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SDG#16

Achieving good budgetary governance: What have we learned from PEFA in the past decade?

Lewis Hawke's picture

The national budget is the primary document through which governments present their plans and the resources, including taxes, they intend to collect to fund them.

Many countries present both national and sectoral strategies that identify policy priorities to be funded through the budget. For example, the health sector could include details of policies to provide vaccination on a range of diseases and details of citizens' access to specific healthcare services.

A government's inability to implement the national budget as planned could be a sign of lack of capacity to forecast revenues and expenditures adequately or an inability to properly cost financial impact of government policies, or quite commonly a mixture of all of these issues.

However, in many cases the reason why governments are unable to execute budgets as planned could be, at least partially due to exogenous factors, such as natural disasters, armed conflicts, or increased level of migration flows.

The Sustainable Development Goals—target 16.6—recognize that providing a sound basis for development requires that government budgets are comprehensive, transparent, and realistic.

This is measured through the Public Expenditure and Financial Accountability (PEFA)[1] indicator that assesses the difference between planned and actual budget expenditure in countries across the world.

Since 2005, 147 countries and 178 subnational governments have carried out a PEFA assessment, with national spending more likely to be on target than subnational spending.