New Policy Study
We analyze how public finances translate (or fail to translate) into better education and health outcomes across six Western Balkan countries, using panel data for the period 2006–2020 and CMP methodology.

Key findings:
• It’s not just how much we spend — it’s how we spend it: stronger budget execution is the key channel through which PFM affects outcomes
• In education, PFM does not operate directly, but through improved technical efficiency → higher preschool enrolment and better student–teacher ratios
• In health, better budget execution is associated with more doctors, higher DPT immunization coverage, and longer life expectancy
• Weak transparency and insufficient medium-term planning constrain the effectiveness of public spending
• PFM is the “silent driver” of social outcomes — without it, even higher spending fails to deliver results

Policy message:
Improving health and education outcomes does not start in the classroom or the hospital, but in the budget process: medium-term planning, transparency, and disciplined execution.

shorturl.at/Wxdkc
#PublicFinanceManagement #Education #Health #WesternBalkans #EvidenceBasedPolicy #PFM

Today, December 12, 2025, we held a Training on Monitoring Public Procurement, where 20 representatives from local public institutions, civil society organizations, and the media from Prilep and Krushevo gained new information and knowledge on the proper monitoring and implementation of public spending.It is time for efficient and transparent public procurement!

In the podcast “Where Is the Money?” on Pari.com.mk, Professor Marjan Petreski discusses the Draft Budget 2026:
As in our FT Commentary 43 (https://shorturl.at/67wyD), the overall budgeting framework is moving in the right direction, but a series of fiscal risks remain.
The inflation target of 2.5% is achievable only if fiscal policy supports monetary policy, without populist expectations of “easy money.”
Productivity in the public sector is declining, while in the private sector it is rising – a critical factor for sustainable wage growth and stable budget revenues.

We are proud that MK-MOD, the Macedonian tax-benefit microsimulation model – developed and maintained by Finance Think – is officially featured on the European models map within EUROMOD .

With this, MK-MOD stands shoulder to shoulder with the models of the European Union, Norway, Switzerland, the United Kingdom, and other countries that develop modern analytical tools for assessing public policies.

This recognition confirms that Macedonia, through Finance Think, is building capacities comparable to European standards – enabling better testing, planning, and evaluation of tax, transfer, and social protection policies.

EUROMOD models map: https://euromod-web.jrc.ec.europa.eu/…/euromod-models-map
About MK-MOD: https://www.financethink.mk/…/tax-benefit…/

We continue improving the model and providing strong support for evidence-based policymaking.

Budget revenues are projected to grow by 3.5%, calculated based on the budgeted revenues for 2025. That nominal growth is realistic—one could even say conservative—if for 2026 we expect real GDP growth of 3.8% and inflation of 2.5%.

However, the problem arises because the projection in the 2025 budget is unrealistic to achieve. Finance Think pointed this out already last year, and it is now evident from the fact that in the first nine months revenue realization stands at 67%, which is lower than what would be proportional for this stage of the year. This brings us to the conclusion that the 2026 budget once again projects revenue growth with an excessively high nominal increase.

In 2026, we should not expect a dramatic jump, but rather a moderate nominal growth of around 6%, in line with the real dynamics of the economy. Anything beyond that would be “cosmetics on paper,” which would only create pressure for the budget to be rebalanced in the first half of the year. The reason lies not only in economic conditions, but also in the fact that the fight against the grey economy and the enforcement of revenue collection—although showing some positive movement—still suffer from significant weaknesses.

https://frontline.mk/2025/11/17/d-r-blagica-petreski-za-frontla-n-bu-etot-za-2026-godina-e-izgraden-vrz-nerealno-visoki-proekcii-na-prihodi/