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The Challenge of Reforming Budgetary Institutions in Developing Countries


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  • Richard Allen
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    The paper notes that the development of sound budgetary institutions in countries such as France, the U.K. and the U.S. has taken a very long time?200 years or more?and is still evolving. It discusses Douglass North''s prediction?which is supported by available data?that institutional reform is also likely to be very slow in developing countries since the budget is especially prone to rent-seeking influences. Finally, the paper discusses the currently fashionable emphasis on complex, multiannual PFM reform strategies, which have been strongly promoted by the donor community; and advocates a simpler approach grounded on Schick''s important principle of "getting the basics right." The paper identifies several areas where further research would be fruitful.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/96.

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    Length: 28
    Date of creation: 01 May 2009
    Date of revision:
    Handle: RePEc:imf:imfwpa:09/96

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    Keywords: Developing countries; World Bank; Budgetary reforms; Budgets; Public finance; budgetary institutions; financial management; budget process; public financial management; performance budgeting; budget systems; fiscal transparency; budget system; external audit; public expenditure; budget support; budget classification; budgetary systems; ifmis; accrual accounting; budget reform; treasury single account; credible budget; budget law; pfm systems; internal control; budget management; fiscal affairs; fiscal affairs department; medium-term budget framework; budgetary improvements; public financial management reforms; capital expenditures; fiscal risk; medium-term budget; financial management information; fiscal policy; budget reforms; fiscal discipline; pfm system; budget institutions; budget framework; resource allocation; fiscal performance; budget improvement; aggregate fiscal discipline; revenue collection; fiscal institutions; aggregate fiscal; fiscal objectives; budget practices; public investment programs; fiscal innovations; performance budgeting reform; budgetary outcomes; financial management information systems; budgetary resources; fiscal power; fiscal reporting; tax administration; budget documents; budget execution; fiscal deficits; fiscal management; outcome budgeting; annual budgeting; fiscal imbalance; government finance statistics; budget coverage; government finance; fiscal reports; public finance specialists; financial management information system; tax reform; budget legislation; tax base; fiscal decentralization; effectiveness of public spending; national budget; fiscal sustainability; financial management systems; fiscal outcomes; accrual budgeting; treasury systems; public finance literature; integrated financial management; annual budget; financial management reform; fiscal frameworks; financial management system; budgetary improvement; tax policy; integrated financial management information systems; budget information; fiscal issues; internal audit; cash accounting; government budget; public spending; government spending; fiscal rules; capital investment; taxation; fiscal control; budgetary appropriations; medium-term fiscal frameworks; public financial management reform; government accounting; budget consolidation; government performance; budget planning; government expenditures; cash budgeting; public investment; budget comprehensiveness; budget cycle; decentralization; full accrual accounting; budgetary processes; credible ? budget; tax collection; budget outturn;

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    1. Douglass C North & John Joseph Wallis & Barry R. Weingast, 2006. "A Conceptual Framework for Interpreting Recorded Human History," NBER Working Papers 12795, National Bureau of Economic Research, Inc.
    2. Richard Allen, 2008. "Reforming Fiscal Institutions: The Elusive Art of the Budget Advisor," OECD Journal on Budgeting, OECD Publishing, OECD Publishing, vol. 8(3), pages 1-9.
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    Cited by:
    1. Knack, Stephen, 2013. "Aid and donor trust in recipient country systems," Journal of Development Economics, Elsevier, Elsevier, vol. 101(C), pages 316-329.
    2. Victor Duarte Lledo & Marcos Poplawski-Ribeiro, 2011. "Fiscal Policy Implementation in Sub-Saharan Africa," IMF Working Papers 11/172, International Monetary Fund.
    3. Peterson, Stephen Bovard, 2010. "Reforming Public Financial Management in Africa," Scholarly Articles 4669673, Harvard Kennedy School of Government.
    4. 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.


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