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February 28, 2008

Central and Eastern European Parliaments:

Budgeting, Oversight, and Paths of Change

By Mario Pessoa

The IMF’s Fiscal Affairs Department promoted a seminar last February 13, 2008, with Prof. Dr. David Olson  to discuss parliamentary oversight particularly in relation to the budget process. The emergence of new democracies in Central and Eastern Europe have created an unrivaled opportunity to examine the transition of legislatures from non-democratic to democratic regimes. The seminar explored the parliament oversight in relation to budget approval and execution in some Central and Eastern European countries (Poland, Czech Republic, Hungary, Slovenia, Russia, and Moldova). 

While some parliaments, mainly in Central Europe, became stable democracies at the end of the initial decade, others in Eastern Europe became dominated by a single presidential party.  These contrasting results can be traced through four paths of change (constitution and party system, members, internal organization, and executive relations), with major consequences for parliamentary oversight and budgeting capability. 

Dr. Olson observed that despite a dramatic change from a communist regime to a democratic one, some relevant characteristics of the previous parliamentary organization have remained. In the case of Poland, parliamentary members had a very realistic and concrete debate on the implementation of some policies and projects even during the single party regime. This tradition continued, and enabled strong parliamentary commissions to emerge that in the current environment influence and demand changes in government policies.

Other research has pointed to the correlation of multi-polar executives with dispersed authority with multi-polar parliamentary decision processes as well. Conversely, a centralized executives correlates with a centralized parliament decision-making structure regarding the budget process, as is the case in Russia and Moldova. Even in some circumstances in which parliamentary approval of the budget looks like perfunctory, the debates and discussions can contribute to the review process and oversight of the government.

One of the conclusions is that even in authoritarian systems there is space for parliamentarians to ask small, practical questions on why some policies do not work well, and press the government and the authorities to act. And in democratic regimes the role of the parliament is very influential regarding the way the budget is approved and executed.

The figure below shows the political changes in parliamentary organization that have taken place in the last decades. For Moldova and Russia the direction was to a more presidentially dependent parliament; for Poland a more democratic pluralistic parliament; finally in Hungary the shift was from a multi party parliamentary system to a democratic majoritarian parliamentary system. Which system will show more effectiveness in budget oversight is something to be further studied.

These and other findings are reported in “Post-Communist and Post-Soviet Legislatures: Beyond Transition,” in the March 2007 special issue of  The Journal of Legislative Studies, 13:1, edited by Philip Norton and David M. Olson.  Work is now underway on the second decade of post-communist parliaments.  The first two books are The New Parliaments of Central and Eastern Europe, edited by David. M. Olson and Philip Norton, 1996, and Committees in Post-Communist Democratic Parliaments: Comparative Institutionalization, edited by David M. Olson and William E. Crowther, 2002.

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