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Top-Down Budgeting

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  • Gösta Ljungman
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    Abstract

    This paper examines the rationale for a top-down approach to budget preparation and approval, and discusses some factors that have to be considered when reorienting the budget process along these lines. The paper argues that the sequence in which budgetary decisions are taken matters, and that a strong top-down approach strengthens fiscal discipline and improves policy prioritization and coordination. Top-down budgeting also alters the division of roles and responsibilities between the central budget authority and line ministries, and requires that the process of determining the total expenditure level, sectoral allocations and individual appropriations is clarified. Finally, the paper argues that strong top-down elements in the parliamentary budget voting process can be effective in addressing the risk of excessive and unsustainable amendments during budget approval.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/243.

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    Length: 24
    Date of creation: 01 Nov 2009
    Date of revision:
    Handle: RePEc:imf:imfwpa:09/243

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    Related research

    Keywords: Fiscal sustainability; Budgetary policy; Budgets; Governance; Government expenditures; expenditure; budget process; fiscal policy; total expenditure; expenditure level; aggregate expenditure; fiscal discipline; expenditure levels; fiscal performance; aggregate fiscal; expenditure cuts; public finances; expenditure ceiling; budget preparation process; expenditures; expenditure areas; expenditure ceilings; budget balance; fiscal rules; budget allocations; expenditure area; expenditure projections; discretionary fiscal policy; budget systems; fiscal policy priorities; government expenditure; fiscal affairs department; annual budget; fiscal outcomes; expenditure increases; fiscal position; fiscal policies; fiscal powers; expenditure items; fiscal stabilization; budget management; expenditure growth; excessive deficits; budgetary institutions; fiscal affairs; public spending; budget negotiations; central government expenditure; capital expenditure; allocation of expenditure; expenditure decisions; government budget; fiscal policy objectives; fiscal forecasts; fiscal illusion; expenditure categories; higher expenditure; global budget; fiscal authority; state budget; national fiscal rules; fiscal agencies; fiscal considerations; national budget; fiscal rectitude; fiscal institutions; budget deficits; central government budget; expenditure plan; fragmented fiscal policy; expenditure proposals; fiscal impact; program expenditure; fiscal crises; fiscal control; public deficits; fiscally sustainable; fiscal projections; fiscal policy formulation; budget structures; fiscal irresponsibility; fiscal frameworks; aggregate fiscal discipline; expenditure priorities;

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    Cited by:
    1. Sophia Gollwitzer & Eteri Kvintradze & Tej Prakash & Luis-Felipe Zanna & Era Dabla-Norris & Richard Allen & Irene Yackovlev & Victor Duarte Lledo, 2010. "Budget Institutions and Fiscal Performance in Low-Income Countries," IMF Working Papers 10/80, International Monetary Fund.
    2. Lledó, Victor & Poplawski-Ribeiro, Marcos, 2013. "Fiscal Policy Implementation in Sub-Saharan Africa," World Development, Elsevier, vol. 46(C), pages 79-91.
    3. Flodén, Martin, 2012. "A Role Model for the Conduct of Fiscal Policy? Experiences from Sweden," CEPR Discussion Papers 9095, C.E.P.R. Discussion Papers.
    4. Bos, Frits & Teulings, Coen, 2011. "Evaluating election platforms: a task for fiscal councils? Scope and rules of the game in view of 25 years of Dutch practice," MPRA Paper 31536, University Library of Munich, Germany.

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