Public Sector Governance and Accountability Series: Budgeting and ...

72 Salvatore Schiavo-Campo
studies on variations in demand to limit congestion. Prices set in this
manner will allow efficient distribution of the services.
Competitive neutrality. When pricing services, the costing should be accurate
and should incorporate all cost items faced by the private sector entities
operating in the same sector.
Equity considerations. Reduced or zero fees can be applied to lower-income
individuals, users located in remote areas, and the like. The criteria for
reduced charges must be transparent and difficult to manipulate. Different
ways of meeting these equity objectives should be considered, because
providing benefits directly is generally more transparent and efficient than
providing benefits through reductions in user fees.
Effective collection system. The efficiency of user-fee collection can make
or break the system. If the fees have been set efficiently and equitably, a
failure to pay should be followed up immediately.
Audit. As always, regular external audits of the organization that levies
and collects the charge are required.
Performance. The performance of organizations should be monitored
regularly to ensure appropriate levels of efficiency and service quality.
User fees cannot be allowed to serve as indirect financial support for
continued inefficiency.
Several countries include in the budget only the net expenditures of
agencies that exercise commercial activities or recover costs, and the budget
appropriation corresponds to the difference between planned expenditures
and expected revenues. As noted at the outset, revenues and expenditure
must be shown in gross terms. If the gross amounts are large, netting out
impedes sound analysis of the government activities, accurate estimates of
economic costs, and valid comparisons between countries. Convenience
cannot supersede the need of the executive to know how the services are
performed nor the right of the legislature and the public to know what public
agencies are doing.
Beyond Direct Expenditure
As mentioned at the start of the chapter, a number of government objectives
can be achieved without direct and immediate government spending, and the
corresponding activities are thus not within the scope of the government
budget. Nonetheless, they have important fiscal and financial implications for
the country. First is a discussion of the category that is most relevant to
African developing countries, for its significant potential as a policy instrument