Legislative budgetary power and fiscal discipline in the euro area

PurposeThe objective of this study is to understand the budgetary role of national legislatures in euro area (EA) countries and to analyse implications for fiscal discipline.Design/methodology/approachBuilding on the budget institutions literature, a legislative budgetary power index for all the 19 euro area (EA) countries is constructed using Organisation for Economic Co-operation and Development (OECD) and European Commission data as well as data generated from questionnaires to national authorities. A two-way fixed effects panel data model is then used to assess the effect of legislative budgetary power on the budget balance in the EA during 2006–2015.FindingsOverall, in the EA, formal legislative powers vis-à-vis the national budgetary process are weak, but there is more legislative involvement in Stability and Growth Pact (SGP) procedures, and legislative budgetary organisational capacity is generally quite good. In contrast to the traditional view in the budget institutions literature, this study’s empirical findings show that strong legislative budgetary power does not necessarily result in larger budget deficits.Research limitations/implicationsData on legislative budgeting were available from different sources, and time series data were very limited.Practical implicationsThere is scope to improve democratic legitimacy of the national budgetary process in the EA, without necessarily jeopardising fiscal discipline.Originality/valueThe constructed legislative budgetary power index covers all the 19 EA countries and has a broad scope covering various novel institutional characteristics. The empirical analysis contributes to the scarce literature on the impact of legislative budgeting on fiscal discipline.

18. International Development

The European Union (EU) is widely recognized to be a major actor in international development cooperation. First, this chapter discusses key issues and debates in EU development policy. These relate to the importance of the EU in this field, the different objectives that it pursues, the aid budgets at its disposal, and the legal competences vis-à-vis the member states. Secondly, the uniqueness of this policy domain, compared to other EU policies in this volume, is addressed. Specifically, it highlights three distinctive features: the availability of budgetary power outside the EU, the long historical legacy dating back to member states’ colonial past, and the key role of trade as the preferred tool for development. Thirdly, the chapter elaborates two main policy-making domains: the EU as a donor itself and as a coordinator of member states’ policies. Overall, the EU follows the regulatory and distributional modes in its role as a donor, and when it seeks to coordinate member-state policy, the policy coordination mode is to the fore. Moreover, intensive transgovernmentalist features appear in both domains. The conclusion summarizes the main trends and future challenges including the implications of Brexit, the rise of China, and the increasing politicization of aid.

Nicaragua’s Troubled Transition to Democracy

Nicaragua was among the last countries in Latin America to become democratic, and among the first to regress to authoritarian practices. It has thus been a fertile testing ground for theories of democratic development, addressing hypotheses about whether leftist revolutions can produce democracy, the difficulties inherent in wartime transitions to democracy, and the roles that foreign actors play in constraining and fostering democratic governance. After achieving independence from Spain in 1823, Nicaragua fell under the hegemony of the expansionist United States and endured a lengthy US occupation. The US-supported Somoza dictatorship was overthrown in 1979 by a revolution that brought to power the socialist Sandinista National Liberation Front (FSLN). The FSLN initially implemented a progressive authoritarian regime under an appointed junta, while fostering widespread political participation channeled through mass organizations associated with the party. Policies that centered on improving equality for the majority at the expense of traditional elites and the private sector drew US hostility. For a decade, US-sponsored counterrevolutionary forces made war on Nicaragua in an attempt to unseat the Sandinista government, and a US trade and financial embargo deeply damaged the economy. During that time, Nicaragua put in place a presidential system, permitted the development of opposition political parties, held partially competitive elections in 1984, and in 1987 inaugurated a constitution that mixed socialist and liberal principles. The 1984 elections were boycotted by right-wing opponents but shifted the basis of legitimate governance from winning the revolution to winning at the ballot box. In 1990, Nicaragua held competitive and internationally observed elections convened as one element of a regionwide Central American peace process. The FSLN lost in an upset that yielded an alteration in power signaling the advent of democracy. After negotiating to depoliticize the armed forces, President Violeta Chamorro took office and signed peace agreements with the counterrevolutionaries. For a decade, democracy prevailed and was deepened via a constitutional reform that transferred budgetary power to the legislature, shortened the presidential term, and prohibited immediate re-election to the presidency. In opposition, the FSLN employed both social mobilization tactics and parliamentary procedure to defend their constituents. Liberal remnants from the Somoza era regrouped and won the presidency in 1996. Democratic consolidation proved elusive, however, and instead the caudillo leaders of the FSLN and liberal parties, former President Daniel Ortega and then-President Arnoldo Alemán, reached a pact through which they radically reduced the political space available to smaller parties and assumed exclusive joint control of state institutions. The liberals again won election in 2001, but after their party split in 2006, Ortega was re-elected to the presidency. The new FSLN government introduced progressive policies that reduced poverty, but the quality of elections declined, and presidential term limits were abolished, introducing a competitive authoritarian regime. The FSLN then eliminated rival parties from serious contention and used legal reforms to consolidate a one-party-dominant system lacking horizontal and vertical accountability and marked by old political patterns of caudillo rule, elite pacts, and personalist rule centered on a single family.

Gefühlshaushalt in Mähren: Leistungsverwaltung, Landesschulden und Loyalitäten nach 1905

In 1910 the Crownland Moravia was confidentially granted a 5 million loan by the Viennese government. Moravia was heavily indebted and spent extensive expenditures for schooling, infrastructure and social welfare. The secret loan to Moravia was just one part of the multi-tiered system of fiscal flows in late Imperial Austria that was subject to emotionally heated debates. Since the budgetary power in the regional, transnational and imperial arenas came with determining the political priorities there, negotiations of the budget mirrored conflicting political camps often divided along national lines. On the imperial level, however, the same politicians forged transnational cooperation and new forms of transnational revenue sharing. Utterances of emotions were made more objective the higher the political level the crownland’s leading officials dealt with. The emotional side of fiscal politics, however, can be seen as a driving force in prioritising certain policy fields.

El control democrático y la rendición de cuentas en el Pacto de Estabilidad y Crecimiento

LABURPENA: Europar Batasuneko herrialdeetako aurrekontu-diziplina zorrotz ziurtatzeko sortu zen bere garaian Egonkortasunerako eta Hazkunderako Ituna (EHI); batez ere, Ekonomia eta Diru Batasuneko partaideen aurrekontu-diziplina ziurtatzeko. Krisi ekonomiko eta finantzarioaren krisiak EHIa errebisatu beharra ekarri zuen, eta era askotako arau-egintzen multzo bat ezarri zen horren ondorioz. Gaur egun, estatuetako politika ekonomikoak zorrotzago koordinatzen eta ikuskatzen dituzte EBko erakundeek. Aplikatzeko arauak eta prozedurak direla-eta gardentasuna galdu egiten da, eta horrek kalte egiten dio kontu emateari. Gainera, herrialdeetako parlamentuei aurrekontuak maneiatzeko gaitasuna murriztu egin zaie, eta murrizketa hori ez da konpentsatu Europako Parlamentuaren egoera hobetuz, izan ere, EHIa eraldatu ondoren, erakundeen arteko harremanetan daukan posizio erlatiboa okerragoa da orain. RESUMEN: El Pacto de Estabilidad y Crecimiento (PEC) fue creado para garantizar, de forma efectiva, la disciplina presupuestaria de los países de la Unión Europea (UE) en general y de los participantes en la Unión Económica y Monetaria en particular (UEM). La crisis económica y financiera motivó una revisión de la PEC mediante un conjunto de actos normativos de diversa naturaleza cuyo resultado ha llevado a una coordinación y supervisión más estrecha de las políticas económicas estatales por las instituciones de la UE. La complejidad de las normas y sus procedimientos de aplicación ocasiona una falta de transparencia que afecta a su rendición de cuentas. Además los parlamentos nacionales han visto limitado el ejercicio de su poder presupuestario y está contracción no se ha compensado con la mejora de la situación del Parlamento Europeo, pues tras la modificación de la PEC su posición relativa en las relaciones interinstitucionales ha empeorado. ABSTRACT: The Stability and Growth pact (SGP) was created to effectively guarantee the budgetary discipline within the EU Member states in general and within the European Monetary Union (EMU) participants in particular. The economic and financial crisis motivated an amendment upon the SGP by means of a set of normative acts of different kinds whose result has led to a closer coordination and supervision of state economic policies by the EU institutions. The complexity of rules and its application procedures result in a lack of transparency that affect its accountability. Besides national parliaments have had the exercise of their budgetary power limited and that constrainement has not been offset with the improvement of the European Parliament situation since after the SGP amendment, its relative position within the interinstitutional relationships had been worsened.

La rénovation du Parlement

Although there is a consensus about the representative parliamentary system throughout Europe, it is in a state of crisis.To renovate Parliament means to restore the essential functions of that institution : budgetary power, legislative action and control of the government.In the field of budget a reform to institute a general budget on expenditure and to impose stricter rules on the funds as well as a very tight budgetary schedule for the government, beside the budget on revenues, was passed by the House at the end of March 1989.In the legislative sphere new approaches should be considered so as to enable Parliament to reduce the complexity of the legislation, to correct badly written texts and to get rid altogether of superfluous texts.The citizens' rights can only be fully safeguarded by a well functioning legislative assembly. A rationalisation of the control on governmental action is necessary in the field of parliamentary commissions and particularly the commissions of enquiry, petitions and the scrutiny of State expenditure.To conclude it should be noted that the renovation of Parliament must go hand in hand with better relations with the common citizen.