Budgetary Reforms in Transition Countries: the role of capacity building

Study for OECD Conference, 10-11 November 2004John Zevenbergen

Main conclusions of report

1. Role of capacity building in budgetary reform

2. Organization of capacity building

3

Role of capacity building

• To instill aggregate budget discipline– strengthening macroeconomic forecasting

• To achieve allocative efficiency: strategic prioritization and reallocation of expenditures– development of MTEF

• To improve operational efficiency: performance of the public sector– introduction of program budgeting

4

Organization of capacity building

• Commitment and leadership from the top management– MoF as the key agent of change– Legitimacy for budgetary reform at the political level

• Capacity building at the organizational level– Organizational structure and possible need for reorganization– Culture of organizations– Financial Management Information Systems (FMIS)

• Capacity building at the individual level (HRM)– Recruitment of well-qualified staff– Retention of staff– Training in public finance management