# **b. Case Study: Force toolkit applied to Armenia**

Using the power of the detailed BOOST data set, we can explore the underlying sources of force and momentum at a greater granularity in each year. This allows policy makers to identify, at the most detailed level, where the emerging expenditure pressures are coming from. In the case of Armenia we will place special emphasis on the ability to distinguish rigid and discretionary expenditures at the detailed level of expenditures.

**Table 13: Top 10 sources of force in Armenia Budget in 2008 at Economic and Functional classification** (percentage points)

|**Top 10 sources of force in the Aremia Budget in 2008**<br>**2008**|
|---|
|4740 Pensions -**Rigid**- 100201 Old age<br>6.2%|
|4630 Current grants to other level of public sector -**Rigid**- 010102 Financial and fiscal relations<br>3.3%|
|4720 Social security allowances in monetary terms -**Rigid**- 090401 Higher vocational education<br>1.1%|
|4230 Acquisition of contractual services -**Discretionary**- 070303 Medical, mother and child centers' services<br>0.7%|
|5110 Buildings and edifices -**Discretionary**- 020201 Civil defense<br>0.6%|
|5210 Strategic reserves -**Rigid**- 040901 Economic relations<br>0.5%|
|5110 Buildings and edifices -**Discretionary**- 060301 Water-supply<br>0.4%|
|4650 Capital grants to other level of public sector -**Rigid**- 110101 Reserve fund of Government of RA<br>0.4%|
|5120 Machinery and equipment -**Discretionary**- 110101 Reserve fund of the Government of RA<br>0.3%|
|5110 Buildings and edifices -**Discretionary**- 040305 Electricity<br>0.3%|
|**Total Expenditures**<br>**-11.2%**|
|<br>Notes: Disaggregation used in BOOST database is by Economic Classification, Functional Classification and Discretionary. Force and|
|Momentum are in percentage points. Source: BOOST dataset and Force Toolkit|

**Table 14: Bottom 10 sources of force in Armenia Budget in 2008 at Economic and Functional classification** (percentage points)

|**Bottom 10 sources of force in the Aremia Budget in 2008**|**2008**|
|---|---|
|5110 Buildings and edifices -**Discretionary**- 040304 Other fuel types|-6.9%|
|4230 Acquisition of other contractual services -**Discretionary**- 090201 General primary education|-4.7%|
|5110 Buildings and edifices -**Discretionary**- 040501 Road transport|-2.7%|
|4820 Taxes, mandatory payments, penalties applied by different levels of govt -**Rigid**- 040901 Economic relations|-2.0%|
|5110 Buildings and edifices -**Discretionary**- 090601 Auxiliary services provided to education|-1.9%|
|5110 Buildings and edifices -**Discretionary**- 110101 Reserve fund of the Government of RA|-1.8%|
|5120 Machinery and equipment -**Discretionary**- 010102 Financial and fiscal relations|-1.3%|
|5110 Buildings and edifices -**Discretionary**- 060101 House-building|-0.9%|
|5110 Buildings and edifices -**Discretionary**- 040201 Agriculture|-0.8%|
|5120 Machinery and equipment -**Discretionary**- 070103 Medical devices and equipment<br>**Total Expenditures**|-0.6%<br>**-11.2%**|
|<br>Notes: Disaggregation used in BOOST database is by Economic Classification, Functional Classification and Discretionary|. Force and|
|<br>Momentum are in percentage points. Source: BOOST dataset and Force Toolkit||

The largest source of force using the economic classification of expenditures during the global financial crisis in 2008 was pensions (Table 13). The momentum of pension expenditures was around half the entire growth in budget expenditures in 2008. A look at the top 10 sources of force in the 2008 budget reveals that the top three items were all rigid and combined added a positive force of 10.5 percentage points during a year when the entire budget had a force of negative 11 percentage points (Table 13). For the 197 expenditure items at this level of classification that had a positive force in this period, these top three items contributed half of the entire force during this period.

Given that the overall budget decelerated in growth (negative force) there were more items that experienced a negative force in 2008. At the economic and functional classification, 58 percent of budget items experienced a negative force in contrast to 2011 where only 38 percent of expenditure items had a