What Has the Open Budget Survey Taught Us About Progress and Challenges to Improving Budget Transparency?

What Has the Open Budget Survey Taught Us About Progress and Challenges to Improving Budget Transparency?

An essay from the International Budget Partnership’s 2015 Annual Report

A core goal of the International Budget Partnership is to encourage governments to make budget information available to the public so that civil society can participate effectively in all aspects of the budget process. The Open Budget Survey (OBS) is the main tool that IBP uses to assess progress in this area, encourage change, and identify challenges.

The OBS 2015 finds that budget transparency has improved modestly over time, particularly for countries that were ranked among the least transparent in previous rounds of the survey. Of the 102 countries covered in the 2015 survey, the average score on the Open Budget Index (OBI) was 45 out of a possible 100. Between 2012 and 2015, for the 100 countries covered in both surveys, the average OBI score increased by 3 points. But among the 41 countries considered weak performers in 2012 (with OBI scores of 40 or less), the average score increased by 10 points in 2015, and by 20 points or more for 11 of these countries.

While these findings correspond with those of earlier surveys, the 2015 results also expose the fact that relatively few countries have improved to the point where they are publishing sufficient information to enable CSOs, oversight institutions, and members of the public to participate effectively in the budget process.

In terms of the OBI, providing a sufficient level of information means scoring above 60 out of 100. This is not an arbitrary target. Most of the survey questions require researchers to score countries based on whether they follow best practice, good practice, or some lesser metric, when providing information to the public. To achieve a score of more than 60 on the OBI, a country would need to meet good practice standards on most of the 109 indicators in the survey that are used to calculate the OBI. Therefore a score of 60 requires countries to meet basic, but not exceptional, standards.

Yet only 24 of the 102 countries covered in the 2015 Survey score above 60, meeting the goal of providing sufficient budget information. Most of these countries scored highly from when they first joined the Survey, and continue to do so. Only nine of these countries have increased the amount of budget information they make available to the public such that they have gone from providing insufficient information to providing sufficient information.

global budget transparency in 2015
A global picture of budget transparency in 2015. Click to enlarge »

In contrast, of the 44 countries that provide moderate amounts of budget information, scoring between 41 and 60 in 2015, roughly half were among the weakest countries (with OBI scores of 40 or below) when first surveyed. Thus, while progress has been made among countries that provided scant budget information when first surveyed, many continue to provide only modest — and insufficient — amounts of information.

Compounding this problem, a significant group of countries in the survey seems to have become stuck in the 41 to 60 range. Fourteen countries with scores between 41 and 60 in 2015 have been stuck in this middle range since they joined the survey, including 11 countries that have been part of the survey since its first round in 2006. This includes Argentina, Columbia, Croatia, Ghana, Jordan, Kenya, and Tanzania; all members of the Open Government Partnership, and often touted as transparency improvers.

Having identified this problem, a critical question for IBP going forward is: why do countries have trouble moving above the 60-point threshold, from insufficient to sufficient information?

One possibility is that countries face political constraints. Improving budget transparency requires political will; if such will is limited, then it may be enough to allow some improvements but not enough to move a country to a level of budget transparency that meets international standards. Another possibility could be technical and capacity constraints. In many cases meaningful improvements in transparency involve more than publishing new documents, requiring a government to go beyond merely releasing to the public information that it had already been collecting. Enhancing the level and variety of detail included in published documents — for instance, quantifying tax expenditures or developing multiyear frameworks — can be more challenging, often requiring new systems and processes.

Yet another possibility for some countries is that the external incentives for improving transparency decrease significantly once a country provides more than minimum levels of budget transparency. Gains in transparency have often been catalyzed by fiscal crises and the transparency requirements of foreign investors and rating agencies. But the demands of these institutions are unlikely to extend to the more detailed data a country needs to provide for effective civil society engagement. Similarly, the transparency yardsticks used by international donors to condition aid flows tend to focus on minimum standards; donor attention tends to wane as countries surpass these measures. And, while the media or CSOs may find low OBI scores useful for shaming countries languishing at the bottom of the survey into action, that spotlight dims by the time a country ranks in the middle of the survey.

IBP recently examined these issues by conducting research to identify why some countries are able to raise their OBI scores above 60, and why others are only capable of more limited improvements. See our new publication The Road to 61: Achieving Sufficient Levels of Budget Transparency to learn more about our findings.

As a next step, we will partner with governments and researchers in the identified countries to dig more deeply into the political circumstances that propelled or limited progress. We will include countries that have succeeded in achieving scores over 60 in the past few years, as well as countries that have expressed interest in providing sufficient information for citizen engagement.

We will also seek to learn what domestic actors have done to continue to demand greater budget transparency from their governments, even after some progress has been achieved. And the roles that external actors have played in working with governments and coordinating with domestic actors to provide the financial and technical resources needed to support further advances in transparency. All of this work will be geared toward the key goal of moving countries up to the next level — to providing sufficient information so that citizens and civil society can participate in budget processes and hold their government to account.

Further Reading

The Open Budget Survey 2015: Let’s all move to New Zealand

The Open Budget Survey 2015: Let’s all move to New Zealand

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The 4.5 million people living in New Zealand have access to the most extensive amount of budget information in the world, according to the latest results of the Open Budget Survey. But how are the rest of the world’s 7 billion people doing? Not nearly as well unfortunately: 68 percent of the world’s population live in countries that fail to publish enough budget information for them to understand how public finances are being managed.

So what does this look like on a global scale? The map below shows how the world would look if land area were scaled by population size, with the colors indicating the amount of budget information people have access to.

(click to enlarge)

China’s already significant landmass grows larger still when scaled by population. Unfortunately, the dark red shading indicates that its 1.4 billion people remain largely in the dark on how the government is managing the country’s USD 2.2 trillion budget. Despite a decade of rapid economic growth and an ever expanding budget, its score of 14 out of 100 on the Open Budget Index (pdf) has changed very little. Highly populated countries like Vietnam and Egypt likewise also make scant budget information available to the public. Vietnam’s transparency score has largely remained the same over the years, whereas Egypt’s score fell dramatically in 2010 and has yet to bounce back to levels achieved in the past.

South Asia – a big yellow blob on the map – is home to almost 1 in 4 of the world’s people. Yellow indicates scores of between 40 and 60, meaning governments are providing limited amounts of budget information to the public. Not terrible, but not enough to provide a full picture of how governments are managing public money, and certainly not enough for citizens to hold their government accountable. Worryingly, transparency in South Asia seems to be regressing: India’s score fell from 68 to 46; Pakistan’s from 58 to 43; and Sri Lanka’s from 46 to 39.

But there are reasons for optimism. South Africa, the fifth most populous country in Africa, has one of the most transparent national budgets in world. Highly populated Brazil, the Philippines, and Russia make substantial amounts information available to the public. (Though an unusually large share of public money in Russia is spent outside the national budget, so the government still has a long way to go to being truly open to the public.)

As the global report (pdf) points out, a concerning trend is that many countries seem to get stuck at these middling levels of budget transparency. Part of reason may be the relative ease in which governments can improve…up to a certain point. Most of the worst performers can make dramatic progress simply by publishing the budget documents they already produce. Those doing better, however, need to go through the likely more difficult process of improving the comprehensiveness of their budget documents.

The world is making gradual progress on budget transparency, but we still have a long way to go to get to New Zealand.

Findings from the Open Budget Survey 2015: Are Governments Equipped to Manage Public Resources?

Findings from the Open Budget Survey 2015: Are Governments Equipped to Manage Public Resources?

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The latest round of the Open Budget Survey — the world’s only independent, comparative assessment of budget transparency, participation, and formal oversight — reveals the vast majority of countries surveyed have inadequate systems for ensuring that public funds are used efficiently and effectively. Of the 102 countries assessed, 98 fall short on at least one of the three core pillars of budget accountability: transparency, participation, or oversight. A concerning 32 countries fall short on all three pillars.

This lack of strong budget accountability systems pose a threat to the implementation of critical international agreements such as the United Nations’ Sustainable Development Goals and the international agreement expected to come from the 2015 Paris Climate Conference.

Transparency (the Open Budget Index)

OBS 2015 Report CoverThe 2015 findings reveal large gaps in the budget information that governments are making available to the public. A mere 24 countries — less than one in four — were found to be providing sufficient budget information (with scores of more than 60 on the Open Budget Index, the part of the survey that assesses transparency) to enable civil society and the public to monitor public finance.

Alarmingly, the 78 countries that provide insufficient budget information are home to more than two-thirds of the world’s population. Worldwide around one in three budget documents that should be made available to the public are not and, even when documents are published, they often lack sufficient detail to allow a full understanding of public finances and hold government to account.

However, consistent with the results of previous rounds, the 2015 survey finds that budget transparency is improving around the world. For the 100 countries with comparable data the average OBI score has increased from 42 in 2012 to 45. Progress was particularly robust among some countries and regions that were previously not as transparent, including the Kyrgyz Republic (its OBI nearly tripled), Tunisia (its OBI effectively quadrupled), and Francophone West Africa.

But this progress is from a low base and far too many countries with unacceptably low levels of budget transparency are failing to advance reforms. For example, Algeria, Bolivia, Cambodia, Chad, China, Equatorial Guinea, Fiji, Iraq, Myanmar, Qatar, Saudi Arabia, and Vietnam have been among the least transparent countries (with OBI scores of 20 or less) every single year they have been in the Survey.

In looking at public access to budget information over time, the Open Budget Survey research has also identified unacceptable volatility in government transparency practices that creates challenges for those attempting to understand and monitor national budgets.

Public Participation and Formal Oversight

Compounding the widespread lack of transparency is a lack of opportunities for the public to participate in how public finances are managed and voice concerns. There are also serious deficiencies in the ability of oversight institutions to play their role in holding government to account. A disappointing 95 of 102 survey countries fall short in providing opportunities for public participation. But there have been some promising innovations in this area, including public hearings, social audits, citizen audit request systems, fraud hotlines, and client surveys.

Formal oversight institutions remain far too weak in many countries. The survey finds deficiencies in legislative research and analytic capacity, as well as poor quality assurance systems among national audit bodies. These factors compromise the ability of oversight institutions to be effective guardians of the public purse.

But improvement can and must happen

The good news is that progress can be achieved quickly and often at little or no cost to the public coffers. For instance, most countries that score poorly on transparency already produce significant budget information, but fail to make it available to the public. Major gains could be made by simply posting these documents on online.

The means and mechanisms to establish these budget accountability pillars are readily at hand. Ultimately, advancing transparency, participation, and oversight almost always comes down to a question of political will.

The right package of reforms varies from country to country, but certain recommendations are frequently applicable:

  • Increase the number of budget documents published and their comprehensiveness.
  • Preserve gains in transparency by institutionalizing reforms in budget laws and regulations.
  • Develop mechanisms to obtain public input on budgets and how they are implemented.
  • Provide legislatures with better access to research and analytic capacity, and tighten up quality control among national audit bodies.

Ultimately it is governments that must act to strengthen the three pillars of accountable budget systems. But doing so will require engagement from a range of actors. Civil society groups, donors, investors, and international institutions each have a role to play in spurring governments to enact reforms.

“Budget accountability can no longer be pushed aside as a technical concern of bureaucrats,” says IBP Executive Director Warren Krafchik. “With the amount of funds likely to be mobilized through the new international development goals alone, and potentially through climate change agreements, the world has an unprecedented opportunity to address poverty, inequality, and other global challenges — but this will only happen if these resources are managed transparently and accountably.”