Budget reform and legislative control in Sweden

Abstract

ABSTRACT The literature on fiscal institutions argues that there is a pro-spending bias in legislative budgeting, which can be mitigated by institutional arrangements. In the mid-1990s Sweden carried out reforms to the budget process that fundamentally restructured parliamentary decision-making, including the voting process and the role of different committees. This paper assesses the impact of these reforms on legislative budgeting. It concludes that the new process helps to safeguard fiscal discipline, but also cautions against a simplistic interpretation of the fiscal institutionalist literature that treats institutional arrangements as exogenous. The constraints of the revised legislative process are essentially self-imposed, which in the final analysis makes it difficult to argue that the Swedish Parliament has lost budgetary control. Moreover, separate reforms of external audit and improvements in the provision of performance information provide an opportunity to strengthen accountability for results.