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This study analyses the evolution of fiscal systems, highlighting the transition from traditional, rigid, incremental and annual models to more strategic approaches focused on performance, outcomes and structural transformation in the medium and long term. The growing complexity of public policies, economic, social and environmental challenges, and the demand for greater transparency have driven the adoption of new methodologies, emphasising the provision of relevant information, linking planning, budgeting and evaluation, and promoting accountability and greater citizen engagement. Transformational, conditional and strategic budgeting have emerged as a tool for promoting medium- and long-term structural agendas, integrating cross-cutting priorities and quantifiable targets, fostering coordination between different areas of government and societal actors, and identifying areas for improvement.
In the Portuguese context, the fiscal system has gradually incorporated elements from various models adopted internationally, becoming enshrined in law as a hybrid model featuring multi-annual planning, programme-based budgeting and performance monitoring mechanisms. Recent legislation, including the BFL (2015) and Decree-Law No. 86/2025, formally structures the budget process in two phases and provides for the coordination of medium-term strategic instruments, such as the Major Policy Choices Act and the Multi-annual Public Expenditure Framework, although this coordination remains visibly incomplete. Initiatives such as the Recovery and Resilience Plan highlight the potential of an integrated, strategic and results-oriented budget, with some of its key elements serving as a possible benchmark for the modernisation of the national system.
The ongoing review of the BFL presents an opportunity to consolidate the medium-term fiscal framework, strengthening the coherence between strategic planning, resource allocation and the assessment of results, centred on the creation of public value, whilst ensuring transparency, accountability and the capacity to respond to medium- and long-term challenges. The effective consolidation of this type of system in Portugal depends not only on technical reforms, but also on a shift in institutional culture and in the way the budget is understood and discussed: not merely as an annual exercise in resource allocation, but as a strategic instrument with clear objectives, serving a sustainable, inclusive and confidence-building multi-annual trajectory for society. From a theoretical perspective, transparency helps to reduce information asymmetries between public authorities and citizens, thereby strengthening accountability and democratic legitimacy. However, it is important to bear in mind that the positive effects of fiscal transparency also depend heavily on the levels of fiscal literacy amongst the population for whom it is intended, as well as on the clarity of the objectives set and the provision of accessible and accurate information on their fulfilment.
Date of last update: 02/09/2026
