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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Are Cash Budgets a Cure for Excess Fiscal Deficits (And at What Cost)?
Authors:Stasavage, David
Dambisa, Moyo
Year:2000
Periodical:World Development
Volume:28
Issue:12
Period:December
Pages:2105-2122
Language:English
Geographic terms:Uganda
Zambia
Subjects:national budget
Economics and Trade
Link:https://doi.org/10.1016/S0305-750X(00)00073-5
Abstract:There has been increasing recognition in recent years that in order for governments to make sustained improvements in their fiscal balances, attention needs to be devoted not just to one-off expenditure reductions or tax increases, but also to changing the procedures used for formulating and implementing budgets. So far, the literature has largely ignored a recent institutional innovation, the cash budget, which involves increased delegation in fiscal policy and in some cases the creation of fiscal policy rules. Using the cases of Uganda and Zambia, the present authors argue that cash budgeting has brought clear benefits in terms of improved expenditure control with regard to line ministries. However, adoption of a cash budget has not provided a means for top politicians in either country to 'tie their hands' with respect to intervention in fiscal policy decisions. In Uganda improved fiscal policy outcomes have, in fact, been achieved as a result of (and not in spite of) discretionary interventions by top politicians. In Zambia, a strict rule imposing a balanced budget on a monthly basis has proven partially effective, due in no small part to IMF enforcement, but costly in terms of increased volatility of expenditures. Bibliogr., notes, ref., sum.
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