Improving the effectiveness and efficiency of the use of  government revenues was what preoccupied me while attending the Third International Conference on Financing for Development in Addis Ababa earlier this month.

Why? Because better public financial management matters just as much as mobilizing domestic revenues to assist development, yet the latter received much more attention from policymakers in Addis.

This is not to downplay the importance of donors pledging to double their support for domestic revenue mobilization or to overlook the commitment by the World Bank and the International Monetary Fund to jointly develop tools for assessing tax policies.

But enhancing government revenues is only part of the mobilization story.

So how much money can be released for development finance by better public spending? McKinsey & Company estimates that better infrastructure spending in developing countries could save 10 percent, or $250 billion annually. This does not seem exaggerated—the IMF estimates average inefficiency in public investment at 30 percent. If we acknowledge that infrastructure spending is usually about a quarter of total public spending, it seems feasible to release a trillion dollars for development every year. That’s significant. And better public spending also offers other benefits, such as increasing trust in government and improving the operating environment for the private sector to increase investment and inclusive growth.

At an Addis side event we hosted on Bolstering public financial management systems for efficiency and delivery, country and multilateral practitioners discussed measures being taken to improve public spending efficiency and service delivery.

Let me share my takeaways from this session.

First, we know more about the state of public financial management than we used to. The Public Expenditure and Financial Accountability (PEFA) framework has made a real difference – the diagnostic tool has now been applied in about 400 cases across more than 140 countries. Ivan Pavletic, Senior Adviser to the representative of Switzerland on the World Bank’s Executive Board, described PEFA as a ‘health check’ for countries’ public financial management (PFM) systems to make sure the crucial parts of PFM are functioning well and are in sync with each other.

PEFA can really make a difference on the ground. Mussa Mohammed, Director of the Ministry of Finance and Economic Development in Ethiopia, explained that his country has used PEFA assessments 22 times to plan and implement improvements to the country’s PFM system. PEFA helped Ethiopia to identify the weakest links in its public finances; and related reforms have contributed to making Ethiopia one of the fastest countries to make progress on the Millennium Development Goals, with poverty falling by half since 2005.

Second, good public investment management can increase spending efficiency substantially. This is an area of PFM that did not receive enough attention until recently. The Bank has now done work in more than 60 countries on this topic. Sanjeev Gupta, Deputy Director of the IMF’s Fiscal Affairs Department, used the event to launch its new public investment management assessment (PIMA) tool. Inefficiently implemented public investment is a drag on the entire economy – the returns to infrastructure do not accrue, while the cost of financing and taxation do. It’s a poor deal for citizens.

Third, despite gains in transparency, much more can be done. Vivek Ramkumar, Director of International Advocacy and the Open Budget Initiative at the International Budget Partnership, highlighted the increased role that citizens are playing. He noted that open budgets involve input from citizens, as we have seen in Brazil and the Philippines, thereby improving budget outcomes and people’s lives.

Fourth, the efficiency of government’s processes for public spending impact on the private sector. The General Director of International Cooperation and Development at the European Commission, Fernando Frutuoso de Melo, drew on the Commission’s discussion paper Collect more, spend better, noting that distributional effects of taxation can only be meaningfully assessed in conjunction with public expenditures.

Fifth, attention for PFM goes beyond what happens in the executive branch of government. As Thembekile Kimi Makwetu, Auditor General in South Africa and Chair of the INTOSAI Capacity Building Committee pointed out, state audit institutions can play a central role in achieving good governance and improved public finance. To that end, INTOSAI has signed a memorandum of understanding with 22 donors and partners (including the World Bank) on cooperation for better governance and accountability. Auditing is not just about checking debits and credits; it also provides a means to follow the money.

The take-away is clear – domestic financing will continue being a major component of financing for development, empowering countries to build their way out of poverty. That’s why we continue to assist countries to look within their own resources for financing their development, by providing advice, technical assistance and financial support. This is a partnership that works and delivers value for money.

As WBG President Kim and IMF Managing Director Lagarde told us recently, we’ll need to shift our thinking “from billions to trillions.”

By improving the capacity to mobilize local resources and raising public expenditure efficiency, we can pave part of the way.

Mario Marcel, a Chilean and Spanish national, is Senior Director of the World Bank’s Governance Global Practice. He previously held senior positions in the OECD, the IDB and Chile’s Ministry of Finance, where he oversaw key public sector reforms.