Top-Down Budgeting—An Instrument to Strengthen Budget Management

November 1, 2009

Preview Citation

Format: Chicago

Gösta Ljungman. Top-Down Budgeting—An Instrument to Strengthen Budget Management, (USA: International Monetary Fund, 2009) accessed November 12, 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 examines the rationale for a top-down approach to budget preparation and approval, and discusses some factors that have to be considered when reorienting the budget process along these lines. The paper argues that the sequence in which budgetary decisions are taken matters, and that a strong top-down approach strengthens fiscal discipline and improves policy prioritization and coordination. Top-down budgeting also alters the division of roles and responsibilities between the central budget authority and line ministries, and requires that the process of determining the total expenditure level, sectoral allocations and individual appropriations is clarified. Finally, the paper argues that strong top-down elements in the parliamentary budget voting process can be effective in addressing the risk of excessive and unsustainable amendments during budget approval.

Subject: Budget planning and preparation, Central government spending, Expenditure, Fiscal policy, Total expenditures

Keywords: Budget preparation, Budget process, Expenditure level, Staff expenditure, WP

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/243
Stock No:

WPIEA2009243
ISBN:

9781451873900
ISSN:

1018-5941

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