Study Finds That FreeBalance Government Customers Outperform Peer Countries

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Improved governance including Public Financial Management (PFM) reform and Government Resource Planning (GRP) solutions associated with improved government effectiveness reduced debt loads.

We believe that automation, controls and management information in the FreeBalance Accountability Suite are tools for governments to improve government effectiveness and accelerate country growth.

FreeBalance, a leading vendor of Government Resource Planning (GRP) software, today published a study comparing 10 governments using FreeBalance solutions at the national level found that countries operating FreeBalance have been outperforming other countries in their economic regions in several relevant economic indicators. “FreeBalance Government Clients: On the Path to Governance Success”, by Carlos Lipari of FreeBalance Advisory Services, is an econometrics study leveraging the International Monetary Fund World Economic Databases and the World Governance Indicators.

The study does not make any conclusions that FreeBalance software was the cause of performance improvement. “The acquisition of FreeBalance software is part of a portfolio of reforms in countries,” said Doug Hadden, FreeBalance Vice President of Products. “We believe that automation, controls and management information in the FreeBalance Accountability Suite are tools for governments to improve government effectiveness and accelerate country growth. There needs to be sustained political will to improve governance for automation tools to be effective.”

The study found:

  •     Empirical evidence that strong government effectiveness and investment levels deliver significantly higher economic growth rates. Therefore, it is a good investment for countries to invest in better governance. GRP systems are considered as a governance investment by enabling improved efficiency, controls and decision-making.
  •     Governments who use FreeBalance GRP solutions have been outperforming other countries in their regions in multiple economic indicators and are expected to continue doing so in the future based on projections. GRP systems enable multiple year planning and management of public investments that are designed for economic improvements.
  •     Governments who use FreeBalance GRP solutions have significantly reduced public debt. The reduction in public debt enables governments to increase public investment while making countries more resilient to financial shocks. GRP systems enable managing public debt through improved controls, integration of debt, revenue and expenditure system, and forecasting through cash and liquidity planning tools.
  •     The econometric analysis on cross-sectional data on a dataset of 172 countries found that government effectiveness and public investment are strongly associated with better economic growth rates. This suggests that controls and performance management functions in GRP solutions can play an important role in boosting economic growth rates. Government fiscal transparency with GRP tools enabling fiscal discipline can play a role in increasing private sector investment to enable growth.

FreeBalance Advisory Services tracks the solutions acquired or in use by developing nation and emerging economy governments for benchmarking purposes. The solutions used in approximately ¾ of the countries in the study are known. Almost 60% of these countries use Commercial-Off-The-Shelf (COTS) solutions while most of remaining 40% use custom-developed software solutions. There is significant evidence from these benchmarks that national governments that leverage Enterprise Resource Planning (ERP) software tend to experience significant project delays and cost overruns. Benchmarks also show that governments that leverage custom-developed GRP software need to redevelop the software frequently.

About FreeBalance
FreeBalance helps governments around the world leverage robust Government Resource Planning (GRP) technology to accelerate country growth. FreeBalance software solutions for public financial and human resource management support reform and modernization to improve governance, transparency and accountability. Good governance is required to improve development results. FreeBalance solutions are active in 20 countries managing more than a quarter trillion ($US) in annual budgets worldwide. For more information, visit the FreeBalance website.

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