Managing the budget: The Dutch experience

This paper deals with attempts that were made in the Netherlands to improve control of public expenditure since the mid-1970s. It seems useful to distinguish between control in the short run and control in the longer run. In the Netherlands expenditures are budgeted and accounted for mainly on a cash basis. More emphasis has only recently been put on commitments. As cash outlays result from commitments concluded to in the past, in-year control focusing on cash outlays cannot be very effective. More important, therefore, is control in the longer run. The instruments of longer term expenditure control introduced in the 1970s and 1980s can be classified into two categories: (1) based on decrementalism; (2) based on some form of re-evaluation. Instruments belonging to the second category are potentially most effective. However, with the exception of the reconsideration procedure all longer term control instruments seem to have failed. Empirical evidence suggests that open-ended programs are no primary cause for the limited control and the resulting overruns. More important may be the existing political norms and values, which seem to prevent the control instruments from effectively being used.