The OECD Index on Parliaments and Fiscal Responsibility provides a comparative assessment of how parliamentary institutions align with the OECD Best Practices for Parliaments in Budgeting. Drawing on data from the 2025 OECD Survey on Parliamentary Budget Oversight, the Index evaluates legislatures across five dimensions of budget oversight and reveals considerable variation across OECD countries. The results show that legislatures generally perform strongly in routine budget approval and oversight functions but are less developed in areas requiring long-term fiscal stewardship, including engagement with fiscal risks, medium-term fiscal frameworks and sustainability challenges. The analysis also highlights the diversity of parliamentary budget oversight models across the OECD and identifies opportunities for strengthening legislative support for restoring public finances.
The Role of Parliaments in Restoring Public Finances
Abstract
The Index assesses how far OECD legislatures are aligned with the OECD Best Practices of Parliamentary Budget Oversight and thus have the capacity to support fiscal responsibility across the whole budget cycle. It is organised around five pillars – fiscal responsibility, budget approval, implementation and audit, committee organisation and analytical resources – to indicate where institutional design supports credible, disciplined and transparent fiscal governance (Figure 3.1). In today’s fiscal context of elevated debt and mounting structural pressures, the Index provides a practical lens to judge whether legislatures are equipped to help place public finances on a sustainable path.
Source: OECD authors’ elaboration.
The Index provides a consolidated picture of how OECD legislatures are organised to support fiscal responsibility and the extent to which parliamentary budget arrangements align with the OECD Best Practices for Parliaments in Budgeting. While the analysis focuses on the legislature’s role in the budget process, parliaments also influence fiscal outcomes through wider legislation with budgetary implications, particularly member-initiated legislation that may not always be accompanied by detailed fiscal estimates. These legislative activities fall outside the scope of the OECD Best Practices and are therefore not captured by the Index. However, robust costings and independent oversight of the budgetary implications of legislation remain important dimensions of fiscal governance.
The average composite score across OECD countries is 2.98 out of 5, indicating a moderate level of alignment with good practices overall, but with considerable variation across countries and across pillars (Figure 3.2). This variation suggests that while core elements of legislative budget oversight are widely in place, their depth, consistency and effectiveness differ substantially across institutional contexts.
Across the five pillars, OECD legislatures perform best in budget approval, with an average score of 0.81 out of 1. This indicates that the core functions of reviewing, scrutinising and authorising annual budgets are broadly well institutionalised. Most legislatures benefit from established procedures, timely access to budget documentation and functioning committee systems, and many retain the formal authority to amend government proposals. Taken together, these features provide a solid procedural foundation for legislative engagement in the budget process.
Performance is also relatively strong in committee organisation (0.66) and budget implementation and audit (0.60), indicating that most legislatures have the formal structures needed to scrutinise budgets and oversee execution. Most maintain dedicated budget or finance committees and involve sectoral committees in scrutiny, although practices vary in terms of openness, leadership impartiality and use of performance information. In-year monitoring is generally well established, with legislatures reviewing supplementary budgets and receiving regular reports; however, systematic follow-up on audit recommendations is less consistent, weakening the accountability loop essential for effective and learning-oriented fiscal governance.
By contrast, performance is markedly weaker in areas requiring forward‑looking fiscal stewardship – the essence of responsible budgeting. OECD legislatures score lowest in fiscal responsibility (0.36), highlighting limited systematic engagement with medium-term frameworks, fiscal risks, and long-term sustainability analysis. Although such information is often available, it is not consistently debated or integrated into decision making. Pre-budget engagement remains limited, and only a minority of legislatures vote on aggregate fiscal totals before considering detailed allocations. As a result, parliaments often exert limited influence on early fiscal strategy, where the most consequential choices are made.
Finally, analytical resources varies considerably across countries, with an OECD average of 0.55. While most legislatures have access to research services or independent fiscal institutions, these vary considerably in terms of resources, independence, and access to detailed budgetary information, affecting the depth and credibility of scrutiny.
Overall, the Index highlights a clear pattern: OECD legislatures are strongest where processes are routine and procedural, but weakest where fiscal governance requires long‑term strategic engagement. In a period of high debt, ageing populations and increasing defence demands, the lowest scores are concentrated in areas related to fiscal responsibility, fiscal risks, medium-term fiscal frameworks and pre-budget engagement, suggesting that legislative involvement remains more limited in upstream stages of fiscal decision making than in the approval of annual budgets.
Note: Scores range from 0 to 5 where 0 indicates minimal alignment and 5 reflects full alignment with the OECD Best Practices for Parliaments in Budgeting. Further details on the index are available in Annex A.
Source: OECD authors’ elaboration based on 2025 OECD Survey on Parliamentary Budget Oversight.
Source: OECD authors’ elaboration based on the 2025 OECD Survey on Parliamentary Budget Oversight.
Some patterns emerge from the results. To explore these, Principal Component Analysis (PCA) is used to visualise the data and illustrate the statistical distance between legislative institutions (Figure 3.4). In this visualisation, countries that appear close together have similar institutional arrangements, while those positioned further apart exhibit more divergent fiscal oversight systems.
To complement this analysis, countries were grouped using K‑means clustering based on the five parliamentary budget oversight pillars. Each country was assigned to one of three clusters according to similarities across these pillars. This approach reveals similarities across sets of countries that reflect common institutional traditions. The average scores for each pillar across these clusters are presented in (Figure 3.5).
Note: This chart uses Principal Component Analysis (PCA) to visualise the Index data, with each cluster represented by a different colour. Since it is not possible to plot five separate pillars on a standard graph, PCA is used to compress the five pillars into two new statistical dimensions. The x and y axes do not represent individual categories like “fiscal responsibility” or “analytical resources”. Instead, they are composite measures. The algorithm blends the original five pillars to capture the maximum amount of overall variation in the dataset. One can then map the statistical distance between each institution in terms of the two new dimensions.
Source: OECD authors’ elaboration based on the five pillars of the 2025 OECD Index on Parliaments and Fiscal Responsibility.
Cluster 3 stands out as the most analytically meaningful grouping, characterised by a greater reliance on indirect rather than direct sources of parliamentary influence. Comprising a majority of Westminster-style systems, the cluster combines relatively limited fiscal responsibility (0.19), budget approval powers (0.63) and committee organisation (0.30) (Figure 3.5). These countries also exhibit comparatively strong analytical resources (0.77). This pattern reflects systems in which governments retain primary control over budget formulation, while parliaments exert influence principally through scrutiny and oversight supported by parliamentary analytical capacity and independent fiscal institutions.
Note: Countries are grouped into three clusters based on K‑means clustering using five fiscal oversight pillars. Cluster 1 includes Austria, Belgium, Colombia, Costa Rica, Denmark, Estonia, Finland, Germany, Hungary, Iceland, Japan, Korea, Luxembourg, Poland, Switzerland and Türkiye. Cluster 2 includes Czechia, France, Greece, Israel, Italy, Latvia, Lithuania, Mexico, New Zealand, Norway, the Slovak Republic, Slovenia, Spain, Sweden and the United States. Cluster 3 includes Australia, Canada, Chile, Ireland, the Netherlands, Portugal and the United Kingdom.
Source: OECD authors’ elaboration based on the five pillars of the 2025 OECD Index on Parliaments and Fiscal Responsibility.
The other clusters are less distinct in analytical terms. Cluster 2 groups a heterogeneous mix of countries that appear to follow a more balanced approach across pillars, with comparatively strong performance overall. By contrast, Cluster 1, the largest group, brings together countries with strong budget approval procedures but weaker performance in fiscal responsibility and analytical capacity. While informative, these groupings reflect broad tendencies rather than sharply defined institutional configurations.
Despite the institutional differences identified across the three clusters, additional analysis found no statistically significant differences in general government debt or fiscal balance outcomes between them. These findings suggest that the cluster groupings are not associated with systematically different fiscal outcomes. Debt and deficit levels reflect a wider range of economic, political and historical factors than institutional arrangements alone. Moreover, strong institutions may not necessarily be expected to be linked to lower debt levels given that countries with stronger institutional frameworks may also have greater capacity to sustain higher levels of public debt through continued access to financial markets.
Overall, the combined PCA and clustering analysis highlights that OECD legislatures do not converge on a single model of fiscal oversight, but instead exhibit distinct institutional configurations. While some systems are characterised by strong procedural foundations or analytical capacity, others demonstrate more balanced engagement across the budget cycle. Notably, weaknesses tend to concentrate in areas related to forward‑looking fiscal stewardship, underscoring a broader pattern identified throughout the Index and highlighting important opportunities for strengthening legislative engagement in long‑term fiscal strategy.