Why parliament, not the government, should control the budget — Economist Behzod Khoshimov explains

Parliament's core function is to determine how much tax to collect, from whom, and how to allocate public funds, says Behzod Khoshimov, a professor at New York University. In an interview with Kun.uz, he discusses the role of democratically elected parliaments and their impact on economic development.

One of the key reasons behind the world’s unprecedented progress in recent centuries is the transformation of traditional state governance, which had been in place for millennia. Governments and courts have existed since ancient times, but the third branch of power — parliaments — began to take shape in their modern form primarily in the 17th century.

According to him, from an economic perspective, one of the primary functions of parliament is to decide where and how to allocate societal resources.

"Historically, societies have reached a consensus: the budget collected from taxes should be spent collectively. Simply put, imagine a country with its own expenses — such as ensuring security, protecting parks and forests, and so on. The key aspect of these expenses is that everyone benefits when they are covered, and everyone suffers when they are not. However, if a single organization provides these services, their availability does not diminish when consumed by one person or another.

Let me explain. There is an economic term called 'public goods.' The main characteristic of public goods is that their consumption by one person does not reduce their availability for others. For example, if one person benefits from clean air, it does not make the air less clean for another. Similarly, in the case of air defense, if fighter jets do not fly over you, they do not fly over others either.

In contrast, goods like bread or food are different — if one person consumes them, there will be less available for others. But public goods generally do not function this way.

Now, someone has to provide these public goods. While everyone in society benefits from them, no one wants to pay for them individually. That is why societies have decided to pool money together and establish an institution responsible for distributing the collected funds. This institution is called parliament.

To illustrate this on a smaller scale, consider an apartment building with multiple households. The residents may contribute money to hire someone to clean the building. Once the cleaning is done, all residents benefit, and no one is at a disadvantage. However, even those who do not contribute financially still enjoy the benefits of a clean building, and you cannot prevent them from doing so. Goods and services of this nature are called public goods. The institution created to finance them is parliament," says Khoshimov.

The origins of modern parliaments can be traced back to the adoption of the Bill of Rights in England in 1689, which was significant because it limited the power of the king.

"In the Middle Ages, the British king could impose taxes on citizens at will, start wars whenever he wanted, and levy taxes on the wealthy to cover military expenses. Eventually, a group of lords and other individuals came together to establish an institution to limit the king’s powers, which became known as parliament. The primary function of this parliament was to deliberate on who should be taxed and how much. In other words, the king had to consult with parliament regarding taxation," explains the economist.

Thus, tax-related matters became parliament’s most fundamental function. Other responsibilities, such as overseeing the executive branch and passing laws in various areas, emerged later.

"Today, parliaments have broad powers and responsibilities. However, in the constitutions of all democratic countries, tax-related matters are exclusively under the jurisdiction of parliament. Other branches, such as the executive or judiciary, do not have the authority to impose taxes or allocate the budget," says Behzod Khoshimov.