1. Medium Term Expenditure Framework: What is it?
PREM Week Thematic Session
Washington, DC
November 21, 2000
Vinaya Swaroop

2. What is a MTEF?
A tool for linking policy, planning & budgeting over a medium-term ( 3 years) at the Government-wide level;
It consists of a top-down resource envelope & a bottom-up estimation of the current & medium-term costs of existing policies;

3. What is a MTEF?
Matching of the two in the context of the annual budget process; and
Involves rolling over this exercise every year by incorporating policy changes.

4. What can it do? If successfully applied, it can
Improve macroeconomic balance by developing a multi-year resource framework (expenditure & revenue);
Assist in improving resource allocation between & across sectors;

5. What can it do?
Improve predictability of funding for line ministries.

6. What it does not do?
MTEF is about budget planning given policy choices;
It does not tell you about what public spending is buying (i.e., the link between inputs & outputs); and
It is not about accountability (i.e., how are resources being spend).

7. A Checklist on MTEF...
Can the country do a reasonable 3-year projections of expenditures & revenue?
Is the bottom-up exercise of 3-year cost projections (capital & recurrent; programs & subprograms) feasible?

8. A Checklist on MTEF...
If the capacity does not exist, what would be a sequenced process of building it?
What country preparations are needed before a MTEF could be successfully adopted?

9. A Checklist on MTEF...
Last but not least: A MTEF will not solve all the service delivery problems.

10. “...Several managers called for annual budgeting within a multi-year framework to remove [budget] uncertainty and improve the operating environment…”
Corporate Day at the World Bank focused on strategy & budget discussions, Nov. 3rd, 2000