3.2.2 Entry points offered by budget

An important part of the implementation of PRS activities is budget allocation. Government and donors are supposed to allocate budgets according to the PRSP. A budget is effectively the translation of planned actions into resources, and reveals the priorities set by the government. Budgets exist on various levels: national, regional or communal; there are also departmental and programme budgets. Normally, governments formulate and finalise their budget every year. However, the PRS context is somewhat different, as an increasing number of countries are now seeking to formulate mid-term budgets covering three to five years. This instrument is known as a Medium-term Expenditure Framework, or MTEF for short.

No matter what kind of budget, an MTEF or a conventional annual budget, the civil society must assess and monitor the budget framework. However, this may often be difficult for two reasons. First, budgets often lack transparency, making any involvement of the civil society difficult. This may be intentional, or could be attributed to insufficient communication. In the latter case, the collection of relevant information may be difficult and time-consuming, but not impossible. Second, it is doubtful that most non-economists would be sufficiently motivated or expert enough to scrutinise budget documents. One solution is to establish a link with local universities and to hire a professional for this work (see Chapter 4, case study Bangladesh). 

Budgets consist of three phases:

1. Budget formulation: The first phase takes place in the last months of the financial year (this differs in many cases from the calendar year, e.g. in Tanzania it spans the period 1st July - 30th June),  when the government (usually the Ministry of Finance) circulates a draft budget indicating the allocation of funds among the various ministries. This process is traditionally done by the government, although the civil society is becoming increasingly involved.
2. Budget debate and analysis: The second phase consists of the approval of the budget by the parliament and/or legislature. Reading and understanding budget documents is however often challenging as they tend to be very technical.  However, parliamentarians could prove useful allies in accessing and understanding these documents.
3. Budget implementation: The third phase is that of implementation, which can differ from what was actually planned. The key question is how much money is actually spent, and with what effect. Two possibilities exist in terms of monitoring:

• Monitor the inputs, i.e. how much is spent on a specific programme?
• Monitor the outputs, i.e. what effects do the programmes have? For this, the tools of the participatory poverty assessment are again useful.

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