Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento Who decides on Public Who decides on Public Expenditures? A Political Economy Expenditures? A Political Economy Analysis of the Budget Process: Analysis of the Budget Process: the case of Argentina the case of Argentina Emmanuel Abuelafia, Sergio Berensztein, Miguel Braun and Luciano di Gresia lao 25, 1° • C1022AAA Buenos Aires, Argentina - Tel: (54 11) 4384-9009 • Fax: (54 11) 4371-1221 • info@cippec. www.cippec.org
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Emmanuel Abuelafia, Sergio Berensztein, Miguel Braun and Luciano di Gresia
Who decides on Public Expenditures? A Political Economy Analysis of the Budget Process: the case of Argentina. Emmanuel Abuelafia, Sergio Berensztein, Miguel Braun and Luciano di Gresia. - PowerPoint PPT Presentation
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Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
Who decides on Public Who decides on Public Expenditures? A Political Economy Expenditures? A Political Economy
Analysis of the Budget Process: Analysis of the Budget Process: the case of Argentinathe case of Argentina
Emmanuel Abuelafia, Sergio Berensztein, Miguel Braun and
Luciano di Gresia
Av. Callao 25, 1° • C1022AAA Buenos Aires, Argentina - Tel: (54 11) 4384-9009 • Fax: (54 11) 4371-1221 • [email protected] • www.cippec.org
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
Outline of the presentation
1.The PMP in Argentina and literature review
2.A (very brief) overview of the formal budget process
3.The actual workings of the budget process
4.Conclusions and recommendations
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
The PMP in Argentina
Institutional Legacies
1930-1983
Constitutionand electoral
rules
•Short horizonsfor policymakersand interest groups
•Weak arenasfor intertemporaldeals
•Congress
Policyinstability
Lack of coordination
Lack of cooperation
Deep determinants
Nature of the PMP
Outer features of policies
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
Implications for the budget process
1.The President is strong vis a vis Congress
2.Provincial governors are powerful informal actors
3.Weak and unstable bureaucracy, which limits budget efficiency
4.Instability in budget outcomes
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
Other papers
- Jones (2001): Congress has an important role in the budget process.
- Rodriguez and Bonvecchi (2005): the role of Congress is weak.
- The evaluation of the role of Congress depends on the universe of public expenditure that one analyzes.
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
The National Budget 2004
34%
34%
13%
11%
8%
.
48%
6%
37%
9%
55%
7%
18%
13%
7%
Total Revenues: $108.080
Municipal’s Revenues
NationalAdministrationRevenues
Coparticipation
PE, FF y Other entities
Provincial’s Revenues
Total Expenditure:
$104.371
Primary Surpluss: $12.645 = 3% PBI
Municipal Expenditure
PE, FF y Other entities
Provincial’s Expenditure
NationalAdministrationExpenditure
Other Expenditures
Payroll
Debt’s Services
Transfers
Pensions
NationalAdministration Budget
Law: $59.712
Argentinean Public Sector. 2004
34%
34%
13%
11%
8%
.
48%
6%
37%
9%
55%
7%
18%
13%
7%
Total Revenues: $108.080
Municipal’s Revenues
NationalAdministrationRevenues
Coparticipation
PE, FF y Other entities
Provincial’s Revenues
Total Expenditure:
$104.371
Primary Surpluss: $12.645 = 3% PBI
Municipal Expenditure
PE, FF y Other entities
Provincial’s Expenditure
NationalAdministrationExpenditure
Other Expenditures
Payroll
Debt’s Services
Transfers
Pensions
NationalAdministration Budget
Law: $59.712
Argentinean Public Sector. 2004
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
Degree of Exogeneity
We constructed an index that reflects how much the public expenditure deviates from its trend.
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
A brief history of fiscal outcomes
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
The formal budget process
APPROVAL
LEGISLATIVO
CongressDiscussion and
approval. Posiblemodiifications
Sets the debt limit
ExecutiveSanction or veto
FORMULATION
Executive
National Budget Office
Agencies and Entities
CUENTA DE INVERSION
Congress
Controlling Agencies
PUBLIC ADMINSTRATION
Implements the budget
IMPLEMENTATION
and CONTROL
Budget Proposal
BUDGET LAW
APPROVAL
LEGISLATIVO
CongressDiscussion and
approval. Posiblemodiifications
Sets the debt limit
CongressDiscussion and
approval. Posiblemodiifications
Sets the debt limit
ExecutiveSanction or veto
ExecutiveSanction or veto
FORMULATION
Executive
National Budget Office
Agencies and Entities
FORMULATION
Executive Executive
National Budget Office
National Budget Office
Agencies and Entities
Agencies and Entities
CUENTA DE INVERSION
Congress
Controlling Agencies
PUBLIC ADMINSTRATION
Implements the budget
CUENTA DE INVERSION
CongressCongress
Controlling Agencies
Controlling Agencies
PUBLIC ADMINSTRATION
Implements the budget
PUBLIC ADMINSTRATION
Implements the budget
IMPLEMENTATION
and CONTROL
Budget ProposalBudget
Proposal
BUDGET LAWBUDGET LAW
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
The actual workings of the budget process
1.The President is the key actor, and he maximizes his goals subject to the constraints set by the rigidity of the budget, fiscal rules and agreements with IFIs.
2.He also has to deal with macroeconomic shocks and other powerful actors. (governors, lobbies, IFIs)
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
The actual workings of the budget process
What are the President´s goals?
- Obtaining reelection (political coalition)
- Favorable public opinion (macro stability, national public goods)
- Helping his home province (pork)
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
Formulation Approval Implementation
President is key actor
-Strategic use of forecasts-President defines allocation of marginal resources-Allocation of funds to home province
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento
An exception:
The Ministry of Economy.– The average seniority of the Ministry of Economy
employees is around 23 years, 15% higher than the average seniority of all the SINAPA´s employees (20 years). Compared with the other agencies, the Ministry is in the top of the employees´ seniority distribution.
– The educational level of the Ministry of Economy’s bureaucracy is above the average. 38% of the total Ministry’ s employees have tertiary education, two times more than the Ministry of Internal Affairs and 20% more than the SINAPA´s average.
– The Ministry of Economy has a higher proportion of upper echelons. 44% of its employees are in the top 3 categories, compared with the system average of 38%.
Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento