Sweden has an advanced and effective budget process that meets OECD recommendations. Priorities for reform include reducing fragmentation in fiscal risk reporting, performance budgeting, and policy evaluation. Sweden should also leverage practices in cross-cutting collaboration and gender budgeting by taking more open and participatory approaches to policy design, budgeting, and accountability to improve performance.

1. Budgeting in Sweden
Ronnie Downes
OECD
37th annual meeting of OECD Senior Budget Officials
Stockholm, Sweden, 9-10 June 2016

2. Contents
• Starting point: 2001 Budget Review
• A budget system in evolution: 2016 Budget Review
– What has changed – and why?

3. Recap: 2001 Budget Review
Over-arching fiscal surplus rule
2-phase budget
cycle
Spring Fiscal
Policy Bill
Autumn
budget
MTEF
New IFI:
Fiscal Policy
Council
Performance

4. Key observations:
Streamlining of the fiscal and budgetary process
• Spring phase now
focuses on medium-
term fiscal plans
• Expenditure detail
reserved for Budget
Bill in Autumn
Process has been streamlined since earlier OECD Review

5. While it has served as a visible anchor for fiscal policy,
several factors impact its future viability:
Key observations:
Commitment to the 1% surplus rule appears to be waning
• Pressing budgetary demands for
more investment and for fiscal room
to respond to the refugee crisis
• EU-wide harmonisation towards a
budgetary-balance norm

6. The medium-term framework is distinguished by its
fixed character
Key observations:
Limits of the medium-term framework are being tested
• A “budgetary margin” gives some in-
built flexibility
• However, this may prove insufficient
for the extraordinary budgetary
demands of the refugee crisis

7. As a general principle, policy-making in Sweden is
characterised by:-
Key observations:
Policy-making process is highly collaborative
• The “silo-busting” practice of
gemensam beredning (joint
preparation), facilitating cross-
governmental input into policy
measures.
• A principle of “crown for crown”
– now under pressure

8. A strong network of independent institutions support the
budget process. In particular, the Swedish Fiscal Policy
Council established in 2007 is now an authoritative fiscal
commentator. However:
Key observations:
Strong independent institutions
• The Council needs stronger access
to information to be able to
reconcile Government disputes
• Its specific findings are not
necessarily designed to be directly
relevant for the upcoming budget

9. There is an extensive range of reports through the
accountability cycle
Key observations:
The quality & transparency of financial reporting is high
• Financial statements are clear,
with focus on central government
• The link between fiscal analysis,
budgeting and accrual accounting
remains limited
• The Annual Report has limited impact on budget
discussions

10. There are specific requirements for reporting on State
guarantees and SOEs, and a series of reports on long-
term sustainability. However:
Key observations:
Systematic approach to managing fiscal risks
• There is so far no aggregated view
on these risks
• There is limited analysis of the
financial situation at the sub-
national level

11. The 2014 “PISA shock” has spurred a review of internal
evaluative and performance frameworks. Specific issues
include:
Key observations:
Performance budgeting is in a state of flux and review
• The performance framework is not
yet very systematic
• Indicator and target selection is not
systematically integrated with
higher level objectives
• There is no clear overall reporting
to parliament or other stakeholders

12. A number of sector-specific ‘inspectorates’ undertake
critical appraisal and assessment. However:
Key observations:
Fragmented policy evaluation
• The results are not designed as
tools to inform public or
parliamentary discourse
• The results do not inform budget
discussions
A new Spending Review pilot currently being undertaken
will need to be rapidly expanded to examine broader
areas of government spending.

13. Trust in the public administration is high as regards
integrity and quality and so the budget process is
regarded as an internal concern. However:
Key observations:
Limited proactive engagement by civil society stakeholders
• consider taking steps to solicit the
views and inputs of stakeholders to
promote more participative budget
development
• Potentially relevant also for more
impactful gender budgeting

14. Building on the established commitment to gender
mainstreaming, the new gender budgeting approach will:
Key observations:
Gender budgeting is a current priority
• Rigorously assess the gender
impact of policy alternatives
• Use gender assessments to
decide upon resource allocation
• Identify and avert gender-
negative policies from the outset
• Promote gender-responsive
policies

15. Summary: 2016 Budget Review
Sweden has a sound, advanced and effective budget process
which meets all of the provisions of the OECD Recommendation
on Budgetary Governance, some in exemplary terms.
Priorities for future reform
• Reduced fragmentation in relation to certain
budgetary practices, most notably reporting
on fiscal risks, performance budgeting and
policy evaluation.
• Leverage advanced practices in areas such as
cross-cutting collaboration and gender
budgeting with advanced initiatives in more
open, participative approaches to improve
policy design, budget prioritisation and
performance accountability.

16. Budgeting
within fiscal
objectives
Compliance with OECD Budget Principles
Quality,
integrity &
independent
audit
Performance,
Evaluation &
VFM
Comprehensive
budget
accounting
Effective
budget
execution
Alignment with
medium-term
strategic plans
and priorities
Performance,
evaluation &
VFM
Transparency,
openness &
accessibility
Participative,
Inclusive
& Realistic
Debate
Fiscal Risks &
Sustainability
Capital
budgeting
framework

17. Budgeting
within fiscal
objectives
Compliance with OECD Budget Principles
Quality,
integrity &
independent
audit
Performance,
Evaluation &
VFM
Comprehensive
budget
accounting
Effective
budget
execution
Alignment
with medium-
term strategic
plans and
priorities
Performance,
evaluation &
VFM
Transparency,
openness &
accessibility
Participative,
Inclusive
& Realistic
Debate
Fiscal Risks &
Sustainability
Capital
budgeting
framework

18. tack så mycket
ronnie.downes@oecd.org
oecd.org/gov/budgeting