II.COMPARISONS OF OECD COUNTRY LEGAL FRAMEWORKS FOR BUDGET SYSTEMS

having to go through all the formal steps of law making. Since such semi-legal arrangements work, there is no perceived need to change laws or introduce new laws. Unnecessary formalism is avoided. Revision of the law would be perceived as limiting the flexibility to make further changes in a consensual way. In Denmark and Norway, what counts is that essential rules pertaining to budget processes are agreed to and known by all the actors. (It appears to be immaterial that the “regulations” are issued by the legislature in one country and the executive in the other.) Unlike continental European countries, in Nordic countries there is no constitutional court to safeguard the constitutional requirements for budgeting. The public is also well informed due to the longstanding emphasis on openness and availability of information – another cherished value. Finally, government ministers are individually accountable to Parliaments, which have strong powers to receive information and examine the performance of ministers. In the case of Denmark, the Constitution allows Parliament to impeach ministers for maladministration. This contrasts with some European countries where ministers are sheltered from prosecution and court trials for budget mismanagement.3

There is a clear divide between those countries that perceive that “law is definitely required” to implement changes in the budget system and those that act on the basis that “law is not needed” or that “law may be required, especially if it enhancing executive budgetary powers”. Reforming budget systems is easier in the latter category of countries than in the former – those shown to the right of the solid line in Figure II.2. Westminster and Nordic countries are not bound by an engrained legalistic way of thinking based on the importance of constitutionalism. Law comes as an afterthought, rather than as the necessary prerequisite and leading component for driving the budget reform process.

2.2. Budget reform: when is law required?

Whereas law has been used for introducing budget reforms in some countries, others have introduced budget reforms without the use of law. In general, a law is less likely to be used in the Westminster and Scandinavian countries than in continental Europe, Asian OECD countries, and the United States. Nonetheless, in Westminster countries, law has in fact been used quite extensively in introducing various reforms (Table II.2). This largely reflects the far-reaching nature of budget reforms adopted in these countries, rather than an introduction of a new legalistic way of thinking. It also indicates that these countries’ executives are voluntarily proposing new laws, especially in the area of budget transparency, to enhance their own inherited or delegated powers.

Law may be used primarily to allow reforms to be introduced in the future. Alternatively, a law may confirm changes that are underway or have