A budgetary "revolution" in France

 

A budgetary "revolution" in France

Wednesday, December 1st, 2010 - 17:59
Wednesday, December 1, 2010 - 17:56
Considered a "revolution" in France, the Framework Law on Finance Acts (La Loi Organique sur les Lois de Finance), has a number of striking similarities with the Government Performance and Results Act of 1993 in the United States.

The reform, popularly named LOLF after an August 1, 2001 constitutional amendment, defined a new architecture for the French state budget, articulated in terms of mission, programs and actions.   Unlike GPRA, it changes the entire budgetary process rather than adding results-oriented features to an otherwise unchanged process. 

LOLF aims to improve the effectiveness and efficiency of the French central government’s expenditures by organizing the annual budget around management by objectives rather than management by means.  The LOLF provides a new and clearer structure for the State budget using three main components: mission, program and action. The missions correspond to the main governmental policies.  A program covers the appropriations designed to implement an action or cohesive set of actions by a given ministry.  The program is broken down into actions, each of which defines more specifically the intended purpose of the appropriation.

Earlier this week, Rutgers University-Newark School of Public Affairs and Administration and the Institut de la Gestion Publique et du Dévelopment Economique in France hosted a dialogue at the Ministry to Economic and Ministry of Budget with researchers and practitioners from the US and France to discuss the measurement of performance and management in the public sector. Despite considerable differences in culture and governmental structure, there was a remarkable degree of similarity in terms of the progress and remaining challenge.

I participated in the Franco-US Dialogue which was a refreshing, candid and realistic discussion.   There is evidence that both countries are moving toward performance based budgeting in a variety of government contexts.  At the same time, I observed two important conclusions:

  • There is no one “correct” or best model that could or should apply in all countries.  The political and social context, past history, and other factors require an approach tailored to the situation in each country.  Countries have not all taken the same path or focused on the same framework.\
  • There is little point in engaging in a major reform effort of this kind unless it is going to be “used” in some way.   Considerations of “use” need to start at the beginning of the process and guide all aspects of the approach. 

Representatives from both countries confirmed the value and importance of implementing performance management systems.