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The Colombian budget process

Author

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  • Ulpiano Ayala Oramas

    ()

  • Roberto Perotti

    ()

Abstract

The rules that govern the budget process are important determinants of fiscal outcomes, with potentially important macroeconomic implications. This paper starts with a review of the theoretical underpinnings of the effects of budget processes and the main empirical evidence. After a brief institutional description of the Colombian budget process, an assessment and proposals for reform are made. The main issues analyzed here are the degree of centralization of the budget process, transparency, rules, and intertemporal links. Serious flaws have been detected: decentralization during the preparation of the budget, proliferation of budget documents, heterodox accounting standards and reporting for deficits and investment, insufficient coverage, biased forecasts and macro assumptions, unduly restrictive rules that promote creative accounting, or seemingly innocuous rules, and weak management of intertemporal links. It is recognized that better rules and institutions can be circumvented, but they can be important in realizing three conditions: allow the public a good understanding of fiscal policy and position, increase the incentives for fiscal discipline, and create an environment where a fiscally sound government can do its job more effectively, and a fiscally undisciplined government will be subject to a more informed scrutiny. These conditions can greatly enhance the scope for a more effective fiscal policy in Colombia.

Suggested Citation

  • Ulpiano Ayala Oramas & Roberto Perotti, 2000. "The Colombian budget process," WORKING PAPERS SERIES. DOCUMENTOS DE TRABAJO 002535, FEDESARROLLO.
  • Handle: RePEc:col:000123:002535
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    File URL: http://hdl.handle.net/11445/825
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    References listed on IDEAS

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    1. von Hagen, Jurgen, 1991. "A note on the empirical effectiveness of formal fiscal restraints," Journal of Public Economics, Elsevier, vol. 44(2), pages 199-210, March.
    2. James M. Poterba, 1996. "Do Budget Rules Work?," NBER Working Papers 5550, National Bureau of Economic Research, Inc.
    3. repec:cup:apsrev:v:88:y:1994:i:04:p:811-828_09 is not listed on IDEAS
    4. Robert P. Inman, 1996. "Do Balanced Budget Rules Work? U.S. Experience and Possible Lessons for the EMU," NBER Working Papers 5838, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Juan Carlos Echeverry & Leopoldo Fergusson & Pablo Querubin, 2004. "La Batalla Política Por El Presupuesto De La Nación: Inflexibilidades O Supervivencia Fiscal," DOCUMENTOS CEDE 002944, UNIVERSIDAD DE LOS ANDES-CEDE.
    2. Ignacio Lozano & Hernán Rincón & Miguel Sarmiento & Jorge Ramos, 2008. "Regla fiscal cuantitativa para consolidar y blindar las finanzas públicas de Colombia," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 10(19), pages 311-352, July-Dece.
    3. Mauricio Olivera & Mónica Pachón & Guillermo Perry, 2010. "The Political Economy of Fiscal Reform: The Case of Colombia, 1986-2006," IDB Publications (Working Papers) 1718, Inter-American Development Bank.
    4. Juan Carlos Echeverry & Jorge Alexander Bonilla & Andrés Moya, 2006. "Rigideces Institucionales Y Flexibilidad Presupuestaria: Los Casos De Argentina, Colombia, México Y Perú," DOCUMENTOS CEDE 003475, UNIVERSIDAD DE LOS ANDES-CEDE.
    5. Juan Carlos Echeverry & Jorge Alexander Bonilla & Andrés Moya, 2006. "Rigideces Institucionales y Flexibilidad Presupuestaria: Origen, Motivación y Efectos sobre el Presupuesto," IDB Publications (Working Papers) 2303, Inter-American Development Bank.

    More about this item

    Keywords

    Presupuesto Nacional; Política Pública;

    JEL classification:

    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt

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