Budgeting and Implementation
Government budgets are more than just tables of dry numbers. Any decision-maker will confirm how politically charged they can be, because implicit in all budgets are decisions about appropriate allocations of government resources. For a given amount of tax revenue, social programs compete with items like infrastructure development, military spending and debt servicing for fiscal priority. And when you consider that in North America alone, the Canadian and US federal governments raise and spend US $1.6 trillion every year, the flows involved are far from trivial.
But budgets carry information about more than just the division of tax dollars between different programs. As environmental problems grow alongside consumption, pollution and population levels, it becomes increasingly clear that budgets have impacts on nature. This is particularly evident when budgets over-allocate natural resources, causing the carrying capacity of biological systems to be exceeded or non-renewable resources to be diminished.
Government budgets also set the stage on which other agents in the economy must perform. Taxes, subsidies and other budget innovations serve to constrain, stimulate or otherwise channel economic behaviour. Unfortunately, too many policies still work counter to, or are disconnected from, the wider goal of long run sustainability.
Government should turn their budgets into more effective mechanisms of sustainable development. If governments are in the business of fostering the lasting and constructive development of nations, then their budgets must balance more than columns of numbers. They must achieve aspects of sustainability. Unless economic concerns are integrated with social and environmental considerations, sustainable development that treats future generations equitably will remain elusive.
International Institute for Sustainable Development (IISD) (1994). MAKING BUDGETS GREEN: Leading Practices in Taxation and Subsidy Reform, available at http://www.iisd.org/pdf/greensumm.pdf