standards^2. It is structured in four sections: 1) programme-based budgeting, 2) the new appropriations
powers of the Parliament, 3) the increased autonomy of the administration, and 4) the integrated
performance system.
2. Programme-based budgeting: A new budget structure for improved
transparency and accountability
One of the major innovations of the French LOLF is the overhaul of the design of the formal structure of
the budget. Breaking away from the expenditure-based approach, where budget documents are primarily
organized along the line of the expenditure categories and spending institutions, it shifts the focus on
expenditure purposes. The new programme-based budgeting defines and categorizes national public
expenditures on the ground of their functions or purposes. As a consequence, attention moves away from
the institutional structures of the administration in charge of implementing the expenditures.
The LOLF’s programme-based system is a three-tier structure organized along the “Mission”,
“Programme”, and “Action”. The Missions correspond to the major public policies. Each Mission
includes a set of programmes to which appropriations are allocated and broken down into sub-
programmes (Actions) that together constitute the operational means of implementing the Programme. In
comparison, the previous budgetary structure based on ‘budget chapters' obscured the ultimate aims of
budget appropriations and the cost of administrative policies and structures. By breaking down the
budget into major public policy objectives, the State's missions and public service goals become fully
transparent.
A Programme covers the appropriations needed to implement a measure, or a coherent set of activities
coming under the same ministry and involving specific objectives. Thus, a Programme corresponds to a
center of responsibility. A Mission covers a series of Programmes designed to contribute to a specific
public policy. A Mission can jointly involve several different ministries (such as, for instance, the
“Research an Higher Education Mission”) or just a single one (such as the “Culture Mission”).
In 2005, there are 34 Missions accounted for in the general budget (plus 13 Missions annex to the general
budget), corresponding to a total of 132 Programmes (plus 26 respectively) and covering 580 Actions.
Among the 34 Missions, 9 are inter-ministerial.
A detailed list of the LOLF’s Missions and Programmes structure is presented in Annex 1.
In Annex 2, appropriations for the 2005 budget are presented in the new Missions structure as a
quantitative application of the programme-based approach (on an indicative basis).
3. Greater appropriation and control powers for the Parliament
As a major change, the LOLF brings forward a revised set of rules for the Parliament appropriation
process in order to increase its budget power.
The LOLF institutionalises the budget policy debate introduced in 1996 at the Parliament. This debate is
the opportunity, before the debate on the Budget Review Bill, for an initial review of the implementation
of the previous year's Budget Act and a multi-annual approach of the budget policy. Thus the LOLF
increases the importance of one of the steps in the annual budget appropriation cycle, in order to further
enhance the Parliament powers over the budget. At the occasion of the spring budget policy debate, the
LOLF gives a greater role to the Parliament in outlining public finance strategy. This is also the time
(^2) The new budget approach includes three types of accounting: cash-basis accounting to track budget execution, accrual-
basis accounting inspired from corporate accounting, and programme-cost analysis tools, linked up with the general
accounting.