Do any countries practice a system of proportional funding/budgeting that combines everyone's funding choices?
Apparently, not. In the cases I have found, the budget is given by the executive and possibly amended by the legislature. Only, in Budget-making legislatures could the legislature use such a method, and there is no evidence to indicate that any do so.
The legislature’s capacity to influence budget decisions is a function of both its authority over executive budget recommendations and its internal processes for decision making. With regard to the scope of legislative authority, Wehner (2004) places legislatures into three categories of influence over budgeting:
- Budget-making legislatures have the capacity to amend or reject the budget proposals of the executive and to substitute one of their own (Sweden, United States).
- Budget-influencing legislatures can amend or reject executive budget proposals but lack the capacity to formulate their own independent budgets (Italy, Netherlands). The amending power is often constrained as well: many legislatures may cut but not add to executive budgets, while others may add as long as they find offsetting cuts.
- Legislatures with little or no budget role lack the capacity to reject or amend executive proposals in any substantive way, largely for fear of prompting the fall of the government (United Kingdom). 1
Such a system would be impractical for any government of size due to level of expertise required and the number of line items that must be considered. Individual legislators do not have the expertise or time to examine the complete budget of a country in order to make an informed decision regarding the allocation of funds.
In budgetary matters, the legislature can receive technical and analytical support from either: (1) an independent nonpartisan parliamentary/congressional budget office; or (2) a limited number of officials (possibly, but not necessarily, civil servants on secondment to parliament) who provide analytical support to the budget committee or other parliamentary committees. Thirteen OECD countries have established some form of specialist budget office attached to the legislature. Recently-created ones, such as those in Canada, Korea, and Mexico have been influenced by the USA’s Congressional Budget Office (CBO), created by legislation in 1974.
Countries’ parliaments have established nonpartisan budget offices for four main purposes:
- Provide budget analysis and independent advice to parliamentarians from both the majority and minority parties represented in the legislature.
- Provide the legislature with medium-term fiscal projections and scenarios that may differ to those prepared by the government.
- Quantify the impact of alternative new tax or spending policies, especially (but not exclusively) on the budget for the forthcoming new fiscal year.
- Remedy the lack of time and analytical capacity that elected representatives have to analyze the details of draft budgets and to propose alternative budget policies. 2
Table of government line items. 2
I would also accept examples of systems that use simple choice-ranking for budget items. So voters just prioritize budgetary items and something else is used to determine actual funding.
One possibility is Zero-based budgeting (ZBB).
For most of the United States government, the main users of ZBB are the legislative, executive, and the agency. The legislative includes the congress, state legislature, and city council, and they require more summarization and focusing on public priorities and objectives. Agencies include the agency director and department managers and they require more detailed information and focus on program implementation and efficiency. Lastly, the executive includes the President, governors, mayor/city manager and they focus on the needs of the legislature and agency. 3
The origin of ZBB has been traced back to at least 1924 and probably goes back much further. As early as 1962, the Department of Agriculture used a variant of ZBB to formulate its fiscal year 1964 budget estimates. However, branded as a failure, the process was abandoned until the late sixties when a modern version of ZBB was successfully used by private businesses. Its success has provided the impetus for numerous States and the Federal Government to adopt the concept in the seventies.
Under the modern version of ZBB as portrayed in the literature, allocation of funds among activities takes place through a process involving several steps.
First, the activities of the organization which need or request resources are identified. These activities are usually referred to as decision units. For example, a decision unit could be an alcoholism program, the reproduction of pamphlets, or research and development on a specific product line. Second, decision packages for each decision unit are prepared. Decision packages contain:
- the goals or objectives of the activity,
- the consequences of not performing the activity,
- alternative ways of doing the activity, and
- alternative levels of effort and spending to carry out the activity.
Once decision packages have been prepared, they are ranked in descending order of importance and sent to the next higher organizational level. As decision packages are sent up the organizational ladder, the manager of the next level may consolidate the rankings of the various programs or activities for which he or she 1s responsible. This process continues until the senior management level (In the case of the Federal Government, the President and his staff) produces the final ranking. Through this ranking process, scarce resources are presumably budgeted in an efficient manner. 4
Within ZBB, a Budget-making legislature could review all the packages produced and amend the executive's budget to change the priorities.
What is the name of such a system, is it or was it ever practiced anywhere, at any scale? If not, why not? (simple lack of precedence? complexity? inherent flaws?)
The inherent flaw in proportional allocation by the legislature may be seen in the context of ZBB. If a "package" requires X amount and the legislature allocates less than 100% of the required amount, the goal(s) identified in the "package" cannot be met. If the legislature allocates more the 100%, the excess budgeted amount is wasted.
1 Role of the Legislature in the Budget Process: Recent Trends and Innovations
2 Role of the Legislature in Budget Processes
3 Zero-based budgeting
4 Streamlining Zero-base Budgeting Will Benefit Decisionmaking (download)