Template-type: ReDIF-Paper 1.0
Author-Name: Jorge Martinez-Vazquez 
Author-Email: jorgemartinez@gsu.edu 
Author-Homepage: https://icepp.gsu.edu/profile/jorge-martinez-vazquez/
Author-Workplace-Name:  International Studies Program. Andrew Young School of Policy Studies, Georgia State University
Author-Workplace-Homepage:  https://icepp.gsu.edu/
Title: Estonia: Fiscal Management and the Budget Process 
Abstract: Estonian authorities have made remarkable progress in a relatively short period of time
 by putting into place the elements of a modern budget process and fiscal management system.
 This progress is especially notable given the difficult circumstances the country has gone
 through in the transition period of the last five years. The most significant changes
 in budgetary policy took place with the adoption of the Law on State Budget in June 1993.
 Several other pieces of legislation have come to complement the Budget Law including laws on
 local budgets, state external audit and the department of treasury. Other reforms have helped
 establish the basis of a modern fiscal management system. These include a monetary board
 assuring the independence of monetary policy from fiscal management and eliminating
 all possibilities of inflationary deficit financing, a well designed and impressively
 simple tax code, an overall well designed system of decentralized government,
 and the privatization of many state enterprises.However, there are still significant steps that
 need to be taken for making the government budget and the budget process itself effective
 instruments of fiscal management in Estonia. In some cases, the new budget institutions
 are at the early stages of development and appear fragile because of lack of resources
 or trained personnel and lack of tradition. In other cases, the proper institutions for
 fiscal management have not been developed or are lacking. Addressing these reform issues
 should significantly enhance the ability of the Government of Estonia to accomplish
 its objectives of macroeconomic stability, a more efficient allocation of public funds,
 and growth of the economy’s private sector.This report takes stock and evaluates the reforms
 in fiscal management already introduced, those scheduled for introduction, and those that
 the Government still should consider putting in place to accomplish an effective
 fiscal management system. Because they have been reviewed recently, this report does not
 discuss in depth existing budget institutions but instead puts emphasis on recent reform
 and highlights those problem areas where additional reforms will be necessary.
 The first section of the report provides a brief overview of the main accomplishments
 and failings of Estonia’s budget process and fiscal management system.
 The next three sections of the report review in more depth the three stages of
 the budget process: policy formulation, forecasting and budget preparation;
 budget execution and the ongoing effort to introduce a modern treasury function
 in the Ministry of Finance; and the institutions for budget compliance,
 namely internal and external ex-post audits and budget evaluation. 
Keywords: Estonia,Fiscal Management,The Budget Process  
Length: 42 pages
Creation-Date: 1997-01-01
File-URL:http://icepp.gsu.edu/files/2015/03/ispwp9708.pdf
File-Format:application/pdf
Handle: RePEc:ays:ispwps:paper9708