negative force. A look at the top 10 items that had the largest negative force reveals that nine of them were discretionary items ((Table 14). This is consistent with the idea that discretionary expenditures are the easier category to adjust and was in Armenia’s case the largest source of negative force to slow down budget expenditure growth in 2008. This was clear at the aggregate level (Figure 17) and is also true at the individual level (Table 14).

As Armenia came out of the global financial crisis real GDP growth rebounded from a low of negative 15 percent in 2009 to seven percent in 2012 (Figure 20) but over the same period public expenditure growth continued to slow with a negative force applied from 2008-2012 (with a small positive force in 2011) (Table 15). Between 2010-12 by far the largest contributor to the negative force were the large cuts to expenditures on buildings and edifices with a negative force of 12.4 percentage points that saw its share of the total budget go from 22 percent to 10 in the space of three years (Table 16).

We have demonstrated that through the force toolkit we can quickly diagnose the most important expenditure items driving the growth of the budget, we can also use it to focus in on a particular subset of items. For example, while the overall budget had a negative force rate in 2012 government officials may still be keen to examine the growth in one of the most important rigid items in its portfolio –wages. Prior to the crisis in 2007 wages were growing at 13 percent before doubling its growth rate to 26 percent in 2008. Like most items the brakes were applied in the following years to rein in spending and growth fell to as low as 2.5% by 2012. Despite the brakes, relative to the overall budget, wages continued to grow faster and hence grew as a share of the budget for five consecutive years through to 2012 (Table 17). The slowing down in the growth rate meant that it averaged a negative force of 1.3 percentage points per year between 2010 and 2012, which placed it as the sixth largest negative force rate of the components within the economic classification (Table 16). Despite having a negative force for three of the last four years it was still not enough to push momentum below positive and in turn it continued to grow. To further reveal the breakdown of the sources of wage growth, we can decompose it into greater detail in order to see if there were variations across agencies or whether the positive momentum despite negative force was generally uniform. Through the Force toolkit and BOOST database you can instantly identify the most important sources of force and momentum across the wages of every center or arm of government.

A look at the wages of the different functions of governments shows that 80 percent of them had a negative force rate between 2010 and 2012, which still left 20 percent that saw an acceleration in growth. In terms of momentum, 97 percent of the agencies had positive momentum for wages and Table 17 demonstrates that between 2010 and 2012, the most important items that drove the growth in wages were salaries of Police Officers and National Security Personnel with a momentum of 5.4 percentage points and 3.2 percentage points respectively. It is clear though that even for these important sources of growth, three out of the four years since 2009 they experienced negative force meaning there was a concerted attempt to slow down the rapid acceleration in growth that was occurring prior to the crisis.