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The legislature has also sought to enhance government accountability and legislative oversight through political agreements, often formalized in (non-binding) protocols annexed to the budget. These protocols, introduced in 1997, are agreed between political parties and signed by the legislature and the finance ministry. While they are not yet fully institutionalized, they have proven to be an effective mechanism for inter-branch cooperation and increasing the influence of the legislature in budgetary matters (Animat and Vial 2004). Examples of such political agreements include the informal rule of structural fiscal surplus of one percent of GDP. Similarly, the political response to the ‘salary supplements’ corruption scandal in 2002 resulted in an all- party anti-corruption pact in 2003. This pact included 50 separate initiatives including the reform of the CGR.

The expertise of individual legislators sitting in the budget and finance committees partially compensate for the lack of institutionalized capacity for budget oversight in the legislature. These legislators have ample experience and expertise in fiscal policy and public finances, often acquired in the executive branch as finance minister or director of the central budget office. Both chambers also show high re-election rates and committee membership is relatively stable, rotating every four years. Legislative coherence is reinforced by party discipline in what is essentially a bi-partisan political system. Nevertheless, the high rate of re-election in the legislature only partially translates individual expertise into institutional expertise.

Reforming external auditing

The consensus view in Chile is that the CGR does not need strengthening; it needs reforming. The challenge is how to make it happen without jeopardizing the budgetary system and fiscal discipline. Many fear that reforming the CGR would open a Pandora’s box that would make the entire system of public budgeting and fiscal control crumble like a house of cards. The paradox of the CGR is that of an increasingly anachronistic agency in what is otherwise a relatively efficacious state bureaucracy. While it is widely respected for its contribution to strengthening public financial management and anchoring integrity in the public sector, it is also criticized for its institutional inertia and its inability to accompany the modernization of public management. A defining challenge of the reform of external auditing is

‘to surpass the country’s legalistic culture embedding the Chilean public administration, […] an administrative ritualism, that expresses itself in a persistent culture of procedures’ emphasizing compliance with rules over achievement of results (Ramírez Aluja 2002:182).

Unlike in Argentina, the weakness of formal oversight institutions is compensated by the probity of the Chilean public administration and its adherence to the rule of law, which the CGR has contributed to anchoring. Chile’s tradition of legality was supported ‘by a series of state institutions with independent decision-making authority that were considered above party politics,’ most notably the CGR which was a ‘feared institution, infamous among bureaucrats for ensuring relative efficiency in Chilean state institutions’ (Siavelis 2002:72). The CGR does constraint behavior and deters unlawful actions through its ex-ante control function. However, it has failed to reform and keep pace with broader reforms in public management.

Structural reform has proved elusive, stumbling on the controversies surrounding ex-ante compliance control. The few reform proposals that were advanced during the military government in 1982 and the democratic government in 1992 resulted only in partial reforms and the rationalization of existing functions. The CGR rightfully underscores that its organic law ought to be revisited, as provided for in the 1980 Constitution. Its current organic law dates back to 1952 and was reformulated in 1964. In 2000, a cross-party agreement recognized the need to


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