The Budget Review and the Committee on Budgetary

The Budget Review and the Committee on Budgetary Control: Coping with Multiple Agents and Multiple Goals Prof. Daniel Tarschys University of Stockholm The Committee on Budgetary Control 15 July 2008

The Importance of Parliamentary Control • build and maintain morale and motivation in the executive branch • build confidence and legitimacy • enhance policy learning and policy innovation.

Questions about public expenditures • The control of disbursements: issues of legality and regularity • The control of output: issues of effectiveness, efficiency and economy • The control of outcomes (or impact)

The focus of parliamentary control • Legality and regularity? • Effectiveness and efficiency? • Outcomes or impact? Yes, but… No

The challenge of multiple agents • When co-funding investments or activities, does the EU mobilise other resources? Is there leverage? • Or does the EU simply hand out money to agents without affecting their behaviour (Mitnahmeeffekt)?

The challenge of multiple goals • Auditors and evaluators repeatedly urge politicians to be clear about their goals • But politicians have many reasons to be vague and ambivalent, as for instance: (i) facilitates agreement (ii) facilitates adaptation (iii) gives leeway for variations

32 goals of cohesion policy • • • • • Solidarity Convergence (countries) Convergence (regions) Regional growth Regional competitiveness European growth European competitiveness Administrative modernisation Institutional development Environmental protection Climate policy EU visibility to citizens EU legitimacy European identity Redistributive justice Rural development Urban development Retraining of the unemployed • • • • Fighting social exclusion Integration of vulnerable groups Gender equality in labour market Boosting small & medium enterprises Inter-regional network-building Inter-regional learning Linking regional elites to Brussels Trans-frontier cooperation Compensation for internal market Compensation for monetary union Making enlargement acceptable in some areas of the old member states Making enlargement acceptable in disadvantaged regions of the new member states Territorial cohesion Cohesion (sense of community)

Multiple agents, multiple goals: what can we know about effectiveness and efficiency? • Co-funding is a common technique but its effectiveness and efficiency are hard to measure • Effectiveness and efficiency cannot be established without reference to concrete goals; the more numerous the goals, the greater the prospects for ”success stories”

Which role for control by the European Parliament? • Possible concentration to the aspect of European added value, leaving other aspects to national legislatures, auditors and evaluators • Need for narrow definition of European added value, avoiding the dilemma formulated by Wim Kok: ”If Lisbon is everything, it is nothing”

Particular attention to European collective goods • Importance of trans-frontier investments • Strong likelihood to identify expenditures with high European added value in areas where there are no return flows whatsoever to particular Member States

Thanks for your attention! The argument developed further in: • The Enigma of European Added Value: Setting Priorities for the European Union (Sieps 2005: 4). • Agenda 2014: A Zero-Base Approach, Sieps European Policy Analysis 2007: 5. www. sieps. se