role of the legislature in public

oppositemincedManagement

Oct 28, 2013 (3 years and 7 months ago)

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International perspectives on the
role of the legislature in public
financial oversight

Associate Professor Joanne Kelly

Australia & New Zealand School of Government

12 April 2013


Discuss international perspectives on the role of
legislature in public financial oversight
(budgeting)...



Understand the possible scope of that role


and
the limitations imposed by current practices and
system



Use as the basis for assessing possible reforms
and changes to that role being discussed here.

Why
do governments budget
?



Planning

&

Accountability

Accounting &

Controlling





Compact between the rulers and the ruled



Relationship between the executive and the
legislature









Posner P & Park C K (2007 ),
Role of legislature in public budgeting

OECD Journal of Budgeting



S81: Consolidated Revenue Fund:


All revenues raised…. shall form

one Consolidated Revenue Fund….




S.83: Money to be Appropriated by Law:



No money shall be drawn from the
Treasury…except under

appropriation made by law.








Posner P & Park C K (2007 ),
Role of legislature in public budgeting

OECD Journal of Budgeting

Translate public resources into
human activities…






…a government’s resources are limited;



its ambitions seldom are.





Weller &
Cutt

1976:1



Private sector allocates resources
through the market


Public sector allocations resources
through the budget process

…to govern is to choose…

….the annual budget expresses most clearly
the government’s priorities



So, the key questions in understanding
a budgetary system are this:

who are the key players in budgeting?
where lies the power to choose? what
limitations are placed on that power?

Two key players in public budgeting...

Traditional budgetary relationship in
Westminster system

Executive:

Ministers
individually &
collectively

Public Service CBO
& line agencies

Legislature:

Members of
legislature;
Committee/s;
Supreme Audit
Office;

Is held to account for spending (by providing reports
on actual spending as requested by legislature;
answering questions)

Holds to account by requesting reports on spending,
examining reports, asking questions, verifying content
of reports, undertaking reviews and inquiries

Westminster

Presidential

Traditional budgetary relationship in
Presidential system

Executive:

Ministers
individually &
collectively

Public Service CBO
& line agencies

Legislature:

Members of
legislature;
Committee/s;
Supreme Audit
Office;

Is held to account for spending (by providing reports
on actual spending as requested by legislature;
answering questions)

Holds to account by requesting reports on spending,
examining reports, asking questions, verifying content
of reports, undertaking reviews and inquiries

Scoping the role of legislatures in public
budgeting







Reforming the role of legislature in PFO: the
case of the PBO


IMF advice

OECD finding

R4: Establish Independent Fiscal
Forecasting institutions



Aim to strengthen, disclose and verify the
information base to enhance the role of legislatures
in budgetary and financial oversight.



Description of tasks:


Medium term fiscal and budgetary forecasting


Costing: new policy initiatives or reform options, electoral platform;


Independent policy analysis;



Netherlands
Central
Planning
Bureau
(1945)

US
Congression
al Budget
Office
(1975)

Sweden
Fiscal Policy
Council
(2007)

United
Kingdom
Office for
Budget
Responsibilit
y (2010)

Canada

Parliamentary

Budget

Office
(2011)

Australia
Parliamentary

Budget

Office
(2011)

Agency of

Ministry

of
Economic

Affairs

Congress



Ministry of
Finance

Ministry

of
the

Treasury

Parliament

Short and
medium term
macro
-
economic
forecasting

Yes,

unique

Yes



No, only
scrutiny

Yes,

(in principle)
unique

No

Long term
macro
-
economic
forecasting

Yes

unique

Yes



No, only
scrutiny

Yes,

unique

No

Costing

Yes,

unique

Yes

No

No, only
scrutiny

Yes, but not
leading to
duplication

Costing of
electoral
platforms

Yes,

unique

Yes



No

No

Yes,

but not leading
to duplication

Monitoring of
fiscal policy
against rules
and objectives

Yes

Yes

Yes

Yes

Yes

Policy research
on own
initiative

Yes

Yes

Yes

Yes

Yes


WRITE THIS UP ON BUTCHERS PAPER OR JUST
REPORT BACK TO THE GROUP AS BASIS OF
DISCUSSION



What is the impact of PBO on the role of
legislature in public financial oversight?



Draw conclusion from the perspective of your
current system...






who are the key players in budgeting?
where lies the power to choose? what
limitations are placed on that power?








Understanding the
budget game


A simplified model of
budget roles &
actors...

Two key role in budgeting...




guardians of the public purse


advocates of public expenditures




The Guardians





Seek to keep expenditures
within hailing distance
of revenues….


1.
Control the aggregates


2.
Allocative efficiency


3.
Operational efficiency



The Spenders



…seek to protect and
expand their resource
base to advance policy
and program aims…



Aggregates



Allocation

Efficiency

Guardians




Spenders


Spenders and Guardians each employ
strategies, practices and processes to
further their objectives in budgetary
negotiations, and these ‘techniques of
competition’ are knowable.




…spenders can push because
the guardians push back….



…the
complexity of budget decision
-
making requires areas of stability and
techniques of conflict limitation or
confinement.