Ultra-Vired: How Budget Rules and Practices Can Reduce Budget Credibility
December 2019 | By Guillermo Herrera and Jason Lakin, International Budget Partnership
Across the world, budget systems differ. One aspect of this variation concerns the degree to which executives are constrained from making changes to the budget during implementation. These rules can be more or less restrictive, and the degree to which executives follow formal rules may vary as well.
In this report, we review a few rules and practices in select countries that tend to enhance executive discretion over budget implementation. Our exploration complements a forthcoming IBP quantitative analysis (Cho and de Renzio 2020) that found that the quality of public financial management (PFM), including controls during budget execution, contributed to higher credibility of the budget in aggregate and compositional terms.