Every Woman Counts: Gender Budgeting in G7 Countries

By PFM Blog Administrator    

Dear PFM Blog Readers,

Check out this blog post on Gender Budgeting by IMF Managing Director, Christine Lagarde, on the IMF's main blog site, IMFBlog. You may also be interested in the Board Paper, prepared by the IMF at the request of the Italian Presidency of the G7, on Gender Budgeting Issues in the G7, cited in that blog post. Many frequent PFM blog writers in the Fiscal Affairs Department contributed to the paper.

Enjoy!

A Conversation with Carolina Renteria

Posted By PFM Blog Administrator 

Carolina Renteria has recently taken over from Richard Hughes as Chief of the PFM1 Division in the IMF’s Fiscal Affairs Department. In this article, which is extracted from a longer conversation with Richard Allen, Carolina describes her previous career, and the fresh approaches and perspectives she plans to bring to her work in FAD.

RA: Carolina, could I start by asking you to briefly summarize your professional career so far? What skills and expertise do you bring to your new job in FAD?

CR: I come from Colombia, worked for 10 years in PFM areas as Senior Advisor to the Fiscal Council and Budget Director in the Ministry of Finance, and as Director of the National Planning Department (equivalent to being Minister of Planning). That experience gave me a very broad view of how the functions of planning, budgeting, and public finance relate to each other. For example, when I was Budget Director, we introduced a medium-term expenditure framework in Colombia for the first time. As advisor to the Fiscal Council, we were responsible for the calculation of fiscal rules and the consolidation of fiscal data. Later, I became Executive Director for Colombia at the World Bank and, from 2013-2016, I was Lead Economist in Africa for the World Bank’s macro-fiscal global practice. During this time I provided technical assistance (TA) on public investment management and other fiscal issues. My Bank experience gave me an opportunity to expand my regional knowledge, and also to assess and understand the varying levels of institutional capacity in the countries of sub-Saharan Africa.

SARTTAC is Launched and Completes its Maiden Training Course

Posted by Udaya Pant[1]

The South Asia Regional Training and Technical Assistance Centre (SARTTAC) was inaugurated on February 13^th, 2017 by the Secretary of Economic Affairs of the Government of India, Shaktikanta Das, at its first class facilities in New Delhi. Representatives of all six SARTTAC member countries (Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka) attended as did six development partners, four of whom are contributing to SARTTAC (Australia, DFID, the EU, and Korea). A delegation of senior IMF staff was led by Deputy Managing Director Carla Grasso, and included the Directors of the Asia and Pacific Department and the Institute for Capacity Development, as well as representatives of the Fiscal Affairs Department (FAD).

Both member countries and development partners commended the IMF for setting up SARTTAC within eleven months of the signing of the agreement between Minister of Finance Jaitley and the IMF’s Managing Director, Christine Lagarde. The collective efforts of several IMF departments and SARTTAC staff were recognised as were those of counterparts within India’s Finance Ministry.  Expectations over SARTTAC are very high from all stakeholders, notably with regard to its unique design in combining technical assistance and training under one roof. Member countries in particular stressed the demand-driven design of SARTTAC programmes and the need for flexible and swift responsiveness. In sum, SARTTAC was envisioned to become a center of excellence, blending capacity building, knowledge sharing and policy advice.

Big Data Analytics for Better Revenue Administration

Posted by Duncan Cleary[1]

The IMF’s senior management recognizes the potential value of Big Data and Analytics[2] for its work. In late 2015, the IMF hosted a symposium on Big Data, and following this event the Managing Director, Christine Lagarde, sponsored the Big Data Innovation Challenge, where she urged staff to ‘step out of your comfort zone and propose bold new ideas’. The challenge saw 109 entries from across 16 departments. There were ten finalists chosen by a panel of internal and external experts. Of these finalists, six were awarded seed money. A proposal from the IMF’s Fiscal Affairs Department (FAD) was placed fifth, with the title ‘Applying Analytics for Better Tax and Customs Administration’. This proposal laid out in broad terms how applying analytics can assist tax and customs administrations in improving their performance across a range of business areas, but with a focus on risk management.

FAD, through its Revenue Administration Divisions, provides technical assistance to many countries on a regular basis. The objective is for these countries to achieve systems of tax and customs administration that are sustainable, fair, and efficient. How can making better use of available data assist in achieving this goal, and what role can FAD play? The proposal from the Big Data Innovation Challenge seeks to develop a methodology that combines both in-country field work and headquarters-based analysis of micro-level tax and customs data. Tax and customs administrations are often holders of large quantities of micro level data, their ‘Big Data’, at the taxpayer/ trader level, and at the transactional level.

Debt Sustainability Challenges in Resource-Rich Developing Countries

A Guest Blog Post Authored by David Mihalyi at NRGI

Readers of the PFM Blog will be interested in a new article by the Natural Resources Governance Institute on debt sustainability challenges in resource-rich countries. The Institute has submitted comments to the IMF and World Bank on how their debt sustainability framework can better address the challenges that many developing countries are facing in light of low commodity prices.

Job Offers: Regional Public Financial Management Advisor for South Asia, based in New Delhi, India

Job Number:1600720

Advertising Department: Fiscal Affairs Department

Description

The Fiscal Affairs Department of the International Monetary Fund is seeking two experienced public financial management (PFM) experts for the IMF’s South Asia Training and Technical Assistance Center (SARTTAC) that will start its operations in early 2017. SARTTAC to be located in New Delhi, India will provide training and technical assistance support to six South Asian countries – Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka. The advisors will coordinate and deliver technical assistance (TA) to ministries of finance and related institutions in these countries, including the sub-national level in India. They will support modernization of fiscal management, budget planning and execution, and institutional capacity development in these countries. The advisors will need to liaise effectively both with senior officials, technical staff, and other TA providers. The advisors will be appointed for and initial period of one year, with possible renewal for a maximum period of four years. They will work under the administrative control of the SARTTAC Director and technical supervision of the Fiscal Affairs Department.

Latin American Treasurers Discuss Fiscal Forecasts

Posted by Mario Pessoa[1]

During July 27-29, 2016 the Paraguayan Ministry of Finance organized the seventh Latin American Treasury Forum (FOTEGAL) together with the International Monetary Fund (IMF), the Inter-American Development Bank (IDB), and the World Bank. FOTEGAL aims at providing a permanent regional dialogue for technical discussions and exchange of experiences among national treasurers. The annual seminar has been a key component of the IMF’s technical assistance program and a testimony of significant improvements in treasury management in Latin America.

The Minister of Finance of Paraguay, Mr. Santiago Peña, in his opening remarks emphasized that public finances are related not only to financial stability but also provide a tool to promote growth and development. In a country such as Paraguay with significant development needs, it is important to use public resources wisely. The Minister mentioned that the fiscal rules approved in 2013 had improved the reliability of fiscal policy, and highlighted the country’s efforts to increase public investment to promote development and benefit the population.

Lagarde Stresses Fiscal Transparency as Vital Tool in the Fight Against Corruption

Last week’s Anti-Corruption Summit hosted by UK Prime Minister David Cameron in London on May 12, 2016 brought together leaders from over 40 countries; the heads of the IMF, World Bank, and OECD; and representatives from business and civil society in effort to kick start a global effort to crack-down on the theft of public resources and use of public influence for private benefit. 

In her remarks during the morning session on “How to Expose Corruption?” the IMF Managing Director Christine Lagarde drew attention to the economic and social cost of corruption and highlighted the important role that fiscal transparency can play in global efforts to combat the misuse of public funds. In particular she drew attention to the IMF’s new Fiscal Transparency Evaluations (FTEs) as the Fund’s key instrument in encouraging governments to be more open about the state of their finances.  The full video of the summit proceedings can be found here with the IMF MD’s intervention coming at 3:15:00 to 3:18:00.

IMF Launches New Public Investment Management Assessment

 

Posted by: Richard Hughes

  ADDIS ABABA, July 15, 2015 - The IMF today launched its new Public Investment Management Assessment (PIMA) at the Third Financing for Development Conference in Addis Ababa, Ethiopia.

  Speaking at seminar on Bolstering Country Public Financial Management Systems for Efficiency and Delivery, Sanjeev Gupta (Deputy Director of the IMF’s Fiscal Affairs Department) presented the findings of a new IMF research paper entitled Making Public Investment More Efficient. The paper showed that the average country was losing around one-third of the potential benefits from their public investment to inefficiencies in the way in which those investments are managed. Mr. Gupta stressed that the potential development benefits of closing this efficiency gap are significant, saying “The most efficient public investors get twice the growth “bang” for their public investment “buck” than the least efficient public investors.” 

  Mr. Gupta went onto explain that if government want to realize the full economic and social benefits from public investments, they have to improve the way in which those investments are managed. The IMF’s new paper also found that strengthening public investment management institutions can close up to two-thirds of the public investment efficiency gap.

 To help countries evaluate the strength of the public investment management practices and identify priorities for reform, Mr. Gupta unveiled the IMF’s new Public Investment Management Assessment (PIMA). The PIMA evaluates 15 institutions that shape public investment decision-making at the three key stages:

• Planning sustainable investment across the public sector;
• Allocating investment to the right sectors and projects; and
• Implementing projects on time and on budget.

 The IMF will be piloting the PIMA over the coming year in close collaboration with the World Bank, Regional Development Banks, and country authorities

 To learn more about the PIMA and the IMF’s work on public investment click here, watch the video below, or contact us at pubinvest@imf.org.

 

 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.

Closing Efficiency Gaps Means Big Gains for Public Investment

IMF Survey - re-posted from the IMF Survey Magazine: In the News website.

• “Efficiency gaps” in public investment spending are large and hinder growth
• Better public investment management can significantly reduce efficiency gaps
• New assessment tools can identify gaps and pinpoint reform priorities

On average, about 30 percent of the potential value of public investment is lost to inefficiencies in the investment process, and closing this efficiency gap could substantially increase the economic dividends from public investment.

Developing Fiscal Risk Statements in Central Asia and the Caucasus

Posted by John Zohrab[1]

The new fiscal risk[2] provisions of the IMF’s revised Fiscal Transparency Code (English, العربية , Español, Français, Português) are resonating in Central Asia and the Caucasus. They are stimulating increased efforts to improve and expand fiscal risk disclosure.

Armenia, Georgia, the Kyrgyz Republic and Tajikistan present fiscal risk statements to parliament in their annual budget documentation. These statements – which are typically published on the ministry of finance websites – are a substantial step forward in meeting international good practice (see table below).

 

To be specific:

Mozambique’s Fiscal Transparency Evaluation

Posted by Xavier Rame, Delphine Moretti, and Esther Palacio[1]

The IMF has recently published a Fiscal Transparency Evaluation (FTE) report for Mozambique. (English/Português) This evaluation was the first to be undertaken in Africa. It shows that Mozambique has made substantial progress in making fiscal information available to the public, but highlights the scope for improvements to the budget documentation and fiscal reports, and further transparency on fiscal risks. The Mozambique FTE is one of ten pilots of the IMF’s new methodology for assessing countries’ fiscal transparency practices, and should help build a more complete picture of governments’ financial accountability practices around the world.

GFSM 2014 – the Quest for Comparable Fiscal Data

Posted by Sagé de Clerck[1]

With the release of the 2012 IMF Board Decision on Bilateral and Multilateral Surveillance, the Fund’s Managing Director, Christine Lagarde, made a statement that: “In the current challenging and highly interconnected global economic environment, it is critical to have effective surveillance to enable the early detection of risks and provide timely policy advice.” What was not explicitly stated, but implicitly understood by all, is that such surveillance and policy advice in a globally interconnected world depend on the availability of accurate and timely statistical data. Such data should be relevant, accurate and timely, and allow comparisons to be made across different time periods, and different regions and countries.

How do we derive comparable fiscal data?

The Government Finance Statistics (GFS) frameworkprovides a potential solution to the challenges highlighted by Christine Lagarde, so far as the fiscal area is concerned.The 2001 version of GFS introduced an integrated framework of stocks and flows, concepts, definitions, and classifications. It assisted compilers to prepare and report fiscal data for policy making and analysis in a consistent and comparable manner. A further step forward has been made with the recent release of the 2014 version of the GFS manual (GFSM 2014).

New Governance Arrangements for the IPSAS Board

Posted by Delphine Moretti

Following a year-long consultation, the IMF-OECD-World Bank-chaired Review Group on the Governance of International Public Sector Accounting Standards (IPSAS) has today issued its recommendations for strengthening the oversight of the IPSAS Board. They include the establishment of a new Public Interest Committee whose founding members will be the IMF, OECD, World Bank, and INTOSAI and a new Consultative Advisory Group comprised of producers and users of government financial statements.

As discussed several times on this blog and in the IMF’s 2012 paper on “Fiscal Transparency, Accountability, and Risk”, the global financial crisis highlighted the significant gaps and weaknesses in public sector accounting practices and underscored the need for more comprehensive, reliable, and timely financial reporting by governments. These concerns were echoed by the G-20 at their meeting in Moscow in February 2013, when they called on the IMF, World Bank, and OECD to work to improve the transparency and comparability of public sector financial reporting.

Strengthening PFM in the Central African Republic

 

Posted by Olivier Benon, Abdoulaye Touré and Marie-Christine Uguen[1]

From November 24—28, 2014, AFRITAC Central (AFC) organized a seminar in Douala, Cameroon, on rebuilding the budgetary and accounting  functions of the Central African Republic (CAR). The workshop was attended by 28 finance officials from CAR’s Ministry of Finance and Budget, the Ministry of Economy and Development, several line ministries (Health, Education, Public Service, and Defense) and the central bank (BEAC).

Background and objectives

Because of the tense security situation in Bangui since 2014, AFC has been unable to deliver technical assistance (TA) in CAR, and have instead used safe havens in neighboring countries such as Cameroon. The November workshop was the first of a series of similar events dedicated exclusively to CAR officials during FY2015.

Implementing an Effective TSA in Mali

Posted by Racheeda Boukezia and Benoit Taiclet¹

March 2012, Bamako, Mali:

Following insurgency and terrorism in the northern regions, civil strife and a garrison mutiny nearby Bamako, a military junta takes power, suspends constitutional order, thus triggering international retaliation. Soon after, the BCEAO -– the regional Central Bank for West African countries -- suspends transactions on behalf of the Malian government and, by doing so, chokes off the bulk of government spending. The Malian Treasury has no option but to reroute key payments through a number of commercial banks. By late 2012, not only is money scarce but it is also dispersed among more than 3,400 bank accounts. Although the transitional government laboriously succeeds in paying wages and making a few other mandatory payments, it is unable to optimize its use of cash and mobilize all idle funds. Is this the end of the would-be Treasury Single Account (TSA)?

How Far Can the IMF’s New Fiscal Transparency Code Take Us?

 

Posted by Carlos Scartascini [1]

The Fiscal Affairs Department at the IMF has been a (if not the) leader on fiscal research, policy analysis, and data generation in the world for the last 50 years. It has influenced the work of scholars, contributed to the development of professionals and policymakers, and more importantly, had a direct impact on the lives of millions of people in the developed and developing world.

Putting Accountability with Teeth into Fiscal Transparency

Posted by Jules Muis¹

On October 6, the IMF and the World Bank held a seminar on progress made in their fiscal transparency efforts. An almost full house was briefed about the revamped IMF Fiscal Transparency Code and Evaluation, and parallel plans for updating the Public Expenditure and Financial Accountability (PEFA) framework. The related Extractive Industries Transparency Initiative (EITI) was used as an example of how public-private initiatives could give a transparency initiative ownership, traction and increased impact.

IMF-World Bank Seminar on New Fiscal Transparency Code and PEFA Framework

Posted by Richard Hughes¹

On October 6, the 2014 IMF-World Bank Annual Meetings kicked off with a seminar on the new Fiscal Transparency Code and PEFA Framework, two of the key international standards for fiscal disclosure and management.

This joint IMF-World Bank event provided an opportunity to learn about and discuss the changes to these important tools for benchmarking the quality of countries’ fiscal transparency and management practices. It also marked the official launch of the public consultation of the fourth and final pillar of the Fiscal Transparency Code on Natural Resource Revenue Management.

Budget Institutions Matter

Posted by Holger van Eden

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.

ICGFM Winter Conference 2013

Posted by Carla Sateriale

The IMF’s Fiscal Affairs Department (FAD) hosted this year’s Winter Conference of the International Consortium on Governmental Financial Management (ICGFM) from December 9-11, 2013. Despite the snowfall in Washington, the attendees’ enthusiasm for PFM innovations, which was the theme of the conference, was not dampened. Dozens of officials and PFM professionals from various development organizations, governments and NGOs convened for discussions on a variety of topics related to PFM, from accrual accounting to climate change.

IMF Division Chief Richard Hughes’s opening remarks highlighted worldwide innovations in financial management, including the trend of independent fiscal councils being established, the increasing number of sovereign wealth funds around the world, and the growing adoption of accrual accounting. Major events during the conference included a presentation by Harvard’s Matt Andrews on the role of governance in development, Xavier Debrun’s exposition of FAD research of the efficacy of fiscal councils, and a discussion panel on PFM innovations headed by Richard Hughes and the World Bank’s William Dorotinsky.

The next ICGFM event will be its annual training course, from May 18-23, 2014 in Miami, Florida. The theme of it will be “Good Public Financial Management Practices in a Period of Global Adjustment.”

Download ICGFM Winter Conference 2013 Program

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. 

Workshop on Fiscal Reporting and Transparency in West Africa

Posted by Yasemin Hurcan and Florence Kuteesa

A workshop on strengthening fiscal reporting and transparency within Anglophone West Africa took place on September 23-25 in Accra, Ghana.[1] The 30 participants in the workshop were exposed to the latest developments and international standards of fiscal reporting and transparency including the IMF’s proposed new Fiscal Transparency Assessment (FTA) Code, which will be launched in the spring of 2014. They also examined the practices and gaps in the region and suggested measures to enhance the attainment of basic practices as articulated in the FTA Code.

The Deputy Minister for Finance of Ghana, Hon. Cassiel Ato Forson, underscored the critical role of fiscal reporting and transparency in sustaining economic growth within the region and strengthening fiscal institutions. He welcomed the IMF’s strong leadership in driving the reform agenda. In addition, the IMF resident representative, Mr. Samir Jahjah, and Dr. Nelson Magbagbeola, from the Economic Community of West African States (ECOWAS) Secretariat in Abuja, Nigeria, emphasized the need to strengthen fiscal reporting practices as a prerequisite for the successful harmonization of public financial management within the region.

The Late-Twentieth-Century Revolution in Fiscal Transparency

Posted by Tim Irwin 

The nineteenth century saw a revolution in the publication of fiscal information and other government data. As Ian Hacking has observed, “If there is a contrast in point of official statistics between the eighteenth and nineteenth centuries, it is that the former feared to reveal, while the latter loved to publish” (p. 20). Yet some governments today make their nineteenth-century counterparts seem like shrinking violets—the new openness being symbolized by the remodeled German parliament shown above, whose glass cupola was designed to show that parliament was “transparent, its activities open to view” (see Alasdair Roberts, Blacked Out, p. xii).

The earlier revolution was discussed in two previous posts on this blog (here and here). This post investigates the changes of the late twentieth century.

The early years of this revolution are nicely illustrated in the episode “Open Government” of the British TV series Yes Minister,[1] which screened in 1980 when the UK government published its budget and accounts, but was not nearly as open as it is now. A new government has just been elected and the incoming Minister of Administrative Affairs meets the Permanent Secretary of his department. It transpires that they have met before when the Minister, in opposition, gave the PS “a grilling over the Estimates in the Public Accounts Committee.”

Is There a “New Consensus” on PFM Reform?

Posted by Richard Allen

The Overseas Development Institute’s annual CAPE Conference (the eighth in the series) on Budgeting in the Real World took place in London from November 13–14, 2013. The Conference attracted an impressive group of 110 national and international public servants, consultants and academics who work on budget institutions. For many practitioners, CAPE is the definitive PFM event of the year. The keynote speech, which was featured in a recent blog post, was given by Antoinette Sayeh, Director of the IMF’s Africa Department. Other notable presentations were made by Matt Andrews of the Harvard Kennedy School, and Allen Schick of the Brookings Institution and University of Maryland.

The Conference included sessions on the form and functionality of budget systems, what constitutes a capable ministry of finance, how reform can deliver change in the budget process, and how improved budget systems impact on development outcomes. Much of this is familiar ground and there was a sense of déjà vu in some of the presentations. One participant asked rhetorically why there were no feedback loops in our profession, why the same messages kept on being repeated from one year to the next, and why PFM practitioners appeared to learn so little and did not change their attitudes or behavior. Nevertheless, while the agenda had a familiar look on the surface, there were encouraging signs that an important if uncomfortable truth about the nature of budget reform is beginning to sink in to the collective mind of the PFM community. Indeed, the Conference may prove to be a watershed in the development of thinking on PFM reform, though much work remains to be done to flesh out the details of the new approach—an emerging “New PFM Consensus”—and put it into practice.

New Blood for FAD

Torben Hansen (below left), formerly the Deputy Permanent Secretary responsible for the budget at the Ministry of Finance in Denmark, has recently joined the Fiscal Affairs Department of the IMF as a Deputy Division Chief responsible for public financial management. Torben was interviewed by the PFM Blog about his career and what he expects to bring to the new position.

   

Q: Why did you decide to join FAD? You have had a varied career working in the Danish finance ministry and elsewhere. What skills, experience and ideas do you expect to bring to the new job?

After working more than 20 years in the Danish finance ministry, the decision to join FAD is a unique opportunity to move my career forward in an international setting. I felt the time was right to seek new challenges, and the new position is a perfect match in terms of both my competencies and professional interests. What I can bring to the new job is first and foremost the practical experience of working with politicians and senior officials in a finance ministry and being at the core of the decision-making processes of government. Setting up the right procedures, institutions and incentives are crucial elements in maintaining a well functioning PFM system. I also hope to bring some knowledge and understanding of change management processes, and not least how difficult these are. At the end of the day, change is about people. And governmental organizations are world champions in avoiding, even opposing, change. Finance ministries have to learn how to work around these obstacles.

Budgeting in the Real World - What Do We Know? What Should We Do?

This is the keynote speech given last week, November 13^th, by Antoinette Sayeh, Director of the IMF’s African Department at the UK’s Overseas Development Institute’s annual CAPE Conference in London on why PFM matters, why reforms are difficult, and what we know to make them successful…..

I am delighted to have the opportunity to deliver this keynote address and would like to thank Messrs. Ed Hedger, Kevin Watkins, and Philip Krause for inviting me to this important conference and for that generous introduction.

Let me start by saying that from the IMF’s perspective, good governance is important for countries at all stages of development. Transparent government accounts and effective public resource management are preconditions for sustained economic growth and prosperity. Indeed, budget formulation, implementation, and oversight lie at the core of good economic governance. Strong budget institutions are essential for countries to achieve sound fiscal policies and effective expenditure programs. Budgets can only be spent once. Getting the priorities right all the way from formulation to execution, and being efficient at it, is all the more important. Transparency and fairness are most important in ensuring that expenditures are aligned with broadly agreed priorities, and in securing society’s buy-in. While most can agree to the underlying principles, the hard part is to have systems and capacity in place that actually ensure that they are respected all along the process chain. As so often, the devil is in the detail. 

Crowd Sourcing Request: A List of All International Comparative PFM Data!

Posted by David Gentry

Public Financial Management (PFM) data sources are rapidly increasing in number and quality. In the last dozen years several new major data sets have been established, such as the PEFA (Public Expenditure and Financial Accountability) Secretariat’s listing of country assessments, the Open Budget Initiative’s Open Budget Survey results, and the IMF’s Fiscal Rules Dataset. Data sets increasingly are well defined, standardized, updated regularly, and often aligned with key analytical issues. They cover at least a large subset of countries worldwide.

An initial list of PFM data sources is shown below. Readers of the PFM Blog are invited to suggest additions, keeping in mind the criteria of useful data described in the opening paragraph above. An updated list, based on reader submissions, will appear in the Blog in the near future.  

How Long Does it Take to Achieve Fiscal Transparency?

Posted by Tim Irwin

In many developing and emerging economies today there are demands for more fiscal transparency, to stop the misuse of public funds. How long might it take for these demands to translate into the kind of transparency achieved in countries like France, Sweden, and the United Kingdom? (The Open Budget Survey has information on fiscal transparency in these three countries and many others.) This new working paper on the history of fiscal transparency in Western Europe (see earlier blog) doesn’t aim to answer questions about developing and emerging economies, but it may provoke some thoughts on the subject.

The evidence it presents can be read in two different ways. On the one hand, there were debates about fiscal transparency in Europe two hundred years ago, which suggests that the transition from secrecy to transparency could be a long one. To illustrate, it’s perhaps worth quoting three advocates of transparency who, for reasons of space, didn’t get discussed in the working paper.

Online PFM Conference: ODI Event Being Streamed Live this Week

Posted by Ryan Flynn

The Overseas Development Institute (ODI) is one of the UK's leading independent think tanks on international development and humanitarian issues. It is organizing a major conference this week: the 2013 CAPE Conference: budgeting in the real world. CAPE stands for Centre for Aid and Public Expenditure, which is hosted by ODI. It aims to shape and drive the agenda for international development assistance, as well as efficient and effective public spending for development at the country level.

The conference will focus on PFM and budgeting in developing countries. The whole two-days (13 & 14 November) will be streamed live online, and questions fielded through social media (#CAPE2013) will be answered by speakers and panellist. You can register to attend here.

Update on Sukuk Financing

Posted by Yasemin Hurcan

In a speech in the World Islamic Economic Forum on October 29, 2013, UK Prime Minister David Cameron announced that the UK would like to become the first country outside of the Islamic world to issue an Islamic bond. He stated that the Treasury was working on the practicalities of issuing a bond-like sukuk instrument worth around £200 million, which it is hoped to launch as early as next year.

In addition, the London Stock Exchange is creating a new way of identifying Islamic finance opportunities by launching a world-leading Islamic Market Index. As was discussed in the blog posted on May 30, 2013, this development suggests that the use of sukuk instruments for sovereign borrowing is likely to increase in coming years. It supports the case for developing international norms on the accounting and reporting of sukuk-related transactions in PFM.

Book Review: The International Handbook of Public Financial Management[1]

Posted by Philip Joyce and Juan Pablo Martinez Guzman[2]

Over the last two decades, public financial management (PFM) has been at the core of many government reforms around the world.  As a subject with many moving parts, the field has become distinctively broad and diverse, with a great array of topics that are strongly linked with each other. For that reason, creating a comprehensive book that covers most, if not all, of the PFM related topics, is a daunting (some might say impossible) task. Richard Allen, Richard Hemming and Barry Potter, three former staff members of the Fiscal Affairs Department of the IMF, however, have managed to accomplish such an objective with the publication of the new International Handbook of Public Financial Management.  The book’s length (more than 900 pages) is itself a testament to the breadth of the field.

In addition to the broad range of topics that make this book almost inarguably the most comprehensive PFM publication to date, it is important to describe two overarching characteristics that make it unique. First, it provides an extraordinary combination of academic knowledge and empirical evidence. Thus, every topic covered is analyzed both through the lens of how ideal PFM systems should be designed and how they are to be implemented given specific country scenarios. Each chapter of the book combines evidence from developed and developing countries; emphasizing institutional arrangements, political economy constraints, and the interrelations between systems. This makes this book an excellent guide for policymakers, practitioners, and academics. Second, this book benefits from the views of the different authors, many of whom are the leading experts on the topics covered by the many chapters. Readers will benefit greatly not just from learning about the topics, but by learning about them from these world-reckoned experts.

History of Fiscal Transparency and Fiscal Secrecy

Posted by Tim Irwin

What encourages governments to publish information about their finances? A new IMF working paper, “Revealing the Mysteries of State: The Origins of Fiscal Transparency in Western Europe” aims to shed light on this question by examining the history of European fiscal transparency. It was inspired by the Fund’s work on promoting fiscal transparency (see this policy paper and the new draft Fiscal Transparency Code).

The working paper looks back as far as Athens in the fifth-century BC and notes a few of the developments of the last two decades, but it concentrates on the fiscal secrecy of the age of absolutism, in which governments used spies to uncover the accounts of other states, and on the efforts of eighteenth- and nineteenth-century reformers to get the accounts published.

One factor encouraging transparency identified by the paper is the strength of governments’ need to raise money from skeptical lenders and taxpayers. Its influence can be seen at work on many occasions, including medieval Spain and seventeenth-century England, but it was particularly evident during the French Revolution.

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.

Annual Meetings Kicks Off with Talks on Fiscal Transparency

Posted by Rachel F. Wang

Many of the key players committed to promoting greater fiscal transparency met on Tuesday for one of the first events of the 2013 IMF-World Bank Annual Meetings.

The Joint IMF-World Bank Seminar entitled “Strengthening Fiscal Transparency and Government Accounting” brought together representatives from international organizations, national governments, think tanks, professional organizations, and civil society to discuss how to promote greater fiscal openness and improve the information base for fiscal decision-making.

The event was kicked off with a welcome address from Bertrand Badré, Managing Director and World Bank Group Chief Financial Officer, and included two panel discussions on

• Strengthening fiscal transparency standards and practices chaired by Richard Hughes, Division Chief in the IMF’s Fiscal Affairs Department), and
• Improving government accounting chaired by Chuck McDonough, Vice President and Controller at the World Bank). 

Panelists included Moritz Kramer from Standard & Poor’s, Phil Sinnett from the PEFA Secretariat, Vivek Ramkumar from the International Budget Partnership, Jo Marie Griesgraber from New Rules for Global Finance Coalition, Devantri Kaur Santa Sigh from the Malaysian Ministry of Finance, Gerhard Steger from the Austrian Ministry of Finance, Fayez Choudhury from IFAC, and Ron Salole from IPSAS board.

Discussions ranged over a variety of areas, including the revision of the IMF’s fiscal transparency code and new fiscal transparency assessment; how fiscal transparency feeds into credit ratings and vice versa; the harmonization of different transparency-related norms and standards; the role that civil society has played in promoting greater fiscal openness by governments; and the opportunities and challenges in moving from cash to accrual accounting.

The keynote address, given by Gerd Schwartz, Deputy Director of the IMF Fiscal Affairs Department set the tone for the morning’s discussion.  The text of his speech is provided below:

I would like to use this opportunity to talk about the importance of fiscal transparency for fiscal sustainability and discuss the work underway to improve both standards and practices.  More specifically, there are four issues I would like to cover:

• First, I would like to highlight the progress made in promoting greater fiscal transparency over the past decade, thanks to collective efforts of many of the organizations represented in this room.
• Second, I would like to discuss some of the lessons of the economic crisis regarding the adequacy of existing fiscal transparency standards and practices.
• Third,  I would like to provide you with an update of the IMF’s ongoing work on strengthening its evaluation tools in the fiscal transparency area; and
• Finally, I would like to review the broader agenda on fiscal transparency and government financial disclosure.

Training the Trainers Program Builds Capacity in Bangladesh

Posted by Chita Marzan

With the objective of building capacity in macro-fiscal analysis and cash management in Bangladesh, a training program was conducted by the IMF Fiscal Affairs Department (FAD) and the Bangladesh Ministry of Finance from July 27 to August 5, 2013 in Dhaka. Two training modules were delivered. The module on Macro-fiscal Analysis included topics such as budget and revenue forecasting, fiscal balance and stabilization, debt dynamics, and the use of a statistical software called Econometric Views (E-Views). The Cash Management module included concepts of cash forecasting and the treasury single account, and their application to debt management and budget management.

The course was the second to take place in the country since 2012. A year ago, a first batch of Bangladesh officials mainly from the Ministry of Finance were trained jointly by FAD and the Singapore Training Institute (STI) on similar topics. Following the success of this initiative, the authorities expressed enthusiasm to train more staff in the Ministry, the Bangladesh Central Bank and the Planning Commission.

FOTEGAL: Sharing Experiences of Treasury Management in Latin America

Posted by Israel Fainboim

Latin American budget officials are members of an association (Asociacion Internacional de Presupuesto Público—ASIP) which delivers an annual international seminar and regional seminars and publishes its own journal. Recently, the countries of the region together with two multilateral donors (the Inter American Development Bank and the World Bank) joined forces with the Fiscal Affairs Department (FAD) of the IMF to set up a similar organization for state treasurers.

That is how the Government Treasury Forum of Latin American (FOTEGAL) was born in 2010. The organization was formalized in a document named the Lima Declaration and through the approval of its own statutes. A total of 16 countries are currently members of FOTEGAL (Argentina, Bolivia, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, and Uruguay) and an invitation has been extended to Brazil to join (this country has participated in several of the annual seminars). The Government of Japan (JSA) has also been a key financial supporter of the activities of FOTEGAL. In addition, the IDB is supporting the development of FOTEGAL’s website. A link to this network and many of the documents and presentations made for FOTEGAL already exists within the website of one of the government treasuries, and a separate web page is under construction.

PFM Innovations: ICGFM Issues Call for Speakers at its Upcoming Conferences

Posted by David Nummy, ICGFM Vice-President for Programs

One outcome of the global financial crisis has been recognition that Public Financial Management is critical to management of the fallout as well as to prevent future crises.   With greater attention, new approaches to the core elements of the PFM cycle have been employed and interest has grown in the experience of countries around the world in meeting the challenges of effectively managing resources in a manner that is transparent.   ICGFM will explore the innovations in PFM that have emerged as well as practices that are recognized as effective.

The International Consortium on Governmental Financial Management (ICGFM) has issued a call for speakers, panels, and presentations that address good practices in public financial management. As this topic will cover both of its upcoming conferences, proposals are solicited for both the winter conference in Washington, DC from December 9-11, 2013, and the 28^th Annual International Training Conference in Miami in May 2014.  The Winter Conference will be held at the International Monetary Fund and is conducted in partnership with the Fiscal Affairs Department (FAD).

Guinea – A Decade of Public Financial Management Reforms

Posted By Abdoul Wane[1]

In this latest in the series of blog posts by IMF area department country teams, IMF Resident Representative Abdul Wane reviews the mixed progress of PFM reform in Guinea.

Against the backdrop of economic fragility and fiscal challenges, Guinea’s medium-term programs supported by Fund arrangements over the last decade aimed to reduce financial imbalances. The growth objectives were predicated on greater fiscal discipline and an improved quality of public spending. Fiscal consolidation was to be supported by tax policy and tax administration reforms and a gradual shift in budget allocations toward priority spending, including investment. To address these challenges structural measures in Fund programs – as well as program conditionality - focused largely on PFM reforms (Figure 1 below). The 2001 PRGF request included three structural performance criteria (PC) of which two were on PFM reforms. Likewise, the 2007 PRGF request included six PCs on PFM out of a total of nine PCs.

However, since Guinea never implemented fully a program supported by the IMF, several measures had to be reprogrammed in successor programs. The sluggish implementation of reforms partly reflects Guinea’s political and institutional fragility. Vested interests stalled the reform agendas, in the absence of checks and balances. Important structural measures could not be implemented fully or were reversed because of insufficient political support, and control systems were bypassed under the watch of the political leadership. As a result, overall performance in PFM reforms has been feeble as periods of regression followed episodes of progress.

The Long and Winding……..Fight Against Corruption

Posted by Chris Iles

Corruption is a global scourge.  In the public sector it can be defined as the diversion of public resources or the misuse of public authority for personal gain. It threatens political, social and economic stability, and undermines economic growth and development by distorting the delivery of public goods and services. Transparency International calls it one of the major threats facing society and has worked hard to focus international attention on reducing corruption in the public sphere. Preventing corruption has become a key policy priority for donors, especially in fragile or conflict-affected countries.

A recent paper[1] by Norway’s U4 Anti-corruption Resource Centre reviews how much we know about the effectiveness of different anti-corruption interventions.  The answer seems to be “not much”.  The paper reviews the fairly scant literature on the impact on corruption of various reforms such as direct budgetary support, PFM technical assistance, using donor systems and applying international norms. Evidence presented by the reviewed literature suggests that most anti-corruption measures are of disputable benefit.

The notable outlier seems to be PFM reform; there is, according to the study, (relatively) strong evidence that PFM reforms have a substantial anti-corruption impact. This is gratifying for PFM practitioners but also somewhat surprising since reducing corruption is not the explicit goal of PFM reform.

PPPs on the Balance Sheet, Please!

Posted by Tim Irwin

Public-private partnerships create a practical problem for public financial management, because their fiscal costs are deferred. Instead of paying for a project during its construction, the government starts to pay only when construction is complete, which may be four or five years after any deal is signed. That means that the main tool of public financial management—budget scrutiny—can’t be used to ensure that PPPs are affordable and a better use of public money than the alternatives. For PPPs with long construction periods, even the analysis of medium-term spending plans doesn’t help.

So what can be done to ensure that the budgetary implications of PPPs are properly considered?

The World Bank Group has just published an Operational Note on managing fiscal commitments from PPPs that helps answer this question. It looks at how these fiscal commitments can be assessed and monitored, whether they are commitments to pay for the availability of a service or to protect a PPP company from certain risks. The Note gives examples of the tasks that can be carried out by different government agencies, such as budget departments, debt-management offices, and PPP units. And it considers the kinds of rules that can be put in legislation to help ensure that the right assessment and monitoring occurs.

However, the Operational Note does not take a position on whether or not PPPs should be put on the government’s balance sheet. Budgeting and Reporting for Public-Private Partnerships by Katja Funke, Isabel Rial, and me argues that they typically should be.

Keeping Reform in the DRC on Track

Posted by Oscar Melhado Orellana

In this third article on the blog in which IMF area department staff express their views on PFM reforms in “their” country, Fiscal Affairs Department technical assistance advisor, Jean Pierre Nguenang, speaks with IMF Resident Representative for the Democratic Republic of Congo (DRC), Oscar Melhado Orellana, about the importance of PFM technical assistance in keeping the IMF program on track.

What contribution are reforms of PFM, revenue administration and tax policy expected to make to improved economic and fiscal performance in the DRC?

The DRC is one of the poorest countries in the world in terms of nominal GDP, despite being considered one of the richest countries in terms of natural resources. It has more than 30 percent of the world’s diamond reserves and 70 percent of the world’s coltan. The DRC is also one of the lowest-ranked countries in the international Corruption Perception Index. The government is still struggling to bring order to the eastern part of the country where recurrent attacks on citizens are perpetrated by armed groups opposed to the regime.

A New PFM Reform Strategy for Cyprus

Posted by George Panteli[1]

The government of Cyprus recently launched a radical reform plan for modernizing the country’s public financial management (PFM) system. The reforms are crucial to the implementation of the economic and financial recovery program on which we are now engaged with the help of the European Union, the European Central Bank and the International Monetary Fund. It will enable Cyprus to bring its budget process into line with best practice in the EU region, and enforce the fiscal rules and financial discipline that are necessary to comply with our Treaty obligations. At the same time, it will create an opportunity for line ministries to enjoy a new-found flexibility in managing their staff and other resources and to focus efforts on improving the quality of education, health and other public services that in many cases lag behind out counterparts in Europe. The strategy encompasses both traditional aspects of the budget system and emerging topics such as project evaluation processes, the management of fiscal risks including public-private partnerships (PPPs) and the future development of a sovereign wealth fund.  

The reform plan is challenging and a realistic timeline is required since the plan will take several years to implement. What are the plan’s main components?  

IMF Strengthens Fiscal Transparency Code

Previously published on IMF Survey online

Following an initial consultation early in 2013, the IMF has released a draft of its revised Fiscal Transparency Code for further public consultation. The revised Code will be the basis for a renewed push for greater fiscal transparency.

Information on public finances is sometimes reported by governments in ways that do not provide a full and reliable picture of their financial position, outlook, and risks. Greater fiscal transparency helps to ensure governments make informed economic decisions and allows legislatures and citizens to hold governments accountable for their use of public resources.

The revised Code aims to strengthen fiscal reporting standards to reflect the lessons of the recent economic crisis, identify and eliminate gaps in published fiscal information, and promote greater fiscal transparency in countries at all income levels. The changes are designed to ensure that policymakers, legislators, citizens, and markets have a more complete picture of the state of public finances.

Successful International PFM Workshop for IFMIS Coordinators at IDB

Posted by Carlos Pimenta[1]

This event, which took place in Washington, DC from May 15-17, discussed the PFM challenges faced in modernizing Integrated Financial Management Information Systems (IFMIS), as they relate to technology, public accounting, treasury and budget. The workshop was attended by about 120 participants, including IFMIS coordinators from 17 countries in Latin America and the Caribbean, private consulting firms, international experts and staff from IDB, IMF and World Bank.

The agenda of the event included topics such as: (1) How to measure progress in efficiency and quality of PFM reforms and systems? (2) The role of IFMIS in cost systems and result-based management, (3) Technological advances in IFMIS development, (4) Budget transparency and accountability, (5) Definitions, techniques and regulatory framework for interoperability and its impact on IFMIS context, (6) Change management and IFMIS implementation, and (7) Service management, maintenance and support for IFMIS.

All presentations, speakers and other information can be reached using the links in the Final Report attached below (in English and Spanish) or here. 

The Rising Risks of Local Government Finances in Africa

Posted by Camille Karamaga

Recent studies by IMF staff indicate that sub-national governments are a significant source of fiscal risk in European countries, especially since the global financial crisis. One reason is that local governments are responsible for many similar functions and financial transactions as central governments. Depending on the depth of devolution, local governments may borrow, manage off-budget enterprises and engage in opaque transactions with the central government and other sectors. In many cases, unfortunately, their accounting and reporting systems are weaker than those of central government, as are the arrangements for external oversight.

In sub-Saharan Africa (SSA), as decentralization gains momentum, similar issues are arising. Although the overall size of the local government sector is still relatively small—on average around 5-10 percent of the national budget—in some countries the figures are much higher, and are growing from year to year. In Kenya, for example, the new Constitution provides for a minimum allocation of 15 percent of the most recently audited domestic revenues to county governments, and the allocation for the current financial year is around 26 percent. In Tanzania budgetary allocations to local government authorities in FY 2010/11 and FY 2011/12 were 21.2 percent and 25.3 percent of the national budget, respectively. Across the region, the trend in local government spending is on the rise as more governments decide, for largely political reasons, that decentralization promotes both better service delivery and enhanced local accountability.

Post-Crisis PFM Reforms in Mali

Posted by Christian Josz[1]

This is the second article on the blog in a series about the views of IMF area department staff on PFM reforms in “their” country. In this article Fiscal Affairs Department technical assistance advisor, Benoit Taiclet, speaks with  IMF mission chief for Mali, Christian Josz, about the importance of PFM technical assistance in keeping the IMF program on track. 

What are the challenges of working in Mali at the present time?  How resilient has the country been in the face of the recent political and economic crisis?

Mali ranks among the poorest countries in the world, and has been under a succession of IMF programs for more than two decades. External funding has always played a significant role in the country’s development with grants reaching more than three percent of GDP. More recently, in 2011 the economy traversed a very difficult period when the country was hit by a drought and terrorist attacks. Following the 2012 military coup, fueled by military defeats, persistent corruption and failing institutions, donors suspended or dramatically reduced their support.  By the end of 2012, despite the fiscal austerity measures taken by the government, including the cutting of almost all capital spending, substantial arrears had accumulated, and the country’s debt rose markedly.

Faced with such concerns, the Fund seized the opportunity of last year’s slight recovery to re-settle in the country, with the reinstatement of our Resident Representative’s office in late 2012. We stepped up our involvement in early 2013 when the military situation was resolved with the fielding of an international coalition against rebel separatists and terrorists.

In the first quarter of 2013, the recommitment of IMF support through a rapid credit facility helped trigger the return of a number of donors whose pledges for funding reached US$ 4 billion in May. Now we hope the economy will rebound, as the authorities move to overcome the challenges ahead, and the production of gold and agricultural products increases. But political and security risks still cast a cloud over the nascent recovery.

Japan Approves Continued Funding for IMF Technical Assistance to South Eastern Europe

Posted by Rocio Sarmiento[1]

Since 2009, the Fiscal Affairs Department (FAD) of the IMF has been providing considerable technical assistance (TA) to South East European (SEE) countries through a Regional Program that is sponsored by the Japanese Government, and is implemented in close cooperation with the Center for Excellence in Finance (CEF), based in Ljubljana, Slovenia. The overarching objective of the Program is to strengthen fiscal management capacity to ensure that all SEE countries—EU member and non-EU member countries alike—have the necessary capacity to design and implement measures to support fiscal consolidation and long-term fiscal sustainability.

The fiscal consolidation efforts of SEE governments have been supported by strengthening fiscal controls, improving the allocation of budgetary resources and more cost-effective service delivery, while efforts to protect revenue through more efficient revenue administration have focused on facilitating reform efforts that over time should bring the region’s tax administrations on par with modern European counterparts, and achieve consistency in the application of tax administration practices throughout the region.

Kenya’s Bold Course in PFM Reform

Posted by Ragnar Gudmundsson[1]

Note: This is the first in a new series of articles on the blog about PFM reforms in selected countries. Each article will be written by the IMF’s mission chief or resident representative in the country concerned, thus casting a fresh light on the reforms and their relationship to the Fund’s surveillance work.

Kenya is going through a huge set of political reforms, including a new Constitution.  What issues in public finance and PFM has this created? 

Kenya’s ambitious new Constitution was promulgated in August 2010, and one of its eighteen chapters is devoted to Public Finance. Key provisions in this chapter relate to devolution and the process of fiscal decentralization to the 47 newly created counties. Devolution was considered by the drafters of the Constitution as a way to promote political stability by ensuring adequate representation and the participation of all Kenyans in the running of the country. In this context, fiscal decentralization was perceived as a mechanism to enhance the delivery of social services on the ground and to promote enhanced accountability from State Officers. Moreover, a central objective of the Constitution is to promote good governance in PFM through the establishment of a sound institutional and regulatory environment at both national and county level.

Who Never Talks about Money and Religion...?

Posted by Yasemin Hurcan and Gregory Horman

Sukuk[1] is an Arabic word that is used to define borrowing instruments issued in line with Islamic norms, the sharia. Sukuk are not limited to private sector borrowers. Increasingly, these instruments are being issued by governments to finance the public sector. Although there is already a sizeable body of literature on the capital market aspects of sovereign sukuk issuance, the public financial management (PFM) dimension of sukuk has not been widely discussed. The implications for areas such as budgeting, reporting, and accounting are not insignificant.

Malaysia is recognized as one of the pioneers of sovereign sukuk issuance, and these instruments make up a significant share of the total public sector debt. Qatar and Bahrain are also notable issuers of sukuk, and in recent years Pakistan has added sukuk to its borrowing mix. In October 2012, Turkey, too, joined the group of countries issuing sovereign sukuk. Although sovereign sukuk issuances have so far been made only by countries where sharia is the governing law, or the population is predominantly Muslim, other countries have investigated sukuk as an opportunity to broaden their sources of financing. In 2008, for example, the UK Debt Management Office consulted with the market to find out the possibility of issuing sukuk as an additional borrowing instrument. These developments suggest that the use of sukuk instruments for sovereign borrowing is likely to increase in the coming years.  

PFM Law Reforms: Balancing Legislative and Executive Powers

Posted by Kubai Khasiani and Florence Kuteesa

A growing number of Parliaments in Commonwealth African countries are casting off their Westminster inheritance and demanding a greater role of parliaments in budget decision-making. The last decade has seen restive backbenchers in some of  these countries bring forward Private Member’s Bills which look to enhancing the legislature’s powers over the public purse at the expense of the executive. This approach has sometimes been fiercely contested or not fully supported, and the product of this struggle between the branches of government leaves many unresolved issues and, in some cases, an outcome that is fiscally challenging to the country.

For almost half a century after achieving their independence, former British colonies in Africa implemented a budget preparation system that enshrined a weak legislature and a strong executive in the decision-making process. Ian Lienert examined the British influence on budget systems in Tanzania, as an example, and noted that the  parliament was engaged only very late in the budget preparation process, had limited powers to alter the government budget after it was presented, and was often not consulted about changes made by the government during the budget execution phase. As a result, parliaments seldom had a significant impact on the size or distribution of government revenue or expenditure.