Comparative Budget Process in Westminster Parliaments: A Lesson for Effective Fiscal Oversight

Abstract

A parliament holds the constitutional power of the purse. As the guardian of the public purse, parliaments have the right to oversee the budget process in its totality. Parliament must ensure that the revenue and spending measures it authorizes in the budget are fiscally sound, match the needs of the population with the available resources, and are implemented properly and efficiently. Legislatures in both developed and developing countries are seeking to strengthen their role in the budget process. Parliament is responsible for monitoring how the government raises money, how much and on what it spends that money, and what consequences that brings forth to the economy of the country. In this context, parliament must exercise oversight before the money is appropriated (ex-ante control) and monitor public expenditure after money has been spent by the executive agencies (ex-post control). A merely token involvement in the budget process relegates the legislative power of the purse to the realm of constitutional fiction. Is it possible for parliaments in the Westminster system to exercise continuous oversight throughout the entire budget process? It was once common wisdom in systems derived from the Westminster model that budget-making was an executive function and parliament had to simply approve it, with or without amendment. In the early decades of the twenty-first century, however, this conception has widely changed. Some parliaments exercise significant oversight throughout the process, while others exercise minimal oversight. This chapter analyzes the budget-making process of a few developed Westminster democracies and compares it to the case of Bangladesh. The findings suggest that the budget process in Bangladesh is less open and ex ante, and that Parliament has little scope to be involved in it. Ex-post oversight is also limited by systemic constraints. Changes in the ROP could make a substantive improvement in the budget process and create room for exercising effective fiscal oversight on the public purse.