is a polarized world in the Open Budget Survey operational independence, and the tools necessary to
(OBS) 2025 in all 125 countries. The global average carry out performance audits e ectively. Most
transparency score is 47/100, highlighting that in most importantly, Nordic model countries with SAIs that are
governments, it is di cult to hold them accountable to independent have 31% less irregularities in
the public due to a lack of transparency. The majority of procurement and 44% more instances of audit
the Nordic countries scored above 75 (good or recommendations being implemented, which
excellent), while only 22 countries have scores higher supports the Nordic model of institutionalized audit
than 75 (good or excellent), and 36% less than 31
(minimal or no scal information) (IBP, 2025). accountability.
The last Fiscal Transparency Evaluation (FTE) 72
country assessment by the IMF shows repeatedly that 2. Public Procurement
scal risk disclosure su ers from weak performance. Public procurement encompasses the world's biggest
68% of assessed countries achieve ‘basic or below' in and most at-risk public nance spending, representing
scal risk management: contingent liabilities of USD 13 trillion or 15-20% of the world's GDP. (OECD
public-private partnerships, state enterprises, and 2024) TI's 2025 cost estimate in weak-governance
climate obligations are not su ciently reported. Each environments is from 10% to 25% of the procurement
of Zambia's and Sri Lanka's scal crises in 2021 and budget. The returns of this are particularly striking due
to the positive impact of Ukraine's Prozorro open
contracting platform on reducing tender prices by 11%
below benchmark prices; in 5 years of implementing
transparency features, it has saved USD 1.5 billion in
tender costs (EBRD, 2025).
3. Legislative Oversight
The percentage of countries surveyed by OBS whose
legislatures have enough time and information to
review budgets before they are adopted is 38% (IBP,
2025).
A key structural answer is the emergence of investments, a decrease of 6.1% in infrastructure cost
Independent Fiscal Institutions – IFIs (parliamentary overruns, and an increase of 2.3 percentage points in
budget o ces that give independent forecasts and
project completion rates (Dabla-Norris et al., 2025). The
analyses of the scal situation) from 38 to 52 countries more civil society and the free media will be able to
by 2025 (OECD, 2025).
react to the disclosures, the more robust civil society
Digital Transformation of Financial will be.
Governance The study on the impact of transparency reform over
the last 50 years across 40 countries rati ed the above
Fiscal accountability is being recon gured, and the ndings (Grimmelikhuijsen et al., 2025) which showed
architecture is changing as digital tools are that an average of 12.4 points more in the last 5 years
transforming it. Integrated Financial Management increases trust in scal institutions, whereas
Information Systems (IFMIS) are now in place in 91 transparency reforms that do not last over time
countries, and are used to automate the control of decreases trust by 7.8 points on average. The bad news
expenditures and to monitor them in real-time. is that for scal openness, on average, if conditions
Despite this, however, the quality of IFMIS is highly move from the 25th percentile to the 75th percentile
variable: 35% of IFMIS deployments in low-income across the 25 scal transparency scores of the IMF,
countries from 2005 to 2020 were not functioning after sovereign borrowing spreads decrease by 47 basis
ve years as a result of a lack of training and political points (0.47%), which lowers the cost of public
opposition to system-imposed controls (Andrews & borrowing.
Turkewitz, 2025). Conclusion •
Opening up scal data portals now, in 67 countries, to Persistent Challenges
international standards of timeliness and The basic obstacle to transparency is a political one Financial governance is not a lofty and formal term
machine-readability (GODI, 2026). They are and not technical. Opacity favors incumbents, is an integral part of the 'DNA' of a competent and
documented to have powerful feedback loops including resource rents, patronage procurement, and legitimate state. The empirical evidence reported h
between information provision and demand for the nancing of politically sensitive activities, through is instructive: Policies that are clear and
good-governance policies result in investment •
accountability, with countries with high-quality portals o -budget nancing. The feature strategy is selective outcomes and, eventually, reduced institutional tru
having 23% more investigative reporting on public disclosure, which means the publication of positive borrowing costs, and corruption. Poor and
nance, 31% more citizen complaints about information about the nances, but hiding liabilities marginalized communities are increasingly impacted
irregularities and 18% higher rates of follow-up by the and risks (Kolstad & Wiig, 2016; Kopits, 2024).
SAI (Fox & Haight, 2024). by an opaque issue. There are signs of development
Technical barriers are added to political barriers in this world, yet faltering.
Reform is gaining steam with frontier technologies. A low-income contexts. Every three years, PEFA The capacity to do independent auditing and open
blockchain payroll veri cation system employed by assessments (2022–2025) are conducted in 68 budget platforms has been greatly enhanced for
Sierra Leone has cut its wage bill ghost-worker rate low-income countries, and the results reveal that digital governance since 2020. Without demand-side
from 8.3% (saving USD 42 million annually), according annual budgets are issued on time by 74 percent of actors (a free press, a ourishing civil society, a
to UNDP (2025). The UK National Audit O ce (NAO) countries, while only 22 percent have issued year-end Legislature that acts), transparency, however, is
AI-powered tool for anomaly detection boosted the nancial statements that have received a clean audit insigni cant. The urgency to invest in nancial
detection of odd transactions. A report from the opinion within the 12-month delay allowed. The •
governance has become greater, as public nances
National Audit O ce (NAO) of the UK showed that its overall picture of a transparent landscape is still far become more concentrated, the need for nancial
AI-powered anomaly detection tool helped to detect from fair (PEFA Secretariat, 2025; IBP, 2025), due to the resources for climate action has been growing, and
unusual transactions.by 47% compared to lack of data quality, citizens' accessibility, and citizen debts have been rising because of the pandemic. We
conventional audit sampling (NAO, 2025). Applications budget summaries in accessible language in most can't a ord to do without accountable public
are indicative of ongoing scal assurance that is parts of the country. institutions. Can we a ord to get them away or not?
continuous and automated, but the democratization Strategic Policy Framework •
of these SAIs to lower capacity is still an unful lled References
agenda. The evidence is adequate to advocate a 6-pillar •
strategy on how to improve nancial governance. The • Andrews, M., & Turkewitz, J. (2025). Functiona
IFMIS implementations in low-income countries.
Transparency and Public Outcomes pillars are ordered from the ground up, in preparation
It is now a well-established link between transparency for the demands side; this is based on the experience • World Bank Policy Research Working Paper No. 108
of other countries that have successfully been • Dabla-Norris, E., Kochhar, K., & Ricka, F. (2025
and outcomes based on empirical research. According dividend of scal transparency. IMF Working Paper
to the World Bank 2010-2024 study of 104 countries, reformed, such as the pillar of producing basic
each 10-point increase in the OBS is correlated with an infrastructure rst, followed by demands side matters • EBRD. (2025). Procurement reform impact assess
ProZorro platform 2016–2025. EBRD Transition Repo
increase of 4.2 percentage points in e ciency of public later, such as in Rwanda, Indonesia, and Estonia. Annex.