1. Eastern Europe SBO Meeting Chung-Keun Park
Relationship between the Legislature and the Budget Office in the Budget Process
Eastern Europe SBO Meeting
Chung-Keun Park

2. 1. Background of this study
Two key players in the budget process
Increasing demand for active legislative involvement in the budget process
OECD experts meeting in October, 2006 ; countries with different power structure
- Presidential : Mexico, U.S.
- Semi-Presidential : France, Korea
- Parliamentary : Italy, Japan, Netherlands, Sweden
- Westminster Parliamentary : U.K.
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress

3. 2. Factors affecting relationship between the Legislature and the Budget office
Power structure
- Presidential to Westminster Parliamentary
Party system
- Strong, cohesive two party system / weaker two party or multiple party system
Structure of the legislature
- Unicameral / bicameral
Structure of the budget
- Comprehensive / fragmentary
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress

4. 3. Recent trends Executive predominance in 20th century
- Expansion of the government
- Growth in technical complexity and bureaucracy
- Rise of disciplined political party
Recent resurgence of legislative role in budgeting
- To improve deteriorating fiscal balance
- Demand for transparency and accountability
- Change from disciplined to fragmented party
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress

5. 4. Increasing legislative role, positive or negative for budgetary goals?
Fiscal discipline
- Feeble faith in their own institutional self restraint
/ greater fiscal responsibility
Allocation
- Narrow purpose for local constituency
/ broader national priorities
Efficiency
- Hamper administrative efficiency
/ provide sufficient flexibility
Accountability
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress

6. 5. Interaction between the Legislature and
the Budget Office in the Budget Process
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress

7. (1) Budget preparation and submission
Deadline for submission
- On average, 3 months before new fiscal year begins
Economic assumptions
- MOF or shared responsibility of related ministries
- Central Planning Bureau (Netherlands)
• Legally independent body composed of 200 economists
Medium-term budget frameworks
- 75% of OECD countries prepare MTBFs (survey, 2003)
- Not legal requirement in most countries, but significant in
top-down budgeting
- Coalition Agreement in the Netherlands
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress

8. (2) Budget deliberation
Legislative committees
- Budget committee / Sectoral committees
• Most countries have budget committee but the U.K.
• Increase of entitlements for sectoral committees
- Recent trend emphasizing balanced role of the two committees
Legislative budget office
- 3 out of 39 countries with more than 26 staffs (survey, 2003)
- U.S. CBO (Congressional Budget Office)
• Non partisan / 235 staffs with budgeting experiences
• Providing legislative estimates and analysing proposal
- Case of Korea, Italy and Sweden
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress

9. (3) Budget approval Amendments Two-stage budget approval in Sweden
- Presidential / Parliamentary
Two-stage budget approval in Sweden
- Spring Budget Bill; aggregate expenditure limit
- Budget Bill; 27 sectoral ceilings and appropriations
Earmarked provisions
- Allocating resources for constituency / smoothing negotiation process in the legislature
- Executive veto power; Line-Item Veto Act in the U.S
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress

10. (4) Budget execution
In-year report of budget execution to the legislature
Appropriations accounts; simple·programmatic /
complex·administrative
Flexibility in execution process
Cancellation or postponement of appropriations is permitted
under limited conditions
• France (up to1.5%), U.S. (cancellation forbidden),
Korea/Japan (supplementary budget)
- End-year flexibility to avoid wasteful end-year surges
Audit
- From financial audit to performance audit
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress

11. 6. Budget reform Most reforms are initiated by the executive
- They have more information and responsibility
Legislative role in budget reform
- Top-down budgeting in Sweden
- The Budget Enforcement Act in the U.S.
- Italy’s budget reform
Requirements for successful budget reform
- A common objective and co-operative attitude
- Enacting the reform in a law as well as
establishing it as a practice
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress

12. 7. Issues for discussion
Tradeoff of more involvement of the legislature
- Negative (Fiscal discipline, Efficiency)
/ Positive (Accountability)
Issues to consider for strengthening budget process
- Information sharing and collaboration of two bodies
- Simplifying budget classification for transparency
- Enhancing legislative capacity to analyze proposal
- More utilization of performance information
- Ensuring fiscal discipline in preparation for future
fiscal risk (increasing entitlements, population ageing)
Some of the advantages of such a tool:
Having one place where we can all go, rather than having to sift through reams of s or hunting down the people who may have the information we need
Being systematically alerted of new communications needs and changes to things currently in progress
Seeing information in the form that is most useful and efficient, to make our work easier and help us do it better
Its goal is not:
To add a new layer of bureaucracy or supervision
To generate more work or traffic
The goal is to reduce these things and cut out the stress