The Budget Process in a Democratic System

The Budget Process in a Democratic System

In representative democracies, the public budget follows an institutional process that reflects the principle of separation of powers and guarantees democratic control over the use of state resources. This process mainly involves the executive branch, which formulates and executes the budget, and the legislative branch, which examines, modifies and approves it as law.

✅ 1. Stages of the Budget Process

✅ 2. Role of the Executive Branch

The executive branch has a central technical and operational role, but it cannot impose the budget on its own. Its function includes:

📌 Project Formulation

• Prepared through the Ministry of Treasury, Finance or similar.
• Based on public policies, government priorities, economic projections, and tax revenues.
• It collects information from all ministries and agencies.
• It is filed within the deadlines established by law.

📌 Presentation

• The project is sent to the legislature for analysis and approval.
• The executive proposes, but does not legislate.

📌 Execution

• Once approved, the executive manages the resources:
  • Make payments
  • Contract services and works
  • Transfer funds
• You can request modifications during implementation, depending on changes in the economic or political context.

📌 Accountability

• It reports periodically to the legislature and control bodies on the execution of the budget.
• Presents reports and budget settlements.

✅ 3. Role of the Legislative Branch

The legislature guarantees that public spending is carried out with democratic representation. Its function is to turn the budget into law, which involves:

• Review the project presented by the executive.
• Modify budget items.
• Approve, reject, or amend the budget.
• Establish limits and conditions for public spending.

🗣️ Key principle: "There is no expenditure without representation".
In other words, no public resource can be used without the approval of the legislative body.

✅ 4. International Variations: Where Does the Legislature Have the Most Budgetary Power?

Although in most countries the budget is prepared by the executive, some democratic systems allow a more active role for the legislative:

🇺🇸 United States

• The President proposes, but Congress has broad control.
• Budget committees can profoundly modify or even write their own version.
• It reflects the principle that "the power of the purse" belongs to Congress.

🇸🇪 Sweden and Scandinavian countries

• The executive presents the budget, but Parliament can make substantial changes.
• There is a culture of broad consensus and multi-party participation from early stages.

🇩🇪 Germany

• The Bundestag has an important role in the revision and modification of the budget.
• The executive presents the project, but the legislature refines and adjusts the items through specialized committees.

🧩 In short

• The Executive proposes.
• The Legislature provides.
• They both control each other.

This system of checks and balances ensures that the executive branch cannot spend without democratic approval, and that the legislature legislates based on technical and administrative information provided by the executive.

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