The development of a consistent and sustainable medium term budget expenditure framework was a prerequisite for Mongolia's medium term growth. The World Bank wished to review and assess the government of Mongolia's medium term expenditure framework currently under discussion within government with respect to its capability to ensure fiscal discipline and protect growth, and where appropriate, to make suggestion regarding policy changes reflected in the MTEF. It was intended that the results of the work: i) would inform Mongolia's Poverty Reduction Strategy (PRSP) and the Bank's dialogue with the Government of Mongolia on the overall growth and fiscal policy framework, ii) would provide useful input into the development of the country economic memorandum, and iii) would inform the design of the proposed Economic Capacity Building Technical Assistance Credit (ECT AC) which supported implementation of Mongolia's PRSP. The specific objectives of the Study included:
• To review the Medium Term Expenditure Plan of the Government of Mongolia with particular emphasis on assessing the policy implications of different policy choices outlined in the MTEF framework and the impact it is likely to have, on the medium term policy agenda in particular the impact on resource allocations in the social sectors;
• To evaluate the impact of policy alternatives on the overall budget and, or provide options for sequencing strategy for existing policies particularly civil service and tax policies.