Budgetary institutions play a fundamental role in a country’s economic development and prosperity. First, the efficient and effective utilization of public resources, the strategic alignment of finances with a country’s priorities, and the maintenance of a sustainable fiscal programme all require sound budgetary institutions. Second, fiscal management and stabilisation policies, especially the adoption of counter-cyclical fiscal policies, are dependent on the quality of budgetary institutions. Third, budgetary institutions are also critical for ensuring government accountability and transparency and delivering pro-poor policies. According to Raudla (2014), budgetary institutions cover two aspects of institutional arrangements. The first is fiscal rules, which entail constraints in taxation, debt, and public spending, and the second is budgetary process rules, the procedures associated with public budgeting which outline the process that governs the preparation, adoption, and implementation of the budget.
April 29, 2022