2014年-世界发展银行全球_Improving_Public_Expenditures_in_Agriculture___Empirical_Evidence_of_the_Effectiveness_and_Efficiency_of_Agricultural_Public_Expenditures_in_Mongolia_96页_1mb

Summary of "Improving Public Expenditures in Agriculture: Empirical Evidence of the Effectiveness and Efficiency of Agricultural Public Expenditures in Mongolia"

Core Content

This report, Improving Public Expenditures in Agriculture: Empirical Evidence of the Effectiveness and Efficiency of Agricultural Public Expenditures in Mongolia, is a comprehensive analysis of the effectiveness and efficiency of public expenditures in Mongolia's agriculture sector. Conducted by the World Bank Group in collaboration with the Food and Agriculture Organization (FAO) and the Ministry of Industry and Agriculture (MIA), the study aims to inform spending priorities and improve resource allocation for the sector.

Main Objectives

• To assess the trends and composition of agricultural public expenditures over the past decade.
• To evaluate the economic and functional breakdown of these expenditures.
• To analyze the budget processes and performance in the sector.
• To identify constraints affecting the effectiveness and efficiency of public spending.
• To provide policy recommendations for improving agricultural expenditure management.

Key Findings

Relative Size of Agricultural Expenditures

• Agriculture has performed well over the past decade, contributing around 17.4% to GDP.
• However, the share of the national budget allocated to agriculture (excluding forestry and fisheries) averaged only 2.4% between 2003 and 2012.
• Agricultural expenditure as a share of GDP averaged 1.1% over the same period.
• Agricultural research and development (R&D) spending was low, representing only 0.4–0.5% of AgGDP in 2008–2012.

Level of Agricultural Expenditures

• Budget allocations to MIA departments are often unclear, with a bulk allocation given to the entire ministry.
• The majority of expenditures go to salaries and wages.
• Annual budget growth has been volatile, with significant fluctuations between 2003 and 2013.
• Subsidies and transfers have grown disproportionately, reaching 57.6% of total current expenditures by 2013.

Economic and Functional Composition

• Capital expenditures have more than doubled compared to current expenditures between 2003 and 2013.
• Capital expenditures are mainly used for infrastructure (wells, water systems, veterinary labs, etc.), equipment, and feasibility studies.
• Operation and maintenance (O&M) expenditures are underfunded, representing only 1.9% of the capital budget in 2013.
• Current expenditures are heavily skewed towards subsidies and transfers, with little support for goods and services.
• Research and development (R&D) and advisory services are underfunded, receiving only 4% of the national budget.

Budget Processes and Performance

• MIA's budget execution performance has been good, averaging over 90% execution between 2003 and 2011.
• However, there is widespread underspending in individual categories, indicating constraints in financial management and analysis.
• The Ministry lacks the capacity to monitor and evaluate sector programs effectively.
• The intergovernmental fiscal system has a top-down structure, limiting local engagement in planning and budgeting.

Effectiveness and Efficiency of Expenditures

• The vaccination program has improved livestock production, but lacks a sound monitoring and supervision mechanism.
• Poor coordination between MIA and local offices (aimags and soums) has hindered program implementation.
• The slow procurement process and lack of resources at local levels have delayed infrastructure projects.
• Despite these challenges, significant progress has been made in irrigation and well construction, which have boosted crop production.

Key Issues Identified

• Limited capacity for planning, budgeting, monitoring, and evaluation.
• Underfunding of core public goods such as research and extension services.
• Weak donor coordination and limited transparency in off-budget expenditures.
• Inadequate financial management and analytical skills in MIA's Finance and Investment Division (FID).
• Disconnection between sector budgets and development priorities.
• Lack of local ownership and involvement in program planning and budgeting.

Policy Recommendations

• Increase the share of the national budget allocated to agriculture to better support its role in economic development.
• Boost operation and maintenance (O&M) expenditures to ensure the sustainability of capital investments.
• Balance budget allocations between subsidies and transfers and goods and services, and establish a clear framework for subsidies with an exit strategy.
• Enhance support for agricultural research and extension services, including reforming the Science and Technology Fund (STF) committee.
• Strengthen financial management and analytical capacity within the FID and budget management units.
• Resource the Monitoring and Evaluation and Internal Audit Department (MEIAD) with skilled personnel to improve monitoring and evaluation of sector outcomes.
• Improve coordination and communication between MIA and local authorities to enhance program implementation.
• Simplify procurement procedures to reduce delays and improve efficiency.

Conclusion

The report highlights that while Mongolia's agriculture sector has shown strong growth, public expenditures remain inefficient and under-targeted. The findings underscore the need for improved financial management, better coordination between central and local authorities, and a more balanced and strategic allocation of resources to ensure the long-term sustainability and effectiveness of agricultural investments. The World Bank remains committed to supporting the Government of Mongolia in these efforts.