Why budget accountability fails? The elusive links between parliaments and audit agencies in the oversight of the budget

Carlos Santiso ()

Brazilian Journal of Political Economy, 2015, vol. 35, issue 3, 601-621

Abstract: Parliaments and audit agencies have critical and complementary roles in the oversight of the budget and the enforcement of government accountability. Yet, the nexus between parliaments and audit agencies is one of the weakest links in the accountability chain, generating an accountability gap in the budget process. This articles analyses the interactions between parliaments and audit agencies in the oversight of government finances during the latter stages of the budget process. Using proxies to evaluate the quality of those linkages, such as the follow-up to audit findings and the discharge of government, it shows important dysfunctions in the interactions between parliaments and audit agencies due to a combination of technical capacity constraints and political economy disincentives. It suggests that the effective functioning of the system of checks and balances in public budgeting critically hinges on the agility of the linkages between accountability institutions. As such, the failure of budget accountability is due to systemic dysfunctions in the systems of accountability, rather than the failure of an individual accountability institution acting in isolation. In addition, the effectiveness of the horizontal accountability architecture depends on the political economy incentives shaping the budget process, which are generated by the interactions between the choice of institutional design and budget rules, with the degree of political competition and electoral rules. JEL Classification: H61; H83; O54; P51.

Keywords: public budgeting; budget process; political economy; accountability; parliaments; audit agencies; institutional design; electoral rules; political competition (search for similar items in EconPapers)
Date: 2015
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