Spending reviews: Experience of OECD countries and prospects for Russia

Abstract

The article focuses on key characteristic features of spending reviews in the OECD countries and formation of institutional environment allowing for introduction of such reviews in the Russian Federation. Spending reviews have been applied as an element of project and program appraisal and evaluation in several OECD countries since 1980-s. Their limited nature at that time could be proved by the fact that they were mainly used only when governments faced severe budget deficits. After the global financial crisis (2007–2008) the situation has drastically changed: spending reviews evolved into an independent instrument of public finance management. The new approach assumes application of spending reviews both for identification of inefficient budget/ program expenditures and reallocation of freed financial resources in line with medium-term policy priorities. In the recent years, a set of principles has been developed and implemented in several OECD countries thus creating enabling environment for the further expansion of spending reviews in countries with different level of economic development and structure of budget systems. Based on the examination of spending reviews’ record in OECD countries, the authors discusses pre-requisites to be put in place in order to launch spending reviews in Russia, including changes in the legal base and integration of spending reviews in the budget preparation process. Changes in several resolutions of the RF Government and orders of the RF Ministry of Finance are required. The role of the RF Ministry of Finance in organization and overall management of the process of spending reviews’ planning and preparation should increase. Also, one of the Commissions in the RF Government should assume responsibilities to conduct oversight and approve general directions of spending reviews, since political support is critical for the final success in implementation of this financial instrument in Russia.