Brazilian Congress: Time to Change the Budget Process

Posted by Helio Tollini[1]

Brazil is a country where the Congress influences the budget process significantly, both in terms of legislation and allocation of resources. The Congress undoubtedly contributed to the huge transparency improvements in the budget process over  the last twenty years. Brazil now ranks eighth in the world in the 2008 International Budget Partnership transparency evaluation. One of the strengths of the Brazilian system is the existence of specialized budget advisors in both houses of Congress (House of Representatives and Senate), which are selected through a competitive public contest. It is widely recognized that these support officials, like the Congressional Budget Office in the USA, are influential in the annual discussions of the draft budget guidelines and the budget law.

However, two less appealing features of the legislative appropriation process always strike international observers: the approval by Congress of more than ten thousand amendments each year, and the existence of a specific “reserve” for legislative allocation of about US$ 2 billion, which finances part of the approved amendments. In fact, each congressman receives a “financial quota” for his/her individual or collective amendments. While internationally uncommon, the latter process has provided some order to the pork barrel politics which seems to be inevitable in countries with strong legislative input in the budget process.

I discuss these and other issues in a paper recently published in the OECD's Journal on Budgeting, Vol. 9 (2009): Reforming the Budget Formulation Process in the Brazilian Congress.