Effective parliamentary oversight – focussed on reinforcing fiscal responsibility - is a cornerstone of sound public financial management. In Chile, the National Congress plays a role in the budget process but operates within a distinct institutional framework characterised by significant executive power, particularly concerning the power to propose and modify expenditures. This chapter examines the arrangements for congressional budget oversight in Chile, covering its constitutional powers, mechanisms of influence, institutional structures, and analytical capacity.
OECD review of parliamentary budget oversight in Chile
Chile's budget process is historically marked by a concentration of fiscal power within the executive branch, a legacy formalised in the 1980 Constitution and subsequent laws. This framework imposes significant limitations on the National Congress's ability to directly amend the budget proposal submitted by the President (see Box 2 for more details on the historical context for this).
The development of Chile’s parliamentary framework has been shaped by historical conflicts between the executive and legislative branches. In the late 19th century, tensions over fiscal authority culminated in a civil war, driven by disputes regarding the budget. This was exacerbated by the economic crash of 1919, which severely impacted Chile – even more than its neighbours. During this period, parliamentary democracy was widely criticised, with Congress being perceived as engaging in imprudent spending and failing to wield its legislative powers responsibly.
Following the economic downturn, the Ministry of Finance commissioned an external review to evaluate Chile’s fiscal policies. The findings recommended limiting congressional influence over budgetary decisions to ensure financial stability. As a result, the 1925 Constitution significantly restricted Congress's ability to modify the budget, a provision that was later reinforced in the 1980 Constitution, which remains in effect today.
The Constitution includes provisions that:
Only the President may introduce increases to estimated expenditures presented in the Budget Bill;
Bills that involve new public spending, whether direct or indirect, require prior authorisation from the President;
Congress cannot, on its own initiative, approve expenditures not included in the Budget or that exceed the amounts approved therein.
The most notable constraint is that Congress may only decrease expenditure items included in the draft budget law;1 it cannot increase spending levels nor reallocate funds between different budget programmes or chapters. Furthermore, Congress cannot amend the core macroeconomic assumptions or revenue forecasts underpinning the budget proposal. These formal restrictions curtail the power of Congress in the budget process.
Despite its formal limitations, the Congress still wields notable influence over the budgetary process. Its principal leverage lies in the constitutionally mandated 60-day timeframe to approve or reject the budget law. While outright rejection is politically unviable and has never occurred, this tight deadline, coupled with the necessity of legislative approval, compels the executive into meaningful dialogue.
Furthermore, although Congress lacks the authority to increase expenditures, legislators can creatively shape the budget by strategically reducing funding for specific programmes. For instance, by minimally funding certain programmes to the point of rendering them non-functional, Congress can prompt the executive to negotiate and reallocate resources.
A similar tactic was observed during the 2025 budget deliberations when Congress lowered overall expenditure levels to signal scepticism regarding the government's revenue projections.
Such mechanisms incentivise the government to engage in behind-the-scenes discussions and seek compromises to address congressional concerns and ultimately secure budgetary approval.
Since 1997, a key outcome of the negotiation process has been the signing of a non-binding "Protocol Agreements" between the Joint Budget Committee and the executive (represented by DIPRES) at the end of the budget approval cycle. These protocols formalise commitments from the executive to undertake specific actions, studies, reports, or even future budget reallocations desired by Congress members, in exchange for budget approval. While not legally enforceable, adherence to these protocols is politically important for the government to maintain support for other legislative initiatives. Recent protocols continue this practice, detailing numerous specific governmental commitments across various sectors.
Congress also exerts influence through its increasing use of budget law annotations, known as glosas, attached to specific appropriations in the Budget Bill (see Figure 2).
These glosas may specify detailed instructions and restrictions on how funds must be spent. They can also be "information annotations" requiring enhanced monitoring or periodic reporting on specific appropriations. The increasing use and detail of these glosas have drawn criticism for potentially serving to enact substantive policy provisions with limited debate, bypassing standard legislative procedures. Monitoring compliance with the numerous reporting requirements mandated by glosas remains an ongoing task. More information on glosas is provided in Box 3.
In Chile, glosas presupuestarias (glosas) are not explicitly defined in the core financial legislation, despite their widespread use in the budgeting process. Instead, their interpretation and legal standing have been shaped by other institutions:
The Constitutional Court defines glosas as the most detailed expression of legislative intent in the Budget Law, offering clarifications, directives, or limits on approved spending. They are legally binding and subject to constitutional review.
The Comptroller General of the Republic (audit body) confirms that glosas, by virtue of their inclusion in the Budget Law, have the force of law during its validity.
The Ministerial Advisory Commission on Public Expenditure, created by the Ministry of Finance to provide expert advice on public spending, further describes glosas as clauses regulating or detailing the scope of specific budget expenditures.
Glosas are increasingly being leveraged by Congress to exert control over the budget. The executive has tried to reign in their use. For example, in 2025, the Finance Minister announced plans to challenge certain glosas in the Constitutional Court, stressing that they should be used solely for regulating budget execution, not as a tool for unrelated legislative matters.
Source: (OPS, 2024[4]; Henríquez, 2020[5])
The Chilean National Congress is a bicameral legislature composed of the Chamber of Deputies and the Senate. Chile is one of just a handful of OECD countries where both chambers participate equally in the budget approval process, including through a joint budget committee structure.
Following the budget's submission by the end of September (see Table 1), the Bill is referred to the Joint Budget Committee (Comisión Especial Mixta de Presupuesto). This committee, established as permanent in 2003, operates year-round, providing a continuous forum for budgetary matters.
To facilitate a detailed review of the extensive and technically complex budget proposal, the Joint Budget Committee is further divided into five budget sub-committees. Each of these sub-committees is assigned responsibility for a specific cluster of ministries or government portfolios. Over a period of several weeks, these sub-committees conduct hearings, summoning ministers and agency heads to explain and justify their budgetary requests. Following these intensive review sessions, the sub-committees report their findings and recommendations back to the plenary of the Joint Budget Committee. Despite this structured approach, the sheer volume of information and the inherent technical intricacies of the budget often constrain the depth of oversight achievable within the allocated timeframe.
Once committee discussions are completed, the budget is voted on in both chambers. Traditionally, congressional debate on the budget was limited to a few key topics, leading to a relatively rapid approval process. However, this dynamic has shifted significantly. Today, discussions in both chambers are far more comprehensive, and the budget is subject to considerably more negotiation and potential amendment than in the past.
In instances where disagreements arise between the Chamber of Deputies and the Senate regarding specific budget provisions, the Joint Committee under Article 70 of the Constitution (Comisión Mixta del artículo 70 de la Constitución Política de la República) is convened. This ad-hoc committee is tasked with resolving the points of contention and formulating a compromise proposal. The proposal emerging from this special bicameral committee must then be voted upon by both chambers without the possibility of further amendments, ensuring a definitive resolution to budgetary disputes.
Beyond the primary budget approval process, other congressional committees contribute to budget oversight. Notably, the Chamber of Deputies' Accounts Review Committee (Comisión Revisora de Cuentas) plays a role in ex-post financial oversight, examining the execution of the budget and the government's financial performance after the fiscal year has concluded.
Despite these mechanisms, the Chilean system of congressional budget oversight faces several challenges. The budget sub-committees are tasked with reviewing wide-ranging and sometimes unrelated government portfolios. Consequently, the depth and focus of scrutiny can vary significantly. It is also dependent on the expertise, capacity, and leadership of the individual budget sub-committee chair.
A more systemic challenge lies in the continuity and cumulative value of the different stages of legislative review. The scrutiny processes within the budget sub-committees, the plenary Joint Budget Committee, the Chamber of Deputies, and the Senate can operate in relative isolation rather than building upon one another. It is not uncommon for work to be left incomplete at one stage, with unresolved budget lines passed along to the next stage. This can lead to discussions being restarted from scratch, duplication of effort, and a diminished overall impact of the legislative review process.
Furthermore, legislative debates, particularly in the plenary sessions of both chambers, often gravitate towards the more politically sensitive or controversial budget lines. This can occur at the expense of a thorough examination of broader fiscal aggregates, the underlying policy trade-offs embedded in the budget, and the long-term financial implications of budgetary decisions. Addressing these issues and fostering a more integrated and continuous review process will help strengthen the effectiveness of congressional budget oversight in Chile.
The Senate has demonstrated a pro-active approach to bolstering its analytical capacity for budgetary scrutiny, taking an initial step in 2003 by establishing a Budget Advisory Unit. This unit was designed to support the crucial work of the Joint Budget Committee. This entity was rebranded in 2019 as the Senate Office of Information, Analysis, and Budgetary Advice (Oficina de Información, Análisis y Asesoría Presupuestaria Senado de Chile, OPS).
The Senate OPS is tasked with providing technical analysis of the budget proposal, its underlying assumptions, and related fiscal documents. Reflecting a growing understanding of the need for independent fiscal assessment, its role was broadened in 2020 to include evaluating the fiscal impact of draft legislation. These developments underscore a clear acknowledgment within the Senate of the necessity for non-partisan, professional analysis to inform budgetary decisions and to provide a degree of counterweight to the executive branch's extensive resources and primary role in fiscal management.
Despite its important mandate and the recognised need it aims to fill, the Senate OPS faces limitations that hinder its overall effectiveness. While it actively supports Senate oversight by processing and organising budget data, its capacity is strained. Limited resources mean the OPS is often overwhelmed by the growing volume of requests for analysis and the sheer number of legislative initiatives, particularly during the intensive budget cycle. This resource constraint curtails its ability to undertake comprehensive, in-depth analytical work.
Furthermore, the OPS grapples with persistent challenges in accessing necessary budget data in a timely and complete manner, which further constrains the scope and depth of its independent analysis.
Its primary focus on serving the Senate also mean that it lacks operational visibility across Congress as a whole. There remains a need for dedicated analytical support across the entirety of the National Congress, including the Chamber of Deputies.
Collectively, these limitations significantly restrict the Senate OPS's ability to fully counterbalance the substantial informational and analytical advantage held by the executive branch, particularly the highly influential DIPRES. Addressing these practical constraints is crucial if Congress is to evolve into a more robust and influential oversight institution.
Recent shifts in Chile’s public finance landscape highlight the critical need to enhance the National Congress's capacity as an institution. The current, more demanding fiscal context has amplified calls for deeper legislative engagement in the budget process and more systematic scrutiny of public spending decisions. Strengthening the capacity of Congress is therefore essential for reinforcing fiscal responsibility and ensuring greater accountability.
Furthermore, while government ministries are often required to submit vast quantities of data, much of this information is not effectively processed, analysed, or discussed by congressional committees. Conversely, valuable existing resources, such as performance evaluations of public programmes, often remain underutilised in the budgetary debate. A critical issue is the structural mismatch between how programmes are monitored (often on an individual basis) and how the budget is structured (which may not easily allow for tracking programmatic spending and outcomes, especially across Chile's numerous social programmes). The cumulative effect is an overwhelming influx of data that, paradoxically, does not consistently translate into informed, evidence-based decision-making by legislators.
Addressing these challenges through targeted reforms is paramount to strengthening Congress’s role as a responsible budget institution. Ultimately, strengthening these capabilities will empower the legislature to more effectively scrutinise public finances and exert a more meaningful influence.
← 1. Except for those established by permanent law.