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March 2014

March 25, 2014

Meeting Rising Pressures to Address Income Inequality—A User’s Guide

Posted by Sanjeev Gupta and Michael Keen

These are difficult times for ministers of finance. Fiscal constraints are tight and raising economic growth a priority. At the same time, income inequality is on the rise, and so is public pressure for governments to do something about it through their tax and spending policies. What’s a minister to do? How can he or she meet these seemingly incompatible demands?

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March 04, 2014

How to Enforce Sanctions against Financial Non-Compliance

Posted by Yugo Koshima and Olya Kroytor1


Many budget system laws include provisions to impose sanctions in cases of financial non-compliance during the budget execution process. Historically, most legal frameworks have involved sanctions on individual officers, rather than on the spending agencies they are working for. Although enforcement of financial regulations is often buttressed by sanctions, sanctions often end up as a last resort solution and in practice are rarely exercised. So, what should an effective sanctions regime look like under a modern budget system law? Reflecting on this question, it is helpful to explore legal developments in several jurisdictions.

In some countries, sanctions under the budget system law center on the notion of strict personal liability of individual officers in the payment process. In brief, “strict liability” means that a person is legally responsible for the damage or loss regardless of fault (negligence or intentional act). For example:

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