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November 21, 2011

Parliamentary Powers and Capacities

Posted by Mohamed Moindze, international consultant

The budget is the instrument used to implement the most important public policies. It affects the lives of all citizens. However, the budgetary process has for many years been under the exclusive control of government. Yet there is no way to achieve good governance of public finances (needed to implement public policies) without effective external control of public finances. In the past, the public’s involvement in the budgetary process (as well as the involvement of parliaments) was not considered useful. Some suggested that such participation could be dangerous since it might undermine a country’s budgetary stability by sacrificing the macroeconomic equilibria.

Increasingly over the last twenty years or so, the developing countries have been undertaking courageous reforms to allow national parliaments to play the eminent role that constitutions grant them in the management of public affairs. This transition is occurring in the context of a general trend toward democratization and good governance. This increased role of parliaments consists of debating the broad outlines of the course that countries wish to take, thus helping to define them, to enact laws, to allocate resources to government for implementing policies, and to control their application.

Unfortunately, in many developing countries, this control often continues to be inadequate. This may be the result of numerous factors (institutional, technical, and historical) that limit parliamentary powers and capacities. The legal framework, such as the constitution and organic laws on the budget law in many countries, outlines the way in which parliament can involve itself in the budgetary process. Under parliamentary regimes where the members of parliament and government are intimately linked (such as in the Commonwealth countries), the power to amend is used prudently since significant changes to the government’s budget proposal could be interpreted as a vote of no confidence in the government. Under such systems, the government and the majority coalition parties in the parliament consult each other prior to publication of the budget proposal (particularly when this majority is not seamless). Under presidential systems, the legislature has unlimited power to amend the budget proposal. In some countries based on Napoleonic law, such as France and most of the countries of French-speaking Africa, amendments may be introduced in the government’s budget proposal provided they do not change the proposed deficit.

Even if it is the parliament that holds the budgetary power based on the principle of authority, the government has regulatory power to change the amount of the budgeted funds as well as the distribution thereof. It may modify parliamentary authorizations, whether by decree or by order. These changes are not without effect on the “supremacy” of parliament in the budgetary process and it is for this reason that this regulatory power to modify the budget that has been voted on is often bound by an upper limit on the amount of the funds that can be transferred.

It should be stipulated that nearly all African parliaments have had legal power to control the budget since the late 1990s with the introduction of multi-party government. However, these powers are not sufficiently utilized because parliaments have few resources and thus insufficient capacity to accomplish their tasks. In the developing countries, the inadequacy of resources has negative repercussions in terms of the balance of power with the executive branch. The work of parliamentary oversight is less rigorous given that the members of parliament must rely on the experts assigned to them by the government and whose first allegiance is to the government. It is very easy for the government to purely and simply shape the parliament so as to have its proposed budget passed or defeat any control. We should not forget than even when the honorable members of parliament are well-versed in their specific areas of competence, they are obviously not equally well-versed in the area of public management, much less on budgetary matters. Yet budgetary control demands solid comprehension and analytical capabilities. As a result, the budgetary control that is exercised does not live up to the expectations of the public.

We should note that many studies conducted by international financial institutions (the World Bank, the OECD, etc.), African regional initiatives such as the PSA (Strategic Partnership with Africa) and CABRI (Collaborative Africa Budget Reform Initiative), and other global initiatives such as the OBI (Open Budget Initiative) indicate that the quality of public finances governance in Africa is compromised by insufficient participation by the parliament in budget preparation and in the budgetary supervision process. If these deficiencies and many other related deficiencies are not corrected, national budgets will not be in accord with citizens’ aspirations and, consequently, governments will probably not make much progress in achieving their stated public policy objectives. Thus, establishing solid parliamentary institutions with good procedures and sufficient capacities for exercising budgetary supervision is a priority for improving the governance of public finances.

The attached document addresses, first of all, the role and powers of parliament in a democracy, the reasons for parliamentary participation in the budget process, and the influence of parliament and its members in this process. Based on proven international practices, it then provides practical advice for the national authorities of the developing countries engaged in the work of improving public governance, particularly those that seek to strengthen parliamentary powers and capacities in the area of budgetary control. This means in particular updating the legal and institutional framework according to international recommendations (PEFA, OECD, IMF), introducing training programs to develop the capabilities of all parliamentarians (and particularly finance committee members), strengthening parliamentary autonomy by making available to parliaments a pool of assistants who are experts in public finance, and improving citizen participation in the budgetary process.

We must also recognize that improving the effectiveness of parliament in the budgetary process cannot be limited to “purely” technical aspects as it is extremely tied to the method of governance which is, in turn, profoundly marked by the country’s institutional and political framework. As a result, the development of national plans to strengthen parliamentary capabilities in budgetary matters always comes up against political and institutional constraints that must be taken into account in order to introduce “viable reforms.” These reforms will have greater chances of success when they enjoy the support of the political class and that of civil society and benefit from a transparent and participatory process as well. Like any far-reaching reform, because the process of strengthening parliament’s capabilities is extremely complex and long-term, the expected benefits are obtained over the medium or long term through a coordinated and well-monitored policy and by drawing all the while on the lessons of experience.

Download Le rôle du Parlement dans le processus budgétaire

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Comments

As Mohamed recognises, the budget process (as with all of public financial management) is a deeply political process and has complex variations. Donors and their consultants should not consider that there are easy answers or that they even know the answers. At best they should know the questions to ask, and Mohamed's paper will help them with this.

The key to parliamentary reform is to understand the current structures and approaches and to strengthen and deepen these. There are many approaches and the way that parliament operates varies greatly from country to country as Mohamed demonstrates.

Recently I noticed that Denmark has its own approach to the Public Accounts Committee as its members are not necessarily members of parliament. They are paid officials appointed by each of the major parties in parliament, but are not necessarily politicians. This may be a model that other countries could consider.

Similarly with Cameroon, where I am at the moment, the Supreme Audit Institution is the Supreme State Control Body (an Inspection générale d’Etat) rather than the Cour des Comptes (Accounts Court). This later body was only created relatively recently in Cameroon and has little power or influence.

Mohamed's comprehensive paper should assist many parliamentarians to understand this varied international practice. It should also encourage consultants and donors to try and really understand the countries where they are working and so provide recommendations which build on the existing foundations.

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