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

Budgeting in Postconflict Countries 449
decision rule or screening advice is possible in these respects. The programs
themselves are normally negotiated with—and funded by—international
donors, usually in the context of disarmament, demobilization, and reintegration
initiatives and on the basis of substantial experience gained with
the compensation schemes for transitional assistance, particularly in Africa.
The following suggestions, however, may be relevant:
Require bottom-up estimates of expenditures that are based on actual
programs.
View the transfer either as compensation for past merit or past suffering
or as a means to facilitate the individual’s reintegration and transition—
or both—but do not meet these legitimate needs by giving a permanent
government job.
Budget the cost of these special programs as a separate item, without
attempting to disaggregate them by economic function—recalling that
they are inherently transitional programs, even if they are expected to
continue for several years, and that they are normally negotiated and
funded separately from regular government expenditure programs.
Screening requests for operations and maintenance expenditure
In screening requests for operations and maintenance (O&M) expenditure,
both commonsense questioning and technical norms appropriate to the
sector should be used. Although O&M expenditure needs are likely to be
lighter in the initial postconflict period because many of the government
physical assets have been destroyed, they should not be neglected. Three
general considerations may be useful in assessing requests for O&M
expenditure in a postconflict setting:
Give the benefit of the doubt to O&M budget requests during the first
postconflict year. In general, during a postconflict transition, underfunding
O&M expenditure is much worse than overfunding. Provided that
financial management and control mechanisms are adequate, overfunding
is more likely to lead to underspending than to waste and abuse—
leaving the unused resources available for reallocation to other uses
during the same or the subsequent fiscal year. Underfunding, in contrast,
is likely to lead to malfunctioning of government from lack of necessary
funds, precisely at the time when it must regain some credibility by
achieving demonstrable improvements on the ground.
Require each government unit, as part of the process of approval of the
O&M expenditure request, to start a selective inventory of its physical