The Reform of Public Expenditure Management Systems in OECD Countries

Abstract

Blőndal examines the key institutional features in the reform of public expenditure management systems in OECD countries. He notes that the countries which are experiencing the best fiscal outcomes are generally those that have more successfully modernized their budget processes. The paper identifies the most relevant aspects for the control of public expenditure: the use of medium-term frameworks, prudent economic assumptions and top-down budgeting techniques; the relaxation of central input controls; the focus on results; the emphasis on budgetary transparency and the introduction of modern financial management practices concerning, inter alia, accruals, capital charges, carry-overs of unused appropriations and interest-bearing accounts. The paper examines the benefits and the problematic aspects of each of these factors and stresses that they must be taken as a package.