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The glossary in this Portal provides definitions of core terms closely related to the medium-term expenditure framework; and links to other online glossaries.

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Theory of second best

The theory of the second best suggests that when two or more markets are not perfectly competitive, then efforts to correct only one of the distortions may in fact drive the economy further away from Pareto efficiency.

Third- party intervention

A technique concerned with helping individuals, groups, or departments resolve serious conflicts that may relate to specific work issues or may be caused by suboptimal interpersonal relations.

Third party payment

Third party payment is the practice of an insurer paying providers directly for services rendered to an insured, as opposed to an indemnity contract which pays the insured person for the losses incurred.

Token provision

A token is something serving as an indication, proof, or expression of something else; token provision is a done as an indication or a pledge.

Top-down budgeting

A process of developing budgets in which top management outlines the overall figures and middle and lower-level mangers plan accordingly.


Transfer is a transaction in which one individual or institutional unit provides a good, service or asset to another individual or unit without receiving from the latter any good, service or asset in return as a counterpart. Transfers may be made in cash or in kind.

Transfer payment

In political science and economics, a transfer payment is a payment of money from a government to an individual for which no good or service is required in return. In economics, government transfer payments can be considered a negative tax, since in the case of a tax, people pay the government without getting any good or service in direct exchange.   Examples of transfer payments include welfare, unemployment insurance, social security payments publicly-funded pensions and public support for students, including scholarships and financial aid and death benefits for parents (el parentos).

Transition Economy

Transition economy is an economy which is changing from a planned economy to a free market. Transition economies undergo economic liberalization, letting market forces set prices and lowering trade barriers, macroeconomic stabilization, where immediate high inflation is brought under control, and restructuring and privatization, in order to create a financial sector and move from public to private ownership of resources. These changes often may lead to increased inequality of incomes and wealth, dramatic inflation and a fall of GDP.   Transition process is usually characterised by the changing and creating of institutions, particularly private enterprises; changes in the role of the state, thereby, the creation of fundamentally different governmental institutions; and the promotion of private-owned enterprises, markets and independent financial institutions.


Transparency refers to an environment in which the objectives of policy, its legal, institutional, and economic framework, policy decisions and their rationale, data and information related to monetary and financial policies, and the terms of agencies’ accountability, are provided to the public in a comprehensible, accessible, and timely manner.  Transparency of fiscal and financial information is a must for an informed executive, legislature, and the public at large (normally through the filter of competent legislative staff and capable public media). It is essential not only that information be provided, but that it be relevant and in understandable form. Dumping on the public immense amounts of raw budgetary material does nothing to improve fiscal transparency. The IMF has assembled in 1998 a Code of Good Practices on Fiscal Transparency, which underlines the importance of clarity of fiscal roles and responsibilities; public availability of information; open processes of budget preparation, execution, and reporting; and independent reviews and assurance of the integrity of fiscal forecasts, information, and accounts.  Transparency is one of the characteristics of a robust public expenditure management (PEM) system. A transparent PEM system provides an understandable guide as to how resources are planned to be used and what results are expected to be achieved. Reporting should also enable easy monitoring of performance against government’s stated intentions.


A treasury is any place where currency or items of high monetary value are kept.

Trust funds

Trust funds are property, especially money and securities, held or settled in trust. In common law legal systems, a trust is a relationship in which a person or entity (the trustee) holds legal title to certain property (the trust property or trust corpus), but is bound by a fiduciary duty to exercise that legal control for the benefit of one or more individuals or organizations (the beneficiary), who hold "beneficial" or "equitable" title. The trust is governed by the terms of the (usually) written trust agreement and local law. The entity (one or more individuals, a partnership, or a corporation) that creates the trust is called the settlor, and in the United States, the trustor, grantor, donor, or creator, as well.