Performance-Based Budgeting and Medium-Term Expenditure Frameworks in Emerging Europe

Abstract

In recent years, governments in many
 regions have adopted a wide range of reforms to make fiscal
 policies more consistent and effective over the medium-term
 and emphasize the impact of policies and spending. Two
 reforms - performance budgeting (PBB) and medium-term
 expenditure frameworks (MTEF) - have been central elements
 in improving the management of public finances. Both of
 these budget reforms have been on the agenda of most new
 European Union (EU) Member States and candidate countries.
 Six of these countries have been selected for this study:
 Bulgaria, Croatia, Latvia, Poland, Slovakia, and Turkey
 (Emerging Europe). The main purposes of this study were to
 (1) compile a comprehensive stock-take of the implementation
 of major budget reforms, including MTEF and PBB in
 particular; (2) identify the lessons from these experiences,
 including the constraints faced by these countries and some
 of their major challenges for the future; and (3) enable
 these and other countries in the region to better understand
 and compare these experiences and to identify some of the
 good practices and ideas they have developed in implementing
 PBB and MTEF reforms. The country reports and analysis
 contained in this study were based on responses to a
 questionnaire filled out by World Bank experts, mostly in
 close consultation with the relevant national authorities.
 Finally, the study recognizes that although the MTEF and PBB
 reforms adopted in these in six countries are far from
 complete, however, these Emerging Europe countries are, to
 varying degrees, now taking significant steps down a
 worthwhile path.