Archive for the ‘Spending Review’ Category

Harnessing Evaluation as a Budgeting Tool

Tuesday, April 15th, 2014

In the wake of the global financial crisis, many OECD countries are looking to increase the role of evaluation as a tool to support good budgeting. In particular, evaluation is increasingly seen as an important part of the information base necessary to underpin an effective spending review process. Spending review aims to identify savings options which might be implemented on budget, and evaluation as an important role in helping to identify savings options. This raises the crucial question of the relationship between budgeting and evaluation, which is the subject of a paper of mine which has just been published by the World Bank, entitled Connecting Evaluation and Budgeting. (more…)

Spending Review: Comprehensive or Selective?

Sunday, January 12th, 2014

The idea that spending review should become a regular part of the budget preparation process is now widely accepted. Most budget professionals now accept that the systematic and ongoing scrutiny of “baseline” expenditure to identify savings options is an essential part of good expenditure prioritization. Without systematic spending review, finding adequate fiscal space for high priority new spending – while keeping proper control over aggregate expenditure – becomes extraordinarily difficult, if not impossible.

So far, so good. The problems start when decisions are made about how to design the spending review process. It seems to have become a widespread article of faith that spending review should be always “comprehensive” or, as some put it, “zero-based”. (more…)

Budgeting in Chile

Tuesday, September 10th, 2013

Chile may be a new OECD member country, but in the realm of public financial management and fiscal policy it has a few things to teach many existing OECD members. The OECD Journal on Budgeting has just published a review of Chilean budgeting practice prepared by an OECD mission comprised of myself and two OECD staff members (more…)

Top-Down Budgeting & the Setting of Ministry Expenditure Ceilings

Tuesday, August 20th, 2013

Top-down budgeting is today widely regarded as a key element of good budgeting practice, and with good reason. In its core sense, agreed by all, top-down budgeting calls for the budget preparation process to be framed by a hard aggregate expenditure ceiling – approximately speaking, a limit which applies to the totality of government expenditure. The aggregate ceiling should be set in a top-down manner, which means that it is set at the start of the budget preparation process prior to any consideration of “bottom-up” spending requests from spending ministries. It should also be hard in the sense that, once set, it is essentially not varied during the budget preparation process. Establishing and enforcing such an aggregate expenditure ceiling is today generally viewed as crucial to ensuring that aggregate expenditure does not grow faster than is consistent with government’s aggregate fiscal policy objectives, and in particular with deficits and debt discipline.

This pertains to aggregate expenditure ceilings. But what does it mean for the setting of ministry expenditure ceilings. This is where the consensus disappears. (more…)

Spending Review

Sunday, June 9th, 2013

In the years since the onset of the global financial crisis in 2007, spending review has come to be widely used by OECD governments, principally as a tool for reducing aggregate expenditure to achieve fiscal consolidation. Spending review is, however, much more than a tool for cutting aggregate expenditure. Properly viewed, it is a core instrument for ensuring good expenditure prioritization – more specifically, for expanding the fiscal space available for priority new spending in a context of firm aggregate expenditure restraint. (more…)