STATE BUDGET INCOME-EXPENDITURE CONTROL RETROSPECTIVE ANALYSIS

Abstract

The study is relevant since there is a need for developing proper viable mechanisms for
implementing effective budget policy, elaborating methodology for budget forecasting and
planning. The paper is aimed at exploring the major conditions for controlling state budget
income and expenditure, deficit and surplus, set out in the international standards and
international methodological recommendations and materials.This paper presents a legal,
grouped in chronological order framework for controlling values of budget income and
expenditure, limiting deficit/surplus in various countries from 1990 to 2005. A stepwise reform
of the Stability and Growth Pact is examined. An analysis of a mechanism for restricting arrears
rate in the countries with federal and non-federal government is carried out. Based on the
countries’ experience in managing regional and municipal finance, the main parameters of
controlling budget deficit and national debt management were identified; allowable state
budget deficit limits were found; a mechanism for limiting budget deficit, debt service and
repayment expenses was reviewed both at the regional, and local levels. An overall assessment
of the Codes of Good practice and similar documents internationally applicable in the area of
budget balancing is made. The conducted study proved that the early 2000s saw both
regulations and restraints imposed on the budget income and expenditure, and restraints
imposed on the budget deficit and debts in many countries that was typical for the federal and
regional/local budgets.The materials of the paper may prove beneficial when studying the
process of overhauling the budget structure, budget system, and system of inter-budget
relations both at the regional, and local levels.