Multi-Year Budgeting: A Review of International Practices and Lessons for Developing and Transitional Economies

摘要

In recent years, many developed countries have moved to develop their annual budgetprocess in a strategic multi-year framework. While a common feature ofmulti-year budgeting approaches is the inclusion of revenue forecasts and expendituresestimates for two or three years beyond the current year, multi-year budgetpractices vary substantially between countries. This article reviews multi-year budgetingpractices in six developed countries (Australia, Austria, Germany, New Zealand,Great Britain, and the United States) and attempts to draw lessons from theseexperiences for the potential application of multi-year budget techniques by developingand transitional countries. We draw five lessons from the multi-year budgetpractices of developed countries that are relevant for developing and transitionaleconomies: (1) a multi-year dimension could be a valuable fiscal policy and managementtool for developing and transitional countries; (2) the approach chosen in eachdeveloping or transitional economy should reflect the country’s policy objectives,unique budget institutions and traditions, and administrative capabilities; (3) the introductionof a multi-year budget dimension is a gradual process; (4) the multi-yearbudget should be used to encourage the constructive involvement of line ministriesin the budget process; and (5) the usefulness of the multi-year budget approach willcrucially depend on the reliability and accuracy of the medium-term budget estimates.