The Role of Parliament in Curbing Corruption

By Rick Stapenhurst; Niall Johnston et al. | Go to book overview

6
Effective Financial Scrutiny

Joachim Wehner


Introduction

Fiscal transparency has become a major theme in the international debate on good governance. This debate has focused mainly on deriving standards for the provision of relevant budgetary and audit information by the government (IMF 2001; OECD 2002). There is less of a consensus to date on how parliaments can contribute to fiscal transparency. Some view parliaments as spendthrift and part of the problem of poor budgetary practices (for example, Bagehot 1963). From this perspective, it is the executive that is the true guardian of public money and guarantor of sound administration. However, recent case studies strongly suggest that budgeting without effective checks and balances can provide an open door to corruption and poor fiscal performance (Santiso and Belgrano 2004; Burnell 2001). Proponents of the latter perspective emphasize the budget’s function as a tool for holding the executive to account. A lack of accountability is widely regarded as a precondition for corruption (Klitgaard 1998).

Framing the debate over financial scrutiny as a struggle of executive versus legislature can be misleading, however, because sound budgeting requires both a competent executive and a legislature that has the capacity for effective scrutiny. In democratic countries, ultimate accountability of the executive is to the electorate; however, several years can pass between elections. During this interval, “horizontal accountability” (O’Donnell 1998) in the form of independent checks and balances plays an essential role in safeguarding government integrity. In a general sense, accountability can be thought of as an obligation to answer for the execution of one’s assigned responsibilities (Murray and Nijzink 2002). In practice, accountability has quite often proven a “notoriously elusive idea” (White and Hollingsworth 1999).

The budget process is a principal mechanism used by legislatures to hold the executive to account. Other practices for legislative oversight include, for example, question time and commissions of inquiry (Pelizzo and Stapenhurst 2004). The budget process is a fundamental accountability mechanism because of its periodic nature and because it encompasses all government activities. In modern democracies, the approval of the budget is typically required on an annual basis and follows an explicit timetable. This means that the legislature has a regular and predictable opportunity to scrutinize the policy and administration of the government.

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