Accountability Institutions by Joachim Wehner

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Performance Budge/ng and Parliamentary Oversight OECD SBO Performance and Results Network Paris, 25 November 2014 Joachim Wehner Associate Professor in Public Policy London School of Economics and Poli/cal Science

description

Presentation by Joachim Wehner at the 10th annual meeting of the Senior Budget Officials Performance and Results Network held on 24-25 November 2014. Find more information at http://www.oecd.org/gov/budgeting

Transcript of Accountability Institutions by Joachim Wehner

Page 1: Accountability Institutions by Joachim Wehner

Performance  Budge/ng  and  Parliamentary  Oversight  

OECD  SBO  Performance  and  Results  Network  Paris,  25  November  2014  

 Joachim  Wehner  

Associate  Professor  in  Public  Policy  London  School  of  Economics  and  Poli/cal  Science  

 

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 ‘If  the  House  of  Commons  by  any  possibility  lose  the  power  of  the  control  of  the  grants  of  public  money,  depend  upon  it,  your  very  liberty  will  be  worth  very  liNle  in  comparison.’  

 

William  Ewart  Gladstone,  1891  

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Evolu/on  of  parliamentary  control  

•  The  original  func/on  of  parliaments  was  to  consent  to  taxa/on,  later  

complemented  by  control  of  its  use  through  detailed  appropria/ons.  

•  Nowadays,  every  fully  democra/c  cons/tu/on  includes  a  requirement  

for  legisla/ve  approval  of  taxes  and  public  spending.  

•  In  some  OECD  countries,  management  reforms  over  recent  decades  

have  radically  altered  the  nature  of  parliamentary  control.  

•  Appropria/on  structures  reflect  the  extent  to  which  decisions  focus  on  

results,  and  the  degree  of  relaxa/on  of  central  input  controls.  

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From  money  to  outcomes  

Money Inputs Outputs Outcomes

O r g a n i s a t i o n

Economy Efficiency Effectiveness

Other influences

Source:  Ellis  and  Mitchell  (2002:  128).  

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Source:  Extract  from  the  Consolidated  Appropria/ons  Act,  2014  [United  States].  

Appropria/on  structure  (1)  -­‐  United  States  

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Source:  Extract  from  the  Appropria/on  Bill  2014  [South  Africa].  

Appropria/on  structure  (2)  –  South  Africa  

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Source:  Extract  from  the  Appropria/on  (2014/15  Es/mates)  Act  2014  [New  Zealand].  

Appropria/on  structure  (3)  -­‐  New  Zealand  

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Source:  Extract  from  the  Appropria/on  Bill  (No.  1)  2014-­‐2015  [Australia].  

Appropria/on  structure  (4)  -­‐  Australia  

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Source:  Extract  from  the  Supply  and  Appropria/on  (Main  Es/mates)  Act  2014  [United  Kingdom].  

Appropria/on  structure  (5)  –  United  Kingdom  

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Challenges  for  legislatures  (1)  

•  Tradi/onal  input  control  via  detailed  line  items  is  based  on  scru/ny  by  

financial  commiNees.  

•  Financial  commiNees  may  be  reluctant  to  give  up  their  tradi/onal  

approach  to  scru/ny.  

•  A  focus  on  results  requires  a  greater  role  for  sectoral  commiNees  with  

the  necessary  policy  exper/se  (educa/on,  transport,  etc).  

•  Sectoral  commiNees  may  be  reluctant  and/or  lack  capacity  to  engage  

with  performance  data  and  public  spending  informa/on.  

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Challenges  for  legislatures  (2)  

•  A  performance-­‐based  system  requires  strong  ex  post  scru/ny  to  assess  

whether  promised  results  were  aNained.  

•  Not  all  parliaments  have  audit  commiNees  that  can  rely  on  auditors  

with  the  capacity  to  carry  out  performance  audits.  

•  Any  adjustments  to  tradi/onal  scru/ny  prac/ces  need  to  be  compa/ble  

with  the  incen/ves  of  legislators.  

•  Legislators’  incen/ves  may  be  such  that  short-­‐term  resource  control  is  

preferred  to  a  more  medium  and  long-­‐term  assessment  of  impacts.  

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Challenges  for  legislatures  (3)  

•  Tradi/onal  parliamentary  scru/ny  is  based  on  the  principles  of  

annuality  and  specifica/on  (Sundelson  1935).  

•  Results-­‐based  appropria/ons  require  a  relaxa/on  of  long-­‐standing  

budgetary  principles.  

•  Financial  scru/ny  mechanisms  evolved  to  hold  government  and/or  

specific  individuals  to  account.  

•  With  outcomes  it  is  difficult  or  impossible  to  clearly  aNribute  

responsibility  for  failure  or  success  in  their  achievement.  

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 Inputs  

 Outputs  

 Outcomes  

Focus  of  scru0ny   Control   Efficiency   Policy  

Appropria0on  detail   High   Moderate   Low  

Execu0ve  flexibility   Low   Moderate   High  

Essen0al  commi<ee(s)   Financial   Financial  /  sectoral   Sectoral  

Time  horizon   Fiscal  year   Fiscal  year   Varied  /  mul/-­‐annual  

A<ribu0on   Possible   Possible   Difficult  or  impossible  

Summary  of  implica/ons  for  legislatures  

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Concluding  remarks  

•  A  country’s  choice  of  appropria/on  structure  reflects  the  legisla/ve-­‐

execu/ve  balance  of  power  and  is  inherently  poli/cal.  

•  Performance-­‐based  appropria/ons  require  a  poli/cal  context  where  

legislators  are  willing  not  to  exercise  detailed  input  control.  

•  It  is  unclear  whether  a  loss  of  detailed  ex  ante  input  control  can  be  

compensated  by  greater  ex  post  accountability  for  performance.  

•  Outcome-­‐focused  scru/ny  in  the  annual  budget  process  is  complicated  

by  problems  of  aNribu/on  and  non-­‐aligned  /me  horizons.