The political economy of budgeting in Latin America procedures, oversight, and participation

This report provides a selective overview of issues pertaining to the budgetary process and a mapping out of budgetary institutions in Latin America and assesses to what extent budgets play the role societies expect from them. We review the legislative involvement, provide first hand updated data on budget committees, institutional prerogatives of the legislative branch and identify the institutional checkpoints for the approval of budgets. We also offer an overview of issues pertaining to budget rigidity. Starting from the stylized fact of budget rigidity in Latin America the paper focuses on the mechanisms governments (both at the national and sub-national levels) have implemented to deal or to overcome budgetary institutional inflexibilities and problems of accountability that are associated with them. We further investigate the existing mechanism of control and accountability budget appropriation. Given that all over the region the executive is the dominant political player and legislatures usually do not have institutional conditions and/or incentives to fully oversight presidents, legislators have delegated oversight to auxiliary bodies such as audit institutions. Finally, we identify and analyze initiatives to enhance transparency and citizen’s participation especially at the non-government level and experiences of participatory budgeting at local level. A number of experiences are reviewed including the Open budget project.