Government Cash Management: Good Practice & Capacity-Building Framework

41 Pages Posted: 20 Jul 2006

See all articles by Yibin Mu

Yibin Mu

International Monetary Fund; Harvard University; World Bank

Date Written: May 2006

Abstract

In many developing countries, government cash management is misperceived as synonymous to budget execution, accounting control, or debt management, instead of as a practice that aims to cost-effectively manage government cash positions, including their risks.

They often neglect the significant adverse impact of inadequate government cash management and the advantages associated with effective government cash management. While there is much literature on debt management, little is specifically about government cash management.

This paper aims to provide some research and analysis on government cash management practice in selected developed countries and recommend a capacity-building framework for developing countries.

It starts with a discussion of the definition and objectives of government cash management. It then presents the common features of an effective government cash management system by analyzing the practice in countries with effective government cash management.

Following the benchmarking, the paper discusses the importance of cash management, analyzes the common government cash management issues in developing countries, and offers some solutions to those common problems.

It also recommends a government cash management capacity-building framework for developing countries.

Keywords: cash management

JEL Classification: E50, H30, H50, H60

Suggested Citation

Mu, Yibin, Government Cash Management: Good Practice & Capacity-Building Framework (May 2006). Available at SSRN: https://ssrn.com/abstract=918008 or http://dx.doi.org/10.2139/ssrn.918008

Yibin Mu (Contact Author)

International Monetary Fund ( email )

1700 19th Street, NW
Washington, DC 20431
United States

Harvard University ( email )

Cambridge, MA 02138
United States

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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