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- Title
A Principal-Agent Theory Approach to Public Expenditure Management Systems in Developing Countries.
- Authors
Leruth, Luc; Paul, Elisabeth
- Abstract
A well-functioning public expenditure management system (PEM) is considered a critical pillar of government efficiency. This article discusses PEM systems in developing countries using an analytical frameworks based on principal-agent theory. This simple model can be applied to various PEM systems and allows for comparisons between institutional settings. To illustrate this, the authors analyse the benefits derived from the use by the ministry of finance of ex post audits and ex ante controls, and assess their value in terms oil their ability to deter cheating. The authors derive a set of possible "control regimes" which can be used by the ministry of finance.
- Subjects
PUBLIC spending; DEVELOPING countries; PUBLIC administration; TAX &; expenditure limitations; FINANCE ministers; BUDGET laws; PUBLIC finance; FISCAL policy; AUDITING
- Publication
OECD Journal on Budgeting, 2007, Vol 7, Issue 3, p103
- ISSN
1608-7143
- Publication type
Article
- DOI
10.1787/budget-v7-art16-en