The politics of budget consultations – Canadian Government Executive

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October 17, 2013

The politics of budget consultations

Budgets are statements of political will and power. They are performance agreements that give expression to government’s priorities and expected outcomes. They are the primary means by which government is held to account in public by parliament, the media, and special interests. The Budget is also an obvious opportunity to propagandize the policy agenda and to shape public opinion.

Budgeting is an inherently political process because society’s needs always exceed the resources available to government. The challenge is to allocate scarce resources among competing demands by setting priorities and making choices. Like Adam Smith’s metaphor of the “invisible hand in the market,” politics guide how governments remake budgets and policy through public consultations.

The case for public consultation is compelling:

• It allows the public service to draw widely upon external expertise and resources;
• It makes for more transparent and robust decision making;
• It pretests likely public reaction to policy announcements;
• It enables policy makers to anticipate concerns, shape communications, and smooth delivery;
• It values citizens’ views and understanding of the issues at stake; and
• It increases public acceptance and support of new policies.

Budget consultations are politicized when political operatives are involved or when public servants are asked to perform political tasks. In Canada, consultations are by default – an alternative to Parliament’s failure to closely examine government spending proposals. Consultations are even more important in developing countries because of fewer resources to waste; the criticality of good governance, international competitiveness, and foreign investment; high levels of post-colonial, post-conflict, or post-disaster activism; and the political imperative for poverty reduction and economic growth.

In post-Apartheid South Africa, Batho Pele ‘People First’ encountered implementation challenges when its scope was extended from three to 40 million by popular demand. Public consultations were needed to decide budget priorities. In health, communities had to choose between STD prevention and heart surgery. It did not work perfectly everywhere, but citizen expectations were kept realistic where consultations were held. The process clarified the real choices that had to be made.

Consultation is fundamental to sound policy and budget making. Many countries conduct extensive consultations with the private sector and civil society. One pitfall can be that nothing gets done because too much time and resources are spent consulting at the expense of achieving results. Sometimes the consultation climate can be acrimonious, and stakeholders take a combative approach. Questions arise about how to identify appropriate stakeholders to consult and when to decide it is time to act.

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