The Quality of Budget Execution and Its Correlates

The Quality of Budget Execution and Its Correlates

What determines the quality of budget execution around the world, measured in terms of a government's ability to accurately hit its own revenue and expenditure targets? The answers could be relevant to the topics of macroeconomic stability, na...

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Bibliographic Details
Main Author:	Addison, Douglas
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTING AGENCY PROBLEM AGENCY PROBLEMS AGGREGATE BUDGET AGGREGATE EXPENDITURE AGGREGATE EXPENDITURES AGGREGATE FISCAL AGGREGATE FISCAL DISCIPLINE AGGREGATE FISCAL OUTCOMES AGGREGATE REVENUE AID DEPENDENT ANNUAL REVENUE APPROPRIATION ARREARS BUDGET CONSTRAINT BUDGET CONSTRAINTS BUDGET DEFICITS BUDGET EXECUTION BUDGET EXPENDITURE BUDGET FORMULATION BUDGET INSTITUTIONS BUDGET MANAGEMENT BUDGET OUTCOMES BUDGET PROCESS BUDGET STRUCTURE BUDGET SUPPORT BUDGET TARGETS BUDGETARY ALLOCATION BUDGETARY ALLOCATIONS BUDGETARY CONTROL BUDGETARY DATA BUDGETARY EXPENDITURE BUDGETARY EXPENDITURES BUDGETARY INSTITUTIONS BUDGETARY OUTCOMES BUDGETARY PROCEDURES BUDGETARY PROCESS BUDGETARY RULES BUDGETARY TARGETS BUDGETING CAPACITY BUILDING CAPACITY CONSTRAINTS CAPITAL EXPENDITURES CAPITAL INVESTMENTS CAPITAL SPENDING CIVIL SERVICE COLLECTIVE ACTION COLLECTIVE ACTION PROBLEM COMMODITY PRICES CORRUPTION CREDIBILITY CREDIBLE BUDGET CUT SPENDING CYCLICAL POLICY DAY-CARE DEBT DEBT BURDENS DEBT REDUCTION DEBT SERVICE DEBT STOCKS DEMOCRATIC COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT ASSISTANCE DEVELOPMENT BANK DOMESTIC BORROWING DUMMY VARIABLE DUMMY VARIABLES ECONOMIC DEVELOPMENT ECONOMIC POLICY ECONOMIC SHOCKS ECONOMIES OF SCALE EDUCATION POLICIES EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXCHANGE RATES EXCLUSION EXPENDITURE EXPENDITURE ALLOCATIONS EXPENDITURE CATEGORIES EXPENDITURE COMMITMENTS EXPENDITURE OUTCOMES EXPENDITURE PROGRAMS EXPENDITURES EXTERNAL AID EXTERNAL ASSISTANCE EXTERNAL AUDIT EXTERNAL COMMERCIAL BORROWING FEDERAL GRANT FINANCIAL ACCOUNTABILITY FINANCIAL ASSISTANCE FINANCIAL MANAGEMENT SYSTEMS FINANCIAL REPORTING FINANCIAL STATISTICS FISCAL AFFAIRS FISCAL CONSTRAINTS FISCAL DEFICIT FISCAL DEFICITS FISCAL OUTCOMES FISCAL POLICIES FISCAL POLICY FISCAL PRUDENCE FISCAL REPORTING FISCAL RULES FISCAL SUSTAINABILITY FISCAL TARGETS GOVERNMENT BUDGETS GOVERNMENT PERFORMANCE GOVERNMENT SPENDING GROWTH RATE HOLDING INFLATION INFLATIONARY CONSEQUENCES INTEREST PAYMENTS INTERNAL CONTROL INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT JOB CREATION LEVEL OF CONFIDENCE LOCAL GOVERNMENTS MACROECONOMIC STABILITY MEMBER COUNTRIES MONETARY FINANCING MONETARY FUND NATIONAL DEVELOPMENT NATIONAL INCOME NEGATIVE VALUE NEGATIVE VALUES NET BORROWING PAYMENT SYSTEMS PENSIONS POLICY FORMULATION POLICY RESPONSES POLITICAL ECONOMY POLITICIANS PORK BARREL POVERTY REDUCTION PRESSURE GROUPS PRICE CHANGES PRINCIPAL-AGENT PRINCIPAL-AGENT PROBLEM PRINCIPAL-AGENT PROBLEMS PRIVATE SECTOR PROPORTIONAL SYSTEMS PUBLIC PUBLIC ECONOMICS PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCIAL MANAGEMENT PUBLIC GOALS PUBLIC GOODS PUBLIC INVESTMENT PUBLIC OFFICIALS PUBLIC SECTOR PUBLIC SERVICE PUBLIC SERVICE DELIVERY PUBLIC SPENDING PURCHASING POWER PURCHASING POWER PARITY REAL GROWTH RECESSION REFORM PROGRAMS REVENUE FORECAST REVENUE FORECASTING REVENUE POLICY REVENUE TARGET REVENUE VOLATILITY SEPARATION OF POWERS SERVICE EMPLOYMENT SOCIAL BENEFITS SOCIAL PROGRAMS SOCIAL SERVICES SOFT BUDGET CONSTRAINTS SPENDING LEVELS STATE GOVERNMENTS SUPPLEMENTAL BUDGETS TAX TAX BASE TAX BASES TAXATION TECHNICAL ASSISTANCE TOTAL EXPENDITURES TOTAL SPENDING TRANSACTION TRANSACTION COSTS TRANSPARENCY UNCERTAINTY UNEMPLOYMENT
Online Access:	http://documents.worldbank.org/curated/en/2013/10/18403816/quality-budget-execution-correlates http://hdl.handle.net/10986/16871

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Summary:	What determines the quality of budget execution around the world, measured in terms of a government's ability to accurately hit its own revenue and expenditure targets? The answers could be relevant to the topics of macroeconomic stability, national development, public service delivery, and political reputation. This paper takes a step toward finding answers through the exploration of a new database of budgets and budget outcomes and potential cross-country correlates of budget execution in levels and in composition. Few countries within the data sample execute their budgets well, in levels or in composition. Expenditure deviations are positively but rather loosely correlated with revenue deviations. Within this broad tendency, there is considerable variation in behavior not only across countries, but also across time within countries. In explaining the cross-country variations, the data confirm traditional drivers for common pool behavior while also supporting constructive roles for political institutions and the technical capacity for public financial management. This is good news for reform minded governments.

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