Outcome Measurement: Great Progress Made in Recent Decades

July 30th, 2010

Performance budgeting and management are, according to many of their critics, guilty of an “emphasis on unmeasurable outcomes” *.  The critics claim that most government outcomes are either impossible or extremely difficult to measure. They see this as the Achilles’ heel of results-oriented management. This overlooks the great progress in outcome measurement has been made by governments around the world in recent decades. Read the rest of this entry »

Program Budgeting – Keep it Simple

June 18th, 2010

Developing countries should, given their limited resources and capacity constraints, keep their performance budgeting systems simple.  It is a remarkable fact, however, that they frequently seek to implement systems considerably more complicated than most of the performance budgeting models one sees in developed countries. One of many areas where this is true is the design of program structures. Read the rest of this entry »

How the UK Will Wield the Razor

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. Read the rest of this entry »

Keeping the Lid on Aggregate Spending

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. Read the rest of this entry »

Balanced Scorecard: Wrong for Government

May 19th, 2010

The balanced scorecard (BSC) has been marketed aggressively to governments as a framework for public sector performance measurement. But the BSC is not, and never was, an appropriate performance measurement framework for government. Read the rest of this entry »

Sweden to Introduce Budget Surplus Rule

May 10th, 2010

Following a major fiscal policy review, Sweden has recently announced that it will legislate a fiscal rule in respect to the budget balance. This represents a significant development in a much-admired fiscal policy framework which was introduced more than a decade ago, during a period of major fiscal consolidation. Read the rest of this entry »

Major New Performance Budgeting Training Initiative

May 4th, 2010

The World Bank has launched a major new initiative to establish systematic in-depth training in performance budgeting, together with associated technical assistance and other services. The CLEAR initiative of the Bank’s Independent Evaluation Group (IEG) is in the process of establishing four regional centers around the world which will offer both generalist and specialist courses in performance budgeting. Read the rest of this entry »

Top-Down Budgeting and Fiscal Exit Strategies: Getting Spending Priorities Right

April 28th, 2010

As countries move to restore their public finances in the wake of the financial crisis, firm control of aggregate expenditure has become more important than ever before. Part of this is ensuring that, after an aggregate expenditure ceiling is set, it is respected throughout the budget preparation process. This is what top-down budgeting seeks to achieve. In practice, however, it is not easy. The central difficulty is how to divide the aggregate expenditure ceiling into ministry ceilings. This is an issue that I will discuss in this and a series of subsequent blog pieces. Read the rest of this entry »

Fixed vs. Indicative Medium-Term Ceilings: The Fiscal Policy Dimension

April 22nd, 2010

I have previously criticized the assumption made by some that medium-term (MT) budgeting necessarily requires that ministries be given fixed MT ceilings – that is, ceilings which represent commitments from government on the level of funding each ministry will receive in the next, say, three years. A system of indicative ceilings is, I have argued, preferable in many countries. There is an important point to add to this debate: namely, that there can sometimes be serious tension between fixed medium-term ministry expenditure ceilings and the aggregate fiscal policy or fiscal rules which guide budget policy. Read the rest of this entry »

Australia Reforms Accrual Budgeting System

April 14th, 2010

When Australia adopted accrual budgeting in the late 1990s, it adopted a very peculiar system of parliamentary authorization of capital expenditure in the annual budget. This system had ideological roots – it was intended to mimic the way businesses operated. In practice, however, it was not only completely incomprehensible to non-experts (including parliamentarians), but also represented a major reduction in democratic parliamentary control over the budget. Australia has now, fortunately, decided that it will abandon this system and move back to a more conventional approach to authorizing capital expenditure. Read the rest of this entry »