Parliament’s role in budgeting

In all OECD countries, the legislature has a traditional role in authorising public expenditures and revenue-raising. Over recent years, there has been a trend towards stronger engagement of the parliament across the full budget cycle, with more countries reporting an ex ante role. In many cases this is related to the division of the budgetary cycle into a fiscal policy semester, followed by a resource-allocation (budgeting) semester, which allows for a sequential engagement by parliament and its committees at various phases in other cases, the ex ante engagement relates to signalling of policy choices and priorities. There is also a marked tendency towards parliamentary approval or discussion of medium-term budgetary frameworks, driven in part by the evolving fiscal framework within the European Union. As to the powers of the legislature, more than half of OECD countries report wide-ranging powers to amend the budget but such powers are not widely used in practice, in part because the government’s authority over the budget is usually a ‘confidence matter’ which can precipitate a change of government. Two-thirds of OECD countries have a single budget committee in parliament the sectoral committees, which are most closely linked to policy issues in their areas, generally have weak links to budget policy-making – even on issues such as performance budgeting where a stronger sector-specific role might be envisaged. About one-third of OECD legislatures have a specialist research unit for budget analysis, and Parliamentary Budget Offices have become much more prevalent across the OECD.