Bargaining failures in presidential and parliamentary systems

This is just a quick collection of thoughts, mainly due to my having seen on Twitter evidence of misconceptions about how these things work (shocking, I know).

With the US in what is technically a funding gap, colloquially known as a shutdown, some folks have pointed out that parliamentary systems have their own variant of this problem. The reference is, of course, to prolonged situations with “no government” after an election.

This is a false analogy.

Lack of a new government while negotiations are ongoing is nothing at all like a furlough of public employees or the closing of services. Nothing at all!

Failure to form a new government is not common in parliamentary systems. Usually after an election it takes anywhere from days to a couple months (shorter than US administration transitions). There are rare cases when it’s longer, such as Germany right now or the Netherlands for part of 2017.

In the interim, things keep going along as they did before the bargaining impasse (or before the election). Services are delivered, employees are paid, etc. If there is an analogy to situations in the US where bargaining over a new budget fails, it would be to a continuing resolution. The difference is that, whereas a continuing resolution requires the House, Senate, and President to agree to continue current levels of funding, the equivalent in a parliamentary context is automatic.

So does that mean that “unelected bureaucracies” get to “do as they please” while the politicians are trying to sort out their differences? (I saw someone claim that!) No, not at all. That’s the sense in which it is like a continuing resolution. The bureaucrats go on doing what they do, until such time as they have new instructions. The new instructions come in the form of a new government being agreed, which goes about implementing its program (which is generally laid out in a public “coalition agreement”).

(Related: It is also worth noting that parliamentary systems typically have nothing like “lame duck” administrations and legislative sessions. A caretaker during the transitional period, before a new government is agreed,  can’t take new initiatives.)

If the parties do not agree to form a new government, it means there is no majority in parliament that prefers some agreed new program over the status quo (the “continuing” part). If the process is protracted–or it becomes clear early that there is not such a majority–there usually can be recourse to an early election to let the voters resolve the deadlock. (If polls suggest the result would be the same, they’ll just keep on continuing till some combination of parties finds a new program it prefers, or the polling shifts enough to suggest the bargaining context would change after an election.)

Let’s go back to the point on bureaucratic agencies. Bureaucratic oversight is a different matter. US bureaucracy is indeed relatively more constrained than its counterparts in most parliamentary systems, but that does not mean that the parliamentary situation–with or without a bargaining impasse–is in any sense one of bureaucrats being powerful and unconstrained.

In many (not all!) parliamentary systems, civil servants within bureaucratic agencies can be given discretion to do their jobs precisely because it’s easier for politicians to rein them in, if necessary. There is only one political principal (again, not always), which we can think of as the parliamentary majority, although in a more immediate sense it is the cabinet. And that means either the caretaker cabinet that continues in the absence of a new government, or the electorally legitimated new government that is formed.

In the US each principal (executive, House, Senate) has to worry that the bureaucracy might follow the other. Plus it is generally harder to change law (three veto gates). So there are both incentive and capacity to bind the bureaucracy ex ante. Whether one form of bureaucratic oversight is “better” isn’t clear. It gets complicated. The main point is that the structure of agencies and the process of oversight and constraint “mirror” the wider institutional set-up and distribution of political power.

Does all this mean that parliamentary government is clearly superior because it is inherent to presidentialism that bargaining failures over spending and policy occur, with no way to resolve them? That is, because there’s no way to get a new government or go to elections? Well, that’s not so clear! A funding gap or shutdown is not actually inherent to presidentialism.

There aren’t any other presidential democracies that I know of where a funding gap could happen. Most such constitutions have either an automatic equivalent of a continuing resolution, or a reversionary point that favors the executive’s proposal.

I would tend to agree that there are lots of reasons to prefer multiparty parliamentary bargaining over the inter-branch kind the US has, or other (pure) presidential systems have. But there are lots of other models, and even the other presidential ones do not have this recurring problem, due to differences in institutional design and budgetary rules.

17 thoughts on “Bargaining failures in presidential and parliamentary systems

  1. Do parliamentary countries really have automatic continuing resolutions? I actually don’t know for certain, and I’m sure there are examples of parliamentary countries which do have this institution, but my intuition tells me most do not; instead, there is simply a broad consensus which is sufficient to always pass a continuing resolution – there are no points to be scored by not doing so. Again, this is just an intuition – I’m not sure. The one case I can speak to is the Netherlands. Both last year and in 2010 Budget day (second Tuesday in September) arrived, but there wasn’t yet a new government to propose it. So instead the outgoing finance minister, acting in caretaker capacity, simply proposed a budget with nothing new in it apart from funding for things already agreed on (and perhaps a few small items which were new, but so urgent and so uncontroversial that no-one challenged the caretaker’s right to propose them) – essentially a continuing resolution. As far as I know, these budgets passed both houses without difficulties. I agree that there are institutional models which. through automatic enactment, may also resolve the issue, but I suspect there is something about parliamentary (and most semi-presidential) systems which contributes to the existence sort of continuing resolution consensus I just described.

    • I think it depends on the country. Australia seemingly does not, and a prime minister must enure that funding will last through a requested election before going to the Governor-General.

      Canada seems to have something where the GG can sign temporary spending authorizations to keep things going. But I’m not sure these would be used during active budget negotiations unless the government pulls the plug (or has the plug pulled) and goes to the polls

    • I guess it depends on the meaning of “automatic”. I think continuance is actual practice, but be constitutional or legal mandate only in some parliamentary systems. I see that comments before mine address this point in some specific cases.

  2. Oh, it is of course also worth mentioning that there are countries (Israel and Poland come to mind) which have clauses leading to automatic early elections if a budget is not passed by a certain deadline. How this affects government-formation periods, I do not know.

    • There are certainly parliamentary countries with constitutional provision for automatic continuance of the previous budget. An example is Germany ARTICLE 111. [INTERIM BUDGET MANAGEMENT]. There are also a wide range of parliamentary countries that effectively have the same thing, but at the level of practice or statute.

      I was a bit startled to learn that the 1975 crisis in Australia made absolutely no sense to Canadians:

      The late Eugene Forsey,15 who had some direct exchanges with Kerr after the event and felt some sympathy for Kerr’s position, was always puzzled by Governor General Kerr’s proposition, invoked as his official ground for dismissing Whitlam: the difficulty in obtaining supply through Parliament if the Senate should persist in blocking all finance measures already passed in the lower house. In Canada, at both the federal and provincial levels, the obtaining of special warrants authorizing payments to finance government during an election and until a new Parliament meets is an acceptable governmental practice achievable by order-in-council.16 For all practical purposes, it renders constitutionally obsolete the insistence on a government securing a vote of supply as a pre-condition to a dissolution.

      McWhinney, Edward. Governor General and the Prime Ministers, The: The Making and Unmaking of Governments (Kindle Locations 888-894). Ronsdale Press. Kindle Edition.

      It is also so common as to be almost universal to give the executive exclusive initiative in spending measures. That applies to presidential as well as parliamentary countries. Section 56 in Australia reads, somewhat embarrassingly, rather like the cognate provision in the Confederate constitution. But at least it proves executive initiative is found in both parliamentary and presidential constitutions.

      • I believe that Section 56 and the relevant portion of the Canadian constitution comes from the Mother Country. I cannot say I have been correctly taught, but my understanding of the Westminster system is that it includes the idea that the executive must request funding for its programs and that the parliament must grant that request or withdraw confidence in the executive.

        Even if I am wrong about Westminster, I do think that such a system is something of an improvement over willy-nilly spending and pork-barrel politics. Providing that the executive is liable to fund every mandated program or seek its abolition.

        As a footnote: Without meaning any offense, reading footnotes out of context can give one the impression that Eugene Forsey was some poor soul studying politics from his deathbed in the pediatric ward.

      • There is no such law in Britain. The practice is imposed by standing order of the house of commons. Canada has a cognate provision but the wording is somewhat different from the Australian constitution.

    • That’s a good point (referring to JD’s on automatic dissolution in some cases). I think there are probably some others with such provisions, too.

  3. Portugal have the “duodecimos” (1/12), who is a kind of continuing resolution – until a new budget is approved, each government branch receives each month 1/12 of the value of last budget.

    • The EU also has a system of provisional twelfths:

      4. If the annual budget is still not adopted at the beginning of the year to which it refers, the system of provisional twelfths applies. This means that not more than one twelfth of the budget appropriations for the previous year or of the draft budget proposed by the Commission – whichever is smaller – may be spent each month for any chapter of the budget.

      How the EU budget works

  4. How do Latin American (Brazil, Mexico, Argentina, and Colombia) and the Philippines presidential countries handle situations like this? Don’t most of the rest of Presidential Constitutions give the President the power to appoint cabinet ministers without legislative approval? Also doesn’t the President have the sole power to initiate the budget? So in most countries, if the budget is not approve, everything is run on auto pilot.

    Isn’t the filibuster in the Senate the problem with this situation? Wouldn’t it just be better to abolish it?

    Is the US the rare or the common country where money bills and/or the budget can be blocked by an upper house, or do other Presidentialist democracies have this power?

    • Oh bicameral presidential democracies, all but Mexico have symmetrical powers over spending, if I recall correctly.

      As I noted in the initial planting, most presidential systems have either automatic continuing resolutions or else the president’s proposed budget takes effect in the absence of agreement.

      Regarding cabinet ministers: in the Philippines they have to be approved by a congressional committee on appointments, and in Colombia they can be censured by bicameral majorities. In the others, there is neither approval required nor majority censure allowed.

      • Why doesn’t the US have automatic spending resolutions? Why is the US the only Presidential democracy to require Congressional approval of cabinet members? Funny that the other Presidentialist countries never copied this provision. Are Latin American Presidentialist countries more parliamentary or less so because the President doesn’t need no cabinet confirmation from the legislature?

      • The US does not have automatic spending resolutions because they had not yet been invented in 1787 and the US constitution is extraordinarily difficult to amend for cultural as well as constitutional reasons. I would not like to be the senator or representative proposing an automatic spending amendment in the basis that it works awfully well in Germany, Portugal or Benin.

      • Would an automatic spending provision really require a constitutional amendment? All I can see from Article I is that the House needs to approve a tax bill first, appropriations are made by law, and receipts must be presented. Am I missing something?

        Aren’t there already provisions to pay for many programs embedded in permanent legislation?

      • Automatic continuing resolutions could possibly be established by ordinary act of congress. Anyone drafting a bill should read INS v. Chadha very carefully.

  5. In Israel there is both automatic budget extension (1\12 of the previous budget per month) and an automatic dissolution if a new budget is not authorized within 3 months of the end of the previous budget year (with special provisions for situations where there is anew government or new elections in the time between the end of the budget year and the 3 month deadline). Automatic dissolution has never occured to my recolection.

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