The Political Economy of the Budget-Making Process in Jamaica, 1991-2010

Over the 20-year period from 1991 to 2010, changes to the Government of Jamaica's budget or fiscal behaviour have not differed, according to the political administration in power. During that period, the Ministries of Education, Health, and National Security consistently received budgetary increases that were unlikely to be reduced given their status as the spending ministries and ministries providing public goods. From FY 1991 to FY 2010, a steady number of polices and priorities have endorsed the finding that the political administration in power does not necessarily affect budget variances. Rather, the budget’s rigidity determines fiscal outcomes. These rigidities — primarily debt and the public sector wage bill — limit the power and influence of ministers of finance in changing the budget.This study explores three factors that influence the budget in the fiscal year. Elections, having an International Monetary Fund (IMF) programme and natural disasters have varying impact on the budgetary outcomes. The political economy of budgeting in Jamaica is a confluence of factors, chief of which are the strictures placed on fiscal policy by very powerful interest groups that are political in nature because of the pressure they can bring to bear on the political directorate as powerful constituents (i.e., voters). The importance of this cannot be ignored in any analysis of the political economy of budgeting.Until the budget offers more space or discretion for the Minister of Finance to negotiate the areas of support, the political economy of budgeting — as evidenced by the Budget Debate — is one of tradition than of real bargaining and tradeoffs with respect to allocations. Is fiscal discipline, therefore, an endogenous factor, or an unavoidable outcome of the budgeting process?