Understanding budget analysis is very crucial. A budget is the most important economic policy instrument any government produces.
Budget analysis reflects a government’s true social and economic policy priorities, often supporting but sometimes contrasting with the goals, commitments, slogans and policies articulated by political leaders.
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The government’s budget affects the lives of everyone of its citizens.
The money it raises comes from taxpayers and the way it is spent on education, health care, roads, transport and infrastructure affects the economy in many ways.
Everyone has a stake in the budget process.
While budgets affect everyone, certain groups such as the elderly, the poor, the disabled and minorities are often particularly vulnerable to the decisions governments make in raising and spending money.
These people live on the edge, small changes on how government allocate resources can have a big effect on their quality of life.
Programs that benefit the poor are often among the first to face cuts in times of budget deficits. You can only understand this by engaging in an in-depth budget analysis.
REASONS
- Military expenditure, public-sector wage bill, public debt repayments are more likely to have the first claim on the scarce public resources.
- Business leaders or urban elites often have more effective and experienced lobbyists.
- Vulnerable people are comparatively “invisible” to government elites who may socialize with the well-to-do.
Even when funds have been allocated to anti-poverty programs or other services benefiting vulnerable communities, weak expenditures, lack of political will power among the poor can mean that the money never reaches the intended beneficiaries.
In many countries, pro-poor groups have discovered that developing the capacity on budget analysis especially on how to analyse, understand and influence the budget can be a powerful tool in advancing their issues.
This applied budget work can include the national budget, the budgets of states, provinces or counties and even budgets of local communities.
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