Does the MTEF shape annual budgets in a developing country?

Abstract

PurposeThis paper explores how the Medium-Term Expenditure Framework (MTEF) conflicts with annual budgeting and how University actors responded to such conflicting demands in a public university in Tanzania, a developing country.Design/methodology/approachThe data for this study were collected from interviews, observations and document reviews. Data analysis processes were guided by the concepts of organizational façades and organized hypocrisy.FindingsThe findings show that while the state required the university to implement the MTEF, budget preparers and managers were concentrating on basic budgeting problems in annual budgeting. As a result of these conflicting demands decoupling occurred, as there were inconsistencies between the talk and actions of actors in MTEF implementation. In response, actors engaged in organized hypocrisy. The talk and actions were organized by developing pro-effective and symbolic layers. The pro-effective layer showed that actors were concentrating on annual budgeting, while the symbolic layer, through the creation of façades, showed that actors symbolically implemented the MTEF.Practical implicationsThe paper suggests that budgetary reforms of governments, Western donors, such as the Inter-national Monetary Fund and the World Bank, and bilateral donors should focus on addressing the basic problems in annual budgeting rather than advocating complex reforms that compel actors to engage in hypocrisy and developing façades. Moreover, university management should address basic budgeting problems to avoid budgeting games during annual budgeting.Originality/valueThis is the first paper to employ the concept of organized hypocrisy to investigate the MTEF. By demonstrating the pro-effective layer, the paper responds to the call for investigation of how accounting works in practice (van Helden et al., 2021). Moreover, by presenting the symbolic layer, the paper responds to the call to investigate how facades are created (Michelon et al., 2016). The paper demonstrates how the concept of organized hypocrisy works well with the concept of organizational facades.

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“…, 2017; Schiavo-Campo, 2009; Raudla et al. , 2022; Mkasiwa, 2022). MTEF outline government spending over a period of three to five years (Pearson, 2002), and its main goals are to increase the fiscal policymaking horizon of governments, ceiling annual budgets, reducing the emphasis on short-term objectives and promoting efficient resource allocation over time (Raudla et al.…”

“…One prominent public financial reform that has been advocated by donors as a best practice (and aid condition) for developing countries to strengthen their public financial management systems over the past few decades is the implementation of medium-term expenditure frameworks (MTEF) (Boex et al, 2000;Filc and Scartascini, 2010;World-Bank, 2012;Sherwood, 2015;Hopper et al, 2017;Schiavo-Campo, 2009;Raudla et al, 2022;Mkasiwa, 2022). MTEF outline government spending over a period of three to five years (Pearson, 2002), and its main goals are to increase the fiscal policymaking horizon of governments, ceiling annual budgets, reducing the emphasis on short-term objectives, and promoting efficient resource allocation over time (Raudla et al, 2022;Fakharzadeh, 2016;Schick, 2009).…”