Reforming Budget Systems in Countries of the Former Soviet Union



The countries of the former Soviet Union (FSU) required considerable revision to their budget processes and procedures to establish systems consistent with transformation from controlled dependencies within a larger planned economy to independent governments of fledgling market-oriented democracies. This article considers the degree to which preexisting, reforming, and reformed budget systems in FSU countries deliver the basic expectations of a public sector resource allocation system. Evidence indicates failures to realign budgeting and finance systems designed for command and control environments to the demands of more market based economic systems, with effects often magnified by the hybrid economies of these transitional states. Significant difficulties and shortcomings in the ability of existing systems to perform basic public sector allocation, management, and control functions are the result, but some countries are ahead of others and their experience can guide reforms across the FSU.