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Political authorities work together with non-state actors to steer the rules for exercise of power, and to guide the interactions between the state and citizens, civil society and the private sector (Kjaer 2004; Kaufmann and Kraay 2007; Brinkerhoff and Bossert 2008).

If successful, budget reform could help improve health sector governance, strengthening the capacity of governments to implement health policies efficiently and fairly and achieve better outcomes (Veenstra and Lomas 1999; Siddiqi 2009).First, MTEF introduces advanced modelling procedures which are intended to provide better estimates of the total resource envelope available.Second, the MTEF process is meant to help countries identify competing priorities for funding which can then be debated and decided during the budget formulation process, rather than during budget execution (Schiavo-Campo and Tommasi 1999).The study encompassed three principle objectives: to design methods to measure budget reform progress in the health sector, to apply this framework to describe reform progress in Lesotho’s health sector and to explore factors affecting reform progress.

The main purpose of this article is to report the empirical findings on reform implementation progress.MTEF is a central component of many public expenditure management reform programmes (World Bank 1998; Le Houerou and Taliercio 2002).