The Impact of Cash Budgets on Poverty Reduction in Zambia : A Case Study of the Conflict between Well-Intentioned Macroeconomic Policy and Service Delivery to the Poor
Facing runaway inflation and budget discipline problems in the early 1990s, the Zambian government introduced the so-called cash budget in which government domestic spending is limited to domestic revenue, leaving no room for excess spending. The authors review Zambia's experience during the pa...
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| Format: | Policy Research Working Paper |
| Language: | en_US |
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World Bank, Washington, DC
2013
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| Online Access: | http://hdl.handle.net/10986/15764 |
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okr-10986-15764 |
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okr-10986-157642021-04-23T14:03:22Z The Impact of Cash Budgets on Poverty Reduction in Zambia : A Case Study of the Conflict between Well-Intentioned Macroeconomic Policy and Service Delivery to the Poor Dinh, Hinh T. Adugna, Abebe Myers, Bernard Macroeconomic policy Service delivery Budget management Government spending policy Fiscal efficiency Cash management Cash social transfers Cash transfer system Budget law & legislation Regulatory reform Reallocation of funds Budget management Cross country analysis account accounting accounts allocation of resources Appropriations authority balance of payments bills borrowing budget appropriations budget deficit budget estimates budget execution budget implementation budget management budget process budget projections budget surplus budget system budgetary resources budgeting consensus debt debt service decision making Democracy economic growth enactment exchange rate expenditure categories financial discipline Financial Regulations Financial support fiscal fiscal balance fiscal discipline fiscal management foreign debt foreign exchange foreign exchange reserves government agencies government expenditures Government Resources government revenue government revenues imports inflation Judiciary lack of accountability Ministries of Agriculture Ministries of Health Ministry of Finance National Planning oil payroll private sector public administration public expenditure public expenditure management Public Expenditure Review public expenditures public health quality of service rehabilitation Resource Mobilization revenue collection Roads selling social sector Structural Adjustment total expenditures transparency Treasury wages Facing runaway inflation and budget discipline problems in the early 1990s, the Zambian government introduced the so-called cash budget in which government domestic spending is limited to domestic revenue, leaving no room for excess spending. The authors review Zambia's experience during the past decade, focusing on the impact of the cash budget on poverty reduction. They conclude that after some initial success in reducing hyperinflation, the cash budget has largely failed to keep inflation at low levels, created a false sense of fiscal security, and distracted policymakers from addressing the fundamental issue of fiscal discipline. More important, it has had a deeply pernicious effect on the quality of service delivery to the poor. Features inherent to the cash budgeting system facilitated a substantial redirection of resources away from the intended targets, such as agencies and ministries that provide social and economic services. The cash budget also eliminated the predictability of cash releases, making effective planning by line ministries difficult. Going forward, Zambia must adopt measures that over time will restore the commitment to budget discipline and shelter budget execution decisions from the pressures of purely short-term exigencies. 2013-09-12T18:53:26Z 2013-09-12T18:53:26Z 2002-10 http://hdl.handle.net/10986/15764 en_US Policy Research Working Paper;No. 2914 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Tanzania Uganda Zambia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
en_US |
| topic |
Macroeconomic policy Service delivery Budget management Government spending policy Fiscal efficiency Cash management Cash social transfers Cash transfer system Budget law & legislation Regulatory reform Reallocation of funds Budget management Cross country analysis account accounting accounts allocation of resources Appropriations authority balance of payments bills borrowing budget appropriations budget deficit budget estimates budget execution budget implementation budget management budget process budget projections budget surplus budget system budgetary resources budgeting consensus debt debt service decision making Democracy economic growth enactment exchange rate expenditure categories financial discipline Financial Regulations Financial support fiscal fiscal balance fiscal discipline fiscal management foreign debt foreign exchange foreign exchange reserves government agencies government expenditures Government Resources government revenue government revenues imports inflation Judiciary lack of accountability Ministries of Agriculture Ministries of Health Ministry of Finance National Planning oil payroll private sector public administration public expenditure public expenditure management Public Expenditure Review public expenditures public health quality of service rehabilitation Resource Mobilization revenue collection Roads selling social sector Structural Adjustment total expenditures transparency Treasury wages |
| spellingShingle |
Macroeconomic policy Service delivery Budget management Government spending policy Fiscal efficiency Cash management Cash social transfers Cash transfer system Budget law & legislation Regulatory reform Reallocation of funds Budget management Cross country analysis account accounting accounts allocation of resources Appropriations authority balance of payments bills borrowing budget appropriations budget deficit budget estimates budget execution budget implementation budget management budget process budget projections budget surplus budget system budgetary resources budgeting consensus debt debt service decision making Democracy economic growth enactment exchange rate expenditure categories financial discipline Financial Regulations Financial support fiscal fiscal balance fiscal discipline fiscal management foreign debt foreign exchange foreign exchange reserves government agencies government expenditures Government Resources government revenue government revenues imports inflation Judiciary lack of accountability Ministries of Agriculture Ministries of Health Ministry of Finance National Planning oil payroll private sector public administration public expenditure public expenditure management Public Expenditure Review public expenditures public health quality of service rehabilitation Resource Mobilization revenue collection Roads selling social sector Structural Adjustment total expenditures transparency Treasury wages Dinh, Hinh T. Adugna, Abebe Myers, Bernard The Impact of Cash Budgets on Poverty Reduction in Zambia : A Case Study of the Conflict between Well-Intentioned Macroeconomic Policy and Service Delivery to the Poor |
| geographic_facet |
Tanzania Uganda Zambia |
| relation |
Policy Research Working Paper;No. 2914 |
| description |
Facing runaway inflation and budget discipline problems in the early 1990s, the Zambian government introduced the so-called cash budget in which government domestic spending is limited to domestic revenue, leaving no room for excess spending. The authors review Zambia's experience during the past decade, focusing on the impact of the cash budget on poverty reduction. They conclude that after some initial success in reducing hyperinflation, the cash budget has largely failed to keep inflation at low levels, created a false sense of fiscal security, and distracted policymakers from addressing the fundamental issue of fiscal discipline. More important, it has had a deeply pernicious effect on the quality of service delivery to the poor. Features inherent to the cash budgeting system facilitated a substantial redirection of resources away from the intended targets, such as agencies and ministries that provide social and economic services. The cash budget also eliminated the predictability of cash releases, making effective planning by line ministries difficult. Going forward, Zambia must adopt measures that over time will restore the commitment to budget discipline and shelter budget execution decisions from the pressures of purely short-term exigencies. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Dinh, Hinh T. Adugna, Abebe Myers, Bernard |
| author_facet |
Dinh, Hinh T. Adugna, Abebe Myers, Bernard |
| author_sort |
Dinh, Hinh T. |
| title |
The Impact of Cash Budgets on Poverty Reduction in Zambia : A Case Study of the Conflict between Well-Intentioned Macroeconomic Policy and Service Delivery to the Poor |
| title_short |
The Impact of Cash Budgets on Poverty Reduction in Zambia : A Case Study of the Conflict between Well-Intentioned Macroeconomic Policy and Service Delivery to the Poor |
| title_full |
The Impact of Cash Budgets on Poverty Reduction in Zambia : A Case Study of the Conflict between Well-Intentioned Macroeconomic Policy and Service Delivery to the Poor |
| title_fullStr |
The Impact of Cash Budgets on Poverty Reduction in Zambia : A Case Study of the Conflict between Well-Intentioned Macroeconomic Policy and Service Delivery to the Poor |
| title_full_unstemmed |
The Impact of Cash Budgets on Poverty Reduction in Zambia : A Case Study of the Conflict between Well-Intentioned Macroeconomic Policy and Service Delivery to the Poor |
| title_sort |
impact of cash budgets on poverty reduction in zambia : a case study of the conflict between well-intentioned macroeconomic policy and service delivery to the poor |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://hdl.handle.net/10986/15764 |
| _version_ |
1764431079301709824 |