February 2019 | by Paolo de Renzio and Jason Lakin, International Budget Partnership
Current approaches to public finance and government budgets, with their narrow focus on macroeconomic stability and economic growth, have fallen short in responding to citizens’ needs and promoting socioeconomic development that benefits all. The limitations of these approaches, and their consequences, can be summarized as follows:
- An overemphasis on fiscal discipline and economic growth relative to equity and service delivery.
- Skewed distribution of costs and benefits.
- Limited space for citizen involvement and broad debate and deliberation.
- An overly technical approach to budget reforms.
The confluence of these factors contributes not only to growing levels of inequality and to persistent poverty and exclusion, but also to people’s growing disaffection with governments, with whom they feel little connection and on whom they are able to exert limited influence.
This paper outlines the elements of a proposal to reframe debates around public finance and government budgets, drawing on the inter-related concepts of justice, democracy, and human rights, and putting more emphasis on issues of equity, sustainability, effectiveness and inclusion. The authors address some of the shortcomings of current approaches and propose a more solid, normative foundation on which public finance decisions can be assessed and taken.