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Sustainable Development and Government Capacity-building

Prof. Dr. Árpád Kovács President of the State Audit Office of Hungary Chairman of the INTOSAI Governing Board. Sustainable Development and Government Capacity-building. Content of presentation. Sustainable development Challange of EU membership Analytical framework

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Sustainable Development and Government Capacity-building

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  1. Prof. Dr. Árpád KovácsPresident of the State Audit Office of HungaryChairman of the INTOSAI Governing Board Sustainable Development and Government Capacity-building

  2. Content of presentation • Sustainable development • Challange of EU membership • Analytical framework • Options in Hungarian scenarios • Towards sustainable fiscal balance • Role of the State Audit Office

  3. Sustainable development • Dimensions of sustainability • Environmental • Social • Economic • National sustainable development strategy as an integrator

  4. Challenge of EU membership Criteria of convergence relevant to fiscal policy and inflation (as % of GDP)

  5. Analytical framework Change generating mechanisms • Competition • Government administration • Values and norms • Cooperative transactions • Change agents for them • Domestic • International

  6. System of interrelations relevant to changes

  7. System of interrelations relevant to changes (cont.-ed)

  8. Options in Hungarian scenarios Social cohesion scenario • Characteristics: • Based on the operation of a social model • More active role of the state • Not a „warming-up” of the so-called welfare state concept but a more efficient social supply system • Applied, to a great extant, in the early 1990’s • Driving forces: low living standards, change of the political system

  9. Options in Hungarian scenarios Competitiveness scenario • Characteristics: • Maximum responsibility of the individual • Decreasing state interventions • Enhancing efficiency • Probable social insecurity, tensions • Applied between 1995 and 2000 in Hungary • From 2000 the so-called experimental scenarios gain ground promising both: • Change of social systems • Improvement of competitiveness

  10. Towards sustainable fiscal balance • High budget deficit and public debt in 2006 • Stabilisation programme of the Government • 2006-2009: stabilisation in a sustainable way with the least possible sacrifice in growth • 2009-2011: commencement of the process of lasting economic growth and improvement of living standards on the basis of the established equilibrium • SAO’s opinion on the new Convergence Programme

  11. Role of the State Audit Office • Intentions: • help to create fiscal balance • implement reforms • promote sustainable development • „“Thesis of Regulating Public Finances” for the National Assembly

  12. Main messages of the “Thesis” • Laying down basic principles for comprehensive regulation of public sector • More transparent, predictable and efficient management of public finances • Better cooperation between the public and private sector • Introduction of rule-based budgeting and programme budgeting • Modernization of public financial IT system • Attainability of long-term financial sustainability

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