Public Sector Governance and Accountability Series

Local Budgeting edited by Anwar Shah

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Budgetary institutions at the Local level serve to allocate community resources consistent with community references. The role and budget documents of these institutions have changed significantly in the past two decades. Local budgets have evolved from instruments of planning and financial control to tools of performance measurement, results management, and fiscal discipline. Local budgets now also serve to enhance citizen empowerment and results-based external accountability in the public sector. Citizens want these documents to be complete and accurate accounts of government operations and to be presented in user-friendly formats. This book documents the choices available to local governments to meet these demands and to ensure prudent and transparent fiscal management at the local level.

Local Budgeting provides a comprehensive guide for local administrators who are involved in designing and implementing budgetary institutions and who wish to improve efficiency and equity in service delivery and to strengthen internal and external accountability. It details principles and practices to improve fiscal management. It reviews techniques available in developing countries for forecasting revenues and expenditures, and it examines institutional arrangements for ensuring transparency and fiscal discipline. In addition, it outlines some strategies to deal with corruption in local revenue administration.

With respect to budgeting, the volume discusses the decisions that need to be made in determining budget format and layout, including the scope of the budget, the degree of transparency of the legal requirements underlying the budget, and the extent to which the budget will emphasize inputs, outputs, and outcomes. Local Budgeting also discusses the role of the capital budget. It details how performance budgeting can serve as a tool for results-based accountability to citizens. It helps the non-specialist reader learn how to interpret budget documents to discover what the government is doing and how well it is performing its tasks. It highlights approaches to stakeholder inputs in the budget process. Finally, it explores the role of budget execution in ensuring management flexibility while enhancing democratic accountability.

Local Budgeting represents a collaborative effort of the Swedish International Development cooperation Agency and the World Bank Institute to improve public expenditure management and financial accountability in developing countries, especially in Africa. We hope that policy makers and practitioners will find this volume a useful guide to reforming budgeting institutions.