Members of the PBO network may be interested to read a summary of a discussion from the recent PBO E-Learning Course. The discussion centred on the proposition that PBOs are more necessary in budget-making legislatures? According to Norton's typology (1993), as adapted by Wehner (2004), a budget-approving legislature lacks the authority or capacity (or both) to amend the budget proposed by the executive, and they approve whatever budget the executive presents to them. A budget-influencing legislature has the capacity to amend or reject the executive’s budget proposal but do not have sufficient capacity to formulate a budget of their own. A budget-making legislature has both the legal authority and the technical capacity to amend or reject the executive’s budget proposal and to substitute a budget of its own. The summary is reproduced below.
There was some general consensus in this discussion that, in fact, PBOs are necessary in all legislatures, be they budget-approving, budget-making or budget-influencing. There are several reasons for this. First, by establishing a PBO in a legislature which has a merely budget-approving function impetus may be created for increasing the role of the legislature in the budget process. Having independent and objective information at the parliamentarians’ disposal may encourage them to be more assertive in their scrutiny of the budget and develop to become budget-influencing or budget-making.
Furthermore, PBOs have functions beyond advising the legislature in its scrutiny of the budget. These include, for example, providing long term economic forecasts, fiscal estimates and identifying macroeconomic trends. Such functions are useful for all legislatures regardless of the extent of their role in the budget process. Even the information produced explicitly related to the budget analysis is important: budget-approving legislatures still need to have access to an understanding of what it is that they are approving. Therefore there is a significant benefit to be had from PBOs even in budget-approving legislatures. It is also important to note that the audience of PBOs’ outputs is not only parliamentarians but also the wider public. This function of increasing the transparency and simplicity of the budget process and raising awareness amongst civil society can lead to further improvements in the budget process, including extending the role of the legislature.
Finally, the existence of a PBO in a budget-approving legislature can, it was argued, have a deterrent effect on the executive. This causes the executive to be more careful in its budget estimations and preparation as it will be aware that it will be reviewed by an independent organisation. There is evidence of this deterrent effect in Canada and the Canadian PBO also makes fiscal estimates and economic trend forecasts, which enable parliamentarians and the general public to better evaluate the claims and proposals of the executive. For these reasons, many participants disagreed with the claim that PBOs are more necessary in budget-making legislatures.
However some contributors doubted the necessity of a PBO in a budget-approving legislature. It was pointed out that a legislature that must simply rubber stamp the executive’s budget proposals has little need for the advice on scrutiny that a PBO provides. It is, from this perspective, only budget-making and budget-influencing legislatures that can benefit from a PBO as they are able to use the expertise provided to enact change. Regardless of this, the general feeling from this discussion is that for several reasons PBOs can be useful to all legislatures, regardless of whether they are budget-approving or budget-making.