Multiyear Budgets and Fiscal Performance: Panel Data Evidence

43 Pages Posted: 30 Jun 2012 Last revised: 24 Dec 2013

See all articles by Razvan Vlaicu

Razvan Vlaicu

Inter-American Development Bank; University of Maryland

Marijn Verhoeven

World Bank

Francesco Grigoli

International Monetary Fund (IMF)

Zachary Mills

World Bank - Europe and Central Asia Region

Multiple version iconThere are 2 versions of this paper

Date Written: December 2013

Abstract

In the last two decades more than 120 countries have adopted a multiyear budget process (Medium-Term Framework, or MTF) that enables the central government to set multiyear fiscal targets. This paper analyzes a newly-collected dataset of worldwide MTF adoptions during 1990-2008. It exploits within-country variation in adoption in a dynamic panel framework to estimate MTFs' impacts on aggregate as well as sectoral measures of fiscal performance. We find that on average multiyear budgeting improves budget balance by about 2 percentage points with more advanced MTF phases having a larger impact. Higher-phase MTFs also reduce health spending volatility, while only the top-phase MTF has a measurable impact on health sector technical efficiency.

Keywords: budget institutions, medium-term framework, fiscal discipline, health sector, technical efficiency, dynamic panel data analysis

JEL Classification: E62, H51, H62

Suggested Citation

Vlaicu, Razvan and Verhoeven, Marijn and Grigoli, Francesco and Mills, Zachary, Multiyear Budgets and Fiscal Performance: Panel Data Evidence (December 2013). Available at SSRN: https://ssrn.com/abstract=2096427 or http://dx.doi.org/10.2139/ssrn.2096427

Razvan Vlaicu (Contact Author)

Inter-American Development Bank ( email )

1300 New York Ave NW
Washington, DC 20577
United States

University of Maryland ( email )

3114 Tydings Hall
College Park, MD 20742
United States

Marijn Verhoeven

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Francesco Grigoli

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Zachary Mills

World Bank - Europe and Central Asia Region ( email )

1818 H Street
Washington, DC 20433
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
159
Abstract Views
1,091
rank
118,602
PlumX Metrics