Watkins, JoannaDorotinsky, William2016-11-292016-11-292013-01https://hdl.handle.net/10986/25491Developing a national budget has always entailed a complex set of negotiations between national Government priorities, line ministry priorities, and a national funding envelope. This note explains how to introduce a medium term horizon into a government’s budgeting process, including the key steps involved. It provides guidance on setting aggregate and line ministry ceilings, reviewing experiences from countries with extensive experience of ceilings (for example, Finland, the Netherlands, Sweden, South Korea, Indonesia, Brazil, Australia, and Canada, among others), as well as those that have more recently adopted them. There is no one right way to set expenditure ceilings. Countries tailor expenditure ceilings to meet their specific needs, budget challenges, and capacity constraints. This note presents an iterative approach - starting from annual ceilings and gradually moving toward a medium-term expenditure framework - allowing for procedural, institutional, and organizational learning and adaptation along the way.en-USCC BY 3.0 IGOMONETARY POLICYECONOMIC GROWTHREFORM PRIORITIESANALYSIS OF CURRENT OPERATING COSTSPOVERTY REDUCTION STRATEGIESANNUAL BUDGET PROCESSBUDGET ESTIMATESMARGINAL COSTSTRATEGIC CHOICESBUDGET POLICIESPOLITICIANSDEBT MANAGEMENTCOST ESTIMATESCENTRAL BUDGETREVENUESFISCAL POLICYBUDGETARY RESOURCESFISCAL FORECASTSECONOMIC STABILITYDECISION- MAKINGPUBLIC FINANCIAL MANAGEMENTPUBLIC FORECASTSBUDGET BILLFISCAL FLEXIBILITYMEDIUM-TERM EXPENDITURE FRAMEWORKBUDGET SUBMISSIONSMANDATORY” SPENDINGANNUAL BUDGET PREPARATIONEXPENDITURE FORECASTTOTAL EXPENDITUREFISCAL RULESBUDGET PASSAGEPERFORMANCE INDICATORSRESOURCE CONSTRAINTSSECTOR CEILING ALLOCATIONSADMINISTRATIVE EXPENSESEXPENDITURE FRAMEWORKBUDGET ALLOCATIONBUDGET DOCUMENTSGROSS NATIONAL PRODUCTDEBTFISCAL RISKSPUBLIC FINANCEBUDGET DEFICITPOLICY DECISIONSECONOMIC FORECASTSBUDGET ENVELOPEBUDGET PLANNINGDEBT SERVICEEXPENDITURE ENVELOPEBUDGET CONSTRAINTINTEREST PAYMENTSAPPROPRIATIONSTRANSPARENCYMINISTERIAL CEILINGSBUDGET PROCESSPUBLIC EXPENDITUREFISCAL CONDITIONSCAPACITY CONSTRAINTSRUNNING COSTSCENTRAL GOVERNMENTGOVERNMENT EXPENDITURECOST OF EXPANSION OF PROJECTSMEDIUM TERM EXPENDITURE FRAMEWORKBUDGET STRUCTUREALLOCATION OF FUNDSDISCRETIONARY APPROPRIATIONSFISCAL YEARPRIVATE SECTORNATIONAL BUDGETEXPENDITURE CEILINGSDEFICIT POLICYFISCAL STANCEPUBLIC DEBTSECTOR CEILINGMACROECONOMIC VARIABLESGOVERNMENT DEBTDECISION- MAKING PROCESSHARD BUDGET CONSTRAINTRESOURCE ALLOCATION DECISIONSBUDGET REQUESTANNUAL BUDGETSFISCAL MANAGEMENTALLOCATIONPERFORMANCE ASSESSMENTUNCERTAINTYSTRATEGIC POLICYMANDATORY SPENDINGEXPENDITURE CATEGORIESINVESTMENT EXPENDITUREFISCAL DISCIPLINEANNUAL BUDGET CYCLEBUDGET PREPARATIONBUDGETING PROCESSMEDIUM- TERM FRAMEWORKOUTCOMESBUDGET STRATEGYBUDGET YEARMEDIUM TERM EXPENDITURESECTORAL CEILINGSBUDGET RULESDEFICITAGGREGATE REVENUEBUDGET CYCLENATIONAL DEVELOPMENT PLANPUBLIC REVENUESFINANCIAL MANAGEMENTIMPACT OF INFLATIONCENTRAL GOVERNMENT SPENDINGAGGREGATE SPENDINGANNUAL BUDGETINGMEDIUM-TERM EXPENDITUREPUBLIC SECTORGOVERNMENT SPENDINGPROGRAMSRESOURCE ALLOCATIONSERVICESBUDGET DECISIONSNATIONAL DEVELOPMENTEXPENDITURE MANAGEMENT SYSTEMBUDGET CHOICESINVESTMENT EXPENDITURESSOCIAL BENEFITSBUDGET DECISIONBUDGET FORMULATIONINFLATIONSECTOR CEILINGSSTRUCTURAL REFORMBUDGET AGGREGATESENTITLEMENT SPENDINGBUDGETPOVERTY REDUCTIONEARLY RETIREMENTSCENTRAL BANKREVENUE FORECASTREVENUE PROJECTIONSEFFICIENCY GAINSAPPROPRIATIONGOVERNMENT PRIORITIESBUDGET DEVELOPMENTBUDGET POLICYSOCIAL INSURANCESERVICE CHARGESBUDGET DEPARTMENTEXPENDITURE MANAGEMENTPROGRAM PRIORITIESAGGREGATE SPENDING LIMITADMINISTRATIVE COSTSBUDGET PROPOSALSTAXESENTITLEMENTSEXPENDITUREBUDGET AUTHORITYMINISTRY CEILINGSNATIONAL BUDGETSAGGREGATE CEILINGSBUDGET EXPENDITUREBUDGET REQUESTSFISCAL FRAMEWORKCAPITAL PROJECTSRESOURCE CEILINGNATIONAL GOVERNMENTBUDGETSINDICATIVE SECTORAL LIMITSGOVERNMENT REVENUEEXPENDITURESEXPENDITURE POLICYMINISTRY BUDGETSEXPENDITURE CEILINGAGGREGATE CEILINGSECTORAL LIMITSSTRATEGIC ALLOCATIONOVERHEAD COSTSPUBLIC RESOURCESFISCAL AFFAIRSSUPPLEMENTAL BUDGETSTRANSFER PAYMENTSANNUAL BUDGETFORWARD ESTIMATESANNUAL BUDGET CALL CIRCULARFISCAL PROJECTIONSPROGRAM ANALYSISPUBLIC EXPENDITURE MANAGEMENTMINISTRY OF FINANCEDEBT PROJECTIONSPERFORMANCE INDICATORREVENUE ESTIMATESFISCAL TRANSPARENCYBUDGET FRAMEWORKPRICE INDEXPERFORMANCE MANAGEMENTBUDGET ENFORCEMENTBUDGET FORMULATION PROCESSPROGRAM BUDGETINGBUDGET ACCOUNTSTYPES OF EXPENDITURESBriefWorld Bank10.1596/25491