A Comparative Governance Perspective On Public Expenditure Approval Process

by Mohd Zahrain Bin Mohd Nor

Abstract

Over the past decade, worrying trends have emerged insofar as two indicators of the Malaysia’s federal government financial position are concerned, i.e. deficit and debt, which suggest imprudent governance of the public finance. The government has been spending more than what have already been approved by the Parliament at the beginning of the fiscal years, particularly the operating expenditure. The latest Auditor-General’s report further proved the imprudence in the governance of the public expenditure and reinforced the urge to strengthen the governance. The role of the legislature in the governance of public finance is important as it can influence the states of the financial affairs of the country through approving/disapproving any public expenditure. Nonetheless, given the poor governance of the public finance, the effectiveness of the governance of the public expenditure by the legislatures has been doubted. Doubt raises question, and in this case: Has the legislature been inadequate in governing the public expenditure approval process?

This study sets to answer that question. The legislative governance of the budget approval process differs across different countries. The differences show that the governance of the budget by the legislative is contingent on several variables, namely: (1) the form of the government; (2) the dominance of the political parties; (3) the power to amend; (4) the specialized budget committee; (5) the budget research capacity; and (6) timing of scrutiny. This paper studied these variables to answer the main research problem by comparing Malaysia with the international best practices and with another country – Canada. The results show that in comparison to the international best practices and the practices in Canada pertaining to the variables studied, the legislature in Malaysia has been found to be inadequate in governing the public expenditure approval process. 

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