Loi Finances 1999: A Turning Point in French Budgeting

The *Loi organique relative aux lois de finances* (LOLF), or Organic Law on Budget Laws, passed in 1999, represents a fundamental reform of the French budgetary process. Often referred to as the "Loi Finances 1999," it fundamentally altered how the French state manages and spends its public funds. This law aimed to enhance transparency, accountability, and efficiency in government spending, replacing a system that had remained largely unchanged since 1959.

Prior to the LOLF, the French budget was structured around a "means-based" approach. Parliament primarily voted on inputs – the resources allocated to various ministries – rather than on the actual results or outcomes these resources were intended to achieve. This system lacked transparency, making it difficult to assess the effectiveness of public spending and to hold government accountable for its performance.

The Loi Finances 1999 introduced a "performance-based" budgeting system. This shifted the focus from simply allocating resources to ministries to defining clear objectives and measuring the results achieved with those resources. The core of this reform involved structuring the budget around "missions," "programs," and "actions."

• Missions: These represent broad policy areas, such as national defense, education, or justice.
• Programs: Within each mission, programs define specific objectives and the strategies to achieve them. Each program is assigned to a responsible minister who is accountable for its performance.
• Actions: These are the concrete activities undertaken within a program to achieve its objectives.

By focusing on programs and measurable outcomes, the LOLF aimed to provide parliament and the public with a clearer understanding of how public money is being spent and whether it is achieving its intended goals. This enhanced the ability of parliament to scrutinize the budget and hold the government accountable for its performance.

The implementation of the LOLF required significant changes in government accounting and reporting practices. Ministries had to develop performance indicators and collect data to measure progress towards their program objectives. This involved substantial investment in information technology and training for civil servants.

The Loi Finances 1999 also affected the budget cycle. The budget process now requires the government to present a detailed budget proposal to parliament that includes not only proposed expenditures but also performance targets for each program. Parliament then has the responsibility to scrutinize these proposals and make amendments as necessary.

While the LOLF has generally been considered a success, it has also faced challenges. Some critics argue that the performance indicators used to measure program effectiveness are not always reliable or relevant. Others contend that the emphasis on performance can lead to a short-term focus and neglect of long-term strategic goals. Despite these criticisms, the Loi Finances 1999 remains a landmark piece of legislation that has fundamentally reshaped the French budgetary system and improved the transparency and accountability of government spending.