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This paper presents a framework for evaluating the level and composition of public expenditures, illustrated by sectoral and country examples. The paper illustrates how this framework can be applied to analyzing broad allocations of spending within and across sectors, drawing upon some key findings and country examples from major sectors (health, education, infrastructure). The report emphasizes six elements which should be an integral part of an ongoing exercise to evaluate public spending. Those elements include: (1) the aggregate level of public spending and deficit of the consolidated public sector must be consistent with the macroeconomic framework; (2) aggregate spending should be allocated to programs within and across sectors to maximize social welfare, including the impact on the poor; (3) the role of the government versus the private sector ought to be a principal criterion governing the choice of programs for public financing and provision--public expenditures should complement rather than substitute for private sector activities; (4) the impact of key programs on the poor, including their incidence and total costs, should be analyzed; (5) the input mix, or the allocations for capital and recurrent expenditures, should be analyzed in an integrated manner within programs and sectors; and (6) budgetary institutions should be analyzed to insure that the underlying incentive structure contributes to aggregate fiscal discipline, allocative efficiency and equity in the composition of spending, and technical efficiency in the use of budgeted resources. Fifteen tables (out of 49) and 5 appendices (out of 17) deal with education-related data. The paper should be useful to policymakers in developing countries, staff in donor organizations, as well as researchers working on public expenditure issues. (Author/EH).
Focuses on the public sector in developing countries. Provides tools of analysis for discovering equity in tax burdens as well as in public spending and judging government performance in its role in safeguarding the interests of the poor and disadvantaged. Outlines a framework for a rights-based approach to citizen empowerment - in other words, creating an institutional design with appropriate rules, restraints, and incentives to make the public sector responsive and accountable to an average voter.
Managing Public Expenditure presents a comprehensive and in-depth analysis of all aspects of public expenditure management from the preparation of the budget to the execution, control and audit stages.
In all highly industrialized countries public expenditures are a substantial and growing share of total economic activity. The authors integrate normative and positive theory and empirical analysis of public expenditure, concentrating on the optimal provision of public goods and the estimation of their costs and effects. This volume emphasizes the techniques that are available for reaching collective decisions about the provision of public goods and stresses the importance of income distribution and intergovernmental fiscal relations. In a mixed economy, where the public sector is growing faster than the private sector, the nature of public expenditures must be closely evaluated and studied. This book is designed to focus on and delineate controversies about public expenditure--to define what it is, analyze its function, show how it operates, and finally to evaluate research on this important subject. The book considers the theories of leading economists (Kenneth Arrow, Lionel Robbins, Carl Shoup, James Buchanan, Paul Samuelson, Richard Musgrave, and others) in arriving at a clear statement of theory in its application to operational problems. Appropriate attention is paid to current techniques such as program budgeting, cost-benefit analysis, and the analysis of the determinants of public expenditure. The book is unique in its emphasis on the integration and critique of contemporary theories of public expenditure, of distributional concerns, and of the political framework of public expenditure decisions. It provides a necessary resource for professional economists required to deal with public expenditure problems in research or practice. Jesse Burkhead is Maxwell Professor of Economics at Syracuse University. He has served on numerous professional and advisory boards. His books include Government Budgeting, State and Local Taxes for Public Education and Public School Finance: Economics and Politics. He is co-author of River Basin Administration and the Delaware, Decisions in Syracuse, and Inputs and Outputs in Large-City Education. Jerry Miner is Professor Emeritus of Economics and a CPR (Center for Policy Research) Senior Research Associate at Syracuse University. He has been a senior research economist for UNESCO in Paris, and an assistant study director of the Survey Research Center at the University of Michigan. His current research includes the efficiency of local schools and the distribution of state aid to local schools. He is the author of numerous journal articles.
The key to better management of public spending, including investment programnming, lies in the process by which programs are identified, prepared, approved, and implemented. Strengthening this process should lead to expenditure programs that are a more appropriate size and are more attuned to overall development goals.
Public expenditure policy, together with efforts to raise revenue,is at the core of efficient and equitable adjustment. Public expenditureproductivity has critical implications for fiscal adjustment, particularly as the competition for limited public resources intensifies.By providing a framework for defining and analyzing public expenditureproductivity and unproductive expenditures, this pamphlet discusseshow economic policymakers may approach these issues.