Erasmus University Rotterdam, Netherlands and Academy of Economic Studies, Bucharest, Romania Accountability in the Public Sector: The Dutch Experience Prof. dr. M. Peter van der Hoek

Many western countries shifted in the 1990s from input-based budgeting and cash-based accounting to some form of output-based budgeting and accrual accounting. Input-based systems provide little information for a government to operate efficiently and effectively. Generally, these systems provide little or no information about output in concrete and measurable terms.

Therefore, the focus shifted from outlays to costs. More attention for performance, output and results would strengthen accountability and control. The Netherlands implemented a new (policy) budgeting system in In this system, the budget focuses on the following three budgeting questions:  What do we want to achieve?  What will we do to achieve it?  How much can it cost?

Departmental accounts focus on the following three accounting questions:  What did we achieve?  Did we do what we thought we would?  Did it cost what we thought it would? The budget system intends to link goals, budgets, means, instruments and performance. The aim is to make accounts more meaningful and transparent.

The system is based on a measurable formulation of policy objectives, preferably in terms of social effects. Policy budgeting begins with formulating general policy goals. Subsequently, these objectives should be operationalized by detailing them in terms of products and services or, if this is not possible, in terms of activities.

In the first years after the introduction of the new budgeting and accounting system progress was slow. In 2003, only 29% of the budget articles offered sufficient or good insight into what ministries aim to achieve. Moreover, in only 21% of the remaining cases there was prospect for improvement. No wonder that criticism emerged that too many policy goals were still formulated vaguely, that is, insufficiently concrete and measurable. Moreover, parliament considered that the political relevance of the accountability was too little.

In response to the criticism an experiment with the budgets and annual reports of six departments was proposed in late Fewer details and technical points and more attention for integral policy accountability should improve the quality and informational value of the departments’ annual reports. A full evaluation cannot be carried out before 2010 because the budgets and annual reports involved will have completed a full budget cycle in However, a preliminary evaluation has been carried out in early 2009.

The budgets for 2009 and the annual reports over 2008 involved in the experiment appear to present more policy information than previously. However, critical observations can also be made: 1. For over ⅓ of the goals it is unclear to what extent they have been realized. 2. For over ⅓ of the goals it is unclear whether the planned activities have been carried out.

Too many goals are still presented in vague terms, so that parliament cannot check the results of the government’s policies. 3. For ⅔ of the goals it is unclear whether the performance has led to realization of the policy goal. 4. It is no longer always possible to trace back which financial means on the level of budget articles have been spent on which priorities.

In 2008, an Accountability Letter was introduced that should address the main policy issues in order to enhance political accountability. However, it gives the government ample room to control the accountability debate. First, the government sets the accountability agenda by choosing the policy issues. Second, the government tends to present a rosy picture of the policy results.

It appears difficult to formulate policy goals in terms of desired social effects. It may be impossible in some cases for technical reasons. However, there might also be a political reason for formulating vague policy goals. Politicians may consider that vague policy goals make them immune for criticism with regard to their achievements.