Mtefs objectives and preconditions
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MTEFs :objectives and preconditions. Allister Moon PREM week, November 2000. MTEF objectives. Aggregate fiscal discipline: an instrument to support sustained stabilisation Strategic allocation: strengthening policy competition and predictability in budget strategy

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Mtefs objectives and preconditions

MTEFs :objectives and preconditions

Allister Moon

PREM week, November 2000


Mtef objectives

MTEF objectives

  • Aggregate fiscal discipline: an instrument to support sustained stabilisation

  • Strategic allocation: strengthening policy competition and predictability in budget strategy

  • Technical efficiency: an instrument for enhancing public sector accountability


Development of an mtef uganda 1992 00

Development of an MTEF : Uganda 1992-00

  • 1992 -94 Macroeconomic framework , + selective treatment of medium term allocation (eg wage bill, defence, roads)

  • 1995 - 97 Macro framework plus comprehensive sector allocations, linked to sector policy objectives(eg UPE, PEAP)

  • 1998- annual consultations on MTEF with donors, legislature, civil society


Aggregate fiscal discipline

Aggregate fiscal discipline

  • Comprehensive and realistic macroframework

  • Multi year perspective on aggregate resources, expenditure envelopes

  • Ensuring consistency between resources and aggregate policy commitments


Strategic allocation 1

Strategic allocation (1)

  • Decisionmaking process:

    • transparent, contestable,

    • Cabinet level

    • early in the budget cycle

    • binding for resource ceilings in annual budget preparation

  • Increase in predictability of sector financing


Strategic allocation 2

Strategic allocation (2)

  • Sector expenditure plans, linking policy to budgets

  • Multi year

  • Integrated (eg local/external financing, capital/recurrent, wage/non wage)

  • Linking inputs/outputs/outcomes


Accountability

Accountability

  • Shifting focus to outputs, rationalisation of controls on inputs

  • Publication of the framework

  • Public announcement of outputs, monitorable performance targets,

  • Focal point for dialogue on budget strategy with legislature and civil society


Preconditions for beginning mtef

Preconditions for beginning MTEF

  • Macroeconomic stability

  • Predictability of aggregate expenditure envelope

  • Commitment from Cabinet

  • Core capacity in finance ministry/central agencies


Preconditions for progress with mtef

Preconditions for progress with MTEF

  • Capacity to enforce hard budget constraint at sector/ministry level (systems capacity and political will)

  • Executive commitment to a more transparent budget process

  • Capacity in sector policy analysis and expenditure planning

  • Supportive donor behaviour


Preconditions for considering an mtef

Preconditions for considering an MTEF


Supporting an mtef supply

Supporting an MTEF: supply

  • Strategies for PE work which focus on long term strengthening of PEM capacity

  • Delivering advisory support within the time constraints of the budget cycle

  • Refocussing sector work to strengthen base for sector expenditure plans


Supporting an mtef demand

Supporting an MTEF: demand

  • Use the MTEF as a reference for policy dialogue and program design

  • Encourage Government’s use of the MTEF in donor coordination

  • Promoting access and role of civil society in MTEF process


Lessons from experience

Lessons from experience

  • Commitment from central agencies critical

  • Balance ‘top down’ and ‘bottom up’

  • Develop ‘bottom up’ sectoral coverage in step with increasing predictability

  • Look for early engagement of players outside the executive

  • Keep expectations realistic and plan for long haul


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