From: Where will the money come from? Alternative mechanisms to HIV donor funding
For | Against |
---|---|
• Households associate the benefits of the government expenditure with the tax paid and are more prepared to pay. | • Earmarking means a loss of control over total expenditure. |
• Earmarking may provide a more consistent source of funds for expenditures that yield high benefits but may not be high on the political agenda, such as road maintenance. | • Earmarking circumvents the budgetary process and review and may distort and misallocate funds. |
• Earmarking shields expenditures from the uncertainties of legislatures that may cut spending. | • Rights to earmarked revenues become entrenched with funding no longer based on agreed priorities. |
 | • Less transparency may lead to inefficiencies and misuse of funds. |
 | • Earmarking can facilitate attempts to create monopolies and abuse of monopoly power. |
 | • Earmarking could lead to cutbacks (or expansion) of services wholly unrelated to need. |
 | • Earmarking leads to less flexibility at the margin to reallocate funds when the budget is under stress. |
 | • Earmarking is incompatible with good cash management. |