In presidential systems, the legislature is a powerful agenda setter and decision maker. In ‘Westminster’ parliamentary systems, cabinet ministers have strong budgetary control. This IMF working paper examines the budgetary powers of the legislature under different forms of government. It asks if it is possible to rank in unambiguous order the powers of presidential and various types of parliamentary systems. Are budgetary powers linked to the degree of separation of political powers in government, and if not, what other factors explain the differences?
Unlike presidential systems of government, parliamentary systems have no clear-cut separation of powers between the legislative and the executive. This is partly because government survival is dependent on parliamentary support. For the five different forms of government identified (Westminster, non-Westminster Parliamentary, Parliamentary Republic, Semi-Presidential and Presidential) there is a broadly linear relationship between the separation of political powers and legislative control over the executive.
To assess whether the same relationship exists in budgetary terms, an index of the legislature’s budgetary powers is established. The
criteria include the establishment of a medium-term budget strategy, power to amend the annual budget, time allowed for discussion of the budget, technical support in the legislature, and restrictions during budget execution.
Against the legislature’s budgetary authority index, the linear relationship appears to break down. Whereas legislative authority over the budget is strong in a presidential system, and particularly weak in Westminster parliamentary systems, firm conclusions cannot be reached regarding the intermediate forms of government. Countries with similar degrees of separation in political power do not necessarily display a similar pattern in the budgetary powers of their legislatures. Political and legal factors, as well as organizational and institutional arrangements are important for explaining why a linear relationship does not hold. Differences are due to a number of factors, including:
- The Political and Electoral System. In a two party political system, the ideologies of parties are more likely to be cohesive than in a broader party system (such as a coalition government formed under a proportional representation electoral system), and a strong centralised budget authority is likely to emerge. When there is a minority Government there is likely to be substantial dialogue between parties to ensure the budget is passed, increasing the power of the legislature.
- Unicameral or bicameral legislatures. When equipped with budget approval authority, a second chamber of the legislature unequivocally strengthens its budgetary powers relative to those of the executive.
- Constitutional or legal restraints. Legally-binding constraints may be imposed on the executive branch. In parliamentary systems, governments generally initiate laws, thereby enabling the strengthening of their own budgetary powers. Presidential systems are more likely than parliamentary systems to adopt laws with quantitive fiscal rules; they also have a longer time period for debating the budget.
- Establishment of a Budget Office at the legislature. Strong, independent legislatures may create a non-partisan budget office, where alternative budget analyses and scenarios may be proposed.
Country-specific factors may also affect the budgetary powers of the legislature:
- Inheritance from former ruling powers. Several countries model their budget systems on those of former foreign-controlling powers (for example, in Anglophone and Francophone Africa).
- Specific constitutional provisions may prevent a strong legislature. For example, Mexico’s Constitution prohibits consecutive congressional terms by members, thwarting the development of legislative budgeting expertise.
- The Royal Prerogative. This is the case in the UK, which has constitutional understandings from an earlier age that provide the executive with unique powers. For the budget, it is a strong source of Treasury control over expenditures.
