Conceptual Framework of an Integrated Approach to Budgeting for the ESCAP Countries

DOI10.1177/002085237704300209
Published date01 June 1977
Date01 June 1977
Subject MatterArticles
/tmp/tmp-183MoyR37CqyBo/input
Conceptual Framework of an
Integrated Approach to Budgeting for
the ESCAP Countries *
UDC
336.121.22(5)
by
Joon Chien DOH,
University of Malaya
INTRODUCTION
Broadly speaking, two characteristics of bud-
geting can be identified. The first is that
budgeting is dynamic. It can change its em-
In the modem sense, budgeting is concerned
phasis and orientation by taking advantage of
with the translation of financial resources into
developments in related fields. In the shift
performance and accomplishments to serve hu-
from control to management orientation, bud-
man purposes. In the process, the expenditure
geting incorporated techniques resulting from
on mission-oriented programmes (to stimulate
the progress in the field of management techni-
the growth of industry, to improve rural health,
ques for performance appraisal.
When the
to promote tourism), or on objects and items
centre of focus and orientation moved away
(salaries, travel, supplies and equipment) is
from management to planning, budgeting
estimated and allocated, the level of revenue
emerged as the champion of analysis and deci-
is projected, budget documents are prepared
sion-informational technologies.
and programmes eventually implemented.
In the second place, budgeting is responsive
to
Stake in Budgeting
changing governmental and societal de-
mands. In the experience of the United States,
There is much at stake in budgeting. It is
itemization of objects of expenditure was intro-
the focal point for control over resources; it
duced at the turn of the twentieth century in
is also the focal point of many aspirations,
response to the concern for economy, effi-
such as economic growth, increased employ-
ciency and responsible government.
With
ment opportunities and improved standard of
growth and complexity in government oper-
living for the masses. In the present-day con-
ations and the resultant inadequacy of the con-
text, budgeting and the financial policies em-
trol-centred system of budgeting, performance
bodied in the budget of a country, whether
budgeting came to the rescue. And when the
they relate to revenue measures or expenditure
gulf between planning and budgeting became
policy, have implications for all.
intolerable, PPBS with its emphasis on analysis
and programming made a valiant effort to forge
a partnership arrangement between the two.
Characteristics of Budgeting
Progress in budgeting is the outcome of
Both the characteristics of
an
dynamism and
interplay between the budgetary experience,
responsiveness in budgeting have also made
the ecological forces and advancement in the
their presence felt in the developing countries
related fields of knowledge and techniques.
of the Economic and Social Commission for
This becomes evident
Asia and
as we examine the char-
the Pacific (ESCAP) region. The
acteristics of budgeting
modernization of
as revealed by its
budgeting has occurred in
historical experience.
many of its post-independent countries (such
as the Philippines, Malaysia, Sri Lanka, Nepal)
to cope with the demands arising from the
expansion in the scope of public sector activities
* Paper prepared for the Workshop on Integrated
and from the focus on planned approach to
Approach to Budgeting organized by the Asian Centre
for Development Administration, Kuala
development. Hence budgeting is dynamic as
Lumpur,
4-12 October 1976.
well as responsive to ecological forces.


142
Components of Conceptual Framework
of the relatively affluent countries of Australia,
New Zealand and
In the
Japan, the rest of the coun-
light of the stake involved in budget-
tries are even much
ing, its dynamism and responsiveness, the
poorer as can be seen
con-
from table 1.
ceptual framework of budgeting formulated for
the ESCAP countries has three major com-
ponents.
The first is the value component
TABLE 7
which attempts to forge a meaningful relation-
ship between budgeting and its ecological set-
ESTIMATES OF PER CAPITA NATIONAL
ting. The second is the technical component
INCOME OF SELECTED COUNTRIES IN
which draws from the experience of budgeting
MARKET PRICES, 1970
in both the countries of the ESCAP region
and of the West. The third is the strategy
component which formulates a number of
guidelines for implementing the conceptual
framework in the light of the problems of
implementing budget reforms encountered in
numerous countries.
As the ESCAP region is a huge one com-
prising more than thirty countries and terri-
tories spanning from the Pacific to the Indian
Ocean, there is much diversity between them
in terms of size, population, political and ad-
ministrative systems and traditions, stage of
economic and social development as well as
the level of literacy. Obviously, it is impos-
sible for any system of budgeting to be equally
applicable to all the countries and territories.
This conceptual framework is therefore design-
ed for either implementation or selective adop-
tion and adaptation depending on the needs
and administrative capabilities of the country
or territory concerned.
Source : U.N. Statistical Yearbook 1974 (New York,
1975, pp. 644-9).
I. THE VALUE COMPONENT
The second is the maldistribution of income.
Conceptual Framework and Ecology
Table 2 highlights this glaring maldistribution
in
Owing
a number of selected countries.
to the close relationship between bud-
geting and ecological setting, it is only logical
that, in designing
As
a conceptual framework of
can be seen from table 2, the share of
budgeting for the ESCAP countries, due atten-
the top 20 % of the households in Pakistan,
tion has to be given to their ecology. From
Philippines, Sri Lanka and Thailand ranged
the budgetary point of view, in
from
as far as the
not less than 41.5 % in Pakistan to a
writer is concerned, the most meaningful vari-
high of 53.9 % in the Philippines, while the
ables in the ecology
share
are the economic and social
of the lower 60 % went as low as
conditions. Two of their features deserve
25.1 % in the
spe-
Philippines to a higher limit
cial attention. The first is that in the words
of 36.6 % in Pakistan. Such serious disparity
of Asia 1975 Year Book, &dquo; Measured against
in the sharing of income has not gone unno-
Western standards, Asian nations are desper-
ticed. Thus the United Nations’ Economic and
ately
Social
poor, with an average per capita gross
Survey of Asia and the Pacific 1974
&dquo;
national product (GNP) of US$340 (even in-
states, The most important aspect of economic
cluding high New Zealand and Australian figu-
and social conditions in the region is the mal-
res) compared with $4,760 in the United Sta-
distribution of income and the mass poverty
tes &dquo; (1). In fact with the major exception
which affects a very large proportion of its
population &dquo; (2).
(1) Asia 1975 Year Book (Hong Kong : Far Eastern
Economic Review, 1975), p. 58. The per capita GNP
(2) United Nations, Economic and Social Survey
of U.S. is the 1973 figure.
1974 (Bangkok, 1975), p. 3.


143
TABLE 2
DISTRIBUTION OF HOUSEHOLD INCOME
Sources : Table computed from the following documents : Government of Pakistan, Household Income and Ex-
penditure Survey 1970-71 (Karachi : Manager of Publications), p. 15; Government of the Philippines, Family
Income and Expenditures, 1971, BCS Survey of Households Bulletin, p. 151; Department of Census and Statistics,
Preliminary Report on the Socio-Economic Survey of Ceylon 1969-70 (Oct. 1971), p. 50; and United Nations,
Intraregional Trade Projections, Trade Protection and Income Distribution, Vol. III : Income Distribution (Bangkok :
ECAFE, 1973), table 3, p. 136.
Budgeting and Social Justice
Forces shaping composition of expenditure
Since budgeting is directly related to the issue
The interplay of a number of factors and
of who gets what, it should be responsive to
forces determines the composition of public
the needs of the masses. To be ecologically
expenditure. These factors include,
relevant, it has a moral responsibility to the
poor in the ESCAP countries. Thus the major
1. Environmental Factors
participants in budgeting have to ensure that
budget decisions are made in favour of the
1.1 Geography (including climate and loca-
poor and for granting the bulk of the benefits
tion)
to them.
While in the technical sense an
1.2 History
instrumentality, such as budgeting, should nor-
1.3 Constitutional
framework (including
mally be regarded as value-neutral, this con-
legal institutions)
ceptual framework rejects such an assumption
in toto. Budgeting cannot afford to be neutral.
2. Technological Factors
Thus this conceptual framework of budgeting
has
2.1
a value commitment of its own.
It is
Population growth and age structure
this commitment towards uplifting and en-
2.2 Population density and distribution (es-
hancing the welfare of the poor which distin-
pecially urbanization)
guishes it from the interpretation of budgeting
2.3 Production (and consumption) technol-
reflected in much of the literature.
ogy
3. Economic Factors
II. THE TECHNICAL COMPONENT
3.1 Growth of national income
3.2 Distribution of income (including re-
The technical component of the conceptual
gional distribution)
framework of budgeting is influenced by two
3.3 Level and rate of growth of per capita
major considerations. Each will be discussed
income
in turn.
3.4 Rate of price change
3.5
Need for
Productivity changes
an Interdisciplinary Approach
4. Political Factors
In budgeting there is need for an inter-
disciplinary approach. This need...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT