Archive for the ‘Budget Preparation’ Category

Should Aggregate Expenditure Ceilings be Comprehensive?

Monday, May 9th, 2016

Aggregate expenditure ceilings are today a feature of budgeting in many OECD countries. An article of mine just published in the OECD Journal on Budgeting addresses a key design issue of the coverage of aggregate expenditure ceilings – should they cover the totality of government expenditure, or is it legitimate to exclude certain categories of expenditure? (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…)

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…)

PB Manual published in Russian

Wednesday, June 13th, 2012

The manual Performance-Based Budgeting is now available in Russian and Bosnian-Serbo-Croat translations, thanks to PEMPAL, the organization of Eastern European budget officials. The manual, written by myself and originally published in 2010 by CLEAR/World Bank, is a primer on the key forms and elements of performance budgeting. It covers a wide range of topics including  program budgeting, the performance information underpinnings of PB, and the relation of PB to other budgeting and accounting reforms. To access the manual, please go to the following links: English version; Russian version; Serbo-Croat version. It is anticipated that a Spanish translation will be prepared in the near future.

New Performance Budgeting Manual

Saturday, September 17th, 2011

The global CLEAR initiative – led by the World Bank – has just published an important new manual on performance budgeting. (more…)

Baseline Expenditure Projections and Employment Inflexibility

Thursday, October 7th, 2010

The importance of good baseline expenditure projections – discussed in recent blog entries by myself and Jordi Baños Rovira – has just been underlined further by the European Commission’s recently-published proposal to make it compulsory for member countries to produce detailed medium-term expenditure (as well as revenue) projections “based on unchanged policies”. This underlines further the pressing need to improve methodologies for estimating baseline expenditure. (more…)

Budget Baselines: comment by Jordi Baños-Rovira

Thursday, September 23rd, 2010

Responding to my recent blog on budget baselines, Jordi Baños-Rovira of the Catalonia Budget Directorate (Spain) writes:  I totally agree concerning the importance of producing sound expenditure baselines projections (also called “continuation budgets” or “current services baselines”), not only for traditional annual budgeting, but specially for elaborating medium-term expenditure frameworks (which should be totally integrated with annual budget elaboration). (more…)

Budget Baselines: Essential and Overlooked

Wednesday, September 15th, 2010

Accurate projections of the “budget baseline” are one of the most important budget preparation tools in support of fiscal discipline. The budget baseline is a projection of where aggregate expenditure is heading if government policy remains unchanged – expressed differently, of inertial trends. (more…)

How the UK Will Wield the Razor

Sunday, June 13th, 2010

The new British government has just released a document explaining the process it will use to achieve drastic fiscal consolidation during this year’s Spending Review. The process will be closely modeled on the successful Canadian program review of 1994-95. (more…)

Keeping the Lid on Aggregate Spending

Tuesday, June 8th, 2010

How can government maintain a firm “top-down” limit on aggregate spending during the budget preparation process? I suggested in an earlier blog that an answer to this could be found in a budget process based on two key principles. (more…)