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Colonel Sherrill believes that the budget secrecy enforced upon executive officers is out of place in a republic.

In 1975 the Bohol Philippines Maternal and Child Health/Family Planning Project resurrected the earlier idea of having community drug stores in villages for the following reasons: 1) the money available in the provincial health budgets and in the national budget for purchase of medicines was limited; 2) the spending of large sums for medicines required by increased service and the increased number of centers would make the project unreplicable in other parts of the country; 3) the policy of the governmnet is to encourage and promote self-reliance among the rural population and discourage expectations of continual aid from the government or foreign sources; and 4) with a community drug store a "botica" the Primary Health Care Centers and Rural Health Units would be assured that clients would have a continuous supply of medicines at low cost. The local midwife usually initiates the establishment of a botica. Meeting with barrio officials the midwife initially convinces them to establish the botica and then works with them to plan its operation. The community and the store owners or sales persons make only a small profit guaranteeing that the drugs can be sold in the rural boticas a little more cheaply than they are in urban commercial drugstores. The Bohol Projects 1st drug store was set up in Barrio Toril Maribojoc on February 24 1976. Since there continue to be many barrios without nearby boticas the project is trying new approaches. The goal is to make inexpensive basic medicines available to Bohols entire rural population and to see this approach replicated in other places.

The average layman cannnot help but be impressed by the number and completeness of the reports prepared under the auspices of the National Academy of Sciences dealing with recommended research programs in space exploration, meteorology, oceanography, solid Earth geophysics, hydrology, etc. Although he may never have seen one of these reports, his attention is drawn to them by newspaper stories, press releases, TV coverage of congressional hearings on science, and figures released by the Bureau of the Budget showing the amount of money that is going into research and development in the various departments of the government. This average citizen, who is also a taxpayer, may feel some twinge of economic concern about what he considers rather handsome support for science. However, he rationalizes that such expenditures are necessary if the United States is to keep ahead of the Russians, or because he feels the United States must retain its world leadership in science as well as in number of telephones and flush toilets. He fails to realize, however, that very little of the national, budget is actually given to the support of basic research and that most of the money labeled ‘R” and ‘D” in the national budget is for applied, mission-oriented research and is handled for the most part as ‘in-house” programs of government laboratories either with their own staff or on a contract basis with industry.

The paper describes the concept of the full employment surplus and its method of estimation in the United States and analyzes (1) its general use as a summary measure of budget impact for purposes of policy evaluation and (2) its use in rules that govern the formulation of budgetary policy. The principal emphasis is on the first use of the concept, but the stabilization policy implications of its use to formulate budgetary policy are also described. In the analysis, wherever relevant, comparisons are made with the use of the actual budget surplus in the same context. The full employment budget surplus is an estimate of what the budget result would be with a given expenditure and taxation program if the economy were at the full employment level of output. It is clearly a hypothetical construct designed to remove the effects of fluctuations in the actual level of economic activity from the budget result and to permit the identification of changes in government discretionary policy. One conclusion of the paper is that, subject to certain limitations, the full employment surplus is superior to the actual surplus for purposes of fiscal analysis in a static context. But in a dynamic context the superiority of the full employment surplus is less apparent except in certain situations described in the paper. In general, the defects associated with using the actual budget surplus to evaluate discretionary fiscal action, such as the possible variation of the size of the surplus as the result of discretionary action, are also relevant to the use of the full employment surplus in a dynamic setting. The full employment surplus concept is presently used in the United States to determine the size of government expenditure to be included in a given budget. The stabilization policy implications of this use of the concept are favorable for achieving full employment compared with the use of the actual budget surplus in the same context. However, the use of the full employment surplus in such a way does not guarantee the achievement of the full employment objective. /// Dans ce document l'auteur examine le concept d'excA©dent de plein emploi et la mA©thode utilisA©e aux Etats-Unis pour l'estimer, puis il analyse 1) son utilisation gA©nA©rale en tant que mesure sommaire de l'incidence budgA©taire aux fins de l'A©valuation de la politique A©conomique, et 2) son utilisation dans les directives qui rA©gissent la formulation de la politique budgA©taire. L'accent est mis principalement sur la premiA¨re utilisation de ce concept mais l'auteur dA©crit A©galement les implications pour la politique de stabilisation qui rA©sultent de son emploi dans l'A©tablissement de la politique budgA©taire. Au cours de l'analyse, des comparaisons sont effectuA©es lorsqu'il y a lieu avec l'utilisation dans le mAame contexte de l'excA©dent budgA©taire rA©el. L'excA©dent budgA©taire de plein emploi est une estimation des rA©sultats budgA©taires qui seraient obtenus en appliquant un programme de dA©penses et d'imposition donnA©, si l'A©conomie se trouvait au niveau de production de plein emploi. C'est lA bien entendu une conception thA©orique destinA©e A faire disparaA®tre des rA©sultats budgA©taires les effets des fluctuations du niveau effectif de l'activitA© A©conomique, et A permettre d'identifier l'incidence des modifications de la politique autonome du gouvernement. L'auteur conclut notamment que l'excA©dent de plein emploi donne dans certaines limites de meilleurs rA©sultats que l'excA©dent rA©el lorsqu'on effectue une analyse budgA©taire statique. Mais dans une analyse dynamique, la supA©rioritA© de l'excA©dent de plein emploi est moins A©vidente, sauf dans certaines situations dA©crites par l'auteur. En gA©nA©ral, les difficultA©s liA©es A l'utilisation de l'excA©dent budgA©taire rA©el pour A©valuer les mesures budgA©taires autonomes, par exemple les variations A©ventuelles du montant de l'excA©dent occasionnA©es par ces mesures, surgissent A©galement lorsque l'on a recours, aux fins de l'analyse dynamique et dans le mAame contexte, A l'excA©dent de plein emploi. Le concept d'excA©dent de plein emploi est actuellement utilisA© aux Etats-Unis pour dA©terminer le montant des dA©penses publiques A inclure dans un budget donnA©. Les implications pour la politique de stabilisation qui rA©sultent de l'utilisation de ce concept permettent de se rapprocher davantage du plein emploi que si l'on utilise l'excA©dent budgA©taire rA©el aux mAames fins. Toutefois, une telle utilisation de l'excA©dent de plein emploi ne garantit pas que l'on atteindra l'objectif du plein emploi. /// En este trabajo se describen el concepto del superAivit en pleno empleo y su mA©todo de estimaciA³n en los Estados Unidos, y se analizan 1) su uso general para medir de forma concisa el impacto del presupuesto, a fin de evaluar la polA­tica y 2) su uso en las directrices por las que se rige la formulaciA³n de la polA­tica presupuestaria. Se hace hincapiA© en el primer uso de este concepto, pero tambiA©n se describen las repercusiones en la polA­tica de estabilizaciA³n que tiene su empleo en la formulaciA³n de la polA­tica presupuestaria. En el anAilisis, y cuando es del caso, se hacen comparaciones con el uso del superAivit real del presupuesto en el mismo contexto. El superAivit presupuestario en pleno empleo es una estimaciA³n de lo que serA­a el resultado presupuestal con un programa dado de gasto y tributaciA³n si la economA­a se hallara al nivel de producciA³n de pleno empleo. Es, desde luego, una construcciA³n hipotA©tica destinada a eliminar del resultado presupuestal los efectos de las fluctuaciones del nivel real de actividad econA³mica, permitiendo la identificaciA³n de variaciones en la polA­tica discrecional del gobierno. Una de las conclusiones del trabajo es que, sujeto a ciertas limitaciones, el superAivit en pleno empleo es mejor que el superAivit real para fines de anAilisis fiscal en un contexto estAitico. Pero en un contexto dinAimico la superioridad del superAivit en pleno empleo es menos evidente, salvo en ciertas situaciones que se describen en el estudio. En general, los inconvenientes que van unidos al uso del superAivit real del presupuesto como forma de evaluar una medida fiscal discrecional, tales como la posible variaciA³n de la magnitud del superAivit a consecuencia de las medidas discrecionales, existen tambiA©n en el caso del uso del superAivit en pleno empleo cuando hay una situaciA³n dinAimica. El concepto de superAivit en pleno empleo se usa actualmente en los Estados Unidos para determinar la magnitud del gasto del gobierno que ha de incluirse en un presupuesto dado. Desde el punto de vista de la polA­tica de estabilizaciA³n, las repercusiones del uso de este concepto son favorables al logro del pleno empleo, en comparaciA³n con el uso del superAivit real del presupuesto en el mismo contexto. Sin embargo, tal uso del superAivit en pleno empleo no garantiza que se cumpla el objetivo del pleno empleo.

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Le systA¨me financier sur lequel se penche l'auteur prA©sente comme caractA©ristique principale une centralisation trA¨s poussA©e, au niveau du TrA©sor, des transactions financiA¨res du secteur public et, dans une moindre mesure, du secteur privA©. Cette centralisation permet au TrA©sor de jouer le rA´le de banquier de l'ensemble du secteur public et fournit A l'Etat un moyen d'action puissant dans sa politique A©conomique, budgA©taire et monA©taire. Les consA©quences politiques du rA´le d'institution financiA¨re assumA© par le TrA©sor sont apparues plus clairement A mesure que s'accroissait le secteur public. Dans les pays africains ayant accA©dA© rA©cemment A l'indA©pendance, pays oA¹ le secteur public reprA©sente gA©nA©ralement une fraction importante du secteur moderne de l'A©conomie, les dA©pA´ts auprA¨s du TrA©sor ont parfois dA©passA© le montant total des dA©pA´ts du secteur privA© auprA¨s des banques commerciales. Cependant, la prA©sentation des documents du budget et du TrA©sor demeure adaptA©e principalement aux exigences de la responsabilitA© financiA¨re et du contrA´le administratif plutA´t qu'A celles de l'analyse macroA©conomique et monA©taire. Les rA©percussions de la politique financiA¨re de l'Etat risquent donc de rester cachA©es, ce qui contrarierait la mise en A“uvre de politiques A©conomique, budgA©taire et monA©taire conscientes et cohA©rentes. La premiA¨re partie prA©sente une mA©thode qui permet d'analyser l'exA©cution du budget en rA©capitulant toutes les transactions du gouvernement central en fonction des paiements, en A©liminant les divergences de composition des donnA©es et de pA©riode d'enregistrement entre le budget de fonctionnement, le budget d'A©quipement, les budgets annexes et les comptes spA©ciaux. La deuxiA¨me partie soutient que la mise en commun des ressources financiA¨res au niveau du TrA©sor permet une large rA©affectation de ces ressources entre les secteurs de l'A©conomie et que les opA©rations bancaires du TrA©sor peuvent exercer une profonde influence sur la masse monA©taire, mAame si le TrA©sor n'a pas recours au systA¨me bancaire. La mise en A“uvre de la politique monA©taire exige donc une A©troite coordination entre la banque centrale et le TrA©sor. /// El aspecto mAis distintivo del sistema financiero que aquA­ se examina es el alto grado de centralizaciA³n de las transacciones financieras tanto del sector pAoblico como, en menor medida, del sector privado, en la TesorerA­a. Esta centralizaciA³n permite que la TesorerA­a funcione como banquero de todo el sector pAoblico y proporciona al gobierno un poderoso instrumento para la polA­tica econA³mica, fiscal y monetaria. Las consecuencias que entraA±a el hecho de que la TesorerA­a actAoe como instituciA³n financiera se han hecho mAis evidentes con el crecimiento del sector pAoblico. En los paA­ses africanos recientemente independizados, en los que el sector pAoblico generalmente representa una gran porciA³n del sector moderno de la economA­a, los pasivos por concepto de depA³sitos en la TesorerA­a han llegado a veces a superar al total de los depA³sitos del sector privado en la banca comercial. Sin embargo, el sistema de registro del presupuesto y de la TesorerA­a se sigue rigiendo principalmente por los requisitos de la rendiciA³n de cuentas y el control administrativo, en vez de regirse por las necesidades del anAilisis macroeconA³mico y monetario. Por consiguiente existe el peligro de que queden veladas las implicaciones de la polA­tica financiera del gobierno, lo que perjudicarA­a la prosecuciA³n de unas polA­ticas econA³micas, fiscales y monetarias conscientes y coherentes. En la Parte I se presenta un mA©todo para analizar la actuaciA³n presupuestaria, mediante la consolidaciA³n de todas las transacciones del gobierno central sobre la base de las corrientes de fondos, eliminando las discrepancias existentes en la cobertura y en el perA­odo de aplicaciA³n del presupuesto ordinario, el presupuesto de inversiA³n, los presupuestos de los organismos sin autonomA­a financiera, y las cuentas especiales. En la Parte II se mantiene que haciendo convergir los recursos financieros en la TesorerA­a se permite alterar sustancialmente la asignaciA³n de dichos recursos a los distintos sectores de la economA­a, y que las operaciones bancarias de la TesorerA­a puedan influir significativamente sobre la oferta monetaria, aun cuando la TesorerA­a no recurra al sistema bancario. De ahA­ que haga falta una estrecha coordinaciA³n entre el banco central y la TesorerA­a para llevar a cabo la polA­tica monetaria.

FEDERAL grants-in-aid to states have been an increasingly significant item in the national budget. From a figure of approximately five and one-half million dollars in 1915, they had increased to over one billion dollars in 1947, and by 1949 had approached the two billion mark.1 Yet in spite of the size and variety of federal grants, these funds are not subject to comprehensive fiscal controls in the majority of the states. Grants, which help to finance many state activities, should be budgeted and placed under the same financial supervision as other state monies.

SINCE the end of World XVar II the Norwegian government has published forecasts of next year's values of several macroeconomic variables. These projections, mixed sometimes with plans and targets, are published in January or February of the year to which they refer in an official document called the National Budget. It is the purpose of this paper to evaluate the administrative system that sets up the National Budgets by comparing its forecasting ability with that of other simpler forecasting methods. In order to evaluate a forecasting system some criteria of success must be developed. Such criteria can be derived from the goals which the system has set for it, from comparisons with the results obtained from other countries using different methods or from comparisons with results obtained by different methods applied in the same country. The first method was used by the author and more comprehensively by P. J. Bjerve to study the Norwegian budgeting system.1 The second has been used by the United Nations Economic Commission for Europe and more systematically by H. Theil.' The third method is utilized in this paper. Each method has its advantages and drawbacks. An evaluation based upon absolute rather than comparative standards can locate sources of error and suggest improvements, but it cannot determine whether the whole effort was worth the cost, given what might have been done by other methods. A comparison of the results obtained by different countries is inconclusive unless it can be shown that the difficulty of forecasting and the seriousness of a given error does not vary greatly among the countries comnared. A comnarison of the results of applying different forecasting methods to data obtained from the same country represents an improvement, so long as no more information is utilized than was available to the policy makers at the time they made their forecasts. The conclusions reached by this study suggest that fairly simple, naive methods of forecasting would have done just as well, if not better in some cases, than the National Budgeting system. This conclusion must be modified to recognize that forecasting was only one of the tasks which the budgeting system was meant to accomplish. But it is of significance because this system is in common use as a forecasting tool by governmental organs and businesses throughout the world and because, in Norway, circumstances were particularly favorable for its use.

IN AN address given recently at the 3rd National Men of Science and Industry dinner sponsored by the American Council of Commercial Laboratories, John R. Steelman, assistant to the President, discussed the national budget for scientific work and specifically the need for increased research and development by the Federal Government, colleges, and industry. Dr. Steelman made the following statement: "There is a real question as to how much further the Government can go, under the existing critical budget pressures, in extending its support. There is a growing belief that the Government should not greatly step up its participation in the nation's research effort until the total budget for research, private as well as public, can be appraised and redefined as to objectives and resources. But I believe strongly that the attainment of our goals of maximum employment and productivity, based upon expanded business investment, will require a vigorous research and development program supported by ...

T HE national budget, during the twenty-two years since its creation in the Budget and Accounting Act of 1921, has been a good reflector of the responsibilities undertaken by the federal government and an instrument for effectuating those responsibilities. The policies governing the role of government and the sense in which the budget has been used as an instrument, however, have been in transition. For the first twelve years under the new budget system prevalent attitudes dictated a restricted responsibility of the federal government in the social and economic affairs