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The international experience of program budgeting: general principles and models

Vol. 20, Iss. 40, OCTOBER 2014

Available online: 26 October 2014

Subject Heading: Foreign experience

JEL Classification: 

Pages: 50-59

Yastrebova O.K. Russian Presidential Academy of National Economy and Public Administration, Moscow, Russian Federation
bogacheva@nifi.ru

Bogacheva O.V. Center of Budgetary Policy, Research Financial Institute, Ministry of Finance of Russian Federation, Moscow, Russian Federation
oy@ecorus.ru

Introducing program-based and target-oriented principles in the system of public finance management everywhere in the world is a specific feature of the recent decade. According to the research of the German Association of International Cooperation (Deutsche Gesellschaft f?r Internationale Zusammenarbeit (GIZ)), the majority of the OECD member countries, to any extent, have transferred or are planning to transfer to a program-based budget. However, this transition requires reforming the system of public finance management in the conditions of pressing problems of public debt, government budget deficit and growing public expenditures, as well as increasing dissatisfaction of the society with the work of public authorities and insufficient access to the information about the State budget. The authors emphasize that smooth implementation of budget reforms is very rare. Only few countries achieved rather fast and significant results in their transition to program-based budget. The authors name the following problems: high expenses, including those connected with the need to regularly collect and process huge array of information that exceeds the requirements of legislative authorities in decision-making process on State budget; mismatch of invested efforts and obtained results, additional burden on the employees of State departments; weakening political support to the process of introducing the program-based budget. The transition process of our country to the program-based budget was not simple either. Even basic questions continue to be debatable: what is program-based budgeting, what is the difference between a program-based budget and a traditional itemized budget; what are the purposes of transition to a program-based budget format, what models of program-based budget do other countries apply and which of them is suitable for Russia? The authors make an attempt to give reasonable answers to these questions.

Keywords: program-based budget, budgeting, public finance, management, target-oriented principles

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