The Challenge of Reforming Budgetary Institutions in Developing Countries

In this recent provocative paper, "The Challenge of Reforming Budgetary Institutions in Developing Countries", author Richard Allen bridges an important gap in the existing literature on Public Expenditure Management, offering a thought provoking yet practical guide to help countries design and implement new PEM legislation and procedure.

Mr Allen's paper stresses that PEM reforms are difficult technical endeavours further complicated by political and change management factors. The paper was first presented at the International Consortium on Government Financial Management (ICGFM) conference in 2008.

Briefly, Mr Allen's paper discusses the main factors that determine the development of budgetary institutions systems over time and what lessons developing countries can learn from the experience of more advanced countries in improving their budgetary institutions. Also considered is how international financial institutions (IFIs), especially the IMF and the World Bank, and other providers of financial and technical support, can facilitate the process of reform in developing countries, specifically focussing on what adjustments are required to the approaches and models IFIs currently apply.

These issues are complex, and the conclusions reached by the paper tentative, and to some degree subjective, and will be controversial and challenging to some readers. The paper identifies several areas where further research would be helpful.

The www.Capacity4Dev.eu editorial team recommend the paper is read alongside Daniel Tommasi's new report on "Strengthening Public Expenditure Management in Developing Countries: Sequencing Issues", published in March 2009.