Development Policy Review

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    Belarus : Strengthening Public Resource Management
    (Washington, DC, 2003-06-20) World Bank
    This report, the first Public Expenditure Review of Belarus, will remain focused on broad systemic questions. A number of the problems emphasized in the subsequent chapters fall into four broad categories. These categories are all closely interrelated: The complicated array of extrabudgetary and quasi-fiscal sources of state finance imposes substantial losses on the economy. Budgetary preparation and approval lacks focus, realism, and an appropriate balance of political influence. The implementation of the budget suffers from excessively weak legality, and allows for too much discretion in the allocation and re-allocation of state expenditures. The connection between state objectives and public expenditures is often unclear or weak. There are many recommendations for changes that could help to improve fiscal discipline, strengthen allocative effectiveness and improve the technical efficiency, we present the most critical actions that are needed: Improve realism in budgetary planning and the management of state obligations. Develop institutions to support commitment to budgetary implementation. Expand the coverage of the budget to account for most activities with fiscal impact. Develop a framework for identifying, quantifying and addressing fiscal risks. Develop a sustainable wage and compensation policy. Streamline subsidies to the productive sectors. Focus on development of sector strategies, one or two sectors at a time: identify objectives, determine performance measures and the links between inputs and positive outcomes. Improve the short and medium term revenue and expenditure forecasting capacity. Put in place systematic rules for budget revision. Introduce guidelines for the allocation of resources in the event of unexpected inflation, cash shortages, or surpluses. Develop a concept of accountability beyond the Ministry of Finance and budget.