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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
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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