Does longer deliberation by the legislature increase the efficiency of the government budget?

IMPACT

The extension of the review period is a crucial instrument for ensuring that lawmakers take an active role in the budget process. This article suggests that a longer deliberation period for a legislature can improve budget efficiency. Moreover, a more diverse legislature has a wider and more balanced range of perspectives, which further improves its decision efficiency. These results support the recent wave of legislative budget activism, which has been observed globally in both developed and developing countries.

ABSTRACT

This article examines the influence of the length of the legislature’s budget deliberation period on budget efficiency, using a novel dataset from South Korea, where the legislature’s budgetary review period was extended from 60 to 90 days. Adopting the budgeted but unused funds as an indicator of budget inefficiency, the authors found that budget efficiency improved when the deliberation period by the legislature was lengthened. Furthermore, the positive relationship between the length of the deliberation period and budget efficiency was strengthened when the group of lawmakers reviewing the budget was more diverse.

Keywords:

• Bounded rationality
• budget efficiency
• budget process
• budget review period
• diversity
• legislative budget activism
• South Korea
• unused budget