Managing Public Expenditure

This paper highlights some key policy issues regarding the performance of public expenditure and proposes an analytical framework for its assessment. The framework distinguishes three economic objectives of policies in the pursuit of better performance of public expenditure: macroeconomic sustainability, allocative efficiency (better outcomes per unit of public expenditure) and technical efficiency (less resource inputs per unit of public output). Against this backdrop, the paper discusses experiences of governments of OECD countries with various policy instruments, including fiscal rules, medium-term fiscal frames, market-based allocation mechanisms and flexible management and control. These experiences could serve as a starting point for peer reviews and international benchmarking ...