Rules and flexibility in public budgeting: The case of budget modernisation in Australia

This paper explores the features of public budgeting that make it resistant to efforts to balancecentral oversight and situational flexibility. Its aim is to help explain why systemic effortsat budget modernisation in the name of ‘devolution’ may have failed to deliver expandedbudget flexibility. After defining flexibility, and briefly surveying how it can be inhibited bybudget practices using the example of collaboration, the paper applies a taxonomy of general‘budget rules’ to illustrate the trade-offs between control and flexibility. It uses an analysisof budget reform in the Australian federal government over the last 30 years to identify akey set of ‘legacy reforms’ – all intended primarily to enable budget flexibility – to showhow their design and redesign were purposed as modification to the general rules, and how,ultimately, they were constrained by them