Treasury-Power and Budget Execution in Fragile States: Liquidity, Authority, and the Political Economy of Reform Failure

Étienne Fakaba Sissoko () and Pierre Bayo
Additional contact information
Étienne Fakaba Sissoko: Université des sciences sociales et de gestion de Bamako - USSGB - Université des sciences sociales et de gestion de Bamako, CRAPES MALI - Centre de Recherche et d'Analyses Politiques, Economiques et Sociales du Mali, Faculté des Sciences économiques et de Gestion - USSGB - Université des sciences sociales et de gestion de Bamako
Pierre Bayo: Université des sciences sociales et de gestion de Bamako - USSGB - Université des sciences sociales et de gestion de Bamako, CRAPES MALI - Centre de Recherche et d'Analyses Politiques, Economiques et Sociales du Mali

Post-Print from HAL

Abstract: Budget reforms repeatedly fail in fragile states despite the widespread adoption of fiscal rules, program budgeting, and public financial management (PFM) reforms. This article argues that such failure stems from a systematic mislocation of budgetary authority in existing analytical frameworks. The article develops a theory of treasury power, defined as the institutional capacity to control the timing and prioritisation of payments under liquidity constraints. It shows that uncertainty over public resources transforms the budget constraint into a sequential and intra-annual liquidity constraint, weakening the binding character of ex ante allocations and shifting effective decision-making to the execution stage. Building on this mechanism, the article explains reform failure as an endogenous institutional equilibrium. Reforms that seek to reduce discretion by strengthening rules or procedures undermine the treasury's adjustment function and are therefore systematically neutralised during execution. This interpretation is consistent with observed patterns of payment delays, arrears accumulation, and expenditure prioritisation in fragile contexts. The article contributes by relocating budgetary authority from allocation to execution, formalising the role of liquidity in budgetary decision-making, and providing a political economy explanation for persistent reform failure.

Keywords: Public Financial Management.; Fragile States; Reform Failure; Budgetary Authority; Liquidity Constraints; Budget Execution; Treasury Power (search for similar items in EconPapers)
Date: 2026-04-30
References: Add references at CitEc
Citations:

Published in International Journal of Innovative Science and Research Technology , 2026, 11 (4), pp.2594-2605. ⟨10.38124/ijisrt/26apr1686⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05608234

DOI: 10.38124/ijisrt/26apr1686

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().