This chapter sets the scene for the analysis of medium-term budgetary practices in the environmental sector in the countries of Eastern Europe, Caucasus and Central Asia (EECCA). This concerns, specifically, the shift to multi-year budgeting, based on medium-term expenditure frameworks (MTEFs). The chapter provides a brief overview of the main premises that underpin the MTEF approach and presents the methodology used to conduct this analysis.

This chapter looks at the major factors that shape the context in which the environmental administrations in the region of Eastern Europe, Caucasus and Central Asia (EECCA) operate and implement their policies. The chapter starts with a brief overview of the macroeconomic and environmental situation in the region, followed by a discussion of the key public finance reforms with a major focus on medium-term budgeting practices that have been progressively initiated in most of the countries over the past ten years. Finally, the chapter looks specifically at the governance structure of the environmental authorities in the EECCA countries and the demand for good practices for the preparation of robust multi-year expenditure programmes.

This section looks at the environmental expenditure trends in the ten countries over a period of four years, 2006-09, based on data provided by the countries themselves. Data collection revealed some methodological and definitional challenges that sometimes made it difficult to interpret the data. Still, the analysis provides a basis for some cautious conclusions.

This chapter looks into issues related to budget planning and formulation and their actual implementation in the EECCA countries. A special focus is placed on the role of the legislature in this process. In addition, the chapter discusses the survey results related to medium-term budgeting practices and their linkages to the annual budgets in the countries. Some budget execution practices are discussed in the next chapter through the example of the environmental sector.

This chapter looks at the major challenges with the design and implementation of multi-year environmental programmes as input to the medium-term expemditure frameworks (MTEF) and the annual budget process. It also looks at donor support for the environment in the region of Eastern Europe, Caucasus and Central Asia and the way it is integrated into multi-year budgeting. Finally, it discusses the capacity of ministries of environment to prepare effective multi-annual programmes for inclusion in the MTEF process and of ministries of finance to guide this process.

This chapter summarises the major findings and conclusions that have emerged from the survey conducted in the ten countries in Eastern Europe, Caucasus and Central Asia reviewed in the this publication. While designing and implementing a robust medium-term expenditure framework that encompasses the annual budget is a difficult task and requires time and experience, the chapter insists that the rules and procedures embedded in medium-term planning of budget resources provide a window of opportunity to sectoral ministries, including ministries of environment, to improve their financial planning and management procedures, as a basis to compete more successfully for obtaining adequate budget resources for the implementation of their multi-year programmes.