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30 ตุลาคม 2013
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Why we need a parliamentary budget office

One thing which the shutdown of the US government demonstrates vividly to the world is how a legislative body in a fully democratic country can have a big say over how tax money is used by the executive body.

Regardless of how this shutdown might affect the economy, the episode upholds the concept that it is not the government alone that can decide on the use of tax money.

This certainly conforms to democratic principles, where parliaments can scrutinise governments.

The question is how well a parliament can perform such scrutiny. Effective scrutiny requires that parliamentarians have the same access to budget information as executives, and enjoy the same level of technical and analytical support in budgetary and fiscal issues.

Unfortunately, this is often not true in reality, especially in developing countries such as Thailand.

In practice, Thailand follows Britain’s bicameral parliamentary system, with an Upper House and a Lower House. The prime minister and cabinet members are voted in through parliament. Thus, the executive and the legislative branches are closely associated (unlike the US parliamentary system, where the president is directly voted in by the people).

The closeness of the (majority) parliament and the government they choose makes budget scrutiny susceptible to ineffectiveness. For example, the government of the day that enjoys majority representation in parliament can push through any budget bills without having to conduct in-depth studies of the bills’ consequences.

The taxpayers are thus deprived of the opportunity to learn the pros and cons of the bills.

In such situations, MPs who disagree with budget bills must be able to provide a comprehensive analysis of the budgets to challenge the majority. Thus, there is no systematic support for members of the Thai parliament to gain such analytical capability or support.

Consequently, we need an institution that helps our MPs make informed decisions, based on rigorous analyses of the fiscal budget.

The United States has a body called the Congressional Budget Office (CBO), which was established in 1974 to produce independent analyses of budgetary and economic issues to support members of Congress. The CBO is nonpartisan and its employees are appointed solely on the basis of professional competence. Fortunately, a similar institution here is in its formative stage. Earlier this year, the House of Representatives set up an internal group to perform tasks similar to the CBO. At the same time, a small group of academic researchers led by the King Prajadhipok’s Institute and the Thailand Development Research Institute was also created with the mandate to develop budget and fiscal analytical skills in a CBO-like fashion.

The group will be called the Thai Parliamentary Budget Office, or Thai PBO.

The Thai PBO will be established in accordance with the OECD’s best practice: 1) It aims to be a professional body that is highly regarded by the public and all political segments, 2) it will provide objective, non-partisan budget information and analysis, and 3) it will be independent from the executive branch but accountable to the legislature.

Nevertheless, several challenges await the Thai PBO.

First, earning a good reputation and the public’s trust requires the PBO’s employees to be both highly competent and highly objective.
This will be a true challenge amid the current political turmoil. The PBO should be politically neutral, rather than attacking certain policies of political parties.

The issues which the PBO chooses to analyse must be important and relevant to the public interest.

All parties, civil society groups, the media and the public at large should be able to understand the analyses and use them as they see fit.
Organisational design will be an important factor to the success of the PBO. For it to be fully independent and be seen as objective, there should be a legislative framework to back the organisation’s legitimacy. This also ensures access to sufficient and continuous funding, as well as human resources management that fits the objective of the organisation. This is extremely important in order to avoid future intervention from political parties.

The PBO’s analyses must also be transparent and available for public and academic evaluation. In the end, the public will need to be aware of the significance and the necessity of having a Thai PBO, and of how it will strengthen our democracy. A series of public awareness activities will serve this purpose.

In a democracy, winning elections is a prerequisite to overturning laws. However, we need checks and balances to ensure that abuses of power do not take place, particularly in government budgets.

I remain optimistic that the public will realise it is crucial for Thailand to get serious about its finances before they become a problem.

Somchai Jitsuchon is research director of the Thailand Development Research Institute. Werapong Prapha contributed to this article.

First published in Bangkok Post, 9 October 2013