The decisive budgetary battle in the Spanish Parliament is about to take place, and taking into account the more and more shameless approach of the Socialist governmental proposals towards the Popular Party programme, it is a good moment to remember some important aspects of the theory on public budgetary policies. I emphasise the theory of the voluntary fiscal constitution of Brennan and Buchanan because I consider that we have a historical opportunity to end up establishing almost constitutional agreements in fiscal matters with the collaboration of the two majority parties. It appears that the Socialists are uttering ideological steadiness as a matter of great urgency and this can facilitate the rebirth of common sense and reasonable policies.

For the "theory of voluntary change" that moves within the analysis of collective choice, the State is a simple instrument at the service of individuals that are, in any case, fundamental economic individuals. The State is an entity of reason. The subject of financial activity is not the State, as a superior and abstract entity endowed with special powers, but a multiplicity of subjects: the individuals that constitute it, conform and decide with multiple and diverse approaches. The activity of the public Economy is conceived as a process of exchange of benefits between individuals through the State, instead of the market. This activity is a theory of voluntary change between money paid in taxes and public goods that the State provides for those who pay the taxes.

With these conceptions it was attempted firstly to apply new accounting techniques, or new forms of the public Budget such as the "Budgetary System planned by programmes" (P.P.B.S.) or the "budget of base zero", with the intention of allowing the Government to appropriately express the objectives that it seeks, the resources that it specifies, the programs and activities that it intends to carry out and the cost that this means for the citizens.

However, clashing notes have arisen regarding the effectiveness of those techniques that are not sufficiently clear and transparent to allow citizens and their representatives in the Parliaments to make a valuation of the utility and sacrifice that all will experience from the activities that the Government proposes. This scepticism becomes evident for example when considering the influence that the public bureaucracy has on the representatives elected by the citizens. It was basically Niskanen who, in his economic theory of bureaucracy insisted more on these aspects. On the other hand, the most recent works show that in the real processes of political decision, as regards establishment of taxes, the coalitions come into play among the diverse groups of citizens that impede the establishment of an appropriate distribution in accordance with the "principle of benefit." The political coalitions, formers of majorities, impose a certain distribution of taxes. The financing of goods and collective services, through taxes, is always verified not with some costs or losses of well-being not compensated by a more or less broad sector of citizens. The idea that the activity of the State bears some social costs is confirmed, and these should be taken into account when deciding about the convenience or not of its intervention in economic processes and the benefit of goods and services of social character.

These problems have led several authors, among those that stand out particularly - Buchanan and Brennan, to propose the "theory of the voluntary fiscal Constitution." Such a contractual-constitutionalist process is essentially political and legal, without prejudice that it is also based on appropriate economic approaches. It is sought to give political representatives of the citizens some coercive tax norms based on certain objective and unquestionable principles of fiscal justice, to which everyone must undergo and that all respect and apply coercively once approved. The possibility is raised that fiscal institutions can be specified almost constitutionally. The fiscal institutions would be chosen to govern imperatively throughout a future period protracted in time.

Brenan and Buchanan explain it like this: "The topic that is debated is, no more and no less, than that of how the basic rules of the socio-economic order can be changed, rules that have been in effect during decades, and to change them peacefully, while the game continues developing under the old rules. It really is an important task (...) We have to redesign our rules, and our ideas regarding rules, with which we put a limit on that which governments can harm in the end, preserving at the same time the benefits that are derived from political action and government. We request our academic colleagues to stop advising this or that government or politician in power. Good games depend on good rules more than on good players. Fortunately for all of us, and above all keeping in mind the reason for rules, it is always easier to reach an agreement on a group of rules than on who is, or not, our favourite player."

"Modern man changed his socio-political norms once he emerged from the eras of darkness. For this he was not only guided by science nor-fundamentally - by blind evolutionary change, but by reasoned speculation of people that took a risk to think in terms of norms different to those under which they lived. They dreamt of a possible future, and some of their dreams were materialized."

With these approaches towards the renovated search for great principles of justice that legal sciences form and that now we see that they also form and have repercussions on economic activity and decisions. Surprisingly, with a more formalist degree and a much more sophisticated analytic instrumentation, it seems that there is a return to the Classical Political Economy in which the interdependence between Law and Economy was remarkable.

Joseph John Franch Menéu
Gaceta de los Negocios, Monday September 27th 1993