a review of capital budgeting practices - imf.pdf

WP/08/ 160 A Review of Capital Budgeting Practices Davina F. Jacobs © 2008 International Monetary Fund WP/08/ 160 IMF Working Paper Fiscal Affairs Department A Review of Capital Budgeting Practices Prepared by Davina F. Jacobs 1 Authorized for distribution by Thanos Catsambas June 2008 Abstract This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. A key challenge in government budgeting is to define an appropriate balance between current and capital expenditures. Budgeting for government capital investment also remains not well- integrated into the formal budget preparation process in many countries. This paper aims to provide an overview of past and current budgeting practices for public investment. The study will also provide a comparison between the budget practices between low-income countries and developed countries and make a series of recommendations for how to ensure efficient integration of capital planning and budget management in low-income countries. 22BJEL Classification H54; H61; H83 Numbers: Keywords: Capital expenditure; public financial management; budgets; public investment, low-income countries Authors’ E-Mail Addresses: djacobs@ 1 Davina Jacobs is a senior economist in the Fiscal Affairs Department.