Budgetary reforms in oecd member countries

Abstract

This article surveys budgetary reforms in the Organization for Economic Cooperation and Development (OECD) countries, which have aimed both at reducing budget deficits and improving public sector performance. (1) It discusses the pressures giving rise to these reforms, recent trends in reducing deficits and the changes to budgetary processes adopted by various countries. Brief reference is also made to changes in expenditure programs. In some OECD Member countries, changes to budgetary processes have been part of an overall program of reform in public sector management. While there are differences of emphasis between countries, there is considerable convergence toward establishing new budgetary processes which have multi-year approach, provide for greater budgetary devolution to ministries and agencies and focus more on managing the performance of government organizations and programs.

An Exploratory Study of Annuality in the Uk Public Sector: Plus Ça Change, Plus C'est La Même Chose?

“…A widespread failure to cascade end‐year flexibility to lower levels within government departments makes it unlikely that the expected benefits will be fully achieved. Shand (1998) highlights the potential problem of giving freedoms at a fairly high level that rarely impact on the majority of decisions that are taken at a much lower level (as evidenced in this research). He warns that if freedoms are:…”

“…However, probably the most prominent suggestion for preventing the rush of spending is to permit some, or total, flexibility in the carrying‐forward of unspent balances. Shand (1998), in commenting on budget reforms in a number of OECD countries, lent support to both multiyear budgeting and budget carry over, and argued that the use of such systems improve macro control (p. 79):…”

Budgetary and Financial Management Reforms in Korea: Financial Crisis, New Public Management, and Fiscal Administration

“…The shift toward accrual accounting and performance budgeting constitutes the core of market-oriented budgetary reform in New Zealand, Australia, and the United Kingdom (Schick, 1997;Shand, 1998;Robinson, 2002b). Currently, the Korean central government and all local governments employ 'cash' accounting (and single-entry bookkeeping) as the basis for financial reporting but commercial special accounts and public funds employ accrual accounting (and double-entry bookkeeping) for financial reporting purposes.…”

Budgeting and Fiscal Management in Transitional Economies

“…In the third phase, most CITs have embarked in a process of transformation of the budget process and are regaining a measure of fiscal control by including fiscal fringe activities in the budget, controlling the growth of budget arrears, strengthening budget institutions and building analytical capacity, and seeking to increase the overall efficiency of the public sector by decentralizing fiscal decision making. 25 For a review of the multi-year budgeting techniques, application of performance-based budgeting techniques and devolution of government authority in the context of CITs, see Campos and Pradhan (1996), Schick (1998), Shand (1998), and World Bank (1998). 26 For example, several CITs, including Russia, Kazakhstan, and Hungary have already begun to include some features of a multi-year budget approach.…”

“…13 In addition, it may not be reasonable to expect CITs to advance their budget processes so fast. After all, it is a fairly recent event that a growing number of western fiscal management systems introduced performance criteria as an important element of the budget formulation process (Schick 1998;Shand 1998;OECD 1998;World Bank 1998).…”