Budgeting for results requires strong political will.

KARACHI -- Result-based budgeting, an impor- tant aspect of fiscal administration, is premised on the notion that it is not enough that governments just make budgetary allocations to pol- icy areas, but it is also essential that they strive to efficiently achieve the policy outcomes.

In advanced economies char- acterised by an efficient public expenditure management sys- tem, the budget-making process essentially starts with a few very important questions.

These include what results are to be achieved in the areas of spend- ing reflected in the budget docu- ment? What is the value of the public money being spent? What standards of service delivery are expected by users of public services?

When these questions, which provide results in exchange for budgetary allocations, are given due consideration in the budget- making process, it is termed 'bud- geting for results'.

Unlike the traditional incremental budgeting, the focus of budgetary control in result-based budgeting shifts from input to output of the budget and from what the govern- ment departments are buying to what they are producing.

Therefore, the result-based bud- geting is an 'output-class' budget ie all the items in the budget document are reflected in terms of ob- jectives, programmes, purposes and activities, which are to be financed during a fiscal year, and not in terms of inputs, which are to be consumed for achieving such objec- tives, programmes and activities.

Moreover, the budget controllers, in result-based budgeting, are in- terested in 'what' aspect of the performance of spending agencies rather than the 'how' aspect ie the output-driven budgeting also gives complete freedom to managers of the spending agencies to decide on the input mix.

Pakistan, in a bid to make its bud- getary process result-based, intro- duced the Medium-Term Budgetary Framework (MTBF) with the sup- port of UK-based Department for International Development (DFID) in 2003 and claims to be following the same budgetary framework to date for its annual budget-making.

In the legislative framework, Section 5 of the Fiscal Responsibility and Debt Limitation Act 2005 calls for the MTBF in Pakistan. Theoretically, the MTBF attempts to integrate policy-making, planning and budgeting in a medium-term framework with the aim of achiev- ing macroeconomic stability and fiscal discipline and this framework is a good fit into the output-class budget paradigm.

However, the extent to which Pakistan has been able to...