Over the last few days an old blog post by David Sasaki has been circulating on Twitter. In the post he argues that fiscal transparency portals are not enough to bring about government accountability for public spending. To him, the “problem with fiscal transparency portals is that there is no mechanism to oblige government agencies to defend the purchases they make, much less sanction them when they misspend public funds.” After dismissing the media and civil society organizations, such as Fundar in Mexico and Openspending.org, as agents of applying such sanction, Sasaki argues that the solution to the accountability problem lies in the direction of creating new accountability institutions and promoting individual citizen activism via new technologies like Twitter and blogs.
What Sasaki got wrong
Sasaki misses two important points. First, the sleuthing of individual citizens like @AleUrbina that he refers to depends on the fiscal transparency portals, such as the one that Fundar created. Before their agriculture subsidy database was created, none of this information was in the public domain. And even once Fundar had liberated the information, it was released in unhelpful PDF files that had to be manually converted into usable formats, analyzed, and presented in a more accessible manner. It was this database that enabled @AleUrbina and others to start putting pressure on the government. Accessing, analyzing, and disseminating data in timely and accessible formats is the role that “infomediaries” like Fundar play. Budgets and other policy documents are technical, complex, and boring. This is why we need institutions that can bridge the gap between these documents and accountability processes. The more than 11 million people who have accessed the Fundar database to date seem to agree.
The second important point that Sasaki misses is that the accountability efforts of both formal oversight institutions and individual citizens are facilitated and amplified by the intermediaries that he so glibly dismisses. The IBP has documented 22 accountability campaigns in 11 countries, ranging from Afghanistan to South Africa, and, yes, even Mexico. These case studies show that intermediaries like Fundar do not only play the role of accessing and digesting budget information — they also mobilize citizens, support the media to report on budget issues, and make common cause with legislatures and other accountability players to force government to be accountable for public spending. The work that Fundar did with the media and others triggered a range of accountability processes in the Ministry of Agriculture, Congress, and the supreme audit institution. While many of these processes are incomplete, and in some cases stalled, they did result in the dismissal of the agriculture minister and establishment of new regulations to limit misuse of the subsidy scheme (read the rest of the Fundar story here).
The Fundar case is not unique. In India the National Campaign on Dalit Human Rights (NCDHR) worked with opposition MPs and media to force a debate in the legislature on funds earmarked for Dalits that had been diverted to pay for the 2010 Commonwealth Games. The pressure applied by MPs finally forced the government to return the money. True, the influence of the NCDHR did depend on the masses of citizens that they mobilized (some of whom may even have had Twitter accounts), but the final push for victory depended as much on the debate in parliament and the media buzz. Even more important, the coordination of the campaign and the production of the research that made it possible, depended on civil society intermediaries like NCDHR (read the rest of the NCDHR story here).
Why his post worries me
While his arguments are easy enough to criticize, Sasaki’s blog post worries me for two reasons. First, many people misinterpret arguments that fiscal transparency is not enough to mean that fiscal transparency is not important. Every single one of the 22 campaigns documented in the IBP case study series depended very heavily on access to information on public spending. This stands to reason. If you are trying to hold government to account for public spending, it is hard to see how this could be done without access to information. The important thing about fiscal transparency is not that it is not enough. The important point is that even while it is not sufficient, fiscal transparency is always necessary. It is a “gateway issue” that allows citizens, CSOs, and all other accountability institutions to advocate for their own issues.
The second reason Sasaki’s post worries me is that it yields to a common temptation to try and find one magic bullet to solve the accountability challenge. The complex reality of accountability politics is too messy for one solution to be of much use, even if it is a sexy one involving a peasant farmer with an iPhone5 or the teams of citizen ambassadors that Sasaki proposes. Actual accountability campaigns reveal a rich reality that involves citizens, the media, legislatures, auditors, CSOs, donors, and government insiders in a wide variety of interesting configurations. Efforts to fix the accountability puzzle with a widget like new technologies risk retarding our understanding and replication of real world accountability processes even further. This is not to argue that citizens and new technologies are not an important part of the accountability equation, just that they should not be framed as solutions that can crack the code on their own.
What is to be done?
If there are no magic bullets, then where should we start, you ask? The IBP case studies show that CSOs have played an important role in amplifying the voices of individual citizens and enhancing formal accountability processes. They are particularly important in contexts where formal accountability institutions are weak. The way they carry out their work is complementary and necessary for more robust engagement of citizens and oversight institutions.
In the last analysis CSOs are not sufficient and neither are citizens or new technologies or anything else. We should be careful of framing the debate as a choice between citizens or CSOs or legislatures. The accountability ecosystem is complex — technology has great promise to help the process work, but we should be spending much more time understanding the interactions between these actors and institutions, not pitting them against one another.
Governments serving half the world’s population shut citizens out of budget decisions that affect their lives
The International Budget Partnership today released the Open Budget Survey 2012, the only independent, comparative, and regular measure of budget transparency and accountability around the world. The results raise serious questions about the prospects for individual countries to overcome poverty and promote economic development and for international efforts like the Millennium Development Goals.
Produced every two years, the 2012 Survey reveals that the national budgets of 77 of the 100 countries assessed – these 77 countries are home to half the world’s population – fail to meet basic standards of budget transparency. The OBI 2012 scores are very low, with the average score among the 100 countries studied being just 43 out of 100. The governments of 21 countries do not even publish the Executive Budget Proposal, the most critical document for understanding government plans to manage the country’s finances.
Compounding this unacceptable lack of budget transparency are the Survey’s findings on the widespread failure of governments to provide sufficient opportunities for citizens and civil society to engage in budget processes. The average score on participation opportunities was just 19 out of 100.
“Absent information and a lack of participation opportunities mean citizens can neither understand the budget nor hold their governments accountable,” commented Warren Krafchik, Director of the International Budget Partnership. “It also opens the door to abuse and the inappropriate and inefficient use of public money, undermining equitable economic development at a time when public resources and services are already dwindling due to the financial crisis. This has major implications for the quality of life for millions of people around the world.”
The report summarizes new research showing that transparent budget systems can lead to cheaper international credit and, according to the International Monetary Fund (IMF), 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.
Rapid improvement is possible – and necessary
While the Open Budget Survey 2012 paints a bleak picture of budget transparency, participation, and accountability overall, there has been steady, albeit incremental, progress over the four rounds since 2006. The average OBI scores for the 40 countries that have comparable data for all four rounds of the Survey has gone from 47 in 2006 to 57 in 2012, with nearly all regions of the world showing improvements. 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 also 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 OBI scores, there are a number of exceptions. Aid-dependent countries like Afghanistan, hydro-carbon 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. Any country can do better if they commit to doing so.
Not only is progress possible, it can happen quickly and at modest cost. The Survey finds that of the collective total of 800 documents that the 100 countries assessed should be publishing, there are 131 that the governments already produce for their internal use but withhold from the public. Governments could dramatically improve their budget transparency, at little or no cost, merely by posting these documents on their existing websites.
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.
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. This could mean a generation of wasted resources and missed opportunities,” commented Krafchik. “The combination of inadequate budget information with the restrictions on public participation will make it far more difficult to monitor progress against the current and next generation of the UN’s Millennium Development Goals. World leaders should realize that they must also promote fiscal transparency and participation if these goals are to be achieved.
“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.”
Go to the Open Budget Survey 2012 page to check out the NEW Open Budget Survey 2012 Data Explorer and Infographic, and to download the Full Report.
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Why Open Budgets? Why Now?
“I think they just ate the funds. Do you see a school here?”
This was the response from a man from Likoni, a poverty-ridden area on the outskirts of Mombasa, Kenya, when asked about what happened to over US$55,000 that the local government was supposed to have used to build the Mrima Secondary School. The man in his mid-30s stood next to a hole surrounded by his neighbors; the hole was reportedly where the Constituency Development Committee had begun digging the foundation for the school and then inexplicably abandoned the project. According to the neighborhood spokesperson, the project wasn’t the right one anyway.
“No one came to the community to ask if we wanted to put a school here. What we need is a dispensary,” he reported, with the others nodding and murmuring their assent.
It doesn’t have to be this way. There are sufficient public resources available globally to make substantial progress on eradicating extreme poverty and creating sustained economic development, but only if these funds are spent effectively and equitably.
We know that for this to happen, governments must have institutions, systems, and processes in place to gather information on public needs and priorities, make appropriate and legitimate decisions about how to raise revenue and spend it, implement these decisions efficiently, and assess how well they did in terms of financial management, service delivery, and outcomes.
It seems in the case of the missing school in Likoni, none of these things happened.
So what do these public finance systems look like? Well, they are transparent – government provides comprehensive, timely, and useful information to the public throughout the budget process; participatory – the government provides meaningful opportunities for civil society and the public to engage in budget decision making and monitoring; and accountable – there are independent formal oversight institutions (legislatures and supreme audit institutions) that have sufficient resources and capacity to hold the executive to account.
Not only does the research support such systems in terms of improving governance, budget policy choices, implementation on the ground (i.e., schools filled with kids learning, not abandoned holes), and, ultimately, outcomes, but there is also growing evidence that greater budget transparency has other benefits, including reducing certain risks to governments and the global economy (in the recent crisis, nearly 25 percent of the unexpected increase in public debt was found to be linked to governments’ failure to provide a clear picture of their financial position) and reducing costs for government borrowing. Lower borrowing costs mean countries have more funds available to build roads, deliver clean water, and combat maternal mortality.
So, Are We on the Right Path? The Upcoming Release of the Open Budget Survey 2012
Every two years the International Budget Partnership conducts the Open Budget Survey (first round was in 2006) to measure the openness and accountability of government budget systems and practices around the world. Drawing from the Survey, the IBP calculates the Open Budget Index (OBI), the most comprehensive cross-country measure of public access to information on the receipt and expenditure of public funds available. The Open Budget Survey 2012, the latest round, covers 100 countries, which makes it the largest comparative, independent assessment to date of budget information, processes, and institutions. As we approach the release on 23 January, it’s a good time to look at where we’re at now, and what the risks are for not making progress toward open budgets.
The 2010 Survey presented a mixed picture. Overall the state of budget transparency was unacceptably poor, with an average OBI 2010 score of only 42 out of 100, and in 22 countries, the governments provided little or no budget information at all — effectively shutting the public out of the budget process entirely.
However, the 2010 Survey did identify a handful of countries, representing a variety of contexts, that had made impressive gains, demonstrating that substantial improvements can be made quickly and at little cost, if there is sufficient political will.
Why is this important, and what can we expect from the 2012 Survey?
The release of the 2012 Survey comes at a critical time. Governments in rich and poor countries are continuing to deal with the fallout from the economic crisis, the world community is pulling together to finance and implement solutions to shared challenges like persistent poverty and the effects of climate change, and substantial new funds are expected to flow into government coffers from promised increases in foreign assistance and new domestic sources — the influence of budget decisions in the outcomes of these efforts cannot be overstated.
At the same time, there is a blossoming international consensus among governments, civil society, and other public finance and economic development actors around the need for greater budget transparency and accountability. This consensus has spurred several global, multi-stakeholder initiatives to promote open and accountable governance, including the Open Government Partnership, the Global Initiative for Fiscal Transparency, and the global civil society Movement for Budget Transparency, Accountability, and Participation.
So the Open Budget Survey 2012 release comes at a time of high stakes for open and accountable budgeting and unprecedented opportunity to make substantial progress. It will cover:
- The current state of budget transparency around the world.
- Who is the transparency champion? And who came in last?
- Trends over time.
- Which country made the most progress? And who were the backsliders?
- Public participation.
- Guess which country is the leader on bringing citizens and civil society into the budget process. You might be surprised.
- Formal oversight institutions.
- Are legislatures and auditors strong enough to hold the executive to account for managing public money?
The arguments for open budgets are too strong to be ignored; the time for concerted action is now. The 2012 Survey will tell us where we are, where we need to go, and how to get there.
Watch this space for the global release of the Open Budget Survey 2012 on 23 January 2013!
Looking back to the 2010 Survey, what do we know about budget transparency, participation, and accountability? Why does it matter?
SEND-Ghana works with a network of local government and citizen organizations to monitor the implementation of the US$46 million a year Ghana School Feeding Program (GSFP) that reaches over a million children. SEND’s critical review of the program catalyzed a strong government reaction: the leadership of the GSFP was replaced and a five-member GSFP Review Committee was established. Following SEND’s recommendations, the revised GFSP has subsequently delivered improvements in providing clean, safe water; de-worming for school kids; and delivering adequate stocks of textbooks to the children served by the program.
This is just one of many examples the IBP has documented over the past several years of how civil society and citizens can make real differences in how well government spends public money to address people’s needs. By making public finance management more efficient, effective, and equitable, these efforts have let to better policies and outcomes, especially for people who are poor and marginalized.
This impact would not be possible if the civil society advocates did not have access to timely and useful budget information and opportunities to participate in decision making and monitoring budgets. This is why every two years the IBP conducts the Open Budget Survey, the only independent, comparative, and regular assessment of budget transparency, participation, and accountability in the world. What are the chances that CSOs around the world will have access to this kind of information to enable them to monitor government spending?
We’ll have a better answer to this question when the 2012 Survey is released next week, but there were a number of key findings we can look back on from the 2010 Survey. (Visit www.openbudgetindex.org for complete 2010 Survey results.)
- The overall state of budget transparency is poor. Only 20 countries had OBI scores above 60 and could be characterized as providing their citizens with enough budget data to enable them to develop a comprehensive analysis and understanding of their national budgets.
- The general trend toward open budgets was nonetheless favorable. There was improvement, especially among countries that provided little information to begin with. The average OBI score for the 14 countries that performed worst in the OBI 2006 has gone up from 25 to 40 in the OBI 2010. Similar improvements were found in some of the countries assessed for the first time in the OBI 2008, including Afghanistan, Liberia, and Yemen.
- Audit institutions and legislatures face challenges. The 2010 OBS found that budget oversight was weak in a significant number of countries assessed. Both legislatures and supreme audit institutions often lacked the independence, resources, and capacity to effectively play their oversight role.
- There are many simple steps to opening up budgets that governments are failing to undertake. The 2010 Survey found one of the quickest, and virtually costless, steps the governments can take to open their budgets is to publish on their websites the documents that they are already producing for internal purposes but withholding from the public. Oversight institutions could do more to use their existing legal authority to the fullest. For instance, supreme audit institutions could publish more information in their audit reports and they (and legislatures) could do more to involve the public.
The Open Budget Survey 2012 will be released globally on 23 January 2012. Will it show that the overall state of budget transparency continued to improve? Who will top the list? Who will show the biggest gains and losses in the OBI? What does the new section assessing public participation tell us about how governments are engaging their citizens? How has the strength of SAIs and legislatures changed?
For the most up-to-date information about the 2012 release, go to www.internationalbudget.org, “Like” us on Facebook at https://www.facebook.com/InternationalBudgetPartnership, and follow us on Twitter at @OpenBudgets.
This post was prepared by A. Venugopala Reddy, K. Prabhakar and Patibandla Srikant of the Public Affairs Centre in Bangalore, India
The findings from the Public Affairs Centre’s recent analysis of the use of the Constituency Development Fund (CDF) in the state of Karnataka, India, reflect many of the distortions inherent in these schemes. The local CDF, called the Member of Parliament Local Area Development Scheme (MPLADS), gives legislators (MPs) a chance to don the role of the executive by allocating funds to development works and actually choosing and implementing specific projects. In Karnataka state, each MP is allocated Rs. 50 million per annum (about US$1 million), an increase of Rs. 30 million per annum (150 percent!) over the prior year. But the Public Affairs Centre study finds that despite this massive increase, many MPs did not bother to utilise the MPLADS fund fully. Some MPs did not even touch their pot, and only two MPs spent 100 percent of their funds.
The poor record of some MPs could be a reflection of their lack of constituency linkages. MPs from the Upper House (Rajya Sabha) are nominated by their political parties, unlike the members of the Lower House (Lok Sabha), who are directly elected by the people. Lok Sabha MPs with direct constituency connections utilized on average 57 percent percent of the allocated funds, while Rajya Sabha members with no constituency linkages utilized only 30 percent. This shows that MPs with weak or no connections to their constituency have less incentive to utilise MPLADS fund.
Underspending was not the only problem. When MPs did spend funds, it is debatable whether they spent them on the right things. Many MPs favoured construction and repair of community halls, ignoring other works related to education, health, roads, and sanitation. A total of 3,857 community hall-related works were carried out in Karnataka from 2004-2009. In this period, Devegowda, former Prime Minister, spent almost US$2 million on community halls, followed closely by a number of other MPs. In fact, community halls received the largest share of funds with 48 percent percent of MPLAD funds being used for these structures. Community halls are followed by roads at 22 percent and education at only 13 percent. Other sectors like drinking water (2 percent), bus shelters (3 percent), irrigation (2 percent), drainage (2 percent), sanitation (1 percent), health (1 percent), and street lights (1 percent) received less than 10 percent combined of the funds. This trend also seems to support social divisions and caste politics. Almost all the community halls are named after a particular caste of the relevant locality.
Not only did MPs seem to choose the projects that enhance their political career (like community halls for favoured castes) but the net effect of the way MPLADS are used is to deprive poor areas of the projects and funding that they need. For example, MPs from Northern Karnataka, where the needs are far greater than in the rest of the state, spent a smaller percentage of their funds than their colleagues from more affluent areas. MPs from poorer regions, like Northern Karnataka, only utilized an average of 47 percent of available funds, while their counterparts from Southern Karnataka, a more developed region, utilized 63 percent of the funds.
It’s interesting to note that MPs with lower education qualifications used their MPLADS funds better, in terms of actual spending them, compared to MPs with higher education qualifications. Only MPs with matriculation and with pre-university course qualification managed to utilize 100 percent of MPLADS funds allocated. MPs with university degrees and post graduate qualifications were generally not able to utilize as much of their funds. One MP with a PhD qualification managed to utilize only 26 percent of the allocated funds. This could be because MPs with less education are more dependent on their political careers than MPs with higher educational qualifications.
Click here for PAC’s full report.
Read about the many other governance problems associated with CDFs:
What is wrong with Constituency Development Funds – Albert van Zyl
Constituency Development Funds: Are they constitutional? – Christina Murray