ABSTRACT
The most important distinction in the budget structure is between current and capital transactions. A capital budget may be used to denote, on the receipts side, the foreign aid received, and on the expenditure side, projects and programs that are covered by foreign aid. Several economic considerations favor the dual budget system. Briefly, these are that the structure clearly shows the current and capital outlays, that it provides a clear identification of borrowing and its utilization, and that it delineates information on the actual capital formation. The lack of a settled view on what constitutes capital has contributed to the emergence of a variety of practices. Three main problems are experienced. First, a multiplicity of budget categories that extend beyond the current and capital divisions has developed. Second, comprehensive criteria are rarely articulated for the classification of revenues and expenditures. Third, there is a lack of consistency in the application of the criteria.
