The Challenge of Reforming Budgetary Institutions in Developing Countries

Author/Editor:

Richard I Allen

Publication Date:

May 1, 2009

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The paper notes that the development of sound budgetary institutions in countries such as France, the U.K. and the U.S. has taken a very long time?200 years or more?and is still evolving. It discusses Douglass North's prediction?which is supported by available data?that institutional reform is also likely to be very slow in developing countries since the budget is especially prone to rent-seeking influences. Finally, the paper discusses the currently fashionable emphasis on complex, multiannual PFM reform strategies, which have been strongly promoted by the donor community; and advocates a simpler approach grounded on Schick's important principle of "getting the basics right." The paper identifies several areas where further research would be fruitful.

Series:

Working Paper No. 2009/096

Subject:

English

Publication Date:

May 1, 2009

ISBN/ISSN:

9781451872439/1018-5941

Stock No:

WPIEA2009096

Pages:

28

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