ABSTRACT
The process of budget preparation is aimed primarily at fulfilling the first two objectives of public financial management: aggregate expenditure control and strategic allocation of resources. Fiscal problems emerge from a mismatch between revenues and expenditure, and call for changes in policy, either mobilization of additional revenue or expenditure reductions or a judicious combination of both. Technical budgeting problems emerge from badly estimated revenue or expenditure, and call for changes in management and methodology. A full understanding of the relative impact of government activity on people in different income groups would require taking into account the distribution of the benefits from public expenditure as well as the distribution of the tax burden. Regular executive-legislative consultation on budget policies and their implementation is a plus-plus game: strengthening the review and approval capacity of the legislature increases the legitimacy of the budget and thus the authority of the executive to implement it effectively.
