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Afghanistan: A Preliminary Fiduciary and Development Risk and Cost-Effectiveness Assessment

This is the first Fiduciary and Development Risk and Cost-Effectiveness Assessment commissioned by the Government and for the Government. The conclusions of this assessment are: PFM systems are relatively strong; systemic fiduciary risks fell quickly between 2003 and 2008; the budget is not as credible as it should be – and has always been this way, the financial costs of reform overall have been relatively high; PFM reform efforts have often been issue or theme-based as opposed to team-based; there is a trade-off between development risks and fiduciary risks; corruption risks, or the risks of gaps in systems actually being exploited, have remained high; economic diplomacy principles would prima facie establish a basis for deeper and broader support from the international community for a reformist agenda set by the President; the apparent delay in forming government and general political uncertainty appears to be impacting negatively on perceptions; perceptions of the Government’s strong stance on corruption and broader reforms, appears to be having a positive impact; and next steps include road testing this report in order to build a consensus of the problems.