 So, what is the outline of the presentation? I'm going to basically focus on those budget institutions which are needed for credible fiscal strategy and also show what are the links between budget institutions and fiscal outcomes and what kind of institutions that we found are needed for supporting credible fiscal strategy and what are the key design features. And then in the second part of my presentation, I'm going to quickly make a present to you the results of the evaluations for G20 Advanced Emerging Markets and for seven low-income countries which are Bolivia, Kenya, Mozambique, Myanmar, Uganda, Vietnam and Zambia. As you can see, these countries covered a wide set of sort of groups which are in different parts of the world. And then in conclusion, I will then list out the priorities for institutional reform and how one could sequence those reforms. So, as I said, we developed this evaluation framework in the department in the last four or five years. We've applied it first to the G20 countries and the paper that we did was launched only last month and that took us a lot of time because we had to consult the countries and also develop the methodology which was acceptable to all the member countries. We applied that to some other southern European countries and these countries have different fiscal needs. Some countries, in the case of G20 Advanced countries, there were a huge consolidation needs in the last four or five years. So we needed to see what kind of institutions you need to be able to understand the magnitude of consolidation and to implement a fiscal strategy to achieve that consolidation. And this framework is also very much applicable for countries where you want to ensure fiscal discipline. So let me first establish the link between the institutions and fiscal outcomes. What this slide presents here is the results from PFAS scores of 50 countries. PFAS is a tool which is used to diagnose the weaknesses in the public financial management systems in the countries and this is sort of an aggregate of the scores. What it's showing is that if one looks at these scores of these 50 countries, the aggregate out turn in the budget, as compared to the approved budget, there is a huge deviation and in some countries the deviation is almost of up to 40%. That applies for aggregate expenditures and it also applies to the composition of expenditure. So this is suggestive of weakness in budget institutions in the low income countries. So what we came up with is we thought there are three phases for the fiscal strategy. One the first phase is to understand what the fiscal challenge is and then the second stage is on the basis of this understanding formulating a fiscal strategy and the third stage is to implement that strategy through the budget process. And to implement this strategy we came up with a list of 12 institutions in each of the different phases of fiscal strategy which are important for achieving fiscal policy goals. Now before I go further let me give you some caveats. One is that this analysis applies to a point in time and the reforms in the budget area are ongoing. So in that sense this analysis is static. And then what we have done is that underlying each of these institutions are certain key questions which allow us or anybody else to say whether some of these institutions exist in the country or not. And those questions range between three and six. In total there are 52 questions. Now what we have done is it's very hard to assign different weights to different institutions so we have assigned the same weight to all of these institutions. Of course when you start talking to some scholars and some people they'll say certain things are more important than others but when we were having discussions with countries we found that there was not that much of an agreement on what is the most important institution for implementing a credible fiscal strategy therefore we decided to give equal weight to all of these institutions. So what do we get by way of results? When we applied this to seven low income countries we have the results of the other G20 advanced and emerging countries. As one can see the blue line gives the scores are the highest for the advanced G20 countries, then comes the scores for the emerging markets and then come the score then yellow for the low income countries. But there are some interesting things which come out from here. One is that the deviation vis-a-vis advanced and emerging markets for low income countries is the highest for the understanding and from the planning stage. In the implementation stage the gaps are much, much smaller and it will become clear as I go forward. So because of lack of time I'm not going to focus too much on all the discrepancies that exist I'm going to focus on six key institutions, one macro-fiscal forecasting, fiscal risk management, fiscal objectives, medium-term budget framework, parliamentary approval and top-down budget. So let me now explain in detail what the results show. The left hand side of this slide shows the scores across three country groups but our focus is on the low income countries and in the half of the low income countries they publish medium-term forecasts in the budget but these forecasts are without any quality control and they only update those forecasts during the budget here and sorry they don't update this forecast throughout the budget here and so these projections are not very useful in that sense and unlike the advanced countries none of the low income countries or for that matter emerging market countries make any projections for long-term fiscal challenges that these countries face. As regards fiscal risk management the main fiscal risks are not discussed or quantified in budget documents neither are the alternative medium-term budgets scenarios produced. In the majority of the low income countries the government prepares a medium-term debt management strategy but which is not very well specified it does not take into account the risks that arise from the assets which are included there. Going now to the formulation side of the fiscal strategy about half of the countries specify some type of medium-term fiscal objective against which the countries can report their performance and when I say objective I'm talking about saying that there is a budget deficit target. In very few countries has this been this target been enshrined in law so they have targets but they are not enshrined in law so there is no fiscal rule of that sort and in almost all these countries assumptions are there from this rule that countries may be following. On medium-term budget frameworks which we all at least sitting in the international institutions have been recommending countries to go in for about half the countries have some type of multi-year estimates for major categories of revenue expenditures but only in some of them are they binding in other words in most of the countries they are non-binding and most of the budget documents do not present consolidated summary of the fiscal impact of the new revenue in expandable use. On the final implementing stage as regards top-down budgeting almost all countries there is a limit on both aggregate and sectoral or industrial spending provided in the budget but these ceilings are really respected and in about half the countries major revenue expenditure decisions are often or sometimes taken outside the budget process and that is quite serious. As regards parliamentary approval parliament typically does not endorse a medium-term fiscal target or objective and in about half of the countries annual budget is not approved in a top-down sequence that is the parliament does not first approve an overall annual budget for total revenues and expenditures. Now how to prioritize reforms? In the case of low income countries this is a difficult task it is a balance between ambition and realism the capacity is poor there are political economy constraints there are weak governance and of course the challenge is to design a strategy which is very much country specific. There cannot be any rules that apply to all countries in all circumstances but there is some guidance that can be sought from advanced country experiences. And what are that guidance what is that guidance from advanced economies? First we looked at the evolution of budget reforms in the UK in US and in France in the 19th century and early 20th century what came out is that they did not attempt too many things at one time. They focused on basic elements of budgeting and they also recognized that some reforms take time to implement and they have to be adapted to countries circumstances. And one other lesson that came out is that one needs to take into account the views of stakeholders external to the finance ministry because in many countries the line ministers tend to oppose any reform that the finance ministry may be proposing. And finally this may require the reforms that we suggest in budget institution reorganization of ministry of finance that comes in from the experience of the UK treasury where it was reformed in 1970s and then again in 1990s and then again more recently in 2010. I'm just going to take another minute or two to just lay out a few things on the strategy. So I have identified seven budget institutions which I think countries should focus on in terms of going forward and one is on the fiscal reporting which is absolutely critical to be able to formulate a good fiscal strategy. One is to have the expanded coverage of the annual financial statement and ensure that this is then audited by external parties and the financial statistics that are reported should be produced by an independent office in line with international standards. The second part is the forecasting and the fiscal risk including a comprehensive information about fiscal risk in the budget is important particularly about PPPs. We recently estimated the total capital stock in relation to GDP for advanced emerging and low income countries. What we found is that in the low income countries a lot of public private partnerships are being entered into and this isn't this is fine because it's making up the the the falling capital stock in number of countries. However it also means that there is fiscal risk that has to be taken on board in these countries. This next thing is to produce and publish macroeconomic forecast along with the the the the related assumptions and also have a medium term forecasting with medium term budget scenarios. Finally two more things on the on the formulating of credible fiscal strategy is as regards fiscal objectives one should adopt a medium term objective and regularly report on the fiscal performance against the stated objective as regarding the medium term budget framework it should be simple and developed gradually. And finally on the intergovernmental fiscal relations one has to make sure that the all levels of government bear the burden of of fiscal strategy and there are no moral hazards of fiscal risk entailed in in the in the fiscal just the last slide as regarding the implementing the strategy I would focus on on top-down budgeting here the issue is having ex ante limits on both aggregate and sectoral spending at an early stage and making sure that those limits are realistic and then changing the parliamentary procedures to allow to follow a top-down sequence and finally the budget execution must ensure that there are restrictions for overspending and and and there are limits on multi-annual expenditure commitments. Thank you very good start so next week