Government cost information and the quality of public expenditure: Lessons from the international experience

Abstract

Allocation and management of public funds can be significantly improved when good information on costs of producing and delivering public goods and services is regularly available, so that tax payers' money can bring better social benefits. Pundits diverge on which is the best way to use the information on government costs extracted from the adoption of accrual accounting in the public sector. Some argue in favor of using such information as an important tool for improving decision making during the regular budgetary process. Others support the idea of revolutionizing the whole budget by adopting the so-called accrual budgeting. This article explores this question on the basis of evidences provided by international experiences and points to important elements that should be taken into account in the ongoing debate in Brazil.