PB Manual published in Russian

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.

Balanced Budget Rule Finalized: Basic Problem Remains

January 31st, 2012

Now that the content of the European-wide balanced budget treaty has been finalized, how does it stack up? In my last blog, I noted out that any permanent balanced budget rule is inappropriate because, in the long-term, it implies zero public debt. This is inconsistent with the proposition that moderate levels of public debt have a legitimate role to play, particularly in the financing of infrastructure. In the final version of the treaty, we now have a provision which relaxes marginally the budget balance requirements for countries which have debt levels significantly below 60 percent. Does this then solve the problem? Read the rest of this entry »

European Balanced Budget Rule

January 16th, 2012

EU fiscal rules have never been fully coherent. The adoption of constitutional rules requiring European governments to run permanent structural balanced budgets – pursuant to the treaty currently being negotiated in Brussels – will, however, make them totally incoherent and contradictory. Read the rest of this entry »

New Performance Budgeting Manual

September 17th, 2011

The global CLEAR initiative – led by the World Bank – has just published an important new manual on performance budgeting. Read the rest of this entry »

Is Program Budgeting Unworkable?

July 12th, 2011

Program budgeting has many critics. One of the most prominent is Allen Schick, who has advanced the proposition that budgeting by programs is unworkable because it is inconsistent with budgeting by organizational unit. Schick’s argument (2007: 113-6) is based on three propositions Read the rest of this entry »

Programs and Organizational Structures in Developing Countries

October 18th, 2010

Nowhere are the difficulties arising from conflicts between program and organizational structure more of a challenge than in developing countries. As discussed in a previous piece, the most serious technical challenge arises from the existence of organizational units which contribute to several programs. Where this is the case, it is necessary to allocate the expenditure of these organizational units between multiple programs in budget preparation and financial reporting. This is a challenge which is beyond the capacity of most developing countries. Read the rest of this entry »

Baseline Expenditure Projections and Employment Inflexibility

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. Read the rest of this entry »

Program Budgeting: the Role of Management Programs

September 27th, 2010

What is the role, and appropriate scope, of “management” programs – that is, programs which group together ministry support services such as HR, IT and finance/accounting? There is wide agreement that management programs can be justified on the pragmatic ground that they avoid the need to allocate support service expenditure to output-based programs. Read the rest of this entry »

Budget Baselines: comment by Jordi Baños-Rovira

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). Read the rest of this entry »

Budget Baselines: Essential and Overlooked

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. Read the rest of this entry »