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

444 Salvatore Schiavo-Campo
donors. Thus, in postconflict countries, where almost by definition the
revenue forecasts are uncertain and cash management systems extremely
weak, the first and foremost objective is putting in place expenditure control.
Without expenditure control, any effort at addressing the other two
objectives of public expenditure management—resource allocation and
operational effectiveness—in the immediate postconflict period would be
futile. Protecting the money and expenditure tracking of the most down-toearth
sort are essential.
However, the imperative to balance the immediate reconstruction
priorities with sound long-term policy and institutional development was
also noted. Therefore, (a) systems for expenditure control must be designed
and implemented in ways that do not jeopardize the eventual improvements
in sectoral allocation and resource management, and (b) a clear ex ante sense
is needed of how far to push improvements in expenditure and cash control
before the time comes for addressing strategic resource allocation and
operational management issues. The finer points of intra- and interprogram
reallocation can perhaps follow in a second stage (while nevertheless keeping
in mind that overbroad allocation rules and loose enforcement can themselves
be a mechanism for waste, fraud, and abuse).
Following are a suggested set of simple but workable criteria and
procedures for screening the different types of expenditure requests, prior
to inclusion in the government budget. The discussion comprises the
scrutiny of proposals for sectorwide programs, for the different categories of
current expenditure, and for investment projects. The bottom-up budget
thus assembled should correspond both to the more pressing needs of
reconstruction and to the revenue and capacity constraints of the country.
For budgeting in postconflict situations, however, the iteration between
needs and resources is different and much more important than in a steadystate
system. It will be recalled from the discussion in chapter 8 that the obligatory
starting point for good budget preparation is a firm forecast of revenue,
which—together with clear government policies for each sector—permits formulating
a hard expenditure constraint on each sector and thus serves to
encourage both discipline and ownership in each ministry’s budget proposals.
In postconflict countries, the situation is very different.With domestic revenue
wholly uncertain, the starting point of the process is an assessment of needs,
conducted by a joint assessment mission (JAM) of donors and the government
and normally led by the World Bank, the United Nations, or both in some form
of cooperation. The results of the needs assessment are then presented to a
donor conference for the purpose of mobilizing enough resources to finance
the reconstruction program. Only after the outcome of the donor conference