1. Policy, budgeting and oversight Legislatures in the Budget Process
2005 Budget Reform seminar Managing Complexity: From Fragmentation to Coordination 30 November, 1 and 2 December 2005 Maputo, Mozambique Alta Fölscher

2. Policy, budgeting and oversight
In most, all CABRI countries parliament affects budget management
Sometimes parliament too active in deleterious way
Sometimes not active enough
Vertical and horizontal accountability
Necessary part of public finance management system
Long history of parliamentary practice – type and scope of role shifts over time
Presentation aimed at stimulating further discussion
On relationship between executive and parliament
What central budget offices can do through changes to institutional arrangements to optimise parliamentary role

3. Where do legislatures fit in?
What is role of legislature?
legislating and policy making
representing citizens
overseeing executive
Rivalry or cooperation
Different systems result in different arrangements
Breaking or stabilising public finances
Incentives
Institutional arrangements count
Making budget policy; restriction and control; or policy accountability and performance
Representative democracy or direct?
Civil society engage through parliament?

4. History
Countries inherited parliamentary practices established over centuries
Magna Carta 1215
Further concessions won and lost over time
Budgets emerged in 19th Century (US as late as 1921)
Early systems no comprehensive document
Increases in spending, bureaucratisation of government, aggregation
While on surface empowering parliaments, disempowered
Information asymmetry
Institutional issues
Preparing budget gradually became to be seen as executive’s responsibility (particularly parliamentary systems)
Some legislatures’ practices contribute to perception of fiscal risk

5. New roles for legislature
Improved information flows from executive
New budget committees (Zambia, Uganda and South Africa)
Building independent capacity (Uganda)
Utilising powers to amend; questioning executive decisions on funding (Kenya)
Channeling discontent with fiscal decisions (Ghana)

6. What threats?
Legislature duplicate or take over role of executive: deadlock
Legislature decisions lead to worse budgetary outcomes
2nd bite at the funding apple
Loss of predictability of policy and fund flows in medium term framework
Legislature budget process at odds with public finance management vision
Legislature vulnerable to interest group lobbying

7. Separating roles and responsibilities towards budget objectives
Need to balance right to approve with oversight with sound management of public finances
Weak powers lead to weak legislatures, poor accountability and break-down of ‘rule of law’ in public finance
Unfettered powers may tip balance towards padding budgets
Ex post accountability arrangements insufficient
No bite, legitimacy and voice of parliament
Too little too late
Greater role means that legislature must either be involved in government budgeting process, or formulate own budget
Trade-offs between involvement in different stages of budget process

8. Mechanisms to manage role of legislature
No new spending / taxes
Substantive limits to amendments
Pay as you go
Fiscal rules
Selective limits / changes
Procedural limitations
Executive veto (full or partial)
Timing and information sharing
Party political based procedures
Voting rules and legislative processes and rules

9. Institutional arrangements for effective legislatures
Legal framework
Cooperative arrangements
Political space
Analytical Capacity
Legislative process and structure
Legislative budgeting rules
Information

10. What opportunities? Partnership and changing role of the centre
Medium term frameworks
Influence, negotiation and ‘powers in the last resort’
Performance orientation
Setting, approving performance targets
Reviewing performance