At this year’s Pacific Update, our panel on Accountability Ecosystems in the Pacific returned to a question that continues to challenge both policymakers and practitioners: why do so many public financial management (PFM) reforms fall short of delivering meaningful impact?

Despite years of investment in legislation, frameworks, and systems, many Pacific Island Countries still face gaps between what accountability looks like on paper and how it is experienced by citizens. 

What emerged in the discussion was not a rejection of reform – but a clear call to redesign financial systems around what matters, and for whom.

From Form to Function

The central message was clear: function must come before form. Good financial governance is not about ticking off international benchmarks or replicating models – it is about creating systems that can deliver services, managing risk, and adapting to political and social realities.

Lisa Denney from La Trobe University, who joined the panel, captured this challenge well: 

"There’s the picture that legal frameworks paint and then there’s the porous, relational reality of how decisions are actually made. If reforms don’t take this into account – if they assume power flows neatly through formal structures – they risk creating systems that exist in parallel to the real processes of influence and negotiation.

• Designing PFM systems that deliver requires asking hard questions at the outset:
• Who holds the real levers of decision-making, and how do they use them?
• What incentives do different actors face – not just in government, but in communities, churches, and the private sector?
• What kinds of accountability are people already practicing, even if they fall outside formal reporting lines?

Accountability as Nation-Building

Gregoire Nimbtik from the Melanesian Spearhead Group and former Permanent Secretary to the Vanuatu Prime Minister’s Office, reframed the problem in broader terms: accountability is inseparable from citizenship and nation-building. If people feel disconnected from the state – if public finance is something abstract and distant – then oversight mechanisms lose their meaning.

In the context of the Pacific, power is not concentrated to a single track. It is dispersed across formal state structures, traditional leadership, church networks, family obligations, and customary authorities. Designing effective PFM systems means acknowledging this complexity – not as a challenge to be managed, but as the actual environment in which public finance operates.

When systems are designed without this awareness, they may be technically sound but socially brittle. They might meet procedural standards while failing to gain legitimacy or build trust. Conversely, systems that are attuned to relational dynamics and local expectations may deliver better outcomes, even if they don’t conform neatly to global templates.

Designing for Delivery, Not Just Compliance

The conversation also turned to the challenge of proxy indicators. While indicators are essential for planning and monitoring, there is growing recognition that they can distort priorities if not carefully chosen.

Too often, we measure what is easy to track—number of audits conducted, policies published, committees trained—without asking whether these activities contribute to actual outcomes. In some cases, proxy indicators create incentives that divert attention from the end goal. We run the risk of improving the scorecard while missing the point.

To counter this, indicators must be rooted in context and purpose. They should reflect delivery, trust, and usability, not just technical compliance. Most importantly, they should be seen as tools for learning and adjustment – not as the definition of success in themselves.

A Pacific Way Forward

As Neelesh Gounder from the University of the South Pacific pointed out, financial systems need to support decision-making closer to the ground, especially by civil servants and subnational actors, and avoid triggering paralysis through fear of making mistakes. That requires not just reforms, but a culture of judgement, learning, and responsibility.

Ultimately, the panel highlighted a critical shift underway in Pacific PFM thinking: one that moves away from reform-as-blueprint and toward reform-as-relationship. A shift from importing systems to crafting ecosystems that reflect how power, trust, and accountability work.

These insights align with broader discussions in the development community. The Thinking and Working Politically (TWP) Community of Practice's recent report, The Political Economy of Accountability Ecosystems in the Pacific, underscores the importance of tailoring accountability approaches to the specific political settlements and power configurations within each country. The report emphasizes that effective accountability mechanisms must engage with the existing social and political structures, including traditional authorities and informal networks, to be truly impactful.

If the goal is better services, greater equity, and stronger public institutions, then our task is not to simplify complexity – but to work with it. That begins with designing public finance systems that don’t just meet global standards, but that deliver for people in ways they can see, feel, and believe in.

This article builds upon discussions from the Pacific Update 2025 panel on Accountability Ecosystems in the Pacific and incorporates findings from the TWP Community of Practice's report, The Political Economy of Accountability Ecosystems in the Pacific. The UNDP Vaka Pasifika Project is funded by the European Union.