Recent standards for reforming budget system laws
Recent standards for reforming budget system laws

Summary/Abstract: The outcomes of the budget process depend heavily on whether there are clear rules for formulating, executing, and reporting on annual budget, as well as clear statement of medium-term fiscal policy objectives. These rules are usually specified in a budget system law (BSL)-or set of laws-that provides guidance for the different steps of budget processes and specifies the budget responsibilities of the key actors.A BSL is the formal expression of rules that govern budgetary decisions made by the legislature and the executive. The objectives of the formal rules are to specify what budgetary processes are prescribed in law, who is responsible, and when key budgetary steps should be taken. The legal basis for budgeting varies considerably across countries-a reflection not only of differences in the budget system, but also of differences in political, administrative, legal, and cultural arrangements. At one extreme, a few countries do not have a formal BLS apart from the constitution. At the other extreme, a few countries (e.g., the United States) have many laws relating to the budget system. Most countries lie between these two extremes; typically, there are only a few laws that specify national budgeting arrangements.Given the diversity of practices regarding the role that law plays in providing a framework for the budget system, a “model law” is not proposed. Rather, each country’s specific institutional, legal, and cultural features need to be considered prior to drafting amendments to an existing BLS or preparing a new BLS to cover specific aspect of budget processes.This paperwork is divided into five parts. First, the reasons for adopting a new law for the budget system are presented. Second, the legal context for the new law is examined. Third, aspects of the political system that impact on the budget are briefly considered. Fourth, the responsibilities of the budget actors covered by the law are examined. Fifth-and-most importantly-the various stages of budget processes that could be included in a BLS are regarded, with reference made to the base budget principles.

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