Recently from Fund

Mauritius: Financial System Stability Assessment-Update

Enhancing Fiscal Policy in Armenia

Assorted

Fiscal policy and the burden of proof

The Real Great Depression

Federal Reserve Assets

The Basel capital agreements

We Are Live on Economist Free Exchange at the Greenspan Roundtable

Parliaments and Budgeting: Understanding the Political Economy of the Budget in Latin America

Common Errors in English

Open Government beta version

Tech Agenda 2009: 21st Century Economy

Tech Agenda 2009: Open Government


Tech Agenda 2009: Open Government" (2/2)

Related;
Federal Funding Accountability and Transparency Act of 2006
Sunlight Foundation

4.8 miles of Electric Beds

Hard Lessons: The Iraq Reconstruction Experience

Official History Spotlights Iraq Rebuilding Blunders

The Organizational Chart for Iraq's Reconstruction


Parking Lot as Situation Room
As a socialist regime, Iraq had millions of state employees and pensioners. Rebuilding officials had no idea how much to pay them. They picked a figure out of the air over a debate in a parking lot, according to the review.

“The decision about emergency payments to Iraqi civil servants took place around a concrete pillar in the parking lot of the Kuwait Hilton. "Having read various background papers, we started talking about if we could do it at five bucks, or we could do it at 50 bucks," David Nummy remembers. "We decided that a good midpoint was 20 bucks. And that's how we established $20 emergency payments."

4.8 miles of Electric Beds
The violence greatly impeded execution, leading to confusion and unfinished projects.

“When finally finished, the waste-water treatment system—which was supposed to serve the entire population of Falluja—will serve just over a third of the city's population, will have cost three times its original price, and will have been completed three years later than originally planned. Moreover, serious questions remain about whether the Iraqis can sustain it after transfer to their control.

It turned out that the U.S. imported a lot of (hospital) beds for Iraq. A representative of the Canadian company that produced them all told (Jack) Holly, (the former logistics chief for the reconstruction effort) that he had received "4.8 miles of electric hospital beds." Over time, the embassy distributed them to various hospitals and clinics—to be operated manually in many cases because of the inadequate power supply.

Headline of the Day

Cartoon porn kids are people, judge says in Simpsons porn case;

CARTOON characters are people too, a judge has ruled in the case of a man convicted over cartoons based on The Simpsons, in which children are shown having sex....

"... The mere fact that the figure depicted departed from a realistic representation in some respects of a human being did not mean that such a figure was not a 'person'."

In dismissing the appeal, the judge ordered each party to pay its own legal costs in the first case dealing with the "difficult" issue.

Budget Circular Beauty Contest

The Winner is Kosova.

Budget Circular

MTEF

Law on Public Finance

Law on SOEs

Assorted

THE AGE OF MASS INTELLIGENCE

Things to Read by Keynes

Who is to Blame for Climate Change? Does it Even Matter?

Moderate Muslim Malaysia: What I Saw

John R. Commons and the Origins of Legal Realism; or, the Other Tragedy of the Commons

Beetles, Frogs, and Lawyers: The Scientific Demarcation Problem in the Gilson Theory of Value Creation

Politics isn't about Policy

Judging National Security Post-9/11: An Empirical Investigation

Principles for Bailout Management

Harvard Lightning Rod Finds Path to Renewal With Obama

Team of Heavyweights

Law Link of the Day

Audio Visual Library of International Law

Stiglitz on Iraq War

Reading for the weekend

When Judges Make Foreign Policy

Indonesia: Progress in Fiscal Institution Building

Recommended reading- Indonesia: Selected Issues, chapter IV;

Progress has been made in strengthening technical capacity at the central government level. Within the Ministry of Finance (MoF), the Fiscal Policy Office (FPO) is now fully operational with a mandate for macro-fiscal projections and analysis, including assessments of fiscal risks. The FPO now prepares fiscal risk statements that are included in the annual budget documents—making Indonesia one of the pioneers in fiscal risk analysis among emerging market economies. Operational management of debt-related risks is undertaken by the Directorate General (DG) for Debt Management, which is responsible for both domestic and external debt management.

Despite some progress, parliament’s technical capacity for fiscal policy analysis is still limited. Parliament’s (DPR) budget committee plays an important role in the budget approval processes, though with excessive emphasis on details which are usually seen as being within the province of the executive (such as close scrutiny of macroeconomic assumptions and detailed review of expenditure items—as opposed to scrutiny at a more aggregated level found in other countries). In contrast with this wide ranging mandate, the DPR had limited qualified technical staff and few with specializations. Some improvement in these areas has been achieved through: (1) increasing the number of technical staff; and (2) greater specialization of staff through the establishment of specific parliament commissions (e.g., the economic commission). These commissions are now able to provide some analytical and technical support to members of parliament, though the DPR’s effectiveness in budget scrutiny and oversight is still inadequate. Intense involvement of the DPR at the pre-budget presentation stages remains (6–7 months before the new fiscal year), but there is only limited focus on medium-term budget issues and on the results of policies embedded in the annual budget. The 2003 State Finances Act calls for an unusually early date for approval by parliament of the annual budget law (2 months before the new fiscal year); nonetheless, DPR committees continue to be involved in budget approval after the annual budget law has been adopted in plenary session. The DPR’s follow-up on the external audits of the Supreme Audit Institution (BKP) remains weak.

Progress has been made in improving the quality of government accounts, but is still incomplete. The adoption of government cash management regulations in July 2007 was an important step in improving the transparency of government banking arrangements. The regulations strengthen the Minister of Finance’s powers to consolidate government bank accounts. On this basis, the MoF conducted a census of government bank accounts operated by ministries and budget users outside treasury control. The ensuing ministry-by-ministry analysis of accounts revealed that over 20,000 government accounts existed. Some of these off-budget bank accounts have either been closed or integrated with the treasury. This was a sizeable step towards establishing an operational treasury single account (TSA). However, there are still a few impediments to the establishment of a TSA. In particular, government deposits held at Bank Indonesia (BI) are poorly remunerated, which impedes the development of active cash management (since the opportunity cost of idle government deposits is small). Transparency also improved following the incorporation of the regional development and investment accounts into financial reports and budget documents. Progress in integrating the operation of other extrabudgetary funds in the budget has been limited

The disclosure of fiscal information to the public has improved significantly.
Several recent amendments to ministerial decrees should help improve fiscal data quality and transparency. In particular, the chart of accounts now requires that the budget, in-year fiscal reports, and annual financial statements use the same terminology, which should simplify budget monitoring. The publication of a comprehensive fiscal risk statement accompanying the annual budget document significantly improves the transparency of fiscal policies and associated risks. In this context, improved reporting of information by SOEs should enable the FPO’s risk management unit to better assess risks for selected key SOEs. The reporting of information on central government debt is now comprehensive and timely, and key contingent liabilities are also disclosed in the annual fiscal risk statement (including those related to public-private partnerships). However, little progress has been made on reporting general government debt (though local government debt remains negligible), and debt accumulated by public enterprises.

Early progress has been achieved in strengthening internal and external audit bodies and in fighting corruption among public officials. The BPK mandate has been strengthened by the adoption of a 2006 law (and associated decrees in 2007). BPK staff headcount has been significantly increased (currently 6,000 staff covering 28 provinces) and training has been improved in both the IG and BPK, though needs remain significant. However, both the MoF’s IG and BPK are experiencing difficulties in accessing taxpayers data needed to investigate potential misconduct of tax officials owing to taxpayers privacy concerns, even though the law provides both institutions such access. Memorandum of understandings between the MoF and the internal and external auditors to address this issue are under discussion. Finally, the role of the Financial and Development Supervisory Agency (BPKP) as an internal audit body has not been reviewed—BPKP is part of the president’s office and has jurisdiction on central government finances. However, it shares internal audit responsibilities related to ministries with the IG, with an unclear distinction between their mandates.

The Three Phases of Money Laundering

Interview with an ex-money launderer Kenneth Rijock

Budgeting in Small Towns

Postcards From Palin's Hometown

McCain had criticized earmarks from Palin;

But records show that Palin -- first as mayor of Wasilla and recently as governor of Alaska -- was far from shy about pursuing tens of millions in earmarks for her town, her region and her state.

This year, Palin, who has been governor for nearly 22 months, defended earmarking as a vital part of the legislative system. "The federal budget, in its various manifestations, is incredibly important to us, and congressional earmarks are one aspect of this relationship," she wrote in a newspaper column.

In 2001, McCain's list of spending that had been approved without the normal budget scrutiny included a $500,000 earmark for a public transportation project in Wasilla. The Arizona senator targeted $1 million in a 2002 spending bill for an emergency communications center in town -- one that local law enforcement has said is redundant and creates confusion.

McCain also criticized $450,000 set aside for an agricultural processing facility in Wasilla that was requested during Palin's tenure as mayor and cleared Congress soon after she left office in 2002. The funding was provided to help direct locally grown produce to schools, prisons and other government institutions, according to Taxpayers for Common Sense, a nonpartisan watchdog group.

Wasilla received $11.9 million in earmarks from 2000 to 2003. The results of this spending are very apparent today. (The town also benefited from $15 million in federal funds to promote regional rail transportation.)

The community transit center is a landmark: a one-story, tile-fronted building with a drive-through garage. Its fleet of 10 buses provides service throughout the region. Mat-Su Community Transit Agency officials say the building was made possible with a combination of federal money and matching gifts from a private foundation.

An American Hero in Government Openness

Daniel Ellsberg

Seven years and almost 50,000 American deaths later, after I had leaked the Pentagon Papers, I had a conversation with Senator Wayne Morse of Oregon, one of the two senators who had voted against the Tonkin Gulf resolution in August 1964. If I had leaked the documents then, he said, the resolution never would have passed.

That was hard to hear. But in 1964 it hadn't occurred to me to break my vow of secrecy. Though I knew that the war was a mistake, my loyalties then were to the secretary of defense and the president. It took five years of war before I recognized the higher loyalty all officials owe to the Constitution, the rule of law, the soldiers in harm's way or their fellow citizens.

For Civil Servants: What would you do in such situations?

Related;
Ellsberg paradox
A most ingenious paradox

Risk, Ambiguity, and the Savage Axioms;

A discussion of a class of situations in which many reasonable people neither wish nor tend to conform to the Savage postulates of rational behavior. There is no way to infer meaningful probabilities for events, even approximately or qualitatively, from their choices in these situations, nor can they be described as acting as if they were maximizing the mathematical expectation of utility, in terms of any probabilities whatever. None of the familiar criteria for predicting or prescribing decisionmaking under uncertainty corresponds to this pattern of choices. Yet the behavior is deliberate and orderly, and it can be described in terms of a simple, specified decision rule. Such self-consistent behavior violating the Savage axioms seems to occur in situations that can be described as highly ambiguous. In reaching a decision under these circumstances, many people seem to act conservatively. Without actually expecting the worst, they choose to act as if the worst outcomes were somewhat more likely than their best estimates of likelihood would indicate.

Quote of the Day

‘We might hope to see the finances of the Union as clear and intelligible as a merchant’s book, so that every member of Congress, and every man of any mind in the Union, should be able to comprehend them, to investigate abuses, and consequently to control them.’

-Thomas Jefferson writing to his Secretary of the Treasury in 1802, cited in Walker 2004:10.

(cited in Carlos Santiso 2005)