Working Paper
Economic development and institutions in Mozambique

Factors affecting public financial management

Mozambique has achieved incipient but still fragile socio-economic development since 1975. The public financial management system has been reformed and improved, but its performance has weakened since 2013.

Applying an institutional economics approach, we have identified the economic growth strategy, the separation of powers principle, and the degree of decentralization as key factors affecting the public financial management system.

As the current strategy based on natural resources seems to be failing, we suggest an alternative balanced growth strategy in the context of an effective democratic political system. It would entail the identification of policy priorities required for fostering sustainable and inclusive development.

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