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A medium-term expenditure framework is considered an essential element of public financial management reform, and this framework has been adopted in many countries. However, in terms of implementation in those countries, the medium-term expenditure framework continues to present a significant challenge within the budget process. This case study provides an inside story of medium-term expenditure framework reform in the Republic of Korea and offers some suggestive evidence about the impact of the reform. Drawing on theories of change management, the study explores how actors within the Korean government created acceptance of reform needs among relevant stakeholders, how they handled various challenges throughout the reform, how they built capacity among stakeholders, and how they institutionalized the reform measures that were consistent with stakeholder incentives. The case highlights the following implications: (1) having strong support from top decision makers is essential to successful medium-term expenditure framework reform; (2) finding ways of integrating a medium-term expenditure framework into the budget process is critical; and (3) making the framework stable and sustainable requires both capacity building of relevant stakeholders and significant organizational restructuring.

Banks & Banking Reform --- Budget --- Change management --- Debt Markets --- Enterprise Development & Reform --- Leadership --- Medium term expenditure framework --- Public Financial Management --- Public financial management --- Public Sector Development --- Public Sector Economics --- Reform --- Stakeholders --- Korea

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The Czech government has made further progress in improving fiscal transparency that was already high by international standards. The measures implemented to broaden the coverage of general government data have been commended. Improved reporting on fiscal risks, including those arising from contingent liabilities, has been welcomed. However, greater effort is needed to improve the public availability of fiscal data and to maintain regular tax expenditure reports. Ensuring appropriate standards for audit and fiscal discipline at the subnational level is critical.

Budgeting --- Public Finance --- National Budget --- Budget Systems --- Auditing --- Budgeting & financial management --- Management accounting & bookkeeping --- Budget planning and preparation --- Fiscal transparency --- Public financial management (PFM) --- Budget --- Czech Republic

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This paper presents an update to the Report on Observance of Standards and Codes on Fiscal Transparency Module for Azerbaijan. Reforms aimed at delineating the roles of the public and private sector in Azerbaijan have moved forward, but a significant amount of work still lies ahead. During 2002, the government simplified requirements for business licensing in an effort to strengthen private sector development. Important steps were also taken toward clarifying the relationship between the government and state-owned enterprises.

Budgeting --- National Budget --- Budget Systems --- Budgeting & financial management --- Budget planning and preparation --- Fiscal transparency --- Public financial management (PFM) --- Budget --- Azerbaijan, Republic of

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This study investigates the World Bank's use of lending and non-lending instruments to affect the policy priorities of developing countries. In a typical year, the World Bank lends more than USD 30 billion to its client countries. It also spends approximately USD 200 million on the provision of analytical and advisory products each year. However, insufficiently granular data on the nature, timing, and distribution of these analytical and advisory products and the policy priorities of client countries has made it difficult for policymakers and scholars to understand which World Bank instruments are most useful for effectuating change in the direction of government policy. With new data on the delivery of analytical and advisory products and micro-level survey data from 1,244 public sector officials in 121 developing countries, this study demonstrates that the organization's non-lending instruments are more effective than its lending instruments at influencing the policy priorities of client countries. The World Bank's analytical and advisory products not only affect the direction of government policy, but also its design and implementation.

Conditionality --- Development Policy --- Finance and Financial Sector Development --- Foreign Aid --- Macroeconomics and Economic Growth --- Policy Evaluation --- Poverty Reduction --- Public Financial Management

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This project, based on the Public Expenditure and Financial Accountability (PEFA) data set, researched how PEFA can be used to shape policy development in public financial management (PFM) and other major relevant policy areas such as anticorruption, revenue mobilization, political economy analysis, and fragile states.The report explores what shapes the PFM system in low- and middle-income countries by examining the relationship between political institutions and the quality of the PFM system. Although the report finds some evidence that multiple political parties in control of the legislature is associated with better PFM performance, the report finds the need to further refine and test the theories on the relationship between political institutions and PFM.The report addresses the question of the outcomes of PFM systems, distinguishing between fragile and nonfragile states. It finds that better PFM performance is associated with more reliable budgets in terms of expenditure composition in fragile states, but not aggregate budget credibility. Moreover, in contrast to existing studies, it finds no evidence that PFM quality matters for deficit and debt ratios, irrespective of whether a country is fragile or not.The report also explores the relationship between perceptions of corruption and PFM performance. It finds strong evidence of a relationship between better PFM performance and improvements in perceptions of corruption. It also finds that PFM reforms associated with better controls have a stronger relationship with improvements in perceptions of corruption compared to PFM reforms associated with more transparency.The last chapter looks at the relationship between PEFA indicators for revenue administration and domestic resource mobilization. It focuses on the credible use of penalties for noncompliance as a proxy for the type of political commitment required to improve tax performance. The analysisshows that countries that credibly enforce penalties for noncompliance collect more taxes on average.

Anti-Corruption --- Budget Credibility --- Diagnostic Tools --- Domestic Revenue --- Fiscal Outcomes --- Fragile States --- Good Governance --- Political Economy --- Political Institution --- Public Financial Management