ABSTRACT
Public expenditure management has been in existence, in one form or other, for more than two millennia, although the terms of usage, in their present form, came into being only toward the end of the twentieth century, and their usage was extensively promoted by governments and international agencies alike to emphasize the growing importance of public expenditures, their underlying policies, the benefits and the costs that they entail, and their implications for overall financing, as well as their impact on fiscal sustainability. Many of the elements that formed part of the expenditure management systems in ancient monarchical regimes continue to this day, not merely because of reliance on traditions and a reluctance to change them, but because of their enduring and viable contributions to the effectiveness of the system. A cursory examination of the history of the system reveals, however, that it changed over the years, and that it is continuing to change, in scope and in underlying concepts, as well as the purposes to be
served. Such a change is an integral part of the evolutionary process of governments. As these changes take place, some deliberately planned and consciously introduced, while some take place more as a reaction, it is necessary to examine whether the changes were in the right direction and whether they have been adequate or whether more radical changes are indicated. This chapter aims at undertaking such a review of, in particular, the more recent reforms attempted during the eighties and nineties, and that continue to be implemented by the developing countries, transition countries and industrial countries. It is appropriate, however, that before undertaking the proposed review the evolution of the expenditure management is considered, albeit briefly, so as to have a perspective on the origins of recent reforms, their relevance for the fiscal policy and systemic issues faced by various countries, and to evaluate the advances made in the process.
