Enhancing Civic Engagement in Cambodia's Public Financial Management

Vin I is a Junior Research Fellow at the Future Forum, a public policy think tank based in Phnom Penh.

This article was written as part of the Future Forum’s Inclusive Policy Fellowship, an endeavour supported by the Australian Government through The Asia Foundation's Ponlok Chomnes II: Data and Dialogue for Development in Cambodia.

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Credit: AI generated image

Public finance is one of the most pivotal policy instruments, outlining crucial financial measures such as revenue mobilization and budget expenditure. Public finance management plays an essential role in enhancing the quality of life for citizens by allocating resources to key services, including healthcare, education, social welfare programs, and infrastructure development. As such, it is crucial that the public is educated and engaged on the national budget. 

In 2004, the Royal Government of Cambodia (RGC) launched the Public Financial Management Reform Program (PFMRP) to transform the public financial management system of Cambodia step-by-step to meet international best practices and standards by 2027. Under the PFMRP, the revenue mobilization, public expenditure, and public debt management were significantly improved, which enabled the government to move from a situation of chronic cash shortages to a rapid accumulation of cash surplus.

Currently, the Public Financial Management (PFM) reform enters its fourth and final stage, "Performance Accountability", where most of the ownership and responsibilities in finance are being transferred to line ministries. To achieve and even exceed the ultimate goals of PFM reform in Cambodia, it is necessary to reinforce the participation of citizens. 

Outcomes are more equitable, with better governance, when citizens are active participants in how public resources are planned, spent, and monitored. The national budget in Cambodia has become more transparent in recent years, yet public engagement remains limited. According to the Open Budget Survey, Cambodia's budget transparency is more improved, while  public participation is very limited. Furthermore, there is a limitation of fiscal information available to the public, according to the Public Expenditure and Financial Accountability (PEFA) Performance Assessment Report 2021.

Civic engagement can help promote a deeper understanding of a government’s challenges and promote sustainable public finance management. The World Bank suggests four principles for increasing civic engagement: 1. Inform: citizens should be provided with clear information to help them understand the problem, alternatives, opportunities, and solutions; 2. Consult: citizen feedback should be taken into account; 3. Collaborate: involve citizens in parts or all of decision-making; and 4. Empower: provide citizens with the power in final decision-making. It is crucial to begin by empowering people with fiscal literacy to assist them in understanding what public financial management is, how citizens can engage, and why it is important. 

To enhance civic engagement in public financial management, Cambodia should focus on two key areas: enhancing public budgeting knowledge and financial literacy, and increasing public accessibility to fiscal information and data.

Enhance public budgeting knowledge and financial literacy 

Cambodia's overall financial literacy scored lower than 30 sampled countries, demonstrating inadequate knowledge of financial concepts, including PFM. Several approaches can be used to improve citizens' knowledge of PFM. First, the Ministry of Economy and Finance (MEF) should take action to promote public budget and finance literacy education, by cooperating with higher educational institutes to conduct in-person workshops. Target trainees should include business people, university students, NGOs, think tanks, or any interested members of the public. This provides an opportunity for the public, especially university students, to gain understanding of the government's vision, policy, reform program and/or related legal frameworks in the areas of public finance management. Moreover, PFM knowledge should be integrated into a formal degree program. Since PFM is a highly complex subject, it is necessary to provide advanced training through  a bachelor's degree or master’s degree focused on PFM. This has been accomplished by various universities in OECD countries so far, including the United States, Australia and the United Kingdom, especially at the graduate level. Cambodia should follow suit, to support the development of a more financially literate public, with more opportunities for citizens to develop knowledge and expertise in budgeting. This could be initiated and led by the Economics and Finance Institute of the Ministry of Economy and Finance, which is responsible for public economics and finance education.

The government should also launch strategic social media campaigns to widely spread  educational content on financial literacy and PFM. Since most citizens use social media in Cambodia, it is useful for promoting budgeting knowledge, especially Facebook or Youtube. The campaign could be conducted as a video series on Cambodia’s PFM topics or through sharing explanatory infographics. This will allow members of the public to gain an understanding of budgets and fiscal policies, and the government's vision, policy, and reform program. If the general public is more financially literate and educated on PFM, they can better engage, provide feedback, and influence policy.

Strengthen the publication and dissemination of fiscal information and data

Currently, the publication and dissemination of fiscal information and data can be found on the Ministry of Economy and Finance’s website. However, the accessibility of fiscal information is not yet very advanced, and scored a D on the PEFA Performance Assessment Report, which is below the standard average (from an A, B, C, D range). To improve accessibility, the government should first expand and spread the citizens' budget. The citizens' budget is a visual aid that includes charts, infographics, and illustrations to explain revenue and spending to the public. Currently, the citizens’ budget has been implemented at some line ministries, with  plans  to expand to all line ministries. This is a step in the right direction, but the expansion of the citizens’ budget should also be carried out on a subnational level. This will help to empower the public to better understand national budget allocations. 

Second, the government should leverage digital platforms to improve efficiency and centralize access to financial data and documents. For instance, in France, the DataFin portal publicizes national and local-level public financial data, with the aim of encouraging the innovative use of open public financial data to improve transparency, accountability, and citizen engagement. Currently, Cambodia is in the process of implementing the Financial Management Information System (FMIS) portal, to digitize public financial management in both national and sub-national administrations. The design of the FMIS portal should include a function that stores all fiscal data and informative documents, such as the annual budget brief, reporting of revenue and expenditures, and so on. This function should allow the public to easily search and navigate documents and data. Moreover, to ensure timely and comprehensive reporting, the fiscal information reports should be published and regularly updated to ensure the public can access the most recent version. With access to this information, the general public would be able to independently understand and analyse the effectiveness and efficiency of public expenditure and budget allocation. Promoting accessibility and public display of fiscal information and data is very important for the public to be informed and participate.

State budgeting plays an important role in improving citizens’ quality of life by allocating resources to services and main government functions. When people are actively involved in how public resources are planned, spent, and monitored, it leads to better governance and more equitable outcomes. Civic engagement also benefits the government by bringing new ideas and fostering a deeper understanding of public needs and priorities. As such, the government should take swift action to increase financial and budgeting education and access to information, in order to enhance civic engagement in public financial management in Cambodia. This can be done by promoting PFM training for the general public, integrating PFM courses into formal education, and social media campaigns, and by strengthening the publication and dissemination of fiscal information and data, including through timely reporting and the FMIS. In doing so, citizens will gain a firm foundation of knowledge needed to engage in public financial management, which will ultimately strengthen governance and ownership over the long-term health of public finances.

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