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October 2016

October 26, 2016

Local Government Reform in Nepal Under the New Constitution

Nepal Under the New Constitution

Posted by Franck Bessette[1]

The 2015 Constitution defines Nepal as a federal democratic republic organized around three levels of government – federal, state and local[2]. The functions and powers of local governments will be substantially increased under this new framework. Roles will also be rebalanced. For example, district governments played a central part in the former system of local administration, but will now assume a largely coordinating role. A substantial reengineering of the public financial management system at local level will be required. The Constitution, however, is silent on many important fiscal issues, bare bones that will need to be fleshed out before the new system of intergovernmental finance can be effectively implemented.

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October 20, 2016

The Timing of the Government’s Fiscal Year

Calendar

Posted by Guohua Huang and Holger van Eden[1]

What is the best fiscal year from an economic and public management perspective? It’s a question not often asked, as it seems a topic that has been resolved by history, tradition and common sense. However, in fact governments around the world have adopted different fiscal years (FYs). The Gregorian calendar year is used by about 70 percent of IMF member countries; the end dates of the 1st, 2nd, and 3rd quarters of the calendar year are used by most other countries. A few use a religious calendar. Examples include:  

  • 1 January – 31 December. All Latin American countries, Francophone Africa, most European countries and many South East Asian countries.
  • 1 April – 31 March. Many countries with historical ties to the United Kingdom follow this calendar, including Brunei, Canada, India, Singapore, South Africa, as well as the U.K. itself.
  • 1 July – 30 June. Australia, Egypt, Kenya, New Zealand, Pakistan, Tanzania, and many countries from the southern hemisphere.
  • 1 October – 30 September. United States (federal government), Thailand, Trinidad and Tobago, and Laos.
  • Religious New Years. Countries such as Iran and Afghanistan use 21 March – 20 March.

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October 14, 2016

Ten Tips to Improve the Transparency of Budget Documents

ThinkstockPhotos-488496739_477x358px
Posted by Greg Rosenberg[1]

Many countries produce voluminous budget documentation, with reports that run for hundreds of pages, and thousands of pages of raw data[2]. The main documents form a verbose, jargon-heavy, disjointed collection of policies, spending programs, and irrelevant or marginally relevant details, with little analysis of macroeconomic or fiscal trends. In a few countries, the story is different. The budget documents are concise and plainly written. They focus on relevant information, with frank analysis of expenditure and revenue trends, and explain clearly how public finances are being managed.  

Producing transparent budget documents requires policy makers to explain complex concepts to a range of audiences. Doing so has tangible benefits. Clear, transparent budget documents can strengthen policy impact, fiscal planning, legislative oversight, and citizen involvement. Such reports enable policy makers to send signals about developing economic and fiscal trends, helping to shape public debate and foreshadowing future responses. 

An open budget that acknowledges economic and fiscal realities, in a way that is easily understood, supports accountability and effective budget planning. It enables civil society organizations to engage with the budget. This, in turn, strengthens the social contract between citizens and the state. And, crucially, the act of clear writing itself helps finance ministries to refine their own thinking on budget strategy and policy, leading to better and more coherent policy choices.

All of this may sound elementary, but experience suggests that it is not.

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