I.COMPARATIVE LAW, CONSTITUTIONS, POLITICS AND BUDGET SYSTEMS

unicameral system where fewer players are involved at the parliamentary stages; 2) the degree of proportional representation, which may weaken the powers of a government relative to a first-past-the-post electoral system. Some countries (e.g. Germany) have cut-offs that exclude very small parties from Parliament, whereas others (e.g. Italy) have had more complete proportional representation that allows more political parties, including the very small, to have seats in Parliament; and 3) the impact of a direct voting system for a president on the effectiveness of the separation of powers (e.g. in France in times of cohabitation,18 the President of the Republic has limited capacity to influence the executive’s draft budget).

●The weight and influence of the bureaucracy supporting the executive. The executive’s central budget policy-making body – the Cabinet of ministers – is usually supported by a strong central Ministry of Finance (or equivalent) and thousands of highly-trained civil servants who, inter alia, prepare and implement annual budget laws. Such a body of staff contrasts vividly with the meagre resources generally available to Parliaments – a few hundred elected parliamentarians assisted by a few non-political staff to assist work on parliamentary committees, including those that examine draft annual budgets.

●The role of the judiciary, notably in limiting the legislature’s powers.

Notes

1.In England, for example, the principle that grants to the Crown (“executive”) should be made by the Estates of the Realm (forerunner of “Parliament”) and the right of inquisition into the application of (royal) funds was established in the 14th century (Bastable, 1892, Chapter VI).

2.This study does not discuss “soft law” versus “hard law”, which has generated considerable debate in Europe with respect to EU laws/directives and domestic law in EU countries (Abbot and Snidal, 2000).

3.A major reason for the relatively large number of budget-related constitutional provisions in Finland is `because it was decided, when drafting the new constitution (adopted in 1999), to merge the 1928 Parliament Act (with amendments) with the 1919 Constitution Act (with amendments). In contrast, in Sweden the Parliament (Riksdag) Act is not part of the four laws composing the Swedish Constitution (see the Nordic countries case study).

4.INTOSAI is the International Organization of Supreme Audit Institutions. Information on the role of INTOSAI role may be found on its Internet site: www.intosai.org.

5.Pizzorusso (1988) emphasises the interface between law and political studies; a companion book by Viandier (1988) focuses on the function of statutes – principally in private and public law – as the source of law and the object of interpretation.

6.See Footnote 107 of Pizzorusso (1988), which cites some 20 of the most influential comparative law studies.

I.COMPARATIVE LAW, CONSTITUTIONS, POLITICS AND BUDGET SYSTEMS

7.Marxist law, laws based on religious values (e.g. Islamic law) or on strong cultural factors (e.g. the Far East, where law is regarded as an instrument to be avoided by a just man) have also been identified. Since the collapse or weakening of communism, marxist law has been, or is being, replaced by “western” law (e.g. for China, see Peerenboom, 2002).

8.One could attempt to refine the characteristics and disaggregate “civil law” countries into the Romano, Germanic or Nordic models (see, for example, Zweigert and Kotz, 1998). Other authors (e.g. Thuronyi, 2003) have presented alternative “family” classifications for these countries differently (e.g. the French, Northern European, Southern European families).

9.Two examples are provided where such challenges have occurred. 1) France. Article 58 of the 2001 Organic Budget Law required the external audit office’s workplan to be reviewed by Parliament. The Constitutional Council judged this to be unconstitutional since the Constitution establishes the independence of the Court of Accounts from the legislature. 2) The United States. The line-item veto of the President of the United States, embodied in the 1997 Budget Enforcement Act, was rejected in 1998 by the Supreme Court as unconstitutional, as the Court decided that the act allowed the President to unilaterally amend or repeal parts of duly enacted statutes by using line-item powers.

10.In Germany, the Constitutional Court in 1989 criticised the loose way in which “investment” is defined in Article 115 of the Constitution, which allows borrowing for investment purposes.

11.Approximate numbers, since based on the numbering in constitutions, including repealed articles or additions of new sub-articles.

12.The 1958 Constitution (Article 34) specifies that annual budget laws, which determine the resources and obligations of the State, shall be adopted according to conditions as specified in an organic law (loi organique, see www.assemblee-nat.fr/ connaissance/constitution.asp#art55).

13.See Article 109 of the 1949 Basic Law (Grundgesetz). Conditions associated with the adoption of the budget framework law are more specific than those for general framework laws. Framework laws may or may not contain directly applicable provisions. The Basic Law Article 75(2), which states that “framework legislation may contain detailed or directly applicable provisions only in exceptional cases”, was adopted in 1969, repealed in 1971 and re-inserted in 1994.

14.Codification in continental European countries is defined more comprehensively, as the systematic assembling of innovative dispositions founded on common principles. It is distinguished from consolidation (see Viandier, 1988, pp. 37-58).

15.Immediately following legislative elections, the Storting chooses one-fourth of its members to form the Lagting and the remaining three-quarters become members of the Odelting.

16.Prerogative powers originally belonged exclusively to the Crown. However, as ministers took responsibility for actions done in the name of the Crown, prerogative powers were delegated to ministers. Parliament was not involved with this transfer of power. Such prerogative powers may be described as “ministers’ executive powers” (House of Commons, 2004, p. 8).

17.The 1958 Constitution did not originally include a directly elected president. This was decided by referendum in 1962.

18.Cohabitation is when the elected president is of a political persuasion different from the government.

I.COMPARATIVE LAW, CONSTITUTIONS, POLITICS AND BUDGET SYSTEMS

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ISSN 1608-7143

OECD Journal on Budgeting – Volume 4 – No. 3 © OECD 2004

PART II

Comparisons of OECD Country

Legal Frameworks for Budget Systems*

This chapter compares the extent to which law is used to specify budget players and processes, with a particular focus on 13 OECD countries. Although budget system laws serve differing purposes, new budget-related laws are often adopted to introduce budget reforms. Differences in the laws underpinning the main budget players – especially legislatures, the political and non-political executive, and external audit offices – are found to be wide. Important differences are observed in the extent to which law is used for specifying each stage of the budget processes: preparation, presentation, adoption (by the legislature), execution, government accounting and fiscal reporting arrangements. Comparative “models” or tables are provided for various budget-related issues and processes, including: budget timetables (legal requirements); fiscal rules; medium-term budget frameworks; the nature, structure and duration of appropriations; annual and in-year accounts, as well as for specific budget players such as parliamentary budget committees or external audit offices.

*This part incorporates the comments of officials from the Ministries of Finance (or equivalent) of Canada, Germany, Norway, Sweden and the United Kingdom who are acknowledged at the beginning of each of those country case studies, as well as useful comments from Kazuhiro Minamitsu (Ministry of Finance, Japan), and Céline Allard and Etibar Jafarov (European Department of the International Monetary Fund).