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The Challenge of Reforming Budgetary Institutions in Developing Countries

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  • Richard Allen
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    Abstract

    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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    Bibliographic Info

    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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    Related research

    Keywords: Developing countries; World Bank; Budgetary reforms; Budgets; Public finance;

    This paper has been announced in the following NEP Reports:

    References

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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, vol. 8(3), pages 1-9.
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    Citations

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    Cited by:
    1. Knack, Stephen, 2013. "Aid and donor trust in recipient country systems," Journal of Development Economics, Elsevier, vol. 101(C), pages 316-329.
    2. Peterson, Stephen Bovard, 2010. "Reforming Public Financial Management in Africa," Scholarly Articles 4669673, Harvard Kennedy School of Government.
    3. 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.
    4. Lledó, Victor & Poplawski-Ribeiro, Marcos, 2013. "Fiscal Policy Implementation in Sub-Saharan Africa," World Development, Elsevier, vol. 46(C), pages 79-91.

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