The Ordonnance of 1959: Reshaping French Finances

The Ordonnance of January 2, 1959, a cornerstone of the Fifth Republic’s establishment in France, was much more than just a legislative act. It represented a radical overhaul of the nation’s budgetary and financial practices, designed to modernize the state, enhance its control over public finances, and promote economic stability and growth.

Prior to 1959, the French budgetary process was often characterized by fragmentation, a lack of transparency, and limited parliamentary oversight. Numerous special accounts and autonomous agencies operated with relative independence, making it difficult to obtain a comprehensive picture of government spending. The Ordonnance aimed to rectify this through a sweeping simplification and rationalization of the budget structure.

One of the key innovations was the introduction of the Budget de Programmes. This system shifted the focus from simply listing expenditures by administrative department to organizing the budget by specific government programs and objectives. This allowed for a clearer assessment of the effectiveness of public spending and facilitated better resource allocation. It encouraged ministries to justify their budgets based on the results they were expected to achieve, fostering a performance-oriented culture.

The Ordonnance also strengthened the power of the Ministry of Finance. By centralizing control over budget preparation and execution, it aimed to improve the efficiency of financial management and prevent budgetary slippage. The Minister of Finance gained greater authority to oversee all aspects of public finances, including the allocation of funds and the monitoring of spending.

Furthermore, the Ordonnance aimed to increase parliamentary scrutiny of the budget. While it centralized executive power in financial matters, it also sought to provide parliament with more information and tools to hold the government accountable. The reformed budget presentation, structured around programs and objectives, made it easier for parliamentarians to understand the government’s priorities and assess its performance.

The impact of the Ordonnance of 1959 was profound and long-lasting. It laid the foundation for a more modern, efficient, and transparent system of public finance in France. It contributed to the country’s economic stability and growth in the decades that followed. While the system has been further refined and modernized over time, the core principles established by the Ordonnance remain central to French budgetary practice. The introduction of program budgeting, the enhanced role of the Ministry of Finance, and the efforts to improve parliamentary oversight all continue to shape how France manages its public finances to this day. The Ordonnance serves as a testament to the power of institutional reform in driving economic and social progress.