3 research outputs found
Multi-Year Budgeting: A Review of International Practices and Lessons for Developing and Transitional Economies
In recent years, many developed countries have moved to develop their annual budget
process in a strategic multi-year framework. While a common feature of
multi-year budgeting approaches is the inclusion of revenue forecasts and expenditures
estimates for two or three years beyond the current year, multi-year budget
practices vary substantially between countries. This article reviews multi-year budgeting
practices in six developed countries (Australia, Austria, Germany, New Zealand,
Great Britain, and the United States) and attempts to draw lessons from these
experiences for the potential application of multi-year budget techniques by developing
and transitional countries. We draw five lessons from the multi-year budget
practices of developed countries that are relevant for developing and transitional
economies: (1) a multi-year dimension could be a valuable fiscal policy and management
tool for developing and transitional countries; (2) the approach chosen in each
developing or transitional economy should reflect the country’s policy objectives,
unique budget institutions and traditions, and administrative capabilities; (3) the introduction
of a multi-year budget dimension is a gradual process; (4) the multi-year
budget should be used to encourage the constructive involvement of line ministries
in the budget process; and (5) the usefulness of the multi-year budget approach will
crucially depend on the reliability and accuracy of the medium-term budget estimates