Managing and Controlling Extrabudgetary Funds

December 1, 2006

Preview Citation

Format: Chicago

Dimitar Radev, and Richard I Allen. Managing and Controlling Extrabudgetary Funds, (USA: International Monetary Fund, 2006) accessed November 8, 2024

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

This paper addresses issues relating to the establishment and financial management of extrabudgetary funds (EBFs), a large group of government entities that on average accounts for 40 to 45 percent of central government expenditure-two-thirds of which represents social security funds-in countries at various stages of development. If improperly designed and managed, EBFs can undermine effective fiscal control. However, they also bring potential benefits in the form of greater autonomy of decision-making in countries with well-established governance and financial management systems that have applied the "agency model" of devolved public management and fiscal control. The paper develops a typology of EBFs and argues that EBFs are frequently created because of failures in the budget system and political economy factors that need to be recognized and, where possible, corrected. The paper recommends that data on EBFs be consolidated within a unified system of fiscal reporting and proposes an analytical framework that governments might use to evaluate the effectiveness and utility of their EBFs.

Subject: Budget planning and preparation, Expenditure, Extra-budgetary funds, Fiscal policy, Public financial management (PFM)

Keywords: Annual budget, Carrying out government policy, Central government, EBFs need, EBFs outlay, Political economy, Term EBFs, WP

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/286
Stock No:

WPIEA2006286
ISBN:

9781451865462
ISSN:

1018-5941

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