The experience of Spending Review in Italy: problems and challenges for the future

Abstract

The terms Spending Review and Expenditure Review usually refer to a series of procedures and institutions related to the decisions, the management and the control of public expenditure. Although shaped according to the specific context, these procedures are usually placed within the wider process of budgetary reforms, in the attempt to contribute to greater fiscal discipline and to enhance the delivery of public services. In this paper we analyze the Italian experience in the light of the recent public sector finance and accounting reform (Law 196/2009). Three relevant issues have hindered a restructuring of the State budget up to now: an excessive fragmentation of budget items, a large share of items considered «mandatory» and insufficient incentives for spending administrations to improve efficiency and effectiveness of their programs. The choice of placing the Italian spending review within the ordinary process of bilateral cooperation between the Ministry for economy and finance and the other line Ministries may contribute to improve financial programming and to raise greater attention to the result of the public expenditure in terms of quantity and quality of services. However, the issues at stake constitute a real challenge and efforts to support the spending review both technically and politically will be needed in order to produce a real change rather than a mere procedural innovation.