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April 02, 2018

Budget Development in a Medium-Term Perspective

Posted by Celeste Kubasta[1]

The Caribbean Regional Technical Assistance Center (CARTAC) recently held a workshop[2] aimed at helping member countries approach their fiscal challenges in a more strategic way, address fiscal discipline and sustainability issues, and foster transparency and accountability. The workshop also continued CARTAC’s efforts to integrate a gender perspective within budget practices. 

Macro-Fiscal Forecasting and MTEFOs

Medium-Term Economic and Fiscal Outlook papers (MTEFOs) are widely used in the region to frame the annual budget preparation exercise. The workshop sessions introduced key concepts of macro-fiscal programming and how to strengthen the role of the MTEFO as a key document in the budget development cycle. Participants were provided formats for explaining their economic assumptions, establishing budget ceilings based on projected revenues and expenditures, and building alternative economic scenarios.  These sessions were followed by an exercise on the development of a baseline fiscal outlook scenario, during which participants applied practical techniques for forecasting budget revenue and expenditure. 

Strategic Budgeting

A formal framework for linking national development plans and the annual budget is often missing in the region, as elsewhere. The strategic planning approach requires prioritization of government objectives and improved articulation of those priorities. Improvements in this area require ministries to prepare a strategy statement which describes how they propose implement the government's priorities through the budget, and over what time period. Some participating countries noted that they already prepare such statements, but these are not always linked to national level priorities. Participants conducted an exercise to prepare strategy statements using gender equity policy objectives. 

Program and performance budgeting is at the core of strategic budget reform. Most participating countries use some form of program budgeting, yet the rationale for such an approach is often lacking, and the quality of the data is weak.  Program budgeting is designed to make the linkage between policy objectives and funding explicit. Most countries in the region, however, adopted program budgeting many years ago and have not subsequently revisited their methodology, program definitions, or objectives. Participants indicated that the lack of program evaluation makes it difficult to validate the linkage between budget policies and program results. Another challenge in the region is the lack of an organized structure for the collection and updating of performance information. This problem is exacerbated by typically poor-quality indicators that often confuse basic concepts of activities, outputs, and outcomes, or encourage non-compliance.

Gender-Responsive Budgeting

Gender-responsive budgeting (GRB) was defined by participants as a set of fiscal and budgetary tools that can contribute to achieving gender and social policy objectives. Participants were introduced to gender equality issues globally and in Caribbean countries, and to different tools such as GRB statements, pre-and post-gender impact assessments, performance-related budget frameworks, and gender audits. This methodology enabled participants to see GRB not as a separate process, but the next logical step in an ongoing process of budget reform in the Caribbean, one that could ultimately lead to more equitable distribution of budgetary funds, according to the needs of men and women.

At all CARTAC conferences and workshops, countries develop action plans which set out the steps they will undertake to implement lessons learned. For the present workshop, the key was to define critical entry points for GRB, and suggest activities, partners, and challenges in the work on GRB. All the countries integrated GRB in their action plans, and included the following approaches:

  • Start with selecting pilot sectors to undertake a GRB-related analysis of relevant spending programs;
  • Support the integration of sex-disaggregated data in key performance indicators; and
  • Integrate gender requirements in budget documents, starting with the budget circular, and prepare a gender impact assessment of new spending proposals.

Some of the countries also plan to work on the preparation of gender audits, and/or the integration of gender in regular audit processes. 


These workshop sessions served as a forum for a lively discussion of budgetary practices in the region. By exchanging experiences, the participants also learned from their peers, and established networks that should facilitate the implementation of new ideas and policies in their respective countries. The action plans and knowledge exchanged at this workshop, like all CARTAC work, will be utilized to continue discussions between the IMF and country officials, and to facilitate the design of technical assistance programs. 


[1] Advisor on Public Financial Management at the Caribbean Regional Technical Assistance Center (CARTAC).

[2] The workshop took place in Port of Spain, Trinidad and Tobago on January 15 – 19, 2018.  Countries attending were Anguilla, Barbados, Bahamas, British Virgin Islands, Curacao, Dominica, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, St Vincent and the Grenadines, St Lucia, Trinidad and Tobago, and Turks and Caicos.  

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.


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