Public finances across the OECD are under growing strain. Debt levels remain elevated following successive crises, while spending pressures related to factors such as ageing populations and rising defence needs continue to intensify. As fiscal space narrows, governments face increasingly difficult trade-offs over how limited resources are allocated. In this context, budget reforms are becoming more urgent to help governments manage these pressures and make sustainable fiscal choices. Countries will need strong budget institutions to ensure that adjustments are credible, durable and anchored in public trust. Parliaments have a central role to play.
Legislatures are, however, not always associated with fiscal discipline. Pork barrel amendments, whereby political actors direct spending towards local constituencies, as well as fragmented scrutiny and short political horizons, have at times undermined their credibility.
The OECD Best Practices for Parliaments in Budgeting set out how oversight can be designed to promote responsible fiscal governance. They emphasise a top-down approach to budget approval, committee systems that give the budget committee a central co-ordinating role, amendment powers that respect overall fiscal limits, strong analytical support and opportunities for public participation. Together, these elements form the foundation for legislatures to support fiscal responsibility. While the report focuses on the role of legislatures in the budget process, it is important to note that parliaments also pass a wide range of legislation with fiscal implications. In these cases, too, they play a role in ensuring effective budget oversight, although this aspect is not covered in the report.
This report uses data from the 2025 OECD Survey on Parliamentary Budget Oversight to assess how practices in OECD legislatures reflect these principles. To provide a more comprehensive view, the report introduces the OECD Index on Parliaments and Fiscal Responsibility. Parliaments remain highly heterogeneous bodies in terms of powers, structures and political incentives, yet clear patterns emerge across the five broad pillars of budget oversight.
Results show that legislatures have strong roles in relation to budget approval, and score relatively high in areas of committee organisation and analytical resources. Most parliaments receive comprehensive budget documentation, have meaningful amendment powers and operate well-established committee structures that facilitate detailed scrutiny. Many also have access to internal research services or benefit from the analysis of independent fiscal institutions that strengthen the quality of analysis.
The weakest performance appears in fiscal responsibility. In practice, a minority of OECD legislatures vote on aggregate budget totals before detailed allocations, which limits their role at the start of the process. Although most legislatures have access to reports on fiscal sustainability and fiscal risks, only a minority debate them. Engagement with medium‑term frameworks also remains inconsistent. Other areas show mixed performance, including budget implementation and audit and citizen engagement. While most legislatures have audit committees, practices are not yet in place to reliably integrate performance information and audit findings into the budget. Moreover, citizen participation lags behind good practice, with few legislatures offering meaningful opportunities for public engagement during the budget cycle.
Parliaments can support fiscal responsibility through greater engagement in these areas. By playing a more active role in debating fiscal risks and long-term sustainability, parliaments can have the opportunity to see that emerging pressures are addressed before they become crises. Legislatures can also expand opportunities for meaningful citizen engagement to build legitimacy around difficult fiscal choices. Depending on national circumstances, strengthening parliamentary budget oversight in these ways may require legislative or procedural reform, improved implementation of existing rules, or a combination of both.
By embracing the principles of responsible budget oversight, parliaments can build trust, deepen public understanding and strengthen the legitimacy of fiscal decision making. At a time when hard choices lie ahead, responsible legislatures can play an important role in supporting sustainable public finances.