Georgia : Public Expenditure Review
Like other low-income countries, Georgia's ability to reduce poverty and meet the Millennium Development Goals (MDGs) by 2015 will depend crucially on its ability to sustain per-capita GDP growth and to use effectively and efficiently its scarce public resources. Indeed, increased public expenditures will not result in improved social outcomes unless current productivity levels are improved. This report shows that weaknesses in Georgia's public expenditure management systems have led to serious inefficiencies and inequities in the use of public resources and have prevented the necessary restructuring in public expenditures. The first three chapters explore sources of these systemic problems in the context of macroeconomic management, revenue policy and administration, and budget management systems. Subsequent chapters explore the scope for strengthening budget management systems in the areas most critical for poverty reduction and the attainment of MDGs: local governments and social sector spending. These chapters both corroborate and supplement with further detail the core constraints on public expenditure restructuring seen in the earlier chapters, but also map out the complementary components of a reform strategy which recognizes the need for parallel action by central agencies, line ministries, and local governments. Given that identified weaknesses cannot all be addressed at once, the PER offers an approach to sequence expenditure management reforms in phases.
| Summary: | Like other low-income countries,
Georgia's ability to reduce poverty and meet the
Millennium Development Goals (MDGs) by 2015 will depend
crucially on its ability to sustain per-capita GDP growth
and to use effectively and efficiently its scarce public
resources. Indeed, increased public expenditures will not
result in improved social outcomes unless current
productivity levels are improved. This report shows that
weaknesses in Georgia's public expenditure management
systems have led to serious inefficiencies and inequities in
the use of public resources and have prevented the necessary
restructuring in public expenditures. The first three
chapters explore sources of these systemic problems in the
context of macroeconomic management, revenue policy and
administration, and budget management systems. Subsequent
chapters explore the scope for strengthening budget
management systems in the areas most critical for poverty
reduction and the attainment of MDGs: local governments and
social sector spending. These chapters both corroborate and
supplement with further detail the core constraints on
public expenditure restructuring seen in the earlier
chapters, but also map out the complementary components of a
reform strategy which recognizes the need for parallel
action by central agencies, line ministries, and local
governments. Given that identified weaknesses cannot all be
addressed at once, the PER offers an approach to sequence
expenditure management reforms in phases. |
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