Budgeting and public expenditures

Reallocation: The Role of Budget Institutions


On the initiative of the Governments of Canada and the Netherlands, the OECD Secretariat conducted a research project on "Reallocation". The final publication was released in February 2005.

Reallocation was defined as the readjustment of expenditures in relation to the current budgetary or medium-term estimates. Reallocation is once again on the political agenda of many OECD member countries due to macroeconomic setbacks and new priorities in the sphere of security, ageing populations (social security and health care), and education.

The report explores the ways in which several types of budget institutions facilitate reallocation. The report looks, among other things, at medium-term expenditure frameworks, rules of budgetary discipline, the role of the minister of finance, and programme review. The report also contains an empirical part in which the development of central government expenditures since 1980 in 11 OECD member countries is analysed. This part makes use of a new classification of government expenditure, called the "microeconomic classification". In contrast to the existing (macro) economic classification, it is based on motives for expenditure, rather than on the types of goods that are purchased.

Reallocation: The Role of Budget Institutions may be purchased from the OECD Online Bookshop.


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