The days when the global economy suffered its most serious downturn since the times of the Great Depression in the 30’s seem to be over. Although the big macroeconomic imbalances that caused the crisis are not solved yet and there are negative indications with respect to the situation of certain countries, the truth is that the worldwide economy seems to be recovering. The challenge consists now of designing strategies to find our way out after the heavy interventions that were necessary to prevent the worsening of the crisis. This shall necessarily have consequences on the public budgets.

            In certain cases, these strategies seem to be more urgent than in others. In Great Britain, for instance, the public debt reached record levels, attaining an amount that represents 59% of the GDP. This increase is mostly due to a rise in the expense of the social items incurred to meet the economic crisis, among which the most important are unemployment subsidies and also the decline in the tax collection. For this reason, the discussion among the political parties about the public finance situation has been taken up again. While the Prime Minister has announced a plan to sell government assets, the opposition has suggested raising the retirement age. The situation in the rest of Europe is similarly complex. The ministers of economy and finance of the countries belonging to the European Union have already started analyzing measures to rebalance the public accounts after the strong incentive plans to recover the economies during the crisis.

            The current Chairman of the European Central Bank, Jean Claude Trichet, who actively participated at the meetings, even considered necessary, in certain cases, a structural reduction of expenditure higher than 1% and suggested that the adjustments should, in many cases, start this year in order to have a clear strategy in 2011 permitting to “strictly comply with” the rules of the Stability and Growth Deal on budgetary discipline. But, on the other hand, many rightly point out that a fiscal adjustment might jeopardize the recovery observed in many countries. Such is the case of Dominique Strauss-Kahn, the Chairman of the IMF, who recently warned that, should the incentives be withdrawn too soon, the economy might fall into a recession again because there are still some symptoms of weakness in the domestic demand, which has not fully recovered.

            It is undoubtedly a critical discussion for the times to come. The challenge consists of gradually withdrawing the fiscal stimulus on the economy and avoiding the inertia of maintaining temporary expense programs that were necessary to meet a specific situation, but without putting the stability attained at risk.

            The current issue of the International Journal on Public Budget includes important articles related to the modern techniques and methodologies to achieve an efficient and effective management of public resources, which shall surely be of use in the difficult times to come.

            The article by Ixone Alonso Sanz, titled Spanish decentralization and the current autonomous State: a budgetary view, delimits a series of phases to analyze the complex decentralization process, having an influence on the budgetary impact of the transfer of skills between the Spanish Central Administration and the Autonomous Communities (CCAA). In order to obtain a close view of the complex and decentralized Spanish State, it makes a budgetary analysis from the point of view of the Central Administration and the CCAA so as to obtain a final picture of the functional specialization of the current autonomous State, highlighting both the “skill” cores –if the neologism is permitted- of each level and such other functions that are shared, by authority or de facto, between both levels.

            Martin Fortis is the author of Performance-Oriented Budgeting as an Instrument of Democratic Strengthening: the Latin America Case. The article tries to show that the cooperation action between the society and the government is capable of extending the social capital available and encourage the development of the nation. Behind this there is the idea that the acquisition of civic skills by the citizens, as a factor of political commitment and social control, contributes to encourage the most effective implementation of public policies and the strengthening of democracy.

            The article titled Top-Down Budgeting: An Instrument to Strengthen Budget Management, written by Gösta Ljungman, examines the rationale for a top-down approach to budget preparation and approval, and discusses some factors that have to be considered when reorienting the budget process along these lines. The paper argues that the sequence in which budgetary decisions are taken matters, and that a strong top-down approach strengthens fiscal discipline and improves policy prioritization and coordination. Top-down budgeting also alters the division of roles and responsibilities between the central budget authority and line ministries, and requires that the process of determining the total expenditure level, sector allocations and individual appropriations is clarified. Finally, the paper argues that strong top-down elements in the parliamentary budget voting process can be effective in addressing the risk of excessive and unsustainable amendments during budget approval.

            Through these substantial contributions, the International Journal of Public Budget makes a valuable contribution to the discussion of essential issues for the budgets and the public sector administration.