Practice Advice on Public Financial Management
Role of Legislature and Civil Society in the Budget Process (OECD)
Summary Advice: The OECD advises that a transparent and accountable budget process has three essential elements: 1) the systematic and timely release of budget data, 2) the legislature must be able to scrutinise the budget reports, independently review them, debate and influence budget policy and be in a position to effectively hold the government to account and 3) there must be an effective role for civil society, through the media and non-governmental organisations in order to influence budget policy and hold the government to account.
Main Points: The OECD advises that an effective role for the legislature is a key ingredient in establishing and maintaining fiscal discipline. It provides the necessary link with civil society and fosters accountability by the Executive.
Finland provides an interesting example of the effect of enhanced budget transparency when legislatures and civil society is engaged in the budget process. In Finland it was ruled that the country’s Freedom of Information Act mandated that the original funding requests from spending ministries to the Ministry of Finance be published at the same time as the government’s budget proposal is presented to Parliament. This had the impact that original funding requests from ministries became more reasonable. As their more extreme requests would be rejected in any case, spending ministers did not want them published since this would reveal them to be either fiscally irresponsible or politically impotent in following through on their initial requests. As a result, the original requests became more reasonable.
Source: OECD (2003). Budget Reform in OECD Member Countries: Common Trends (2003) at http://www.oecd-ilibrary.org/governance/budget-reform-in-oecd-member-countries-common-trends_budget-v2-art20-en (accessed 21 October, 2012).
Page Created By: Matthew Seddon on 1 November, 2012. Updated by Ian Clark on 4 January 2013. The content presented on this page is drawn directly from the source(s) cited above, and consists of direct quotations or close paraphrases. This material does not necessarily reflect the official view of the publishing organization.