Making the Most of the Budget Cycle: The Budget Approval Phase
By Jay Colburn, International Budget Partnership— Jun 20, 2017
This post is the second in a series looking at the budget cycle and how civil society organizations can most effectively engage at each stage of it.
In the first post in this series, we discussed the first phase of the budget cycle during which the executive branch of government formulates a budget proposal and submits it to the legislative branch for deliberation and enactment. We explored a variety of ways in which civil society organizations (CSOs) and citizens can offer their expertise and opinions into the proposal on how public funds will be raised and spent. Along these lines we will now turn to the next phase in the cycle, the budget approval stage.
What Happens at the Budget Approval Phase?
The budget approval, or enactment, phase is when the Executive’s Budget Proposal is submitted to the legislature, where the members may then debate, alter, and approve the final budget. Frequently, it is at this point that the key issues in the debate over the budget are established. Ideally, the legislature has the authority, resources, and time to review the executive’s proposal and make amendments. In practice, the legal framework for the budget process or the political system in a country may limit the impact the legislature can have on the budget.
Many legislatures are also hampered by their lack of staff and budget expertise. Nevertheless, these constraints do not close off all options. In most countries, legislators can engage in budget issues by holding hearings, establishing special committees, requesting information from the executive branch, or having public debates. The process ends when the budget is adopted by the legislature, either intact or with amendments. The budget also can be rejected by the legislature and, in some countries, replaced by the legislature’s own proposal. The outcome document from this approval process is known as the Enacted Budget.
Influencing the Budget During the Approval Phase
As this process culminates in the enactment of the final budget law, this is often the point when media attention is greatest, offering CSOs valuable opportunities to advocate for their issues. By providing independent analyses of the Executive’s Budget Proposal when information is in high demand, as it is during the approval process, and engaging in legislative deliberations, CSOs can inform the debate over the budget and influence its direction.
In many countries, the legislature has very limited analytic capacity to allow them to rigorously scrutinize the policies and assumptions in the budget proposal. CSOs with technical skills can contribute to the approval process by analyzing the revenue and expenditure policies being proposed and provide this analysis to legislators to help them more clearly understand issues related to the budget and make better decisions. For example, each year the Centre for Budget and Governance Accountability (CBGA) in India publishes an in-depth analysis of the national budget within 24 hours of the presentation of the budget in parliament. Such quick-fire analyses can help civil society and the media better understand the big picture as well as specific proposals for allocations for particular sectors or issues. Coming in early also helps to influence the direction of the debate over the budget. CBGA also developed an online budget tool that uses interactive graphics to explore the various priorities and proposals in the budget in a more visual way. Read more about how CBGA was able to quickly develop this tool using freely available sources.
In countries where the legislature plays a more active role in the budget process, nongovernmental groups are frequently asked to serve as expert witnesses at hearings and to comment on budget proposals in other ways, as well. Their analyses and testimony can influence the debate, highlight important issues about the impact of budget proposals on the poor, and even build the capacity of legislatures to analyze budgets and improve the quality of budget hearings and reports. Such public hearings and parliamentary discussions include opportunities for public engagement in a variety of forms. In Germany, the parliament’s budget committee holds public hearings in which testimony from economists, trade associations, labor unions, employer federations, and civil service employee associations, among others, is heard. The Georgian parliament’s committee meetings on the budget are open to the public as well as aired on television and radio. And in Trinidad and Tobago, citizens and CSOs are invited to respond and exchange to publicly aired parliamentary debates and proceedings through call-in television programs and social media platforms.
In Brazil, formal institutions called Public Policy Councils provide a different, more involved avenue for dialogue between government and civil society across the local, state, and federal levels during the budget approval phase. These councils are designed to connect citizens and policy experts to specific line ministries and function to monitor the proper allocation of resources. Thematic conferences are held regularly and attended by citizens and community leaders. At these conferences, policy proposals are discussed and voted on with the objective of providing public input into policy priorities.
While passing a budget law is a serious undertaking, in the end, budget decisions enacted by the legislature are only meaningful if the money is actually spent as intended. So, what happens after the budget proposal is considered, analyzed, amended, and enacted? Stay tuned for the next post in this series that will focus on the budget execution stage in the budget cycle.
Additional examples with greater detail of how civil society and the public can engage with the government in the approval process each year can be found by exploring the data on public participation from the Open Budget Survey 2015. The Global Initiative for Fiscal Transparency has also recently released a guide and set of case studies on public participation in fiscal policy. For further guidance on civil society participation in the budget process, review some of IBP’s resources and guides, including: