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Planning and Budgeting: Linking Policy, Planning and Budgeting
5 February 2007
Third International Roundtable on Managing for Development Results
This note summarizes the key issues related to improving planning and budgeting in public organizations, as background for the planning and budgeting sessions at the Hanoi Roundtable for Development Results.
The generally accepted reasons for reforming national planning and budgeting processes are numerous and include the facilitation of better service provision, more efficient use of resources, more targeted use of funds, and greater accountability for policy implementation. However, many governments face significant challenges trying to improve planning, budgeting, and the links between the two process areas. Typically, the challenges arise from the need to establish clear policies, ensure that budgets reflect those policies and that spending is in line with allocations, and the need to measure results and feed those back into policymaking. A number of questions arise in regard to these challenges. They include the following.
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What are appropriate building blocks and institutional structures in a given country context and what are the appropriate tools to achieve them? What incentives are needed to build these structures? How can they be put in place?
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How best can effective multiyear budgeting be introduced? What are the main political, technical, and capacity issues?
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How can benchmarking tools such as those developed by the Public Expenditure and Financial Accountability (PEFA) program and PEFA’s “Strengthened Approach to PFM Reform” help countries improve the management of their public financial management (PFM) systems?
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What are the key challenges and lessons learned in introducing performancebased budgeting?
The remainder of this note provides a short situational analysis, followed by an overview of key topics and related challenges and findings. It concludes by suggesting a few discussion points that may help to stimulate debate.
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