Managing Budget Conflicts in International Organisations · 2 I. Introduction Budgeting in international organisations is a defining organisational process. But while comparative

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Managing Budget Conflicts in International Organisations: A Comparison of EU, ILO and WHO *

Ronny Patz** and Klaus H. Goetz*** Department of Political Science, University of Munich

Paper presented at the Panel

“Bureaucratic Perspectives on International Organizations “

ECPR General Conference, Montreal, 26-29 August 2015

Draft is work in progress – Comments are welcome - Please do not quote without permission -

Abstract Budgeting is one of the most complex procedures in international organisations, as it requires multi-level and multi-temporal coordination between many actors. In addition, IOs are faced with divergent priorities of their members and demands for zero budget growth leading to increased conflicts over how to distribute limited resources. To better understand how budget conflicts are managed, the present paper reviews previous scholarship on IO budgeting and, against this background, establishes (i) institutionalisation and (ii) routinisation of budget procedures as key variables for analysing the temporal dimension of budgeting processes and degrees of (iii) autonomy, (iv) centralisation and (v) concentration as key dimensions along which to compare the roles of international administrations in budgeting. It presents an initial descriptive comparison of budgeting in the EU, the ILO, and the WHO alongside these dimensions to assess core similarities and differences in the budget timescape and administrative power distribution in these three international organisations.

*This paper arises out of the research project on “Timescapes of International Administrations: Time Rules and Time Horizons of Planning and Budgeting” (http://www.politicaltime.eu). The project is funded by the German Research Foundation (DFG) as part of the Research Unit “International Public Administration: The Emergence and Development of Administrative Patterns and their Effects on International Policymaking” (http://ipa-research.com). We thank Sina Beckstein, Claude Biver and Helai Scharifi and for their research assistance. ** [email protected] *** [email protected]

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I. Introduction

Budgeting in international organisations is a defining organisational process. But while

comparative analysis on international organisations has grown rapidly in recent years (Tallberg et

al. 2014; Hooghe and Marks 2014), and while there has also been a growing interest in the work

of the administrative bodies of these organisations (Barnett and Finnemoore 2004; Kim, Ashley

and Lambright 2014), little comparative research has been conducted on budget procedures in

international organisations (this is as true today as it was 25 years ago, see Dicke 1991). What we

know in comparative terms on IO finances and budgeting is mostly from the 1960s (Szawlowski

1961, 1963, 1965, 1970) and 1970s (Hoole 1976; Hoole, Job and Tucker 1976; Hoole, Handley

and Ostrom 1979). Only recently the increasing role of voluntary and earmarked contributions

has attracted renewed comparative research interest (Graham 2011, 2015; Eichenauer and

Reinsberg 2014; Reinsberg 2014). The best knowledge we have on the evolution of budgeting

and finances in international organisations is based on studies of the European Union’s finances

(notable Laffan 1997, Lindner 2006) and of those of the UN (Sommer 1951, Singer 1961, Müller

1995, Hüfner 2003). The central focus of most these studies has usually been on member state

contributions and intergovernmental or inter-institutional conflicts over the distribution of IO

funds, not on administrative tasks and responsibilities.

Against this background, the present paper presents and applies a comparative framework to

study the budget timescapes of a variety of international organisations with a focus on the role of

international public administrations (mostly ‘secretariats’) in IO budget procedures. The

framework relates temporal patterns of IO budgeting to the horizontal and vertical power

distribution in budgetary matters inside the permanent administrations of international

organisations and also to the degree of autonomy that these secretariats have vis-à-vis the

intergovernmental and other political decision-making bodies of their IOs throughout the

budgeting process. Following a review of the relevant literature on budgeting in international

organisations and the presentation of the conceptual bases, we apply this comparative framework

to three cases of international organisations with complex principals (see Lyne, Nielson and

Tierney 2006 for a discussion on complex principals) and relatively differentiated administrative

structures: the European Union (EU) where the Commission has an intermediate position

between with the Council and the European Parliament, the International Labour Organisation

(ILO) where the International Labour Office has to work with social partners deciding alongside

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the member states and the World Health Organisation (WHO) where the central administration is

facing strong regional forces on one side and the Gates Foundation as a dominant non-state

funder of the organisation on the other. The question is how the institutionalised budgeting

sequence, the routinisation of this process and the power distribution throughout the budget

process reflect the specific organisational structures and financial conditions of these

organisations.

Our preliminary findings, which indicate some important similarities and differences in the

administrative structures and procedures related to budgeting in complex IOs, are based on the

comparative analysis of legal frameworks of budgeting in the three organisations, on the study of

public documentation and internal administrative documents received from the IOs relating to

budgeting procedures of the past ten years, as well as on 17 expert interviews.1 We find mostly

routinised budget procedures, ensured through networks of budget officials mirroring the

organisational structure of the three organisations and departments responsible for coordinating

the overall programming and budget process. These departments are positioned in central

management services or, in the case of the EU, in a directorate-general resembling a finance

ministry in a national state, in the former cases closely working with the offices of directors-

general, in the latter with a politically appointed budget commissioner. Under budgetary

pressures and in light of new financing models, new routines have been established in the EU and

WHO, including stronger coordination with and involvement of the politico-administrative

leadership or the organisations.

II. Budgeting in International Organisations: the administrations between member state

conflicts and financial crises

During the early post-World War II decades when many international organisations were founded

and grew in size and relevance, a number of scholars began studying the financing and budgets of

these international organisations. Based on knowledge of the difficult financial situation of the

League of Nations and other pre-war IOs (Hill 1927; Jacklin 1934; Jenks 1942; Sumberg 1946;

Singer 1959), the main interest was in the United Nations finances and budgeting and the changes

1 14 Interviews were held in October 2014 and July 2015 with 17 officials directly involved in the budgeting processes of the three IOs (9 EU officals, 5 officials on WHO, 3 on ILO). Two additional interviews were held with UN and national experts having significant expertise in IO administration and budgeting. One ILO official answered some factual questions via email.

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introduced compared to the pre-war context (Carnegie Endowment for International Peace 1947;

Sommer 1951; Singer 1957, 1961; Mower 1964; Claude 1973). Among other things, the central

role of the Advisory Committee on Administrative and Budgety Questions (ACABQ) in the

budget process has been highlighted, albeit one very much focused on cutting budgets compared

to the draft budget proposed by the UN Secretariat (Singer 1957). A comparative perspective

with a focus on the substance of IO budgets, to a lesser degree on the budget process, was

provided by Richard Szawlowski. His overview contributions (Szawlowski 1965) as well as

comparative studies focused on the finances of individual IOs such as the Council of Europe

(1961), the United Nations (1963) or the WHO (1970) demonstrated the varying patterns of

growth and stagnation of IO budgets. This underlined that there were specific dynamics at play in

different international organisations, despite a general trend towards nominal and in many cases

also real budget growth. In the 1970s, a number of studies on WHO budgeting (Hoole 1976) and

IO budgeting more generally (Hoole, Job and Tucker 1976; Hoole, Handley and Ostrom 1979)

then tested different budgeting models from research on national budgeting, such as

incrementalism, for international organisations. Whereas the findings remained largely

inconclusive, there seemed to be the general trend that the initial budget proposal by the IOs’

administrations usually were higher than the previous budget, were then cut by the IO’s executive

body before a restoration of the initial figures in the assembly stage of budget decision-making

(Hoole, Job and Tucker 1976: 279), showing how each budgeting stage can have its own

dynamics depending on the actors involved. Since then, interest in budgeting in IOs has been

scattered, despite the realisation that budget negotiations and financial decisions are a major

source of conflict and stress inside international organisations (Claude 1973; Taylor 1991).

Besides some legal contributions on IO finances and member state contributions (Francioni 2000;

Archibald 2004; Ingadóttir 2011), IO budgeting has been mainly a matter of single empiricl case

studies, from the finances of UNESCO (Bacot 1980) or of the International Sea-Bed Authority

(United Nations Office for Ocean Affairs and the Law of the Sea 1991) to those of the African

Union (Engel 2015), noticing the differences of the budget process compared to national

budgeting (e.g. with regard to the existence of biennial budgets) in the UNESCO case or the

difficult financial situation of the African Union in the latter. The variety of case studies on the

United Nations finances (Beigbeder 1986; Dicke 1991; Taylor 1991; Müller 1995; Mendez 1997;

Hüfner 2003; Laurenti 2007), including on UN peacekeeping budgeting (Nimikas 2004; Diehl &

PharoaKhan 2005), have often been focused on the financial problems of the UN, especially in

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times when a number of member states failed to pay their contributions in the 1980s (e.g.

Beigbeder 1986) and in particular with a view to the difficult relations that the USA have with the

UN (e.g. Hüfner 2003). These studies alert to the fact that budgeting in major IOs regularly faces

budgetary crisis as a result of geopolitical tensions, financial management problems within the

IOs, the addition of new tasks to the portfolio of IOs without proper agreement on the financing

modes or fiscal constraints within member states in times of economic downturn. One of the few

comparative analyses of IO budgeting found in particular that there are a large variety of financial

and budgetary arrangements in the different UN organisations and that these differences are a

function of “the size, the structure and the programmes of the organization in question” (Dicke

1991: 190).

Dicke also noticed the lack of comparative analyses of IO budgetary decision-making, whereas

general decision-making in IOs seemed well-understood (ibid.: 191). Volumes like the Routledge

Handbook of International Organization (Reinalda 2013) or International Organization

(Rittberger, Zangl and Kruck 2012) do not include chapters on IO budgeting, suggesting that

there is still no consolidated knowledge on this matter today. The only notable exception has

been the study of EU budgeting, which has seen a variety of substantive contributions over recent

decades, from special issues on the EC budget (foreword to the Journal of European Integration

special issue by Easson (1985)) or major monographs by Laffan (1997), Lindner (2006) and

Becker (2014) or edited volumes such as the one by Benedetto and Milio (2012), which all

provide intertemporal comparisons and showing stability and change in substance and procedures

of EU budgeting. Besides the substantive description of the income sources and the allocation of

expenditure of the EU budget, these studies usually have been focused on budgetary conflicts

between member states themselves or between the European Parliament and the (European)

Council. An important conclusion from this literature has been that changes to the power balance

between the two principle institutions matter for the outcome of budgetary negotiations and have

recently led to a strengthening of the Council’s more restrictive budgetary position (Benedetto

2013; Crombez and Hoyland 2014). Furthermore, changing institutional arrangements such as the

introduction of the multiannual financial framework in 1980s have affected the degree of conflict

and cooperation between actors with varying interests as much as budgetary conflicts are the

consequence of external pressures on the budget coming from financial crisis such as the one the

European Union has been facing since 2008 (cf. Laffan and Lindner 2015).

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Most notably, however, none of the contributions on the finances and budgetary process of IOs

has been focused on the role of the international public administrations in the budgeting process.

Singer (1961) for the UN and Lindner (2001, 2006) for the EU have paid substantive attention the

variety of roles of IPAs, from budget preparation to moderating roles of the UN Secretariat and

the Commission throughout the budgeting process, and Szawlowski noted frequently that the task

of budget drafting while formally assigned to IOs’ Directors-General or Secretaries-General is in

reality delegated to special budget divisions (1961: 354), but administrative procedures and

coordination have never been central to these analyses. And while Goetz and Patz (2014) have

started to address this lacuna by looking into coordination of budget procedures within the

European Commission, and while Caroll and Kellow (2011: 39-44) trace the varying degree of

influence of the OECD’s administration in the budgeting process as part of their case study on

OECD, these contributions are single case studies without a comparative dimension.

This lack of more comparative approaches and lack of focus on the role of the administration is

surprising even beyond the argumentation presented in the introduction. International

organisations themselves have been looking for examples in budgeting procedures in other IOs

when adapting their own rules and practices and reform processes have often been started in

order to provide more time to member states to scrutinise the budget drafts of the administration,

suggesting that power and influence of IPAs matter very much in designing IO budget

procedures. For example, ILO changed its budget process in the 1980s because the “tight

production schedule” left little time for constituents “to examine fully, and take a position on, the

programme and budget proposals” (ILO 1987). In several cases, finding solutions to this meant

looking to other IOs. FAO studied four other UN agencies – ILO, UNESCO, UNIDO and WHO

when considering reforming its own budget procedures (FAO 2006) and the move of the Council

of Europe to a biennial budget procedure from 2012 onwards was “based on the model of the

OECD” (Council of Europe 2010). The ongoing synchronisation of the planning and mid-term

budgeting cycles across the UN system is also based on a comparative assessment of budget

procedures (see the overview table on the move to a Quadrennial Comprehensive Policy Review

(QCPR) (United Nations 2014)). Only the growing importance of voluntary and other non-core

contributions to international organisations (JIU 2014; OECD-DAC 2015) has led to renewed

interest in the comparative analysis of IO finances in the academic literature (Archibal 2004;

Graham 2011, 2015; Reinsberg 2014; Eichenauer and Reinsberg 2014). As a result, the standard

budget procedure (see Table 1 below) that emerges from the comparative literature on public

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budgeting in general and from the research on IO budgeting in particular has to be extended by a

resource mobilisation stage.

Table 1: Stages of the IO budgeting process (standard procedure)

a) Mid-term priorities 1. Priority Stage (incl. expenditure ceilings) b) Short-term priorities

a) Preparation of department submission b) Review and feedback (one-time or reiterative)

d) Finalisation of budget draft 2. Budget

Proposal Stage e) Formal submission of budget draft

a) Budget specialist and/or Executive debate b) Assembly debate(s)

c) Formal or informal reconciliation between multiple or heterogeneous collective principals

3. Budget Adoption Stage

d) Formal Adoption a) Regular mobilisation (incl. assessed

contributions) 4. Resource Mobilisation Stage

b) Ad-hoc and non-core mobilisation a) Proposal for adjustment or adopted budget

5. Adjustment Stage b) Adoption of adjustment

6. Execution Stage Implementation

a) Reporting (ongoing and ex post) 7. Follow-up Stage b) Discharge

The different stages may not appear in all IOs and they may not necessarily be sequential (e.g.

resource mobilisation might start already during the adoption stage), but the reflect the standard

procedure that, in one way or another, is described in many contributions on IO budgeting.

Thus, previous research on IO budgeting has contributed to our knowledge of the evolution of IO

finances of time, to our understanding of the main stages of IO budgeting (in particular the role of

the administration in the budget proposal stage) and the central conflicts between member states

over organisational and budgetary priorities, and to the recognition that institutional arrangements

on one side and budgetary crises on the other matter for stability and change in budgeting

dynamics within IOs. What we lack is a comparative and in-depth understanding of the role and

power of IPAs in all this. How are IO administrations able to manage core budget routines,

especially in more complex IOs, and to what extend are they willing and able influence the

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outcome of budget negotiations? This question is relevant because many international public

administrations are more than secretariats of intergovernmental conferences. They are actors in

their own right, with permanent and functionally differentiated administrative structures, with

recognised political or administrative leaders, with operational programmes and with mandates

ranging from the coordination of independent expertise to the provision of public functions more

commonly associated with states. Their staff, general operations and projects require resources

provided through assessed contributions by member states, through voluntary contributions by

governmental or non-state donors budgets or through in-kind support, whether at the headquarters

or ‘on the ground’ around the globe. This makes budgeting and resource mobilisation central

organisational processes in international organisations in which international public

administrations are heavily involved and heavily invested. Where they are faced with complex

principals and heterogeneous preferences, their role should extend to more than translating clear-

cut political guidance from governing bodies into draft budgets and to more than implementing

final budgets according to equally clear-cut programmatic decisions. They should be moderators,

negotiators and self-interested actors with organisational and budgetary goals of their own, where

studying decision-making, coordination and priority-setting inside the administration is as

relevant to our understanding of IOs’ budgeting processes as it is necessary to understand the

varying interests of member states, donors and other actors participating in budgetary decision-

making that have been the focus of prior research.

After the first 15 years of the United Nations, one conclusion on the involvement of the UN’s

international public administration was that “the [UN] Secretariat [had] accepted a passive,

conservative and circumscribed role” in budgeting, unable to overcome “power vacuums” and

stalemates (Singer 1961: 179). If our expectations formulated above are correct, comparative

research on IPAs’ role in today’s budgeting in international organisations should find

administrative practices that suggest a much more active bureaucracy that uses its positional and

informational advantages trying to steer and shape IO budgeting, procedurally but also

substantively. The framework that we develop below takes account of this perspective, first by

proposing a procedural and temporal dimension of IO budgeting and then by looking into

administrative power distribution in order to understand which actors are in the driver’s seat

during the various stages of the budgeting process.

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III. Analytical Framework: Budget Timescape and Politico-administrative Budgeting

Powers

The analytical framework for the comparison of expenditure budgeting in international

organisations presented below is routed in the perspective of actor-centred institutionalism

(Scharpf 1997), assuming that, in principle, individual or collective actors will follow the course

of action that institutional rules set for them. However, depending on the rewards and sanctions

offered by the institutional setting, actors will make “strategic or tactical choices” (ibid.: 42) and

take actions outside or even against the rules in order to maximise their own power or the

resources made available to them. A core assumption following from this theoretical framework

is that international public administrations (IPAs) and the individuals and groups inside IPAs, just

like any other administration, are striving for autonomy (see Bauer and Ege 2014 for a conceptual

discussion), i.e. power to direct their own course of action and power to influence their

environment. How and in what ways they can exercise this quest for autonomy depends on the

framework of rules within which they operate. One of the means to achieve autonomy is to

increase their rights and capacities to collect and deal with specialised information about complex

realities beyond the limited perspectives of their member states (Barnett and Finnemore 1999).

Once these capacities are available, IPAs can try to depoliticise decision-making by rationalising

the process using information that only IPAs themselves can provide (cf. Barnett and Finnemore

1999: 709), making courses of actions quasi-inevitable. Especially in complex budgeting

environments, depoliticising the budget process can mean that budget specialists inside the

administration can keep control over the core budget decision-making while member states and

other principals without comparable administrative resources and access to detailed financial

information will have to rely on the IPAs budget expertise. On the other hand, budgeting involves

complex political compromises, package deals, and offset-payments across multiple dimensions.

from the overall budget ceiling to the allocation of specific funds for specific purposes. These

political compromises may not be possible at technical level, therefore requiring a stronger

involvement of political level of the administration who can argue with their political peers and

suggest solutions for complex negotiations.

Budgeting is a prime example in which the special knowledge of IPAs about specialised sectoral

policies and budget solutions meets the intrinsically political reality of budgeting, allocation of

funds to specific goals and the financial management attached to the different types of funding

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mechanism. We expect that IPAs prefer a large degree of autonomy in determining IOs’

spending, in raising funding, and in managing funds made available to them; accordingly, they

could use their specialised knowledge to argue for the specific allocation of funds to

organisational priorities that they themselves have identified. In order to do so, IPAs would need,

first, to ensure they play a role in all stages of budget decision-making to be able to keep control

over where funds are allocated; second, increase routinisation of budget decision-making and

management to such a degree that member states (or other principals) do not have the time

available to hold lengthy political discussions about priorities but mainly follow the IPAs

proposals based on their specialised knowledge; and, third, increase their autonomy in

determining priorities and in managing funds in order to be able to shift spending according to

organisational needs. Depending on the stage, the IPA will either assign core management task to

budget specialists at lower or middle management, while during the politically more sensitive

stages the scarce time of the IPAs politico-administrative leadership is employed to take part in

difficult budget negotiations.

In light of these expectations, the analytical framework we present below is based on the standard

budget procedure presented in Table 1 above. In a first step, we develop a set of budget process-

related variables that are intended to capture how the temporality of budgeting is institutionalised

and how much budgeting is routinised. We then present three more classical variables focused on

administrative power distribution in the budget process. Here, we are first interested in the

degree of autonomy the constitutional documents assign to the IPAs at different stages of the

budgeting process. Then, we study to what degrees the budgeting units or officials specialised in

budget procedures are in the lead and during what stages the political level (top-level appointed

officials and their offices) become involved.

III.1 Process variables: Institutionalisation and routinisation of budget procedures

Budgeting is among the most temporally regulated processes in public organisations, ranging

from long- and short-term time horizons to detailed procedural rules for the establishment and

execution of the budget. Through time rules, budgeting becomes one of the most regularised

political and administrative processes. However, the degree to which the different stages of

budgeting (see Table I above) are temporally institutionalised through rules and routinised in

practices not only differs from one international organisation to the next; it can also differ over

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time within the same organisation. To understand this, institutionalisation and routinisation have

to be seen as closely connected. Following the perspective of actor-centred institutionalism, the

core questions are: Why are institutionalised time rules followed (or not)? Under what conditions

will actors follow stable routines although they are not based on formal rules? Are established

routines becoming institutionalised over time? Or are new rules used to establish new (or to re-

establish previous) routines?

Institutionalisation

By institutionalisation of the budget timescape we refer to the degree to which (a) there are

formalised and authoritative rules that regulate the existence and detailed sequence of the

budgeting process, and (b) whether there are rules that clearly define the timing or duration of the

respective budgeting stage, independent of their formalisation. Institutionalisation matters

because it defines to what extent time as a resource and power over time are allocated to different

organisational actors (Goetz 2014), providing them (as time-takers) with degrees of autonomy

over certain amounts of time to influence the outcome of the respective budgeting stages or as

time-setters who decide about deadlines for others. The institutionalisation of a budgeting stage is

considered ‘high’ if it is regulated at the level of treaties or in financial rules that come with a

clear sanctioning mechanism and if these rules explicitly specify dates or exact (minimum or

maximum) durations. Institutionalisation is coded ‘intermediate‘ if the stage itself is regulated at

treaty level or in financial rules, but without clear rules for timing/duration or if the

timing/duration of a stage is regulated but only in administrative guidelines or comparable

administrative rules without relevant mechanisms to enforce them. Institutionalisation is ‘low’ if

a stage is not regulated or only vaguely specified in low-level rules.

Routinisation of the budget procedure

Researching organizational routines empirically can involve performative aspects or, put

differently, the behaviour of “specific people at specific times” (Pentland and Feldman 2005:

796), ostentative aspects or the abstraction of patterns of behaviours such as the narrative of

routines (ibid.), as well as artefacts of organisational routines such as rules and written

procedures guiding the routines, but without necessarily predetermining them (ibid.: 797). By

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establishing a standard abstraction of the budget process, we have already looked into the

ostentative aspects of IO budgeting, and our operationalisation of institutionalisation of time

rules requires the study of artefacts that determine or reflect the routines of IO budgeting. Our

understanding of routinisation therefore refers to the actual performance of budgeting and the

degree to which the practice follows predictable rhythms and standard routines. For the present

purpose, we refer to two different understandings of routinisation:

(1) Where clear legal deadlines exist, explicitly (through specific times or durations) or implicitly

(e.g. due to the end of a year in a regular procedure), we code routinisation as ‘high’ if the

budgeting (sub)stage has always been finalised with the explicit time limits set by these deadlines

in the last ten annual or the last five biannual or multiannual budget procedures. Routinisation is

‘intermediate’ if deadlines have been respected in at least eight out of the last ten annual

procedures or four of the last five biannual or multiannual procedures, and ‘low’ if otherwise.

(2) Where no legal deadlines exist, we define routinisation of the budget process as ‘high’ if a

budgeting (sub)stage is finalised within 30 days of a corresponding time period over the past 10

annual budgeting procedures (e.g. the compilation of the draft budget draft is finished between 1

and 30 June of five consecutive years). Formalisation is ‘intermediate’ if the maximum distance

is 30 days for 8 of the last 10 annual procedures or 4 out of the last 5 biennial budget procedures

(and 45 days maximum for all 10/all 5) and ‘low’ if else.

III.2 Politico-administrative power in budgeting

While above we have first established our understanding of the different stages of budgeting in

international organisations and then defined institutionalisation of the budgeting timescape as

well as the routinisation of the budget procedure, we now operationalise the politico-

administrative power distribution in budgeting. The core questions therefore are (a) how much

relative power the IPA has in the budgeting process and (b) which actors inside the IPA are most

implied in the different stages of budgeting, i.e. where the administrative power centres in IO

budgeting lie. The study of international organisations has long been centred around principal-

agent models (e.g. Vaubel 2006), asking how independent IOs and their bureaucracies are from

member states or how they put in place oversight to constrain bureaucratic behaviour (Ege and

Bauer 2013: 139). This follows a diverse range of research perspectives on autonomy and control

of public administrations looking into “autonomy as having own decision-making competencies”

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over internal management or policy or “autonomy as being shielded off from governmental

constraints on actual decision-making”, whether structural, financial, legal or interventional

(Verhoest et al. 2004: 110). Other public administration scholars have focused on coordination

mechanisms in (national) public administrations, centred on the question what role the core

executives or central agencies have in public policy-making (Dahlström, Peters and Pierre 2011).

Following our theoretical assumption, we expect that the administration wants discretion in

allocating and managing the budget from the member states, lower levels in the IPA want

discretion from high levels and sectoral or geographical sub-units want discretion from

administrative centres. The interest in controlling or supervising is then directly opposite.

When it comes to power of international public administrations in budgeting, we distinguishing

three dimensions of politico-administrative power distribution in the budgeting of IOs, which we

assess for each (sub)stage:

(1) Administrative autonomy indicates the degree of independence of the permanent

administration from its political principals in budgeting. A budgeting (sub)stage is coded ‘high’ if

the administration under consideration can legally take its own decisions at the respective stage

without depending on the council(s), ‘intermediate’ if it is a shared decision where neither can

decide alone, ‘low’ if the council(s) or member states can decide alone or simply need to consult

the IPA. Administrative autonomy will be measured through the analysis of legal rules requiring

ratification or at least approval by the governing bodies of an international organisation (e.g.

treaties, rules of procedure, financial regulations).

(2) Administrative concentration indicates the degree of control of a core budget department or

similar central services with organisation-wide competences in budgeting. Concentration is coded

‘high’ when the budget department has the final word in a given budgeting stage, ‘intermediate’

when the budget department has a coordinating or mediating role among other organisational

units, and ‘low’ when a budget stage is handled primarily in line departments, geographical sub-

organisations or other organisational bodies. We expect concentration to be reflected in

administrative structures, procedural rules and in administrative guidelines on the budgeting

process. Some aspects of concentration may be part of organisational practice which will be

found in administrative documents or which can be uncovered through interviews.

(3) Administrative centralisation indicates whether top officials of the IO bureaucracy are

directly involved at the respective stage(s). A sub(stage) is coded ‘high’ if during a given budget

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stage organisational leaders or politically appointed officials (such as director-generals and

secretary-generals, deputy director-generals etc.) and their personal offices have generally had a

leading role in budget procedures during time periods under investigation, ‘intermediate’ if they

had a limited role, and ‘low’ if the stage is mainly been dealt with at technical level or by middle

management. While centralisation may be regulated in formal rules, we consider that this will

rather be reflected in organisational practices that we need to study through internal documents or

interviews.

Depending on the specific research interest and the availability of sources, researchers might

select only certain stages for the analysis e.g. focusing on the core budget process stages 1-3 or

trying to understand the routinisation and power distribution in the resource mobilisation process.

When studying multiple stages and stubstages, giving different scores to certain sub-stages that

are more important to the overall process than others (such as formal adoption of budget

proposals and formal adoption of the final budget). Table 2 below represents the full matrix with

all stages and sub-stages as defined in Table 1 and all variables defined in this chapter, without

pre-assigning specific weights to individual (sub)stages. In the next chapter, we will use these for

a first descriptive comparison of EU, ILO and WHO budgeting in some specific stages for which

we have data at this point.

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Process Variables Administrative Power Variables

Stages of the budget process

Institutionalisation (rules)

Routinisation (practice)

Autonomy of the IPA

(legal power)

Centralisation (top leadership role)

Concentration (budget specialist

role) a) Mid-term H – I – L* H – I – L H – I – L H – I – L H – I – L

1. Priorities c) Short-term H – I – L H – I – L H – I – L H – I – L H – I – L a) Preparation H – I – L H – I – L H – I – L H – I – L H – I – L

b) Review H – I – L H – I – L H – I – L H – I – L H – I – L c) Finalisation H – I – L H – I – L H – I – L H – I – L H – I – L 2. Proposal

d) Submission H – I – L H – I – L H – I – L H – I – L H – I – L a) Budget specialists H – I – L H – I – L H – I – L H – I – L H – I – L

b) Assemblies H – I – L H – I – L H – I – L H – I – L H – I – L c) Reconciliation H – I – L H – I – L H – I – L H – I – L H – I – L 3. Adoption

d) Adoption H – I – L H – I – L H – I – L H – I – L H – I – L a) Regular H – I – L H – I – L H – I – L H – I – L H – I – L 4. Resource

Mobilisation b) Ad-hoc/non-core H – I – L H – I – L H – I – L H – I – L H – I – L a) Proposal H – I – L H – I – L H – I – L H – I – L H – I – L 5.

Adjustment b) Adoption H – I – L H – I – L H – I – L H – I – L H – I – L 6. Execution Implementation H – I – L H – I – L H – I – L H – I – L H – I – L

a) Reporting H – I – L H – I – L H – I – L H – I – L H – I – L 7. Follow-up b) Discharge H – I – L H – I – L H – I – L H – I – L H – I – L

TOTAL** H [x >= 66%] I [33%< x<66%] L [x <= 33%]

H [x >= 66%] I [33%< x<66%] L [x <= 33%]

H [x >= 66%] I [33%< x<66%] L [x <= 33%]

H [x >= 66%] I [33%< x<66%] L [x <= 33%]

H [x >= 66%] I [33%< x<66%] L [x <= 33%]

Table 2. Analytical Framework of the Budget Process and the Role of the Administrative Actors in IO Budgeting * H = High, I = Intermediate, L = Low ** Sum of scores for all substages. Will depend on selection of stages and substage score weighting.

16

IV. Budget procedures and administrative roles in the EU, ILO and WHO

[This chapter is work in progress with further empirical data required to full assess the three IOs

along the five dimensions developed above and to do this rigorously across all stages throughout

all stages of the budgeting process. This chapter is therefore mainly descriptive. The most

detailed data is available for the EU, see Patz and Goetz (2015), which is an earlier version of

this draft applying the framework to EU budgeting.]

European Union WHO ILO

Current Budget period

2015 (2014-2020) 2014-15 2014-15

Adopted budget € 145.3 bln US-$ 3.98 bln US-$ 0.8 bln

Integrated Budget Yes Yes No

Voluntary Contributions No Yes

(76.6%) Yes

(~32%)

Special circumstances

The EU formally has own resources

independent from member states;

Council & European Parliament co-decide on

the budget

The share of voluntary contributions is

significant, with the Gates Foundation

providing an estimated quarter of

all contributions; WHO is strongly

federalised, including 1 region with its own

budget

The tripartite constituents

(governments 50%, workers

25%, employers 25%) collectively

decide on the budget in ILO’s

main bodies

Geographical centre(s) Brussels Geneva

+ 6 regions Geneva

17

IV.1 Institutionalisation of the budget procedures

The European Union (EU)

The European Union’s budget timescape (see Goetz 2015 for a discussion) is highly regulated,

both at the level of the treaties (TFEU arts. 311-325) and also in detailed legislative rules in the

Financial Regulation (Regulation 966/2012), which are complemented by extensive delegated

rules (Commission Delegated Regulation 1268/2012). These legal rules are further specified and

adapted to the realities of EU budgeting through the Interinstitutional Agreement on Budgetary

Discipline and Sound Financial Management (‘the IIA’), including an annex thereto with detailed

sequences and timing of the budget procedure agreed between the three main budgetary

institutions, i.e. the European Commission, the Council and the Parliament. Inside the European

Commission, administrative rules and guidelines are in place to further ensure routinised

processes throughout the whole budget procedure. These rules cover the different stages of the

budget procedure, from priority setting (through the Commission’s Budget Circular) to the

different substages of drafting the budget (including internal budget hearings and a formal

procedure of adopting the draft budget), up until the Commission’s role in the reconciliation of

positions between Council and Parliament leading up to the adoption of the budget (Goetz and

Patz 2014).

The overall degree of institutionalisation is intermediate, but major stages and substages are

highly institutionalised, most at the level of the Treaties and some further specified in the EU’s

Financial Regulation. This means that these time rules can be enforced by the Court of Justice of

the European Union, making them highly authoritative. There are rules on the minimum duration

of the Multiannual Financial Framework (five years or more) and for the eventuality that no new

framework is agreed by the end of the old one. The annual budget procedure is regulated in

article 314 TFEU through deadlines for the provision of budget bids from institutions other than

the Commission (1 July), for the submission of the draft budget by the Commission (1

September), for the first reading of the Council (1 October), for the reaction by the European

Parliament (42 days), and for the Conciliation Committee to come to an agreement (21 days). In

case there is no agreement by the end of the year, a monthly provisional budget enters into force

(art. 315 TFEU), creating a virtual deadline for the budget process. The Commission has to report

annually on budget implementation (art. 318 TFEU). The Financial Regulation (FR) defines the

18

reporting deadline at 15 September (art. 150.4 FR) and adds additional monthly and four-monthly

implementation reporting duties (art. 150.1 and 150.2 FR). The Financial Regulation also

requires amending budgets to be presented, in principle, before 1 September (art. 41.3 FR) and

includes more specific timelines for reporting obligations in case more limited in-year transfers

are made (art. 26 FR). These formalised and authoritative rules are further complemented by self-

set deadlines for interinstitutional meetings (in the annex to the IIA), self-set Commisison-

internal deadlines in the drafting stages and a wide range of time rules in the regulations setting

out the EU’s spending programmes for the execution of and reporting of the funds set up by these

regulations. Overall, the institutionalisation of the budgeting timeframe can therefore be describe

as intermediate, with a tendency towards high institutionalisation of core substages.

Overall, the European Union’s budget procedure is structured along the traditional distribution of

powers between the European Commission and the two legislative institutions, the Council of the

European Union and the European Parliament, the latter also referred to as the two arms of the

budgetary authority. The Commission as the core administrative body of the European Union not

only has right to initiate all EU legislation, it is also the EU institution that presents the draft

Multiannual Financial Framework, the draft for every reform of the own resources (i.e. revenue)

rules that also set the annual expenditure ceiling for payments from the EU budget (currently

1.23% of the EU’s GNI). The Commission is also the institution that presents the draft annual

budget. The Council then discusses the draft at the level of national budget experts in the Council

Budget Committee before it formally establishes its position in first reading at political level.

Afterwards, the Parliament amends the Council position by a decision in the plenary, following

discussions at committee level led by the EP Budget Committee. During those stages,

Commission officials take part in meetings both at technical and at political levels in Council and

Parliament, defending the Commission’s proposals or providing explanations required by

members of the two institutions. After the first reading, a Budget Conciliation Committee stage

follows during which diverging positions between both arms of the budgetary authority need to

be reconciled, with the Commission having a formally assigned mediating role. If Conciliation

fails, the European Commission has to present a new draft budget, and if no draft budget is

agreed by the end of the year, a system of provisional monthly budgets enters into force until

there is a new annual budget (for descriptions of the budget procedure see Benedetto 2013;

Crombez and Høyland 2014). Thus, the European Commission, although legally with varying

degrees of responsibility, is participating throughout all sub-stages of this core budget process

19

from priority setting to the adoption of the annual budget (cf. Goetz and Patz 2014).

Once the core budget procedure (priority-setting, proposal-drafting, adoption) is over and an

annual budget is established, the budget is executed and managed in a decentralised manner,

inside the Commission through the Directorates-General and outside the Commission through the

other EU institutions and bodies, executive agencies and managing authorities in the member

states. Within certain limits, the Commission, which has main responsibility for implementing

the budget, can shift funds within its own budget independent of, or with only light-touch

Council and EP approval. However, frequent amending budgets are still required to react to

changes in revenue and expenditure or to mobilise certain special funding instruments such as the

Globalisation Adjustment Fund. These amending budgets need approval from Council and

Parliament. Budget execution is a central responsibility in financial management and in order to

ensure proper management and implementation of EU funds, the European Commission’s

financial management has recently undergone significant reform (Levy et al. 2011). In the major

spending areas of the EU budget that are jointly managed with member states, the Commission

has also increased control over time (Porras-Gómez 2014), to be able in the follow-up phase to

report timely, comprehensively and reliably to the European Court of Auditors, and the two

institutions responsible for the discharge, the Council and the European Parliament.

The International Labour Organisation (ILO)

There is no precise provision in the ILO Constitution on the budget procedure, just a general

remark that the ILC should define the rules and procedure:

“the arrangements for the approval, allocation and collection of the budget of the

International Labour Organization shall be determined by the Conference by a two-thirds

majority of the votes cast by the delegates present, and shall provide for the approval of the

budget and of the arrangements for the allocation of expenses among the Members of the

Organization by a committee of Government representatives.” (Art. 13.2c ILO

Constitution)

Certain details of timing are regulated in the Governing Body Standing Orders:

“5.5.5. Documents prepared by the International Labour Office and dealing with the items

on the agenda of the Governing Body shall be made available electronically to members of

20

the Governing Body, in English, French and Spanish at least 15 working days before the

opening of each session. In the case of the discussion on the Programme and Budget, a

period of 30 working days is required.” (Standing Order 5.5.5, Governing Body)

However, most details are specified only at the level of the ILO Financial Regulations or even

one level below, i.e. the Financial Rules, the latter proposed by the Director-General and

approved by the Governing Body.

ILO has a two-year budget, no starting year defined (Article 1, ILO Financial Regulations). The

Director-General submits the budget estimates “in time” (interpreted as 6 weeks according to an

ILO official) for the first session of the Governing Body in the year preceding the respective

biennium (Art. 5, ILO Financial Regulations). As the GB usually meets in March, this means

early February. The Governing Body prepares a report on the budget estimates for ILO two

months before the International Labour Conference (ILC), which usually meets in June. The

Director General submits the budget estimates approved by the Governing Body to the ILC

where they are discussed and approved in the Finance Committee, before being approved by the

ILC (Art. 6, ILO Financial Regulations).

The World Health Organisation (WHO)

The WHO Constitution (article 34) defines that [t]he Director-General shall prepare and submit

to the Board the financial statements and budget estimates of the Organization”. These estimate

shall be “consider[ed] and submit[ted] to the [World] Health Assembly” by the WHO Board,

which is composed of 34 members representing the six federal regions of WHO (art. 55 WHO

Constitution). It is “[t]he functions of the [World] Health Assembly […] to supervise the

financial policies of the Organization and to review and approve the budget” (art. 18 WHO

Constitution). The Board can add “any recommendations [it] may deem advisable.” (art. 55

WHO Constitution) after its consideration of the budget estimates.

WHO has a two-year budget, starting in even years (Regulation 2.1, WHO Financial Regulation).

The Director-General presents the budget estimates at least 12 weeks prior to the WHA and

before the Executive Board meeting preceding the WHA. As the WHA usually meets in a week

around 20 May, the proposed estimates have to be presented by the end of February. The

Director-General can report the need for changes that arose between the budget proposal and the

21

respective EB meeting considering the draft budget. The Director-General can also report the

need for changes to the budget proposal following the EB discussions to the WHA. The budget

for the following financial period shall be approved by the Health Assembly in the year preceding

the biennium to which the budget proposals relate, after consideration and report on the proposals

by the appropriate main committee of the Health Assembly.

In 2013, the WHO financial regulations were changed (WHA 66.3) so as to make the WHA to

agree to the budget as a whole, including assessed and voluntary contributions, a proposal

supported by PBAC in December 2012. The 2014-15 budget was the first to be approved in its

entirety, in 2013, followed by the first Financing Dialogue, which regularised the resource

mobilisation stage as part of the core budgeting process.

IV.2.2 Routinisation of the budget procedures

European Union

For over 25 years, the adoption of the EU’s annual draft and final budget has been a highly

routinised exercise. Thanks to a pragmatic timetable under which the European Commission

presents its draft budget earlier than legally required, both the EP and Council have been able to

hold their technical and political debates ahead of time so that since 1988 final budgets have

always been agreed at the end of the year. In the past five years (budget years 2011-15), all of the

institutionalised deadlines, except for the Conciliation phase, were respected in the annual budget

procedure and the past three multiannual frameworks were also agreed before the new ones

entered into force. In 2011, 2013, and 2015, Parliament and Council were not able to agree on the

final budget within the 21 days foreseen for the Conciliation, therefore requiring the Commission

to present new draft budgets within a very short time in order to allow for the adoption of the

final budget by the end of the year, which was the case in all three years. In recent years, all

substages that are not highly institutionalised were finalised within a 30-day corresponding

timeframe, except for the adoption of the Commission budget estimates (the compilation

substage), which was delayed considerably in 2014 due to a relatively late political agreement on

the multiannual financial framework and in 2015 due to the European Parliament elections. Still,

the core budget procedure has been highly routinised in recent years, although the failed

22

reconciliation and the later-than-possible adoption of the budget hint to a disturbance in the

budget procedure routines.

There are further indications that in particular the budget adoption stage has come under

considerable pressure. Increased pressures on the European budget from EU member states who

are less willing to provide the funds needed to the European Union to fulfil all its legal

commitments have led to a situation where the EU has accumulated a virtual debt of close to 25

billion Euro in unpaid bills. In order to deal with this situation, the stages of drafting and

adopting the annual budget have become more and more entangled with the other stages (Goetz

and Patz 2014). The degree of, and reporting on, budget implementation is more important than

ever to project into the future when payments will be needed. The formulation of past and future

mid-term budget priorities has a direct impact on current and future spending that needs to be

regulated in the annual budget, and budget revisions are more and more means of shifting funds

between the present and the future in order to allow the cash flow not to run dry. The entangling

of the different stages has led to an increased need for negotiations, and the timeframe of budget

negotiations is becoming too short to solve all the conflicts that have now been merged into a

continuous instead of a sequentialised budget process. The failure of budget conciliation is just

the most important indicator that the established routines are on the brink of failure and that re-

routinisation may be needed to cope with the changed situation (Goetz and Patz 2014). In 2015,

failure of the negotiations at the end of the year could only be averted at the very last minute by

requiring the Commission to present a detailed timeline on how to reduce the significant

payments backlog. If this is not achieved, the routinisation of the adoption stage may be further

decreased in the future.

International Labour Organisation (ILO)

Despite general organisational reforms in recent years, the main timeline of ILO budgeting has

been very stable in recent years/biennia, showing a high degree of routinisation across all major

stages. Overall, the budget timeline is mainly structured by the rhythm of the core meetings (GB

in Nov and March, ILC in June). Over the past five biennia, the Director-General’s budget

proposal has always been presented between 28 January and 13 February (n-1), following the

Governing Body meeting that always took place in November of year n-2 in which the budget

preview had been discussed. This preview document was presented between 26 September and

23

24 October (n-2) in the last five biennia, with the latest two being presented the earliest, underline

the high degree of routinisation also at this stage. A revised budget proposal has always been

presented during the March session of the Governing bodies, between 16 and 25 March (n-1), and

the final adoption took place during the June ILC, between 10 and 18 June. Altogether, there are

no indications of any recent disturbances in the budgeting process despite the requirement not to

increase the budget.

The timeline of the ILO budget procedure for the 2016-17 biennium:

May 2014 Programme Guidance Letter by the Director General May 2014 Programme memorandum (detailed timeline) by PROGRAM End of July 2014 Deadline for department submissions of budget proposals 2nd week of August Internal Peer review 26 September 2014 Director-General presents the preview of his Programm and Budget

proposals for the November GB/PFA discussions November 2014 GB/PFA discussed budget preview 2 February 2015 Director-General presents Programme and Budget Proposals 25 March 2015 Revised DG proposals following 3 and 5 June 2015 ILC Finance Committee meeting 10 June 2015 ILC adopts ILO Budget

World Health Organization (WHO)

Despite changes and reform efforts in recent years, the main timeline of WHO budgeting has

been mostly stable in recent years/biennia. It seems to be mainly structured by the rhythm of the

core meetings (WHA in May, EB in January and May). The last 5 biennial budgets (2008-9 until

2016-17) have all been proposed between the end of November (year n-2) and mid-January (n-1),

with 2008-9 being the earliest and 2016-17 the latest date, indicating an intermediate

routinisation. In fact, the member state body dealing with budgetary matters (the PBAC)

officially complained about the comparatively late presentation of the draft budget. However,

already the timeline for the 1996-97 budget foresaw the distribution of the draft programme

budget by 1 December (n-2, 1994), showing that the date for the budget proposal still has been

relatively stable over a longer-term period. The revised version of the last five budgets has been

proposed between mid-March and end of April (n-1) to the WHA, which also corresponds to

scheduled date for the revision of the draft programme budget for the 1996-97 budget (April

1995), again underlining a mostly routinised budgeting process over time. Finally, The last five

biennial budgets (2008-9 to 2016-17) have all been adopted between 20 and 24 May of the year

24

n-1, i.e. during the regular meeting of the World Health Assembly, showing a high degree of

routinisation. Since the current biennium (2014-15) in which the WHO became integrated, so that

ceilings for member state contributions and for activities by voluntary contributions are formally

adopted by the World Health Assembly, the adoption of the WHO is followed by a formalised

“Financing Dialogue” in which the organisation attempts to better coordinate the alignment of

available resources, donor interests, and organisational priorities before the start of the new

biennium. Routinisation of this process cannot yet be assessed as the second Financial Dialogue

is expected to start in autumn 2015.

Timeline of the WHO budget procedure for the 2016-17 biennium:

10-12 September 2014 Regional Committee for South-East Asia discusses draft proposed budget

15-18 September 2014 Regional Committee for Europe 29 Sep – 3 Oct 2014 Regional Committee for the Americas (PAHO) 13-17 October 2014 Regional Committee for Western Pacific 20-22 October 2014 Regional Committee for the Eastern Mediterranean 3-7 November 2014 Regional Committee for Africa January 2014 Changes introduced for EB version after RC consultations 21-23 January 2015 21st PBAC discussed budget proposal 26 Jan – 3 Feb 2015 136th EB 30 April 2015 Director-General presents revised budget proposal 14-15 May 2015 22nd PBAC discussions 20 May 2015 WHA Committee A discusses budget resolution 22 May 2015 68th WHA Approves Budget Autum 2015 Financing Dialogue for resource mobilisation from donors

IV.3 Administrative power: autonomy, concentration and centralisation

The European Union (EU)

The institutionalisation of the European Union budget timescape sets the legal frame within

which the European Commission can autonomously manage its own time and within which it can

influence budget decision-making and execution. However, while the legal frame largely defines

the autonomy (or lack thereof) of the Commission from Parliament and Council, it does not

specify the power distribution inside the European Commission and clarify which actors are

responsible for which stage of the budgeting process. Recent research on the power relation

inside the European Commission has highlighted, without specifically looking at the budget, an

increasing centralisation and presidentialisation of the European Commission with differentiated

25

roles between the administration and the political (Commissioner) level (Wille 2013). This trend

is reflected in a strengthened Secretariat General of the European Commission, which has de

facto become an enlarged office of the President of the European Commission (Kassim et al.

2013). Under the Juncker Presidency, presidentialisation seems to have increased further, with

stronger vice-presidents who also work closely with the Secretariat General. Thus, we observe a

trend towards horizontal coordination by the central services of the Commission, mainly the

secretariat general, and increased vertical transfer of policy-making towards the College and

cabinet-level actors. With regard to the autonomy of the Commission, the general conclusion has

been that its strength is mainly based on its exclusive right to initiative, although it also has

significant degrees of freedom in areas such as competition where it is tasked to enforce EU

legislation (Thatcher and Sweet 2011).

Looking at autonomy in budgeting, we find that the Commission derives its power fundamentally

from the right to initiative – here to set its own priorities and to present draft budgets (art. 314

TFEU), including the draft multiannual financial framework and amending budgets – and from

its responsibility in executing and managing the budget (art. 317 TFEU), even though it has to

cooperate with member states and even though the frame for the budget execution is set in the

Financial Regulation and sectoral spending programme regulations that are ultimately adopted by

Council and Parliament. The Commission has additional autonomy in the budget adoption phase

thanks to its treaty-based mediating role in the Conciliation phase, where it can bring in its own

negotiation strategy (as reflected in the administrative guidelines for the Conciliation phase) and

towards the final adoption of the budget, as it is responsible for putting in place the provisional

budget in case budget negotiations to not come to an end by the end of the year. The reporting

and discharge phase is mainly predefined by the financial rules and by the demands from

Parliament and Council, providing only some room for manoeuvre where the reporting

obligations are not legally prescribed. Overall, the autonomy of the Commission in budgeting is

intermediate, with varying degrees of power throughout the budget procedure. Its power in the

drafting stage is also temporally restricted through the clear deadlines set by the treaties (see

above).

Concentration of power inside the Directorate General for the Budget (DG Budget) of European

Commission is very high throughout most of the budget procedure, except when it comes to the

submission of budget bids by the other institutions and the line DGs inside the European

26

Commission as well as during the execution stage. Budget implementation authority is vested in

the decentralised units for administrative expenditure and in the major spending DGs and the

managing authorities in member states for the operational budget. Reporting and the involvement

in the discharge are shared tasks that the line DGs and their respective Commissioners or the

administrative heads of the other institutions have to perform in cooperation with DG Budget,

which is responsible for the compilation of detailed financial reporting. In the formulation and the

negotiations of the multiannual financial framework, the Secretariat General has a much stronger

role than in the annual budget procedure, reflecting both the more politicised nature of MFF

requiring the Secretariat General to support the Commission presidency and the horizontal policy

implications that the MFF and the adoption of a wide range of spending programmes aligned to

the MFF timeframe have. Overall, concentration in expenditure budgeting is very high, in

particular during the core budget procedure, with more diffuse responsibilities in the execution

and follow-up stages.

Finally, vertical centralisation, which refers to the direct involvement of the College as a whole,

the President, the Budget Commissioner (and his cabinets) or the Director General of DG

Budget, depends very much on the political nature of each substage. While there is a tendency on

the part of the Commission to depoliticise the budget procedure as much as possible and to

reduce involvement of the higher levels throughout the process, the most politicised stages such

as the mid-term priority setting through the MFF, the adoption of the budget and the defence of

the draft budget during the political and reconciliation substages and the defence during the

discharge procedure usually involve at least the Budget Commissioner. The recent politicisation

of the annual budget procedure due to the increased payment backlog and the failure of the three

out of five Conciliation procedures (see above) has meant increased monitoring of

interinstitutional negotiations by the Secretariat General for the political level and an early

involvement of the President’s office, which in cooperation with the cabinet of the budget

Commission started in the 2012 budget procedure to send a political letter to all cabinets, laying

out the short-term priorities that need to be respected during the budget drafting. This has

complemented a letter sent from the Director General of DG Budget to his colleagues in the other

DGs. Centralisation overall is therefore intermediate, which is a reflection of the varying degrees

of centralisation throughout the budget procedure. Nevertheless, the fact that since the Juncker

Commission, the Budget Commissioner has been upgraded to a Vice-President of the European

Commission (with a strengthened role of Vice-Presidents overall) can be seen as a sign that

27

centralisation in budgeting will further increase in the future as budget decision-making has been

more and more politicised since the start of the financial crisis.

The International Labour Organisation (ILO)

Autonomy: [TBD]

Concentration: [TBD]

Centralisation: [TBD]

[…]

The World Health Organisation (WHO)

Autonomy: [TBD]

Concentration: [TBD]

Centralisation: [TBD]

[…]

IV.4 Comparative patterns of IO budgeting

[work in progress]

EU ILO WHO

Relevance of the financial crisis

“It is important to reflect the fiscal constraints which many public administrations in Europe experience. […] That is why the Commission is coming forward with these proposals, which will save more than €1 billion by 2020” (MEMO/11/907; European Commission,

“The representative of the Government of the United Kingdom […] appreciated the Director- General’s recognition of the impact of the financial crisis on public finances, as well as his further efforts to present a lower budget” (ILO Programme, Financial and Administrative Committee, March 2009,

“I am presenting the Proposed programme budget 2010–2011 at a time of severe financial crisis and economic downturn. As Member States debate this budget, all parts of the world are being affected, to different degrees” (Director General Chan, WHA May 2009, A62/4)

28

December 2011) GB.304/8/3(Rev.)) Core budget

evolution 6.2% reduction (commitments and payments) from 2013 to the 2014 EU budget.

Zero real growth from biennium 2012-13 to 2014-15.

Zero nominal growth for assessed contributions from 2012-13 to 2014-15; 0.5% increase including voluntary contributions

Central coordination department

DG Budget, Directorate A, in particular Unit A1, under the Director-General of DG Budget

Strategic Programming and Management Department (PROGRAM), under the Deputy Director General for Management and Reform

Planning, Resource Coordination & Performance Monitoring (PRP) Directorate, under the Assistant Director-General for General Management

Instrument(s) for the short-term priority

setting

a) Budget Circular b) Political guidance letter

a) Programme Guidance Letter b) Programme Memorandum

Bottom-up process in which priorities are formulated at national level

Short-term priorities

suggested by

a) Director General DG Budget for the budget circular b) Heads Cabinet of the COM President and of the Budget Commissioner

a) Director-General ILO for the Programme Guidance Letter b) PROGRAM for the Programme Memorandum

For 2016-17, WHO country offices could propose at maximum 10 priorities for which 80% of resources would be used

Special coordination procedures during the

proposal review stage

a) Budget hearings over three weeks (DG Budget with individual Directorates-General or thematic groups b) College-level negotiations

Budget hearings with collective participation of the different sectors of ILO

Network meetings at different levels (see below)

Decentral and other

administrative structures for coordination during the

review stage

a) Budget planning units in all Directorates General b) Special chefs of cabinet for budget matters

a) Network of PROGRAM officers in different departments

a) Network of programme and budget officers in regional offices b) Programme Networks c) Category networks d) Global Policy Group (WHO Director General, Deputy-DG and Regional Directors)

Level of horizontal

coordination during the

review stage

a) Heads of Unit in the budget hearings b) Commissioners and their cabients

[TBD] all levels of the organisation, for each stage starting at programme level and ending in the GPG

Are the member states in the

driving seat or the

“Sure, they [the negotiations] are dominated by a certain procedural logic, and in the end they are

“The driving actor, this is clearly the Office. […] [The member states are represented] at working level. These are desk

“besides the WHO’s [own budget] experts, there are no budget experts with an explicit budget expertise [on the side of the member

29

administration throughout the budget process?

(Autonomy)

dominated by what the member states can agree on. But there are always 2-3 issues where the Parliament can prevail.” (Interview EP expert)

officers and heads of unit and after 14 days of governing body meetings they return home and then they are working on completely different matters” (Interview MS expert)

states]. In general, I could think of 3-4 persons” (Interview MS expert 1) “The secretariat is the player […] but the member states have a large influence on the outcome and also on the procedure” (Interview MS expert 2)

How does the complexity of member state

positions affect the process?

The ambassadors involved in the final stages of the budget negotiations “are bound by clear rules […] and always have to phone back and ask whether they can say something else. This prolongs this kind of negotiations. Maybe it would be better if the finance ministers were there.” (Interview EP expert)

There are coalitions across the different constituent groups, i.e. some countries may rather side with the workers while others side with the employers on particular topics, allowing the administration to work with cross-constitutent supporters for certain programmatic goals

The strong importance of the regions leads to a situation where the European Region effectively assembles most “donor countries”, whereas most of the other regions include states that profit from technical assistance funds provided through WHO.

Is the top-level of the

administration involved?

(Concentration)

Only where necessary, usually in the later stages of budgeting. Since November 2014, the position of Budget Commissioner was upgraded to Vice Commission-President, indicating a stronger involvement of the top leadership in EU budget politics

Director-General is closely involved, from the Programme Guidance Letter and during the negotiations with the constituents in the final stages

All iterations have to go through the Director-General’s office and the Global Policy Group making the exercise rather top-heavy; the DG is directly lobbying member state governments

V. Conclusion: A comparative approach to IO budget timescapes and the role of IPAs

By proposing a comparative framework for the analysis of budgeting in international

organisations, we build upon past efforts to study of the growing sphere of global public

institutions. Our specific focus on the institutionalisation of budgeting time rules and the

routinisation of budget procedures allows us to discover similarities and differences in how

budget procedures are organised in different international organisations. Our focus on

administrative power, both with regards to the autonomy of administrations from member states

30

and with regards to internal horizontal and vertical power distribution allows for a detailed

understanding of how budget conflicts are managed in a range of international organisations.

In comparing budget procedures in EU, ILO and WHO, we find that the EU has highly

institutionalised procedures while ILO as the oldest of the thee IOs has only little rules formalised

at the constitutional level. Still, budgeting has remained a fairly routinised process across most

stages of the budgeting process in all three organisations. However, external pressures can

challenge existing routines and timeframes and new routines are be added such as the Financing

Dialogue and the increasing institutionalisation of the Global Policy Group in WHO or a more

political circular letter introduced the level of cabinets in the EU. All three organisations have

central departments responsible for programme and budget coordination, usually at the level of

middle management, who are responsible for ensuring the temporal coordination of the budgeting

process. These departments are separate from financial management departments, although they

cooperate close. In ILO and WHO, the budgeting departments are part of the central management

services and work closely with the director-generals’ personal offices while the EU with its

sizeable budget and its complex administrative structure has a separate Directorate-General for

the Budget that is comparable to a finance ministry. The EU budgeting process is supervised by a

Budget Commissioner, with limited involvement of the Commission’s central management (the

Secretariat General) or the President of the European Commission in regular budgeting (at least

until October 2014). In all three organisations, there are networks of officials responsible for

budget planning, with decentralised units or staff reflecting the specific organisational structure

of each IO, e.g. federal networks in WHO, underlining the organisation-wide importance of

budgeting. Finally, whereas the formal autonomy of IPAs may be limited to the drafting or

proposal stages, internal coordination mechanisms and the question when and how to involve the

administrative leadership in budgeting seem to be closely linked to the question of the

administrative power, not just achieve the timely conduct of the budgeting process, but more

broadly to keep control over the final outcomes of programme and budget negotiations.

At this preliminary stage, we therefore see that the proposed framework allows a range of

insights beyond single case studies and is expected to increase our understanding of

organisational dynamics in budget of a diverse set of international organisations, informing wider

debates about the role of international administrations in the global system and adding a public

administration view to the study of international organisations.

31

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Annex I – Expenditure in UN system organisations (incl. funds and programmes)

Own compilation based on UNSCEB data.

0

1000

2000

3000

4000

5000

6000

7000

8000

Expenditure in the UN system (2012, million US-$, UNSCEB figures)

37

Annex II – Share of voluntary contributions in UN system organisations (incl. programmes)

Own compilation and calculation based on UNSCEB data (specified and unspecified voluntary contributions as share of all revenue).