This section develops empirical measures that summarize characteristics of theinstitutional structure of the budget processes in CEEC. Using a methodology similar to vonHagen (1992), I identify and characterize institutional elements of the budget process thatstrengthen the coordination and cooperation in public budgeting and construct indexes asnumerical representations of these qualitative properties of budget procedures. Institutionalprovisions to achieve coordination of budgeting decisions vary in scope and strength. Asregards the design of decision-making structures, coordination devices that move the processto more hierarchy and/or more cooperative decision-making and that introduce mechanismsfor monitoring and enforcing fiscal targets are considered to promote fiscal discipline. At thebudget preparation stage, procedures guided by a binding commitment on fiscal targets and/orby a strong prime minister and finance minister should keep spending pressures coming fromdepartmental ministers at bay. Limits on the power of the parliament to increase the spendingand deficit target set in the government budget draft and a centralized organizational structureof parliament that promotes coherent policy-making should mitigate the common poolproblem at the budget authorization stage. Concerning the implementation stage, mechanismshould exist that guarantee that the adopted budget is duly executed and that adjustments incase of economic shocks are consistent with sound fiscal policy.
The institutional data set is based primarily on information that I collected from relevantnational legislation and through two questionnaires designed by myself and answered byfiscal policy experts or individuals directly involved in the budget process from the respectivenational ministry of finance, central bank, and parliamentary budget committee (and, if it
exists, the research institute of parliament).
4 The legal norms determine the basic roles andresponsibilities of the principal actors and establish the broad framework of budget processes,but they generally do not regulate in detail all institutional arrangements relevant for thepresent analysis. In particular, the legislation does generally not specify the detailed structureof the budget preparation process. The assessment of legal norms alone may also notaccurately reflect actual practices, if informal rules have a significant influence on theprocess or if a common understanding of the procedure imposed by law has not yet emerged.Hence, I combined the information from the budget legislation and expert assessmentsgathered through the questionnaires to derive a detailed picture of the respective nationalbudget processes. For details on the construction and the design of the questionnaires, seeGleich (2002). The legislation I evaluated include, for each country, the constitution, theorganic budget law, and the rules of procedure of the parliament. For some of these legaldocuments, I obtained different versions, reflecting the changes made during the last decade.Gleich (2002) contains a list of the legislative documents underlying the present study. Toclarify details, in particular with regard to the timetable of the preparation stage and dates andparticulars of changes in budget procedures, and to avoid mistakes in the interpretation oflegal provisions or answers given in the questionnaires, I also contacted several of thoseresponding to my questionnaires via phone and/or e-mail. In addition, I used informationprovided in official publications of national authorities and in secondary sources such asacademic journals and publications from the International Monetary Fund and the EuropeanCommission, both to increase the database and to check for consistency with the informationgathered by myself. Despite these efforts, the assessment of the material obviously still
