Post on 08-Feb-2017
Budgeting Practices and
Procedures in Asia
Budgeting and Public Expenditure Division
Public Governance Directorate OECD
Dec 2015
I. Objective and Structure of the Survey
II. Main Survey Results
III. Key Findings and Next Steps
Content
• To create an international comparative database
• OECD survey : Two previous surveys in 2003 and 2007 and recent survey executed in 2012/2013
• Regional Survey: Eastern Europe/Central Asia (PEMPAL) + Latin America countries (LAC) + Asia
• Asia Budget survey was carried out in partnership with World Bank (PEMNA)
– OECD Budget Survey Training (Jan, 2015)
– Most Asia (15) participated in the survey
– Bhutan, Cambodia, Chinese Taipei, Indonesia, Lao PDR, Malaysia, Mongolia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, Vietnam + Japan, Korea
Objectives and background of the Survey
Structure and sections of the Survey
Formulation
Approval Execution
CBA
Budget cycle •Central/federal level
General Information
Fiscal Sustainability
MTEF
Top-down budgeting techniques
Capital budgeting
Relaxing Central Input Controls
Budgeting Transparency
•Main Areas
Key Findings of
Main Survey Results (Draft)
1. General Information : Location of
Central Budget Authority (CBA)
The ratio of MOF being CBA is relatively low in
Asia
28
1
3 1
Location of CBA : OECD
Ministry of Finance/Economy
President's office
CBA is split
Other central government institution
10
3
1 1
Location of CBA : ASIA Ministry of Finance/Economy
CBA is split
Prime Minister's Office
Other central government institution
1. General Information : Head of CBA
Asia: 60% of the head is political appointee
OECD : 2/3 of the head is civil servant
6
9
Head of CBA: ASIA
Senior civil servant Political appointee Other
21
11
1
Head of CBA : OECD
Senior civil servant Political appointee Other
2. Fiscal Sustainability :
Prudent Macroeconomic Estimates
Macroeconomic estimates are mostly developed
by CBA rather than other actors in Asia
0%
10%
20%
30%
40%
50%
60%
70%
Central budgetauthority
Ministry of Finance(other department)
Prime Minister's office Other Governmentbody
Independent body Private sector
Actors responsible for macroeconomic estimates
ASIA OECD PEMPAL
2. Fiscal Sustainability: Fiscal rules
The most widely adopted fiscal rules in Asia
are budget balance rules and expenditure rules
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Budget balance Debt Expenditure Revenue
Percentage of countries using fiscal rules, according to type of rules
ASIA OECD PEMPAL
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Percentage of countries using fiscal rules
ASIA OECD PEMPAL
2. Fiscal Sustainability:
Fiscal projections
Time span of projections is short (up to 10 years)
in most Asia, while 31-50 years in OECD
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
OECD ASIA OECD ASIA OECD ASIA OECD ASIA OECD ASIA
Up to 5 years Between 6-10 years Between 11-30 years Between 31-50 years Over 50 years
Revision frequency
Time span of long-term fiscal projections
Time span and revision frequency of long-term fiscal projections
Every year Every three years Other intervals Not applicable
3. Medium Term Expenditure Framework
(MTEF)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
MTEF in place MTEF not in place
Percentage of countries with MTEF in place
ASIA OECD PEMPAL
Many Asia report having as MTEF in place, but
lower than OECD
4. Top-down Techniques :
Ceilings on the line ministries
Overall expenditure of line ministry is more
used and program (sector) is less used in Asia
0%
10%
20%
30%
40%
50%
60%
70%
Total/overall expenditure ofthe line ministry
Other aggregate levels (e.g.programme or sector)
Agency level or otherorganisational level
No such limits
Ceilings on the line ministries' initial request ASIA OECD PEMPAL
4. Top-down Techniques :
Resolution of allocation disputes
The ratio of allocation disputes are resolved by
the cabinet is low in Asia
0%
10%
20%
30%
40%
50%
60%
70%
Resolved by the cabinet Resolved by the financeminister
Resolved by the Presidentor the Prime Minister
Other The issue is sent to aministerial committee
Resolution of disputes between ministries in the budget formulation process
ASIA OECD PEMPAL
5. Capital budgeting : PPP unit
More than 70% have established PPP unit in
Asia
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
No Within the MoF Separate agencyunder the MoF
Within a lineministry
Separate agencyunder a line ministry
Delegated to lineministries (no MoF
unit)
Other unit
PPP unit in central governments
ASIA OECD PEMPAL
6. Relaxing central input control :
Carry-over regime
The central input controls are more strict in
some aspects in Asia
0%
10%
20%
30%
40%
50%
60%
70%
80%
ASIA OECD ASIA OECD ASIA OECD
Yes without requiring any approval Yes but requiring approval No, carry over not permitted
Carry-over regimes Discretionary Operational Investment
6. Relaxing central input control :
increase spending after budget approved
The central input controls are more strict in
some aspects in Asia
0
5
10
15
20
Investment Operational Mandatory Discretionary
ASIA
Permitted Not permitted
0
5
10
15
20
25
30
35
Investment Operational Mandatory Discretionary
OECD
Permitted Not permitted
7. Budget Transparency :
Economic assumptions publicly available
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ASIA OECD PEMPAL
Are the economic assumptions underlying the budget and the methodology used to establish them publicly available?
Publicly available Not publicly available Not applicable
The ratio of disclosing underlying assumptions
are low in Asia
7. Budget Transparency : Publicly available budget documents
0
2
4
6
8
10
12
14
16
Pre-budget report Budget proposal Citizens budget
Publicly available budget documents ASIA
Publicly available Not publicly available Not applicable
0
5
10
15
20
25
30
35
Pre-budget report Budget proposal Citizens budget
Publicly available budget documents : OECD
Publicly available Not publicly available Not applicable
The ratio of publicly available budget documents
is low in Asia
Main Suggestions
1. Fiscal Sustainability can be improved
• Adopting longer time span of fiscal projections help identify fiscal risks (pension, population)
• Prudent macroeconomic estimates
2. More countries can consider adopting MTEF
3. Budget transparency should be improved (economic assumptions, budget documents)
4. The balance between CBA and line ministries on ex-ante controls (input control, Top-down techniques) can be reconsidered in relation to performance budgeting
Next Steps
• Encourage additional participation in the
survey those who have not participated in yet
• Data Quality Control considering late, new
participation and 1st survey in Asia
• After going through above mentioned steps,
publication process will be proceeded
THANK YOU !