independent of the central budget, thus ending the conflict of interest whereby DIPRES evaluates the performance of public budgeting system it supervises. The government put forward a legislative proposal to establishing a National Agency for the Quality of Public Policies in December 2006. The commission also recommended strengthening the internal control system and its supervisory body, the CAIGG, and enhancing the legal framework for freedom of information. The government responded by beefing up the 1999 legislation on access to public information and proposing the creation of an Institute for the Promotion of Transparency, following the Mexican model.
The new organic law for the CGR will be based on the CGR’s own proposals and an independent review of the CGR to be carried out in 2007. However, current proposals do not envision enhancing the role of the legislature in the oversight of public finances, nor strengthening the linkages between the legislature and the CGR. The reform process has nevertheless become imbued with controversy in the context of the selection of a successor to the comptroller-general, Sciolla Avendaño, who had reached the age limit. As in 2002, when Lagos sought to nominate a candidate from outside the CGR, Bachelet initially proposed an outsider to the CGR, Pablo Ruiz- Tagle, instead of the former deputy comptroller general and acting comptroller-general since June 2006, Noemí Rojas Llanos. This was interpreted as another attempt to diminish the influence of the right on the CGR.
The opposition in the Senate rejected the president’s candidate in November 2006, paving the way for a consensus candidate.51 In April 2007, the Senate finally endorsed President Bachelet’s second nominee, a renewed lawyer and academic, Ramiro Mendoza Zúñiga, for an eight-year mandate. The Senate’s approval was accompanied by a cross-party agreement to reform the CGR. Mendoza Zúñiga represents a unique chance to reform and modernize the external auditing function. He is relatively young (47 years of age), is an outsider to the CGR, and his mandate is now backed by a political consensus on the need for reform.
Conclusions: Auditing for accountability?
We might hope to see the finances of the Union as clear and intelligible as a merchant’s book, so that every member of Congress, and every man of any mind in the Union, should be able to comprehend them, to investigate abuses, and consequently to control them. President Thomas Jefferson writing to his Secretary of the Treasury in 1802, cited in Walker 2004:10.
Undoubtedly, AAAs have a critical contribution to make to improve fiscal transparency and financial accountability. However, they are not as effective as they could or should be (Santiso 2006e, 2007). This article demonstrates that the effectiveness of AAA is only partially explained by the choice of organizational model. While institutional arrangements for external auditing of government finances do matter, the effectiveness of AAAs is conditioned by the broader political economy in which they are embedded.
Furthermore, the reform of AAAs is itself inherently political, constrained by the political space for reform and the political incentives of reformers. There are many pathways to reform but the case of Brazil shows that gradual reform has greater chance of succeeding. Conversely, the example of Argentina suggests that reform strategies seeking to transplant exogenous models are likely to fail. Institutional reform does occur, but inserts itself in the trajectory of state building
51 For the first time, the Senate debate and vote were public. The deliberations of the Senate were previously made behind closed doors in a special session and through secret vote.