The Evolution of Budgetary Institutions in Estonia: A Path Full of Puzzles?

This article examines the evolution of budgetary institutions in Estonia between 1993 and 2008, with a main focus on rules governing the preparation, adoption, and implementation of the state budget. It discusses the initial choice of budgetary institutions in 1993 and subsequent developments in the light of theoretical propositions put forth by the fiscal governance literature. The case of Estonia poses a number of puzzles, and the article seeks to explain the institutional choices in Estonia: Why did the coalition government opt for a delegation mode of fiscal governance in 1993? Why has the preparation phase of the budget process evolved toward a contracts approach from 1994 onward, while the adoption phase has moved closer to a delegation mode? The article demonstrates that alongside government type, institutional choices can be influenced by lesson‐drawing from history, examples of other countries, and negative experiences gained in legislative budget process.     

THE USE OF PERFORMANCE INFORMATION IN BUDGETARY DECISION‐MAKING BY LEGISLATORS: IS ESTONIA ANY DIFFERENT?

The goal of this article is to examine to what extent legislators in Estonia use performance information in budgetary decision‐making. Interviews with the members of the finance committee of the parliament show that legislators make only limited use of the formal documents containing performance information. Instead, they rely, for the most part, on informal social networks for gathering information they consider necessary for budget discussions. According to the legislators, the main reasons for limited use of performance information are the following: the documents containing performance are too long and cumbersome, the legislative budget process is too time‐constrained, and the parliament has only a limited role in making substantive changes to the budget. The study also indicates that more experienced politicians are less interested in performance information than the novices but there are no significant differences between legislators from governing and opposition parties.