Expenditure

Public expenditure is one of the critical ingredients of a country’s development. To make public expenditure efficacious, it is essential that resource allocation decisions are underpinned by sound analysis and that a well designed set of institutions, systems, and a performance focus guide budget formulation and execution.

Public expenditure issues touch on virtually every aspect of the World Bank’s work. The country's budget should be a central mechanism in translating Bank lending into results on the ground. Sustainable poverty reduction will always require informed and well functioning resource allocation processes--due to their impact on macroeconomic stability, the allocation of resources to strategic priorities, and the efficiency and effectiveness with which policies are implemented. Within the World Bank, public expenditure issues often define the relationship between macro and sectoral concerns and they are where many of the interests of the Bank and the Fund intersect. The major vehicle of the World Bank for analyzing public sector issues in general and public expenditure in particular, is a public expenditure review (PER).