Budgetary Institutions and Fiscal Performance in Egypt

What is it about?

This paper analyzes the link between budget institutions and fiscal performance with a focus on the Egyptian case. It reviews the main theoretical and empirical literature that links budget institutions to fiscal performance. It then assesses the status of Egypt's budget institutions alongside the three main phases of the budget cycle: formulation, approval, and execution and audit. At the last section, the study provides analytical insights on how the budget institutions existing in Egypt might be responsible for the deteriorated fiscal performance of the country.

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Why is it important?

The fiscal performance of Egypt has been deteriorating. Both of the fiscal deficit and public debt are continuously increasing as ratios of GDP. While such performance might be explained by the relatively high levels of public expenditure and the poor tax collections, there are many factors that are believed to contribute to such status. These factors are mainly related to what is called "budgetary institutions". More specifically, if the budget process in Egypt is governed by strict rules and controls, and allows for transparency, credibility comprehensiveness and sustainability issues to take place during the budget cycle phases, the fiscal outcomes are expected to improve in Egypt.

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