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OECD Budgeting at a Glance in Latin American Countries: OECD Database on Budgetary Institutions, Practices and Procedures Version 1 Teresa Curristine, Budgeting and Public Expenditures Division, Public Governance Directorate, OECD Inter-American development Bank Regional Policy Dialogue: IADB May 8-9 2006


Structure of Presentation Part 1: The background and process Part 2: General content Part 3: Budgetary institutions and reforms: results from Latin American countries Part 4: Next Steps

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1)Background and process


Background • Survey/questionnaire on formal budget institutions, practices and procedures • In 2003, 45 countries responded – 27 OECD countries – 18 non member • Five different regions - Africa, Asia, Europe, Latin America and Middle East • Results in searchable web based database by question and country. http://ocde.dyndns.org 4 •

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Click to edit Master text styles Second level ● Third level ● Fourth level ● Fifth level

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Purpose of Database This data enables • Regional and international comparisons • Analysis of budgetary trends and changes • More informed analysis and theory testing • Aids development of common practices and standards • Fosters mutual learning 6 •

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2006 Revision and Update of Questionnaire Two Phases Phase I: Latin American countries only (pilot phase) October 2005 –April 2006. With funding and support from IADB and with the assistance for LSE public policy group Phase 2: All OECD countries and more nonmember countries •

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Phase I: Latin American Countries • • • • • •

Lessons from 2003 Survey Revised and streamlined questionnaire Reviewed by international steering committee Sent to 17 LA Countries, in December 2005 13 countries completed survey Quality check of responses

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13 Countries Completed Survey • • • • • • • • • • • • •

Argentina Brazil Bolivia Chile Colombia Costa Rica Ecuador Guatemala Mexico Paraguay Peru Uruguay Venezuela


2) Content of OECD Survey


Overview of Database Content • Nearly 100 questions covering different stages of budget process and budgetary institutions • Different stages of budget process – Preparation and Formulation – Approval – Execution and Flexibility – Accountability and control 11

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Budgetary Institutions • Constitutional/Institutional framework – Budget laws – Role of legislature in budget process • Rules and Procedures – Fiscal rules – Medium term frameworks – Spending controls – Performance measures and evaluation – Accrual accounting

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3) Budgetary Institutions and Reforms: Preliminary Results from Latin American countries


Functions of Budget systems – Process and institutions • To maintain aggregate fiscal discipline • To allocate resources in accordance with government priorities • To promote the efficient delivery of services Budget functions can work against each other Reforms try to make functions work together 14 •

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Result of Phase I of Questionnaire in LA Countries • Common practices and procedures • Trends in reform of budgetary institutions- regional comparison • Possible theory testing

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Number of Professional Staff in Central Budget Authority (2005) 700 Headcount

600 500 400 300 200 100

Note: Source :

*Argentina reported 201-500 staff OECD Budget Practices and Procedures Survey, 2006

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0

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Months

How Far in Advance of the Beginning of the Fiscal Year is the Executive Formally Required to Present its Budget to the Legislature?

5 4 3 2 1

Source :OECD Budget Practices and Procedures Survey, 2006

Venezuela

Uruguay

Peru

Paraguay

Mexico

Guatemala

Ecuador

Costa Rica

Chile

Brazil

Bolivia

Argentina

0


Trends in reforms of Budgetary Institutions in Latin American Countries • • • • •

Fiscal rules Medium-term expenditure frameworks Top down budgeting Performance Information Budget Transparency

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In Developing the Budget are there any fiscal rules that place limits on fiscal policy?

Answers

Yes

80%

No

20%

Answers %

Source :OECD Budget Practices and Procedures Survey, 2006

100%


Error in Government Revenue Forecast Error in Government Revenue Forecast* Last Fiscal Year

-30 -25 -20 -15 -10

-5

0

Error in Government Revenue Forecast* Previous to Last Fiscal Year

Venezuela

Venezuela

(22.47%)

Peru

Peru

(1.66%)

Mexico

Mexico

(8.37%)

Guatemala

Guatemala

(0.45%)

Ecuador

Ecuador

(9.11%)**

Costa Rica

Costa Rica

(5.95%)

Chile

Chile

(13.31%)

Brasil

Brasil

(2.08%)

Bolivia

Bolivia

N/A

Argentina

Argentina

5

-30 -25 -20 -15 -10

Percentage error Underestimate Note:

Source :

Average error

-5

0

5

Percentage error Overestimate

Underestimate

*Error is defined as (actual divided by forecast) minus one **Based on one year’s data only

OECD Budget Practices and Procedures Survey, 2006

Overestimate

(13.15%)


Medium Term Expenditure Frameworks in LA Countries Country

MTF

Legal Requirement

Number of years

Frequency of revision

Argentina

Yes

Yes

3

Annually

Bolivia

No

-

-

-

Brazil

Yes

Yes

4

Annually

Chile

Yes

Yes

3

Annually

Costa Rica

No

-

-

-

Ecuador

No

-

-

-

Guatemala

Yes

Yes

3

Annually

Mexico

No

-

-

-

Paraguay

No

-

-

-

Peru

Yes

Yes

3

Annually

Uruguay

Yes

Yes

5

Annually

Venezuela

Yes

Yes

3

21

Annually


Trends in development of Performance Information In LA countries

Venezuela

Uruguay

Peru

Paraguay

Mexico

Guatemala

Ecuador

Costa Rica

Chile

Brazil

No

Bolivia

Argentina

Yes

Is the inclusion of performance measures (outputs and outcomes) in the budget a legal requirement?


Approximately How Many Performance Targets are There in the Budget?

Numbers

Source :OECD Budget Practices and Procedures Survey, 2006

Peru

Mexico

Costa Rica

Chile

Brazil

Argentina

1750 1500 1250 1000 750 500 250 0


Effect of Supplementary Budgets as a Share of Total Planned Expenditure (2005) 22

The number of supplementary budgets submitted (FY 04&05)

6

20 18

40

16 14

Percent 12

NA

10 8 6

2

4

19

NA

4

2

Zero

0 Argentina

Bolivia

Brasil

Chile

Zero Costa Rica

Ecuador

Zero

Zero

Guatemala

Mexico

N/A Peru

Paraguay Venezuela

Last FY

Source :

OECD Budget Practices and Procedures Survey, 2006

Previous to last FY

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Some issues in Budget Transparency How long after the end of the budget year are final and audited accounts published? Months 16 12 8 4

Venezuela

Uruguay

Peru

Paraguay

Mexico

Guatemala

Ecuador

Costa Rica

Columbia

Chile

Bolivia

Argentina

0


4)Next Steps


Next Steps Phase II for OECD countries and nonmembers • Review of Phase I • Review by International Steering group • Send out to OECD member countries and non members

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oecd budgeting at a glance in latin american countries: oecd database on budgetary institutions, ...  

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