The reform strategies for budget process (a strategy suggestion for Turkey)

ABSTRACT Over the past twenty years a set of ideas have spread around the world that have led to a large number of attempts at reform of budget systems. United Kingdom, USA, Australia, New Zealand and finaly Canada faced an unsustainable fiscal situation and responded with major reforms of the systems of budgeting, financial management and reporting. These reforms emphasise the integration of planning and priority setting, budget formulation, budget execution, financial reporting and performance auditing. There has been an emphasis on strategic control of aggregate spending and priority setting and facilitation of greater efficiency and effectiveness through delegation of management authority with accountability for results. These general approaches have emerged in all parts of the world, and across countries that have quite different historical traditions in public sector management. As with Turkey the situations of these countries when they change the institutions of budget system were unique in many ways, but there were sufficient similarities for Turkey to be able to take useful points from their experiences. From the perspective of performance, a well functioning budget system should facilitate decisions and actions that achieve the three key objectives: aggregate fiscal discipline, allocative efficiency and technical efficiency. On all these three counts the Turkish system of budget, performs very badly not only in comparison to standarts achieved by most industrial countries but also by the standarts achieved by many developing countries. In addition of this, each of the infrastructure of public expenditure management and accountability displays major structural weaknesses. The current system renders the budget dysfunctional for the purpose of managing a modern economy. Turkish budget system requires a major reform if it is to support an effective government. The specific problems in Turkey suggest that reform will need to emphasize: increasing comprehensiveness of the budget, developing the capacity to formulate policies, budget with a medium term perspective and gradually moving away from a centrally controlled budget system to one where spending agencies are provided with flexibility in using resources and are held responsible for results. Political understanding and support for this reform is vital to make budgeting a tool that supports government policies and programs. XIII