Analysis Of The Causes Of Low Budget Reliability In Ghana

Abstract

The goal of every government is to ensure that budgets reflect the intended plans, actions, and policy directions of the government (budget reliability). The quality of the Public Financial Management systems is largely a consequence of fiscal discipline and macroeconomic stability. Among these factors include the governance systems, the role of the actors, the effectiveness of institutions, and the level of economic growth. Ghana over the decades has performed poorly in ensuring budget reliability despite several reforms implemented to improve the country’s performance. This raises a primary concern about the underlying factors causing budget deviations. Although earlier studies have largely attributed these causes to technical challenges, it is the argument of this study that issues of budget deviations need to be examined in the bigger social context. The social context largely determines the adherence and the enforcement of these institutional arrangements. The study argued that it does mean that if there are adequate resources and institutions are well established, it will necessarily mean that the expected outcomes will be achieved. Until one understands the nature of holding power in society and how power is used in shaping how institutions are either implemented or subverted, one cannot offer a sufficient explanation about the causes of budget deviations. Findings of the study revealed that significantly, institutional weakness because of political interreference, the nature of formal rules, government “flagship” programs, and non-adherence accounts largely for these deviations. Also, many of the “sins” identified appeared to have been committed by the principal (political elite) and not necessarily the agents (bureaucrats). This, therefore, calls for a rethinking of reforms to target the behaviour of the political elites that will guarantee the adherence to the rules of budgeting and the public financial management practices in Ghana.