Budget

May 20, 2014

Budget Institutions Matter

Posted by Holger van Eden
G20 pix blog post
Most economists would agree that institutions help shape economic and fiscal outcomes. But which institutions really matter, and to what extent, is less clear. A recent IMF Board Paper and annex featuring country evaluations produced by the Fiscal Affairs Department, which was presented today here in Washington, shines a light on the G-20 countries’ efforts to strengthen their budget institutions in the wake of the global financial crisis, and evaluates their impact on fiscal policy. In particular, it asks whether strong budget institutions helped these countries during the 2010–13 period to cope with the substantial fiscal consolidation needs that arose after the Great Recession. The evidence suggests that these institutions have indeed been important.

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April 15, 2014

PEMPAL Meeting on Results-Based Monitoring and Evaluation

New Picture (7)
 Posted by Gelardina Prodani and Hakan Ay1

Image1

From March 3-6, 2014, 20 countries representing the PEMPAL Budget Community of Practice (BCOP) in cooperation with the Ministry of Finance of Turkey gathered in Antalya, Turkey for BCOP’s annual plenary meeting.2 The agenda focused on country experiences with results-based monitoring and evaluation (RBME). David Shand, an international expert in this area, acted as the facilitator for the meeting.

The meeting was formally opened by Mr. Ilhan Hatipoglu, the Director General of Budget and Fiscal Control in the Ministry of Finance of Turkey, and Mr. Martin Raiser, Director of the World Bank in Turkey.

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October 21, 2013

How to Decide on the Budget: Set Menu or à la Carte?

Posted by Renaud Duplay

The recent debate over the United States federal budget, which led to a partial government shutdown, was at times hard to follow. Behind the debate over health care reform, lay also a more procedural struggle over the way to prepare the budget on Capitol Hill. Indeed, part of the butting of heads has resulted from a disagreement over what to negotiate on, in the first place. The US Constitution is relatively light on how the budget should be passed, so many legal options were considered in recent weeks, including: passing a continuing resolution to fund federal services and agencies; passing a continuing resolution linked with a defunding of the Affordable Care Act – Obamacare; funding individual federal agencies on a vote by vote basis; funding individual programs of federal agencies given expected adverse impacts of the shutdown, such as on cancer research trials. These options were, to make it even more complicated, linked to various stances on the federal government debt ceiling: separate decision-making, a linked agreed increase, or what resulted, a temporary suspension. In all this a new federal budget for the new budget year was not on the table. This is now on Congress’ to do list for the next three months.  

All of this is possible because the US federal budget works a little bit like ordering à la carte in a restaurant: you can skip the main course if you don’t feel like it and still end up enjoying the meal (or, more often, not really). Indeed, implementing a deal over the US federal budget requires selecting from a different menu of votes depending on the content of the deal. In addition, authority to spend can be given in various ways: either by appropriations bills – for federal agencies’ operating costs for instance – or by specific legislation that grants authority to spend on entitlement programs until this very legislation is modified or repealed. Those programs are called “mandatory” which by the way sets the tone for any future discussion on them.

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October 15, 2013

A PFM View of the New French “Loi Organique”

Posted by Benoit Chevauchez[1]

France is now equipped with a fiscal rule. The organic budget law adopted last December[2] was the French government’s response to the obligations set out in the European Treaty on Stability, Coordination and Governance (TSCG) signed in March 2012. The Treaty resulted from a process initiated in December 2011 by the European Council, in the wake of the euro crisis. The basic idea of the Treaty is that “Euro zone countries” should adopt national fiscal rules in order to integrate in their own legislation the Maastricht principles of fiscal discipline that are set out in the European treaties.

Before the new treaty was ratified, the French national budget law did not address issues of fiscal sustainability. The French Constitution of 1958 was silent in this regard, even if an amendment adopted in 2008 had introduced the concept of “budget balance over the medium term”, but only as a theoretical principle without any operational impact. Similarly, the 2001 LOLF (loi organique relative aux lois de finances), and its predecessor the 1959 Organic Ordinance, wholly ignored sustainability issues.

In practice, France has had a rather modest record in terms of fiscal sustainability: its EU stability programs have seldom been respected, its macroeconomic assumptions have been frequently optimistic, and its debt level has steadily increased up to 90 percent of GDP. Thus, for France, the adoption of the new organic law (OL) is an important initiative, that might also mark a turning point in its fiscal tradition.

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May 13, 2013

Twenty-one Countries Meet in Albania to Discuss Program Budgeting Reforms

Posted by Gelardina Prodani, Ministry of Finance, Albania and Konstantin Krityan, Ministry of Finance Armenia

Albania
As Chair and Deputy Chair of the Public Expenditure Management Peer Assisted Learning (PEMPAL)[1] Budget Community of Practice (BCOP), we would like to inform you about an exciting meeting that was held recently in Tirana, Albania on program budgeting.

From February 25th to 28th 2013, the Ministry of Finance of Albania hosted 81 participants from 21 PEMPAL member countries from across Europe and Central Asia (ECA). As suggested by our BCOP members from last year’s plenary meeting,[2] the agenda focused on technical aspects of program budgeting and performance measurement. The three main sessions of the meeting covered international approaches and country cases in (i) design of programs and performance measures, (ii) budget documentation, and (iii) performance monitoring and evaluation.

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Представители двадцати одной страны встретились в Албании, чтобы обсудить переход на программное бюджетирование

Авторы: Джеральдина Продани, Министерство финансов, Албания, и Константин Критян, Министерство финансов, Армения

Albania
В качестве председателя и заместителя председателя Практикующего сообщества по бюджету (В СоР) Сети по взаимному обучению и обмену опытом в управлении государственными финансами (PEMPAL)[1] мы хотели бы проинформировать вас о встрече, которая недавно состоялась в Тиране, (Албания), по теме программного бюджетирования.

С 25 по 28 февраля 2013 года Министерство финансов Албании приняло в общей сложности 81 участника из 21 страны-члена PEMPAL из Европы и Центральной Азии (ЕЦА).  Как и было предложено членами нашего Практикующего сообщества по бюджету (BCOP) на пленарном заседании в прошлом году,[2] повестка дня фокусировалась на технических аспектах бюджетного финансирования программ и на оценке эффективности работы.  Три основных сессии заседания были посвящены международным подходам и практическим примерам стран в следующих областях: (i) дизайн программ и критерии эффективности работы, (ii) бюджетная документация, и (iii) мониторинг и оценка эффективности программ.

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January 17, 2013

How Can the Pace of Budget Transparency Be Increased? Examining the Results of the Open Budget Survey 2012

Posted by Vivek Ramkumar

IBP WB medium


The International Budget Partnership (IBP) and the World Bank Institute (WBI) are pleased to invite you to join practitioners in the fields of development and fiscal management in a discussion on how to increase budget transparency and participation around the world. The discussion will include a presentation of the results of the IBP’s latest round of the Open Budget Survey and then focus on indentifying innovative and practical suggestions for rapidly improving country performance on the Survey.

Date: 5 February 2013
Time: 9.30-11 am (Breakfast will be served from 9 am)
Venue: IFC Auditorium, 2121 Pennsylvania Avenue, Washington D.C.

There is growing interest in the role of open budgeting systems in development. An increasing body of evidence shows that the best way to manage public funds efficiently and equitably is through budget systems that are transparent, inclusive, and monitored through independent oversight institutions. Recent research studies also show that transparency can help to attract easier and cheaper international credit and thereby increase public revenues. On the other hand, lack of fiscal transparency can undermine fiscal discipline,increase borrowing costs, and promote opportunities for corruption and other leakages.

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January 03, 2013

Simplifying Budget Documents – Time for an International Standard?

Posted by Camille Karamaga

Improving the quality of budget documentation lies at the heart of many reforms aimed at enhancing understanding of the content of the budget estimates as well as fostering transparency and accountability. Some budget laws prescribe a minimum set of documents to accompany the budget estimates. These may include, for example, reports on: (i) the medium-term macroeconomic forecast; (ii) fiscal policies and public expenditure trends; (ii) medium-term forecasts of government revenues, expenditures, debt, and the fiscal balance; (iii) medium-term resource ceilings; (iv) government guarantees, contingent liabilities and other fiscal risks; (v) spending on expenditure programs and projects by sector; and (vi) projections of donor aid flows. In countries with a Westminster tradition, the budget speech includes much of this information, but additional documents may be presented to the parliament.

Improving the content and quantity of fiscal information is not the same, however, as improving its quality or transparency. More does not always mean better or clearer. Indeed, it often means the reverse. Governments tend to respond to demands for information from the parliament, financial markets, NGOs and ordinary citizens by producing more and more data, often in unprocessed form. This may get them off the hook of public “accountability”, but places them squarely on another hook, accusations of information overload and obfuscation.

The design of a strategic planning framework, medium-term budget frameworks and program budgets has led to a proliferation of detailed information, performance indicators, and monitoring and evaluation reports. Mountains of annual budget books are produced with separate estimates volumes being prepared by each line ministry. The excessive detail contained in the budget estimates weakens their usefulness as raw material for discussion by parliamentary committees. Nor are they meaningful to the general public. In short, much of the  information produced by the government easily becomes a “data cemetery” which contributes little to the decision-making process or enlightened public debate.

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