Budgeting and public expenditures

OECD parliamentary budget officials: second annual meeting (11-12 February 2010)

 

The Swiss Parliament hosted the second annual meeting of OECD parliamentary budget officials in Bern, 11-12 February 2010. The term "parliament" is used as a generic term to refer not only to parliaments, but also to congresses, national assemblies, and legislatures.

The meeting was chaired by Margret Kiener Nellen, President of the Finance Committee, Chamber of the National Council, Swiss Parliament, and by Mark Schipperijn, Head of Secretariat, Parliamentary Financial and Alp Transit Surveillance, Swiss Parliament, and attended by 45 people representing 19 delegations.

The meeting opened with a welcome address by Hans Altherr, Second Vice-President of the Chamber of the Council of States, Swiss Parliament.

Agenda

Thursday, 11 February 2010

Roundtable on Recent Parliamentary Budgeting Developments

This session was designed for delegates to make informal presentations on recent budgeting and public expenditure developments in their countries from a parliamentary perspective. Participants exchanged information on reforms which are taking place and provided a useful opportunity for participants to keep up to date with developments in an informal setting. Special time was allocated to countries that did not participate in last year’s meeting, for them to profile their respective parliamentary budget institutions.

Presentations by : Spain, Turkey (1) & (2), France, Korea, Italy.

Fiscal Rules in Light of the Global Financial Crisis

Background document GOV-PGC/SBO(2010)2.

A large number of OECD member countries have fiscal rules of various types, including spending, deficit and debt rules. These rules have come under great strain and have been de facto abandoned in many cases due to the global financial crisis.

This session explored the future of fiscal rules in light of these recent events. Will they become integral to restoring fiscal responsibility and sustainability or have they been undermined to such a degree that they will not be able to regain credibility? What can be learned from recent experience in terms of the optimal design of fiscal rules?

Presentation by Prof. Allen Schick.

Restrictions on Parliament’s Role in the Budget Process:

Common restrictions on parliament’s role in the budget process include: not being allowed to increase any appropriation, only reject or reduce them; being allowed to increase an appropriation only if an equal reduction is made in another appropriation; and any change in the government’s budget proposal being viewed as a vote of confidence in the government. Other restrictions include the government’s prerogative in preparing a budget proposal, time limits on parliament’s scrutiny of the budget proposal, and special provisions if parliament does not approve a budget.

This session reviewed these and other restrictions, and identified trends in this regard among OECD member countries. It commented on the effectiveness of such restrictions in promoting fiscal discipline vis-à-vis other institutional features.

Presentation by Mr. Joachim Wehner, Italy and France.

***

Friday, 12 February 2010

Dynamic Scoring:

Dynamic scoring is taking full account of all the economic effects of policies when estimating their budgetary effects. Both tax and spending proposals may induce behavioural changes by individuals, e.g. changes in hours of work, in effort, in human capital or financial investment, in consumption and savings, in risk taking, etc. These changes can then have "second-round" effects through changes in market equilibrium, i.e. changes in prices in goods and services markets, changes in wages, interest rates, and so on. In turn, these will lead to modification of macroeconomic aggregates, including total output, consumption and aggregate savings that will ultimately influence the growth rate of the economy. All of these can affect the revenue that the government collects, so the full chain of consequences will determine the actual budgetary cost of tax and spending proposals. But such scoring is formidably difficult to produce.

This session assessed the key conceptual and practical challenges posed by dynamic scoring, and considered the advantages and disadvantages of adopting it.

Presentation by the OECD Secretariat.

Parliamentary Budget Offices – Key Issues:

This session highlighted the key issues involved with establishing and operating parliamentary budget offices. It compared the experiences of Canada following one year of the Office of the Parliamentary Budget Officer and the experiences of the United States following 30 years of the Congressional Budget Office. The discussion included elements of the standard OECD template for profiling parliamentary budget offices.

The session was led by Mr. Kevin Page, Parliamentary Budget Officer, Canada, and Mr. Barry Anderson, OECD Secretariat, representing Bob Sunshine, Deputy Director, Congressional Budget Office, United States.

Presentation by Korea.

Report by the OECD Secretariat:

This session was designed to update participants on current and future projects by the OECD in the field of budgeting and public expenditures. It was also an opportunity for participants to identify emerging priority areas for future work, the nature of their interest in the subject, and their willingness to participate in particular studies.

 

Related Documents

 

OECD network of parliamentary budget officials (PBO)

 

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