Organisational structure of budget management
Directions for reform in the Western Balkans and the Republic of Moldova
This paper studies the differences between the organisation of budget management in
selected government administrations in the Western Balkans and the Republic of Moldova
and good practice across the European Union (EU). It observes that the ministry of
finance (MoF) in these administrations typically engages in direct budget negotiations
with a large number of budget organisations. This practice is in stark contrast with
the budgeting approach observed in the EU, where the MoF only deals directly with
government ministries and a limited number of constitutional bodies. The paper highlights
the adverse consequences for the strategic role of the MoF for fiscal policy, the
accountability of line ministries for budgeting and service delivery in their sector
and the introduction of modern public financial management instruments such as medium-term
budgeting and performance-based budgeting. This paper recommends that governments
reduce the number of first-level budget organisations and give line ministries more
responsibility for budget management in their sector. At the same time, the paper
recommends strengthening line ministries’ accountability for budget management towards
the parliament.
Available from July 11, 2024
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