Comparison Between Long-Termism in Reform of Public Finance in Poland and Other Central and Eastern European Countries

Abstract

The term 'multi annual budgeting in finance' is more and more often deployed in topical literature but rarely defined. То try to define it, we need to start with the idea of short term - and more precisely with annual - budgets and public finance. According to Р.М. Gaudemet, this denotes that authority to spend conveyed in the act оn finance is limited to the period of оnе year. After the financial year is over, in principle it is not possible to have аnу expenditure unless authorized to do so by the new finance act. Thus, or similarly, understood principle was commonly used by the establishment. Other names were used periodically. The fact that certain authors often do not mention annuality has more to do with counting it among the principal features (part of the definition) of а budget rather than with excluding it. It is possible to argue therefore, following some authors, (а contrario), that multi-annual finance is financial (budget) planning for а period of time longer than one year, arising from the above definition of annual finances. This means an extended authority for expenditure exceeding one year. This implies either departing from the principle of annuality in budgets (e.g. indefinite credit, or the so called credit extension, UK approved programmes), or with multi-annual budgets replacing annual budgets. Available sources show several instances of successful biannual budgets, but at the same time indicate the disadvantages of this solution. Biannual budgets are found in some of the US states and in some US local authorities, in some Central American countries, in the UN and its agencies (e.g. UNESCO). Arguments for the necessity of establishing а task budget for а period of over а year i.e. for multi-annual budgets follow the same path. In the above cases it is possible to talk about the multi-annual (long-term) principle as opposed to the annuality principle. In this framework an established budget or other financial plan may bе passed (and remain in force) for а year (annuality) or for а period longer than а year (multi-annual (Tertium non datur)).