Within the executive, the role of a finance ministry or treasury is to coordinate and drive the budget process in accordance with a schedule. The finance ministry has the economic expertise to prepare macroeconomic projections. These are important in order to assess the amount of money that will be available for spending. The finance ministry also plays a crucial role in formulating fiscal policy, guiding the drafting of the budget, and later in monitoring budget implementation. Various spending departments are ultimately responsible for expenditures within their jurisdiction, such as health, education, agriculture and so on. Spending departments will often try to extract as many resources as possible, whereas the role of the finance ministry is that of the guardian of the public purse.

Democratic constitutions require taxation and public spending to be approved by parliament. Therefore, the role of the legislature is to scrutinize and authorize revenues and expenditures, and to ensure the budget is properly implemented. The nature and effect of legislative engagement vary. Some legislatures write the budget; others approve executive budget proposals without changes. In some legislatures most of the debate around the budget takes place on the floor of the house; elsewhere the emphasis is on discussion in committees. Some legislatures fragment decision-making power in the budget process across various committees; others have a single financial committee that dominates the process. Ultimately, the final vote takes place in the chamber. However, where committees play a strong role, the house tends to be guided by committee reports in approving financial legislation. Legislators are aware of their constituencies’ priorities and needs when considering the budget.

Independent supreme audit institutions such as auditor generals or audit courts carry out an audit of government accounts in order to determine whether government did in fact implement that budget as passed by the legislature. Some of them also consider whether this was done efficiently and effectively. While this basic task is similar across different systems, there are differences in the institutional design of supreme audit institutions. For instance, some are directly linked to the legislature, while others have judicial independence. There are also differences with regard to capacity, resources, and types of audit conducted. The role of supreme audit institutions and their interaction with parliament is considered in detail in another unit.

The potential contribution to the budget process of civil society organizations, covering the full spectrum from think tanks to community-based organizations, is increasingly appreciated. Civil society organizations can provide independent research from a perspective that is not covered by conventional analyses. One example is the work on the impact of the budget on vulnerable groups such as women or children that civil society groups have pioneered, sometimes in collaboration with the legislature. In some countries where the legislature has limited research capacity, think tanks and universities can ensure access to sound technical analysis of fiscal issues. Civil society input to the legislature is promoted when committee and chamber debates are open to the public, legislative information is freely available, and when committees conduct hearings and receive submissions on legislation and budgets.

The media has an important role to play in ensuring that the central issues in budgetary debates are widely understood. In order to play this role, journalists require full access to the legislature and its committees, and all relevant documentation should be available to them. Training and capacity building can help journalists to maximize the quality of their reporting on the budget, and there have been instances where media institutes or civil society organizations have provided such opportunities. A later unit discusses the role of civil society and the media during the budget process.

International financial institutions and donor agencies play a powerful role in the budget process of poor countries with particularly high levels of foreign debt. When international financial institutions and donors attach stringent conditions to loans, the legislature’s role may be severely diminished to rubberstamping budgets that reflect prior agreements between lenders and the executive. To be supportive of sound budget practices, donor funding needs to be transparent and predictable, and full information on such funding should be given in the budget. Increasingly, the negotiations around debt and new financing involve a wider range of state and non-state actors. Consultative Group Meetings, as they are called, have become important opportunities for the private sector and civil society groups to make their voices heard on economic and budget policy issues.