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MTEFs and fiscal performance: panel data evidence

Author

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  • Grigoli, Francesco
  • Mills, Zachary
  • Verhoeven, Marijn
  • Vlaicu, Razvan

Abstract

In the last two decades more than 120 countries have adopted a version of a Medium-Term Expenditure Framework (MTEF). These are budget institutions whose rationale it is to enable the central government to make credible multi-year fiscal commitments. This paper analyzes a newly-collected dataset of worldwide MTEF adoptions during 1990-2008. It exploits within-country variation in MTEF adoption in a dynamic panel framework to estimate their impacts. The analysis finds that MTEFs strongly improve fiscal discipline, with more advanced MTEF phases having a larger impact. Higher-phase MTEFs also improve allocative efficiency. Only top-phase MTEFs have a significantly positive effect on technical efficiency.

Suggested Citation

  • Grigoli, Francesco & Mills, Zachary & Verhoeven, Marijn & Vlaicu, Razvan, 2012. "MTEFs and fiscal performance: panel data evidence," Policy Research Working Paper Series 6186, The World Bank.
    • Handle: RePEc:wbk:wbrwps:6186
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    2. Kanayo Ogujiuba & Omoju Sola, 2013. "Medium Term Expenditure and Fiscal Management in Nigeria: A Review of the (2005-2008) Framework," Journal of Economics and Behavioral Studies, AMH International, vol. 5(5), pages 291-306.
    3. Ellegård, Lina Maria, 2013. "Divided We Fall. Conflicts of Interests Regarding Fiscal Discipline in Municipal Hierarchies," Working Papers 2013:42, Lund University, Department of Economics.
    4. Deebii Nwiado & Leelee N. Deekor, 2020. "Medium Term Expenditure Framework (MTEF): A Panacea for Public Expenditure Management (PEM) In Nigeria?," Business and Management Studies, Redfame publishing, vol. 6(4), pages 1-13, December.
    5. Eckardt, Sebastian & Mills, Zachary, 2014. "What goes up must come down -- cyclicality in public wage bill spending," Policy Research Working Paper Series 6760, The World Bank.

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    Keywords

    Public Sector Expenditure Policy; Debt Markets; Health Monitoring&Evaluation; Banks&Banking Reform; E-Business;
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