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 »

Program budgeting: Program vs. Organizational Structure?

September 6th, 2010

One of the thorniest problems for program budgeting is the relationship between programs and organizational structure. If ministries have major organizational units which straddle several programs, significant practical problems arise in linking organizational unit budgets and program budgets. It becomes necessary to allocate organizational unit expenditure between programs, both in budget preparation and in financial reporting. Such expenditure allocation is a challenging task in any country. In practical terms, however, it is beyond the capacity of many developing countries. For these reasons, strong pressures arise to force programs to conform to organizational structure, thereby by-passing the problem. Read the rest of this entry »

Outcome Measurement: the Central Role of Surveys

August 14th, 2010

My last piece discussed the great progress which has been made in outcome measurement over recent decades. This has been hugely important in providing a better information base for performance management and budgeting. Perhaps the most important single methodological development in this area has been the increased use of surveys. Read the rest of this entry »

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 »