The President’s Budget for 2001: Depleted Economic Choices

For government to be able to function and fulfill the role assigned to
it, it must collect sufficient resources and allocate and use those
resources efficiently and effectively. In this regard, any assessment
of the government budget cannot proceed without an implicit recognition
of the integral relationship between revenue and expenditures, the two
principal elements of fiscal policy. Thus, the analysis of this paper
assesses not only expenditure program but also the revenue program of
the President’s Budget for 2001. In particular, the President’s budget
proposal is evaluated in terms of two principal objectives of a good
public expenditure management: fiscal discipline and strategic
allocation of resources.

On the one hand, fiscal discipline requires good revenue forecasts and
aggregate expenditure controls. On the other hand, resource allocation
is assessed in terms its consistency with policy pronouncements of the
government. In particular, resource allocation is appraised with
regards to the manner by which government expenditures are programmed
across sectors and categories in order to promote overall economic
growth and equity.

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