Public Sector Accounting and Budgeting

Public Sector Accounting and Budgeting

New public financial management: Trends, frameworks, and challenges

Document Type : Review Article

Authors
Mohammad Rahimpour 1
Reza Fattahi 2
1 Department of Accounting, Faculty of Management, Economics, and Accounting, Payam Noor University, Tehran, Iran
2 Accounting Instructor, Department of Accounting, Faculty of Management, Economics, and Accounting, Payam Noor University, Tehran, Iran
10.22034/psab.2026.233619
Abstract
In recent decades, Public Financial Management (PFM) has undergone profound structural transformations aimed at enhancing transparency, accountability, and efficiency. Adopting an analytical review approach, this paper examines international and domestic research within the 1983-2025 timeframe. By synthesizing theoretical literature, international policy frameworks, and empirical studies, this research contextualizes global PFM trends within the specific context of Iran and analyzes its associated challenges. Previous studies indicate that reforms such as performance-based budgeting, accrual accounting, medium-term expenditure frameworks, and digitalization have shifted the PFM paradigm from input-based control towards public value creation and results-orientation. However, this paper argues that the success of these technical tools is severely constrained by structural impediments. Challenges such as bureaucratic resistance, politicization of financial processes, lack of institutional and human capacity, and poor data quality have often led to the formalistic and unsustainable implementation of reforms, particularly in developing countries. By examining the Iranian context, this paper illustrates how these global challenges manifest in a specific national setting, exacerbating the gap between de jure policies and de facto implementation capacity. Ultimately, the paper concludes that the sustainability of financial reforms necessitates a gradual, context-specific approach that, rather than focusing on mimicking international models, is predicated on strengthening the foundations of governance, building domestic capacity, and securing political will.
Keywords
New public financial management
Financial governance
Financial reforms
Institutional challenges

Subjects

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  • Receive Date 27 July 2025
  • Revise Date 11 September 2025
  • Accept Date 09 October 2025