Pro-Poor Public Spending Reform : Uganda's Virtual Poverty Fund

The Poverty Action Fund (PAF) was introduced in Uganda in 1998 to reorient government expenditures towards implementing its Poverty Education Action Plan (PEAP) as well as to account for Heavily Indebted Poor Country (HIPC) resource use. This pape...

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Bibliographic Details
Main Authors:	Williamson, Tim, Canagarajah, Sudharshan
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTABILITY ACCOUNTING ALLOCATION BASIC SOCIAL SERVICES BUDGET ALLOCATION BUDGET ALLOCATIONS BUDGET CLASSIFICATION BUDGET CLASSIFICATION SYSTEM BUDGET EXECUTION BUDGET FORMULATION BUDGET IMPLEMENTATION BUDGET MANAGEMENT BUDGET PREPARATION BUDGET PROCESS BUDGET REFORMS BUDGET REPORTING BUDGET SUPPORT BUDGET SYSTEMS BUDGETING CONFLICT DEBT DEBT RELIEF DEVELOPING COUNTRIES DISBURSEMENT DISBURSEMENTS ECONOMIC GROWTH EXPENDITURES FINANCIAL ARRANGEMENT FLEXIBILITY FUNGIBLE GOVERNMENT BUDGET GOVERNMENT EXPENDITURES GOVERNMENT GUARANTEES HEAVILY INDEBTED POOR COUNTRIES HIPC INCOME INCOME POVERTY INDEBTED INTERNATIONAL DEVELOPMENT LOCAL GOVERNMENT LOCAL GOVERNMENTS MEDIUM TERM EXPENDITURE MEDIUM TERM EXPENDITURE FRAMEWORK MINISTRY OF FINANCE MONETARY FUND NATIONAL BUDGET POOR POOR COUNTRIES POVERTY ERADICATION POVERTY FUND POVERTY OUTCOMES POVERTY REDUCING POVERTY REDUCTION POVERTY REDUCTION PROGRAMS POVERTY REDUCTION STRATEGY POVERTY REDUCTION STRATEGY PAPER PRIVATE SECTOR PROGRAMS PUBLIC EXPENDITURE PUBLIC EXPENDITURE MANAGEMENT PUBLIC EXPENDITURE MANAGEMENT SYSTEMS PUBLIC FINANCIAL MANAGEMENT PUBLIC SECTOR PUBLIC SPENDING RECIPIENT COUNTRIES RECIPIENT COUNTRY REMEDY RURAL RURAL ROADS SANITATION SECTOR PROGRAMS SERVICE DELIVERY SOCIAL SERVICE SWAP SWAPS TOTAL PUBLIC EXPENDITURE TRANSPARENCY
Online Access:	http://documents.worldbank.org/curated/en/2006/03/12159984/pro-poor-public-spending-reform-ugandas-virtual-poverty-fund http://hdl.handle.net/10986/11192

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Summary:	The Poverty Action Fund (PAF) was introduced in Uganda in 1998 to reorient government expenditures towards implementing its Poverty Education Action Plan (PEAP) as well as to account for Heavily Indebted Poor Country (HIPC) resource use. This paper notes the successes of the PAR, the negative aspects, and the key lessons learned. Successes include: reorienting budget allocations towards pro-poor service delivery and demonstrating the additionality of debt relief; mobilizing donor resources and harmonizing conditions; and improved budget predictability, transparency, and accountability. The negative aspects include: unbalanced budget allocations, biased budget implementation, partial monitoring and evaluation, and no exit strategy. The key lessons were: To be effective, a Virtual Poverty Fund (VPF) should be simple and limited to the identification of Poverty Reduction Strategy Paper (PRSP) priority expenditures in the budget classification system; a VPF should be introduced in a way that supports rather than replaces the implementation of such comprehensive improvements in budget preparation and implementation; and a VPF does not bypass the need to have a PRSP and an effective budget process that identify priority pro-poor expenditures to be included in the VPF as part of a broader policy framework for growth and poverty reduction.

Pro-Poor Public Spending Reform : Uganda's Virtual Poverty Fund

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