2002年-世界发展银行全球_FYR_of_Macedonia___Public_Expenditure_and_Institutional_Review_147页_9mb

FYR of Macedonia Public Expenditure and Institutional Review Summary

Core Content

This report, Report No. 23349-MK, is a Public Expenditure and Institutional Review (PEIR) of FYR Macedonia, conducted by the World Bank in 2002. It evaluates the country's fiscal and institutional challenges, particularly in the context of political and economic instability, and proposes a sequenced agenda for institutional reform to improve public resource management and policy implementation.

Main Views

Fiscal Stability Without Reform

• FYR Macedonia has experienced significant fiscal stabilization since 1994, with inflation decreasing from 400% to 2.2% and the fiscal deficit shrinking from 5.5% to 0.2% of GDP.
• Despite this, fiscal pressures remain high, especially due to the 2001 security crisis, which led to a GDP contraction of 4.6% and an estimated deficit of 6.8% of GDP.
• Public expenditure has been a major burden, with pensions accounting for over 8% of GDP and public wages also a significant portion, despite the country's relatively low GDP per capita.
• Capital expenditures have been historically low, contributing to a deteriorating infrastructure.
• Unbudgeted political commitments and the costs of implementing the Framework Agreement (FWA) have added to fiscal pressures.

Institutional Challenges

• The government's capacity is limited, particularly in central agencies, which lack strategic focus and coordination.
• Policy formulation is weak, with insufficient monitoring and evaluation mechanisms.
• Budget processes are fragmented, lacking predictability and transparency, which undermines credibility and reliability.
• Public sector employment and pay structures are not aligned with economic realities, leading to inefficiencies and high costs.
• Accountability mechanisms are underdeveloped, both internally and externally, and there is a lack of performance measurement systems.

Key Information

Key Sectors and Reforms

• Health and Social Protection: These sectors have been identified as areas requiring significant reform. The Health Insurance Fund (HIF) faced large deficits and debt until 1999, and while its financial position improved, structural inefficiencies persisted.
• Pension system: The pension system is a major component of public expenditure. A new pension framework law was introduced in 2000, but reforms are still needed to improve targeting and efficiency.
• Civil Service Reform: The government has taken steps to introduce an arms-length Civil Service Agency and secondary legislation for civil servants, but performance evaluation systems are still lacking.

Budget Process

• The budget preparation and execution process is disjointed, with limited predictability and insufficient transparency.
• Off-budget funds and donor funding account for a large portion of resources, with only a third of donor funding included in the budget.
• Special Revenue and guarantees are not well-managed, leading to potential misallocation of resources.
• The 2000 budget was a step forward, but reforms were derailed by the security crisis.

Recommendations

• Phase 1: Improve resource allocation within fiscal constraints.

  • Eliminate non-essential programs and services.
  • Rationalize expenditures in the health and education sectors.
  • Strengthen commitment control and improve the treasury system.
  • Implement financial management reforms in the health sector, including global-budget contracts for hospitals.
  • Establish pension supervision agencies and improve benefit delivery.
  • Increase predictability and conservatism in fiscal forecasts.

• Phase 2: Institutionalize reforms through stronger accountability, capacity building, and improved policy formulation.

  • Enhance information quality for decision-makers.
  • Improve transparency and accountability mechanisms.
  • Develop performance evaluation systems and organizational objectives.
  • Strengthen coordination between central agencies.
  • Improve the role of Parliament in holding the government accountable.
  • Revive efforts to implement the 2000 budget reform and the FWA.

Conclusion

The report emphasizes the need for institutional and structural reforms to ensure fiscal stability and effective public resource management. Without these reforms, the economic and social objectives of FYR Macedonia will not be met, and the delivery of public services will remain below potential. The sequenced agenda for reform aims to address these challenges through a combination of resource reallocation, policy improvement, and enhanced accountability.

Report Organization

• Executive Summary
• Fiscal Stability Without Reform
• Policy Formulation
• Budget Implementation, Monitoring, and Accountability
• Human Resource Management
• Tables and Figures
• Annexes

Key Contributors and Acknowledgements

• Task Manager: Pascale N. Kervyn de Lettenhove
• Peer Reviewers: Malcolm Holmes, Stefan Koegerle, Nick Manning, Hermann Von Gersdorff
• Main Contributors: Erika Jorgensen, Juan Carlos Ginarte, Xiaoqing Yu, Loraine Hawkins, Gord Evans, Michael Reddington, Bill Radburn, William Dorotinsky, Serif Sayin, Gary Reid, Jana Orac, Slobodanka Matakova, Marius Vismantas, Evgenij Najdov, Rajna Cemerska, Kathryn Rivera, Mismake Galatis

Tables and Figures

• Table 1.1: Economic composition of revenue and expenditure, 1993-2001
• Table 1.5: Fiscal Projections with Reform (in % of GDP)
• Figure 1: Public Revenues and Expenditures, 1992-2001
• Graph 3.1: Balance of Executive and Legislative Powers

Final Note

The report highlights the urgent need for institutional reform to support long-term fiscal stability and effective public service delivery, especially in the context of the peace agreement and economic growth. It serves as a foundation for future reforms and World Bank-supported adjustment operations.