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Business and Economics > Budgeting

You are looking at 1 - 10 of 26 items for :

  • Type: Journal Issue x
  • Structure, Scope, and Performance of Government x
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Cover IMF Working Papers
Inclusive GovTech: Enhancing Efficiency and Equity Through Public Service Digitalization
Manabu Nose
How could the GovTech improve budget processes and execution efficiency? Could the GovTech strengthen redistributive function of public expenditure? Based on an event-study method, this paper finds that the introduction of digital budget payments and e-procurement could significantly enhance budget transparency and help expand the coverage of social assistance to reach the most vulnerable population. Exploiting staggered adoption of digital budget payments, a synthetic control regression identifies meaningful increase in pre-tax income shares among the bottom 50th percentile and female workers, especially for emerging market and developing countries, with effects materializing gradually over 10-year period. The paper delves into the potential mechanism driving these equity benefits, highlighting the reduction in business informality as a primary channel. However, the paper emphasizes that the mere adoption of GovTech strategies or digital technologies is insufficient to unlock its full potential. The outcomes are intricately linked to supporting policies, regulations, organizational and system integration, and robust digital connectivity. The paper underscores that inter-agency coordination facilitated by a dedicated GovTech institution emerges as a critical factor for reaping both efficiency and equity gains from GovTech initiatives.
Keywords:
GovTech; Inclusion; Staggered technology adoption; Synthetic control; Expenditure efficiency; Coordination in organizations; budget transparency; GovTech adoption; GovTech maturity; budget payment; inclusive GovTech; Digital financial services; Digitalization; Income; Budget planning and preparation; Asia and Pacific; Sub-Saharan Africa; Middle East and Central Asia; Western Hemisphere
Cover IMF How To Notes
How to Design and Institutionalize Spending Reviews
Laura Doherty
and
Amanda Sayegh
Spending reviews refer to the process of conducting in-depth assessments of existing public expenditure in order to identify opportunities to reduce or redirect spending from low-priority, inefficient, or ineffective spending. They offer a systemic approach to ensuring that spending is aligned with the government’s policy priorities, is effective in achieving its intended objectives and is deployed efficiently. This How to Note outlines the various objectives of spending reviews and provides guidance on designing a spending review process, including the organizational architecture and roles and responsibilities of various stakeholders. It also discusses the various stages of con¬ducting spending reviews and mechanisms for integrat¬ing their outcomes into the budget process. This note draws on lessons and experiences from countries that have established spending reviews, while recognizing that this is an emerging area for further reform.
Keywords:
• Spending reviews; public expenditure; public financial management; budget planning; program performance; efficiency and effectiveness; analyzing spending; A. spending review objective; IMF's Fiscal Affairs Department; spending review methodology; PFM reform; Public expenditure review; Budget planning and preparation; Expenditure efficiency; Europe; Global
Cover IMF Working Papers
Unorthodox Expenditure Procedures in CEMAC and WAEMU Countries
Mr. Bruno Imbert
,
Hoda Selim
,
Ms. Gwenaelle Suc
, and
Qing Zhao
This paper takes stock of unorthodox expenditure procedures in CEMAC and WAEMU countries and assesses their potential fiscal impact. “Unorthodox procedures” are defined as spending practices that bypass legal provisions governing public expenditure processes and circumvent regular controls or other budgetary rules, including those related to budget time limits, approved ceilings, or approved appropriations. The paper shows that despite PFM reforms, recourse to such procedures has persisted—resulting in the accumulation of arrears; inadequate fiscal reporting, including large stock-flow adjustments; and corruption vulnerabilities.
Keywords:
Budget institutions; budget execution; expenditure controls; fiscal reporting; public financial management; Francophone Africa; procedures in CEMAC; PFM principle; WAEMU country; Multiyear expenditure; control procedure; Budget execution processes; Expenditure control; Budget planning and preparation; Africa; West Africa; post disbursement regularization; cash disbursement; budget authority; expenditure ceiling
Cover IMF Working Papers
Trust What You Hear: Policy Communication, Expectations, and Fiscal Credibility
Mr. Nicolas End
and
Mr. Gee Hee Hong
How do policy communications on future f iscal targets af fect market expectations and beliefs about the future conduct of f iscal policy? In this paper, we develop indicators of f iscal credibility that quantify the degree to which policy announcements anchor expectations, based on the deviation of private expectations f rom official targets, for 41 countries. We find that policy announcements partly re-anchor expectations and that f iscal rules and strong fiscal institutions, as well as a good policy track record, contribute to magnifying this effect, thereby improving fiscal credibility. Conversely, empirical analysis suggests that markets reward credibility with more favorable sovereign financing conditions.
Keywords:
Fiscal credibility; fiscal policy; forecast errors; private expectations; fiscal institutions; fiscal rules; fiscal councils; fiscal surprises; market expectation; credibility indicator; policy track record; government announcement; forecast bias; imprudent government; Fiscal rules; Budget planning and preparation; Fiscal stance; Macro-fiscal analysis; Global
Cover Staff Discussion Notes
Second-Generation Fiscal Rules: Balancing Simplicity, Flexibility, and Enforceability
Luc Eyraud
,
Mr. Xavier Debrun
,
Andrew Hodge
,
Victor Duarte Lledo
, and
Ms. Catherine A Pattillo
Fiscal rule frameworks have evolved significantly in response to the global financial crisis. Many countries have reformed their fiscal rules or introduced new ones with a view to enhancing the credibility of fiscal policy and providing a medium-term anchor. Enforcement and monitoring mechanisms have also been upgraded. However, these innovations have made the systems of rules more complicated to operate, while compliance has not improved. The SDN takes stock of past experiences, reviews recent reforms, and presents new research on the effectiveness of rules. It also proposes guiding principles for future reforms to strike a better balance between simplicity, flexibility, and enforceability. Read the blog
Keywords:
SDN; fiscal rule; business cycle; deficit bias; Fiscal policy; debt; fiscal rules; fiscal governance; balance rule; expenditure rule; rule effectiveness; rule adoption; Fiscal stance; Budget planning and preparation; Global; Europe
Cover IMF Working Papers
Independent Fiscal Councils: Recent Trends and Performance
Mr. Roel M. W. J. Beetsma
,
Mr. Xavier Debrun
,
Xiangming Fang
,
Young-Bae Kim
,
Victor Duarte Lledo
,
Samba Mbaye
, and
Xiaoxiao Zhang
Countries increasingly rely on independent fiscal councils to constrain policymakers’ discretion and curb the bias towards excessive deficits and pro-cyclical policies. Since fiscal councils are often recent and heterogeneous across countries, assessing their impact is challenging. Using the latest (2016) vintage of the IMF Fiscal Council Dataset, we focus on two tasks expected to strengthen fiscal performance: the preparation or assessment of forecasts, and the monitoring of compliance with fiscal rules. Tentative econometric evidence suggests that the presence of a fiscal council is associated with more accurate and less optimistic fiscal forecasts, as well as greater compliance with fiscal rules.
Keywords:
WP; output gap; bond yield; interest rate; independent fiscal councils; fiscal rule compliance; fiscal forecasts; fiscal council; IFC dummy; government effectiveness; absolute value; EU law; council interaction; public finance; Fiscal councils; Fiscal rules; Fiscal stance; Budget planning and preparation; Europe; Global
Cover IMF Working Papers
Governments and Promised Fiscal Consolidations: Do They Mean What They Say?
Mr. Sanjeev Gupta
,
João Tovar Jalles
,
Mr. Carlos Mulas-Granados
, and
Michela Schena
This paper analyses the causes and consequences of fiscal consolidation promise gaps, defined as the distance between planned fiscal adjustments and actual consolidations. Using 74 consolidation episodes derived from the narrative approach in 17 advanced economies during 1978 – 2015, the paper shows that promise gaps were sizeable (about 0.3 percent of GDP per year, or 1.1 percent of GDP during an average fiscal adjustment episode). Both economic and political factors explain the gaps: for example, greater electoral proximity, stronger political cohesion and higher accountability were all associated with smaller promise gaps. Finally, governments which delivered on their fiscal consolidation plans were rewarded by financial markets and not penalized by voters.
Keywords:
WP; promise gap; political economy; fiscal consolidation; budget plan; budget implementation; narrative approach; elections; fractionalization; accountability; government popularity; government effectiveness; financial market indicator; B. measuring Consolidation Promise Gaps; market's reaction; Output gap; Budget planning and preparation; GDP measurement
Cover IMF Working Papers
The Case for an Independent Fiscal Institution in Japan
Mr. George Kopits
In response to the recent financial crisis and the ensuing buildup in public indebtedness, an increasing number of advanced economies have created independent fiscal institutions (IFIs) to improve the quality of public finances and to strengthen the credibility of government policy. A review of Japan’s fiscal policymaking over the past decades suggests that Japan would greatly benefit from establishing an IFI in line with internationally accepted standards of good practice. Such an institution could help correct critical weaknesses in policymaking and anchor expectations, especially if introduced as part of a fiscal framework with a medium-term perspective.
Keywords:
WP; IFI head; a number of IFIs; IFI projection; IFI surveillance; debt ratio; Japan’s fiscal policy; public debt sustainability; independent fiscal institutions; government policy; regime shift; fiscal policy stance; IFI mandate; government initiative; Multilateral development institutions; Budget planning and preparation; Europe
Cover Technical Notes and Manuals
Expenditure Control: Key Features, Stages, and Actors
Sailendra Pattanayak
This paper defines and explains key stages of the government expenditure chain and describes the controls applied at each stage, including their objectives and key features as well as centralized vs. decentralized approaches in application of those controls. The paper also examines the influence of different administrative traditions on types of expenditure controls, including the authority and responsibility of various institutional actors. Finally, it discusses typical weaknesses/problems associated with different traditions of expenditure control and suggests specific measures for strengthening the control framework. While providing examples of expenditure control practices from more than 32 countries, the paper points out that more than two-thirds of the 85 low and middle income countries covered by the publicly available Public Expenditure and Financial Accountability (PEFA) assessments have weak systems of expenditure control that are also associated with higher levels of expenditure arrears and a lack of budget credibility. This paper will help public financial management practitioners to evaluate budget execution systems and identify priorities for strengthening expenditure controls. It will also usefully guide technical assistance work related to modernization of government budget execution and expenditure control systems, including the design and implementation of IT-based financial management information systems.
Keywords:
TNM; payment; control; country; Expenditure control; budget execution; treasury management; commitment control; transaction processing; financial management information system; expenditure arrears; cash planning; accounting and reporting; public financial management; payment order; expenditure cycle; forecasting government cash requirements; expenditure transaction; appropriation framework; expenditure control weakness; expenditure control tradition; payment control; expenditure operation; expenditure control systems; Budget planning and preparation; Budget execution and treasury management; Central government spending; Australia and New Zealand; Africa
Cover IMF Working Papers
Fragmentation and Vertical Fiscal Imbalances Lessons from Moldova
Mr. Serhan Cevik
Using a novel municipality-level panel dataset, this paper investigates the empirical characteristics of vertical fiscal imbalances (VFIs) in Moldova over the period 2005–13. The results show that the extent of variation in VFIs across 898 municipalities can be explained by the level of per capita income, fiscal capacity, and demographic characteristics, as well as the central government’s fiscal behavior that reflects fiscal constraints and policy preferences at the national level. Political affiliation does not appear to be a significant factor, and the results are inconclusive in terms of direction. While some model specifications show larger VFIs when the mayor of a municipality belongs to the same party ruling the central government, other models suggest better coordination and thus lower VFIs. Altogether, these findings underscore the need for well-coordinated reforms to create economies of scale, enhance revenue collection, and improve the composition of spending at the subnational level.
Keywords:
WP; central government; revenue; vertical fiscal imbalances; Vertical fiscal imbalance; fiscal decentralization; subnational governments; budget balance; finance statistics; fiscal policy stance; revenue effort; effort variable; dependency ratio; restructuring revenue administration; mean value; Fiscal federalism; Budget planning and preparation; Global