1. Linking planning, policy and budgets : experience with MTEFs
Public Expenditure Analysis & Management Seminar, May 22-24, 2001
Allister Moon ECSPE

2. MTEF objectives
Aggregate fiscal discipline: an instrument to support sustained stabilisation
Strategic allocation: strengthening policy competition and predictability in budget strategy
Technical efficiency: an instrument for enhancing public sector accountability

3. Development of an MTEF : Uganda 1992-01
Macroeconomic framework , + selective treatment of medium term allocation (eg wage bill, defence, roads)
Macro framework plus comprehensive sector allocations, linked to sector policy objectives(eg UPE, PEAP)
annual consultations on MTEF with donors, legislature, civil society

4. Aggregate fiscal discipline
Comprehensive and realistic macroframework
Multi year perspective on aggregate resources, expenditure envelopes
Ensuring consistency between resources and aggregate policy commitments

5. Strategic allocation (1)
Decisionmaking process:
transparent, contestable,
Cabinet level
early in the budget cycle
binding for resource ceilings in annual budget preparation
Increase in predictability of sector financing

6. Strategic allocation (2)
Sector expenditure plans, linking policy to budgets
Multi year
Integrated (eg local/external financing, capital/recurrent, wage/non wage)
Linking inputs/outputs/outcomes

7. Accountability
Shifting focus to outputs, rationalisation of controls on inputs
Publication of the framework
Public announcement of outputs, monitorable performance targets,
Focal point for dialogue on budget strategy with legislature and civil society

8. Preconditions for beginning MTEF
Macroeconomic stability
Predictability of aggregate expenditure envelope
Commitment from Cabinet
Core capacity in finance ministry/central agencies

9. Preconditions for progress with MTEF
Capacity to enforce hard budget constraint at sector/ministry level (systems capacity and political will)
Executive commitment to a more transparent budget process
Capacity in sector policy analysis and expenditure planning
Supportive donor behaviour

10. Supporting an MTEF: supply
Strategies for PE work which focus on long term strengthening of PEM capacity
Delivering advisory support within the time constraints of the budget cycle
Refocussing sector work to strengthen base for sector expenditure plans

11. Supporting an MTEF: demand
Use the MTEF as a reference for policy dialogue and program design
Encourage Government’s use of the MTEF in donor coordination
Promoting access and role of civil society in MTEF process

12. Could have done better?
Hazards of restructuring the budget cycle with external players
Earlier , more systematic attention to problems in budget execution
integration problems : wage bill, development budget
scope for acceleration?

13. Special factors? Strong presidency, strong presidential commitment
MFEP management
absence of donor conditionality?

14. Lessons from experience
Commitment from central agencies
Full integration in budget process
Incrementalism : delivering ‘interim’ results
Develop ‘bottom up’ sectoral coverage in step with increasing predictability
Prepare for engagement of players outside the executive
Plan for long haul