Budgeting and public expenditures

Restoring Fiscal Sustainability: Lessons for the Public Sector

 

 

 

 

       

As countries come out of the economic and financial crisis with a sharp deterioration in their public finances, they need a fiscal recovery plan to reduce debt burdens before long-term pressures hit with full force.

The OECD has found a number of lessons taken from country experiences that may be useful as each country grapples with its own – often unsustainable – fiscal position.

Read ‘Restoring Fiscal Sustainability: Lessons for the Public Sector’  on line (PDF, 1.3MB)

 Conclusions

 

A multi-year deficit reduction programme allows citizens and creditors to adjust gradually and provides a disciplinary framework to achieve more sensible government finances. Although it should not be implemented until the economy is on stronger footing and public confidence in financial markets has been restored, agreement on, and announcement of, a credible deficit reduction plan can help encourage the recovery by reducing the fears of inflation or currency instability.

In the absence of a plan, creditors will eventually begin to demand an increasing risk premium for holding government debt, which could slow or even choke off the recovery. If the fiscal position continues to deteriorate, at some point the risk premium will be insufficient to induce creditors to invest in government instruments.

This point could occur if inflation accelerates, fear of default rises, or financial instruments elsewhere look more appealing, leading investors to shift their funds to safer countries.
It is not too early to plan for the future. In fact, it is critical that countries get started now.


OECD can help the G20 monitor fiscal consolidation plans and can assist countries in formulating and implementing such plans. In the public governance area, two OECD activities are of particular relevance.

  • The OECD Working Party of Senior Budget Officials has experience in providing countries with in-depth peer reviews of their budget policies and processes to help them identify best practices and strategies for fiscal consolidations.
  • OECD comprehensive Public Management Reviews can provide countries with whole-of-government strategies for programme reviews and help improve the implementation of reductions by taking into account interactions across public management areas.

 

For further information on the OECD's work in this area see www.oecd.org/gov/budget

 


 

 

Related Documents

 

Senior budget official country reviews of budgeting systems

OECD Public Management Reviews - Ireland: Towards an Integrated Public Service

 

Countries list

  • Afghanistan
  • Albania
  • Algeria
  • Andorra
  • Angola
  • Anguilla
  • Antigua and Barbuda
  • Argentina
  • Armenia
  • Aruba
  • Australia
  • Austria
  • Azerbaijan
  • Bahamas
  • Bahrain
  • Bangladesh
  • Barbados
  • Belarus
  • Belgium
  • Belize
  • Benin
  • Bermuda
  • Bhutan
  • Bolivia
  • Bosnia and Herzegovina
  • Botswana
  • Brazil
  • Brunei Darussalam
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Cape Verde
  • Cayman Islands
  • Central African Republic
  • Chad
  • Chile
  • China (People’s Republic of)
  • Chinese Taipei
  • Colombia
  • Comoros
  • Congo
  • Cook Islands
  • Costa Rica
  • Croatia
  • Cuba
  • Cyprus
  • Czech Republic
  • Côte d'Ivoire
  • Democratic People's Republic of Korea
  • Democratic Republic of the Congo
  • Denmark
  • Djibouti
  • Dominica
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Equatorial Guinea
  • Eritrea
  • Estonia
  • Ethiopia
  • European Union
  • Faeroe Islands
  • Fiji
  • Finland
  • Former Yugoslav Republic of Macedonia (FYROM)
  • France
  • French Guiana
  • Gabon
  • Gambia
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Greenland
  • Grenada
  • Guatemala
  • Guernsey
  • Guinea
  • Guinea-Bissau
  • Guyana
  • Haiti
  • Honduras
  • Hong Kong, China
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iraq
  • Ireland
  • Islamic Republic of Iran
  • Isle of Man
  • Israel
  • Italy
  • Jamaica
  • Japan
  • Jersey
  • Jordan
  • Kazakhstan
  • Kenya
  • Kiribati
  • Korea
  • Kuwait
  • Kyrgyzstan
  • Lao People's Democratic Republic
  • Latvia
  • Lebanon
  • Lesotho
  • Liberia
  • Libya
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Macao (China)
  • Madagascar
  • Malawi
  • Malaysia
  • Maldives
  • Mali
  • Malta
  • Marshall Islands
  • Mauritania
  • Mauritius
  • Mayotte
  • Mexico
  • Micronesia (Federated States of)
  • Moldova
  • Monaco
  • Mongolia
  • Montenegro
  • Montserrat
  • Morocco
  • Mozambique
  • Myanmar
  • Namibia
  • Nauru
  • Nepal
  • Netherlands
  • Netherlands Antilles
  • New Zealand
  • Nicaragua
  • Niger
  • Nigeria
  • Niue
  • Norway
  • Oman
  • Pakistan
  • Palau
  • Palestinian Administered Areas
  • Panama
  • Papua New Guinea
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Qatar
  • Romania
  • Russian Federation
  • Rwanda
  • Saint Helena
  • Saint Kitts and Nevis
  • Saint Lucia
  • Saint Vincent and the Grenadines
  • Samoa
  • San Marino
  • Sao Tome and Principe
  • Saudi Arabia
  • Senegal
  • Serbia
  • Serbia and Montenegro (pre-June 2006)
  • Seychelles
  • Sierra Leone
  • Singapore
  • Slovak Republic
  • Slovenia
  • Solomon Islands
  • Somalia
  • South Africa
  • South Sudan
  • Spain
  • Sri Lanka
  • Sudan
  • Suriname
  • Swaziland
  • Sweden
  • Switzerland
  • Syrian Arab Republic
  • Tajikistan
  • Tanzania
  • Thailand
  • Timor-Leste
  • Togo
  • Tokelau
  • Tonga
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Turks and Caicos Islands
  • Tuvalu
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • United States
  • United States Virgin Islands
  • Uruguay
  • Uzbekistan
  • Vanuatu
  • Venezuela
  • Vietnam
  • Virgin Islands (UK)
  • Wallis and Futuna Islands
  • Western Sahara
  • Yemen
  • Zambia
  • Zimbabwe
  • Topics list