THE ROLE OF PARLIAMENT IN THE BUDGETARY PROCESS THE EXAMPLE OF THE CROATIAN PARLIAMENT 2000 2003 Vjekoslav Brati Occasional Paper No 19 October 2004 Institute of Public Finance 2004 2 THE ROLE OF PARLIAMENT IN THE BUDGETARY PROCESS THE EXAMPLE OF THE CROATIAN PARLIAMENT 2000 2003 1 Abstract The Croatian Parliament has the right to modify the Government s proposal of the budget which in reality it does very rarely because the ruling coalition has a majority of votes as well as because the members mainly follow the party line This is the basic reason for the relative insignificance of the Parliament as compared with the part it might really play during the legislative phase of the budgetary process Research carried out in Parliament indicated drawbacks and shortcomings of the Parliament and showed that there is a lot of room for enlarging the importance of Parliament in the budgetary process JEL Classification K40 H61 Key words Parliament Budgetary Process Croatia 1 This article is published in Croatian in the journal Financijska teorija i praksa 28 1 2004 pp 7 25 and is downloadable from http www ijf hr publikacije indexpub html 3 1 Introduction Although the Croatian Parliament is one of the key institutions in the budgetary process and in government as a whole there has as yet been no research into the topic of the role of Parliament in the budgetary process For this reason then the objective of this paper is to demystify certain features and facts that characterise the state of affairs in and work of the supreme legislative institution on the budget proposal The objective of carrying out this work was to bear out or falsify certain hypotheses as follows Parliament could have a much more important role in the budgetary process than it has today the existing collaboration and communications between Parliament and Government during the budgetary process are not developed to the level that they could and MPs have relatively little time available to them for a quality and well grounded budget debate The budget is the outcome of the budgetary process The budget is the instrument the government uses to influence the economic state of the country it serves as a system of control of the collection and spending of budgetary resources and it highlights the most important of objectives of government during the fiscal year The institutions of the budgetary process primarily parliament should through their mechanisms make possible a quality and effective allocation and control of the spending of budgetary resources The role of every parliament in the budgetary process including the Croatian parliament depends on many factors such as the autonomy of parliament the duration of the process and the speed with which quality budgetary decisions are made For Parliament indeed to be a parliament the work of which is transparent and open to the whole of the nation it should take the responsibility upon itself rather than leaving it to some other political institutions The precondition for this is that all the political decisions should be made actually at sessions of parliament and not in the government or the coordinating body of the ruling coalition in which it is for example the prime minister that has by far the most to say In theory Parliament may modify the Government s draft budget but in practice this is almost never done This is because of the voting majority that the ruling coalition has in Parliament and the fact that MPs mainly obey their party whip And this is actually the major reason why the role of the Croatian Parliament during the legislative phase of the budgetary process is not as great or as significant today as if might be Thus we may say that there is plenty of room in Parliament for improvement of its work with respect to budgetary matters as well as opportunities for further development and enlargement of the role of the Parliament during the legislative phase as well as other phases of the budgetary process This paper deals with the basic elements of the budgetary process and the relations of Parliament and budget Apart from the introduction the paper contains four other chapters The first three sections of the second part show the results of research carried out in Parliament The investigation covered interviews with MPs with members of the Parliamentary standing Committee on Finance and the State Budget The Budget Committee a questionnaire administered in the Croatian Parliament and an analysis of the educational background of the MPs This questionnaire in conjunction with the interviews to a large extent demonstrated what the basic problems and discontents of MPs during the budget debate are Part three Parliament and the Budget discusses the basic postulates of 4 parliamentarianism and its development and the role that today s parliaments have in the budgetary process and what this role depends on The next chapter the Croatian Parliament and the Budget explains the Croatian budgetary process in terms of phases and timetable There is particular focus on the analysis of the role of the Budget Committee of the Croatian Parliament The conclusion provides concluding considerations and recommendations for improvements of the existing state of affairs and augmentation of the role of the Parliament in the budgetary process 2 Results of the Investigation In order to be able to investigate as accurately as possible the role played by the Parliament in Croatia during the budgetary process a questionnaire was administered in the parliament chamber several interviews with MPs and members of the Budget Committee were held and the educational structure of the Parliament and the proportion of members of parliament with qualifications in economics were analysed 2 1 Questionnaire in Parliament During January 2003 a small scale questionnaire with fairly simple questions was administered in the Croatian Parliament along the lines of questionnaires carried out in other countries Two months were needed for the completion of the questionnaire and the interviews The concern that the majority of the MPs would not fill out the questionnaire proved well grounded which is shown by the response of only one third of the members In spite of this a number of conclusions could be made as well as proposals for the improvement of the legislative phase of the budgetary process This questionnaire which was completely anonymous was filled in by 47 representatives 30 of the overall number of members of
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