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The China Law Center Hosts Workshop on Exercising the Legislative "Power of the Purse"

The China Law Center hosted an "International Workshop on the Legislature, Budget Supervision, and Public Finance" in Beijing on May 13-14. The workshop explored how China's national and local legislatures might more effectively exercise supervisory power over government budgets, improve transparency and openness in public finance, and develop better institutional checks on government power.

Under the Chinese Constitution, local assemblies known as "people's congresses" have the authority to approve and supervise public expenditure at every level of government. Scholars and officials acknowledge, however, that the congresses' ability to exercise this power has been extremely limited in practice.

"Few of the mechanisms designed to provide checks and balances operate effectively in China," noted Jeffrey Prescott '97, Associate Director of The China Law Center. "A potentially important mechanism to address systematic problems like corruption and waste of public resources is effective legislative review of government budgets."

The China Law Center co-sponsored the workshop with Professor Cai Dingjian, Director of the Institute for Study on Constitutionalism at China University of Political Science and Law in Beijing. Cai, a former official in the National People's Congress, is one of China's leading experts on the legislative system. Also attending the event were officials from the national legislature and China's central government, as well as prominent legal and public administration experts. But most participants were local legislative leaders responsible for budget supervision from all over China. The main objective was for them to engage in in-depth discussion of the problems they face with their colleagues and their American counterparts.

The China Law Center's team included four leading American budget experts: Paul Posner, a former senior official of the Government Accountability Office who is now Director of the Master of Public Administration Program at George Mason University; Jeff Holland, Chief of the Projections Unit at the Congressional Budget Office; Art Stigile, Chief of the Budget Concepts Branch at the Office of Management and Budget; and Philip G. Joyce, Professor of Public Administration at George Washington University.

During the two-day forum, many participants noted the distinction between the legislature's authority to supervise government budgets and the capacity to actually carry out such work. Both Chinese and American experts stressed the need for greater legislative access to budget information, and for capacity to independently analyze this information and act on it. Professor Cai, noting that budgets in China are still often treated as "state secrets," emphasized the need for greater openness and transparency in the entire process. Other speakers noted some positive recent developments, particularly the more active role of China's National Audit Office in supervising government finances, and there was some discussion of how this office might complement a more robust legislative role.

The Chinese officials and experts were extremely frank about the obstacles that reformers face in this area, and many mentioned that seemingly "technical" budget issues quickly raise more fundamental problems of government transparency and the need for a greater public role in the government decision making process. "The challenges that China faces in this area are enormous," Prescott noted. "The leadership would like to see a more rational and effective public finance system, but there is still resistance to reforms that challenge traditional power centers."

Despite these challenges, many of the participants expressed an interest in pursuing further efforts in their own localities, and invited Professor Cai and The China Law Center to work with them on designing experimental reforms. At the same time, there seems to be room for changes to national policy, as China's Budget Law is up for revision. Professor Cai concluded the workshop by urging officials to take further action: "To push forward reform in China, we need a sense of political responsibility, political wisdom, and we need people in positions of power to use their power to promote reform." The China Law Center plans to continue to work with Cai and other partners to help incorporate some of the suggestions from the workshop into the new law.