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The Challenge of Reforming Budgetary Institutions in Developing Countries

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  • Mr. Richard I Allen

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.

Suggested Citation

  • Mr. Richard I Allen, 2009. "The Challenge of Reforming Budgetary Institutions in Developing Countries," IMF Working Papers 2009/096, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2009/096
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    References listed on IDEAS

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    1. Douglass C. North, 1991. "Institutions," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 97-112, Winter.
    2. Sara Fyson, 2009. "Sending in the consultants: development agencies, the private sector and the reform of public finance in low-income countries," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 4(3/4), pages 314-343.
    3. 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.
    4. 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. World Bank Group & New Zealand Ministry of Foreign Affairs and Trade & Australian Department of Foreign Affairs and Trade & Overseas Development Institute, 2016. "Strengthening Public Financial Management Reform in Pacific Island Countries," World Bank Publications - Reports 25070, The World Bank Group.
    2. Adhikari, Pawan & Kuruppu, Chamara & Matilal, Sumohon, 2013. "Dissemination and institutionalization of public sector accounting reforms in less developed countries: A comparative study of the Nepalese and Sri Lankan central governments," Accounting forum, Elsevier, vol. 37(3), pages 213-230.
    3. Stephen Knack, 2014. "Building or Bypassing Recipient Country Systems: Are Donors Defying the Paris Declaration?," Journal of Development Studies, Taylor & Francis Journals, vol. 50(6), pages 839-854, June.
    4. Lawson, Andrew & Harris, Jamelia, 2023. "Is the problem driven iterative adaptation approach (PDIA) a panacea for public financial management reform? Evidence from six African countries," World Development Perspectives, Elsevier, vol. 31(C).
    5. Syarifuddin, 2018. "Accrual Basis Landscape: The Absence of Political Will in Preventing Dysfunctional Behaviour in Indonesia," GATR Journals afr160, Global Academy of Training and Research (GATR) Enterprise.
    6. Peterson, Stephen Bovard, 2010. "Reforming Public Financial Management in Africa," Scholarly Articles 4669673, Harvard Kennedy School of Government.
    7. van Helden, Jan & Uddin, Shahzad, 2016. "Public sector management accounting in emerging economies: A literature review," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 41(C), pages 34-62.
    8. Knack, Stephen, 2012. "When do donors trust recipient country systems ?," Policy Research Working Paper Series 6019, The World Bank.
    9. Peterson, Stephen, 2011. "Reforming Public Financial Management in Africa," Working Paper Series rwp10-048, Harvard University, John F. Kennedy School of Government.
    10. Andrew Berg & Edward F. Buffie & Catherine Pattillo & Rafael Portillo & Andrea F. Presbitero & Luis‐Felipe Zanna, 2019. "Some Misconceptions About Public Investment Efficiency and Growth," Economica, London School of Economics and Political Science, vol. 86(342), pages 409-430, April.
    11. Fisayo Fagbemi, 2020. "Assessing the Role of Governance in West African Fiscal Performance," The American Economist, Sage Publications, vol. 65(1), pages 97-122, March.
    12. Abbas Al-Mejren, 2015. "Impacts of Fiscal Legal Setting and Institutions on Budget Outcomes in the Rentire State of Kuwait," Working Papers 920, Economic Research Forum, revised Jun 2015.
    13. Carter Patrick, 2013. "Does Foreign Aid Displace Domestic Taxation?," Journal of Globalization and Development, De Gruyter, vol. 4(1), pages 1-47, August.
    14. Knack, Stephen, 2013. "Aid and donor trust in recipient country systems," Journal of Development Economics, Elsevier, vol. 101(C), pages 316-329.
    15. Sophia Gollwitzer & Eteri Kvintradze & Mr. Tej Prakash & Luis-Felipe Zanna & Ms. Era Dabla-Norris & Mr. Richard I Allen & Irene Yackovlev & Victor Duarte Lledo, 2010. "Budget Institutions and Fiscal Performance in Low-Income Countries," IMF Working Papers 2010/080, International Monetary Fund.
    16. Lledó, Victor & Poplawski-Ribeiro, Marcos, 2013. "Fiscal Policy Implementation in Sub-Saharan Africa," World Development, Elsevier, vol. 46(C), pages 79-91.
    17. Patalinghug, Epictetus, 2017. "Assessment of Planning and Programming for Capital Projects at the National and Agency Levels," Discussion Papers DP 2017-37, Philippine Institute for Development Studies.
    18. Séne, Ligane & Fall, El Hadji, 2013. "Bilan et défis des reformes harmonisées de programmation budgétaire en Afrique : cas du CDMT, Quid de l’expérience du Sénégal ? [Medium Term Expenditure Framework (MTEF) in Africa : A Senegal Case ," MPRA Paper 58841, University Library of Munich, Germany.

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