MTEF Case Studies
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Box G.3
Key Performance Instruments and Measures in the Russian Federation Strategic government priority setting (Key Areas of the Government Activities till 2012 or KAGA) contains activities and targets for each sector under broadly identified thematic areas. Most programs entail interministerial and interagency implementation and cover slightly more than one-third of budget expenditure. KAGA projects are planned in alignment with the budget. However, information on actual expenditures is not readily available. KAGA projects are prepared by line ministries. In May 2004, the MoF issued a regulation on Reports on Results and Main Areas of Activity (DRONDs), obliging all federal ministries, services, and agencies to prepare performance reports with objectives, tasks, and targets for the next three years, including specific performance indicators and budget expenditures broken down by objectives, tasks, and programs. The DRONDs link federal budget expenditures to outcomes and outputs. The reports encompass all federal and departmental earmarked programs as well as nonprogram activities. Improved budget justifications (justification of expenditure assignments) link budget appropriations by type (public services, earmarked programs, and interbudgetary transfers) with output and outcome indicators. Improved policy costing (register of expenditure commitments) provides estimates of budget expenditures necessary to fulfill existing public commitments and government functions as specified in the legislation. Federal earmarked programs are cross-ministerial programs that address complex issues of socioeconomic development and usually cover periods longer than three years. Annual performance reports focus on inputs and outputs rather than outcomes. The new programmatic instrument in Concept for Raising the Efficiency of Public Spending till 2012 intends to incorporate federal earmarked programs into state programs. Source: World Bank 2011.
In the second half of 2008, like many other countries across the world, the Russian economy was hit hard by the global financial crisis. With the sudden fall in oil prices, reversal of capital flows, and disruption of access to external financing, real GDP dropped significantly. The fiscal surplus turned into a deficit for the first time in a decade. Thanks to the country’s strong fiscal position and large reserves prior to the crisis, the government has managed to smooth the negative effects of the economic crisis. In the