Governments not meeting transparency standards

Tom Berry, Head of Communications at DI,  welcomes the 2012 Open Budget Survey, a comprehensive overview of which countries value budget transparency.

The International Budget Partnership (IBP) launched their bi-annual Open Budget Survey this week. It made sobering reading for those of us working in the transparency field revealing that three of every four nations (representing over half of the world’s people) fail to meet basic budget transparency standards.

While there had been an overall improvement since the start of the initiative in 2006, change is clearly happening too slowly. The survey revealed that 77 of the 100 countries assessed failed to meet basic standards of budget transparency, meaning that people have access to less than half the desired levels of budget information that they need to fully grasp how their government is using public resources to hold it to account. The governments of 21 countries do not even publish their executive budget proposal, the most critical document for understanding exactly how governments plans to manage their country’s finances.

Compounding this lack of transparency are findings on the widespread failure of governments to provide sufficient opportunities for citizens and civil society to engage in budget processes. The survey examined this area in detail for the first time. The average score on participation opportunities was just 19 out of 100. Only South Korea (which scored 92) is judged as providing its citizens with sufficient space to engage in the budgetary process.

Improved decision making through transparency

counting-the-poor-featured-image-200x150IBP claim (and DI agree) that the success of efforts to reduce maternal mortality, eliminate persistent poverty, provide children with access to high-quality education, and address the impact of climate change all hinge on whether countries make the right budget choices and whether decisions are implemented effectively. We believe greater transparency helps people scrutinise government spending decisions more effectively – increasing accountability, empowering citizens and contributing to improved decision making and service delivery.

Interestingly, the Open Budget Survey summarises new research showing that transparent budget systems can lead to cheaper international credit and, according to the International Monetary Fund, are critical to a country’s fiscal credibility and performance. For instance, using findings from a recent analysis by the International Monetary Fund, the IBP estimates that Portugal’s lack of fiscal transparency has enabled the government to hide a substantive part of its government debt, to the tune of approximately US$26 billion, or 11 percent of GDP.

The Open Budget Survey also highlights substantial new case study evidence showing that in countries around the world when citizens have access to budget information coupled with opportunities for public participation the result can be better policies, better implementation on the ground, and, ultimately, better outcomes.

Incremental progress

The news isn’t all bad. While the survey paints a bleak picture of budget transparency, participation, and accountability overall, there has been steady, albeit incremental, progress over the four rounds of the survey since 2006 with nearly all regions of the world showing improvements. It is clear the commitment of governments – accompanied by other favorable factors such as donor interventions, international standards and civil society pressures – can yield significant and rapid improvements in budget transparency.

The survey results show that good performance is possible in a variety of contexts. While countries that are dependent on natural resource revenues and aid in Africa and the Middle East may be more likely to have lower scores, there are a number of exceptions. Aid-dependent countries like Afghanistan, hydrocarbon revenue-dependent countries like Mexico, low-income countries like Bangladesh, and countries in the Middle East and sub-Saharan Africa like Jordan, South Africa and Uganda all have relatively transparent budget systems.

Even with the dearth of governments providing substantial opportunities for public participation, the survey identified a number of examples where governments are taking innovative and meaningful steps to engage citizens in budget decisions and oversight. These include hotlines for reporting problems with service delivery, public hearings to gather input on proposed budget policies, and efforts to bring communities into audits of public programs. In short, there are excellent models that executives, legislatures, and supreme audit institutions all over the world can draw from.

Making governments accountable

At the same time, however, progress has not been as consistent or as rapid as is possible, or as is necessary. Though there has been improvement, at the current rate of progress it will take decades or more for all countries to reach a reasonable level of budget transparency. We believe that there needs to be a focus on increasing transparency of all of the resources available for poverty reduction in order to maximise the impact on tackling poverty, and government expenditure is central – it is the largest resource available to the majority of developing countries (approximately three times more than international resources) and, as the government is accountable to its citizens for realising poverty reduction and other goals, increasing transparency at this level is crucial to efforts to eradicate extreme poverty – an achievable goal of the post-2015 Millennium Development Goal framework.

The report concludes that “reforms can be accomplished at little to no financial cost and can benefit billions of people. Good budget practices have been identified and standards have been set. Substantial technical assistance is available. The framework to improve exists – all that is typically missing, in many individual governments, is the political will to act. That must change.”

Transparency is high on the political agenda this year, and is expected to feature in discussions on the post-2015 development framework, at the G8 and within Open Government Partnership.  We hope that this level of interest will translate into real action by governments who clearly have a long way to go in improving budget transparency.

The complete Open Budget Survey 2012, including detailed analysis, methodology, and recommendations, can be found at here.

An infographic to illustrate the Open Budget Survey is available here.