by [email protected] | Nov 29, 2022 | Budget Allocation, Budget Implementation, Budget Monitoring, Budget Transparency, Citizen participation, Civil Society Organizations
Each month, we shine a spotlight on partners who are using budget advocacy to bring transformational change to their communities. This month we’re spotlighting Julius Kapwepwe, director of programs at the Uganda Debt Network. This interview is supported by the European Commission.
1. What is the Uganda Debt Network (UDN)?
UDN’s vision is a Uganda where public resources are prudently, sustainably and equitably managed.
2. What drew you to budget and advocacy work?
From an early age, I was interested in the public and economic affairs of my country. My parents were ordinary people—traders and farmers—but they were always politically aware, so I was naturally attracted to the public sector. My parents baptized me with the names “Kapwepwe” after the former vice-president of Zambia, and “Julius” after Julius Nyerere, the former President of Tanzania. They were both African liberation giants. So, I grew up Pan-African oriented, believing that African countries have the legroom and the space to finance their development priorities.
3. What is UDN’s connection to the International Budget Partnership (IBP)? And how has the partnership affected financial transparency in Uganda over time?
UDN has partnered on the Open Budget Survey (OBS) since 2006. The survey is an evidence-based process that visibly adds value for the government. They [the government] would say, “Oh, we thought we’re connecting with people, but now I see that there’s a gap [in communication] here and there.” Or, “Oh, we have generated this [budget] publication, but have not been conscious to upload it in time for the public to meaningfully engage with it.” The OBS has contributed to quicker uploading of key documents in Uganda such as the pre-budget statements.
4. How is UDN working towards greater transparency in the acquisition and management of government debt?
When the government is looking to acquire debt, we want to look at the quality of the terms of the proposed loan and the conditions for the loan. Through the national parliament (our legislative body) there is a regular window for stakeholders to offer input in the loan management process. We are seeing great activity now compared to where we were several years ago. We are in a much better position. The issue is that although we can provide input, our input is not always implemented. But we are moving toward a more open and inclusive process.
5. UDN has developed the kind of working relationship with Uganda’s government that other countries would love to replicate. For example, the 2021 OBS was launched in Uganda with the minister of finance at the Ministry of Finance. How did that relationship develop?
Budget advocacy has required a closer working relationship with select government institutions such as the Ministry of Finance, national parliament, inspectorate of government, auditor general and the Central Bank of Uganda. It goes back to the government’s recognition that evidence-based processes such as the OBS add value, which then builds value into the government’s budget processes.
6. What is still left for UDN to accomplish in Uganda?
Our OBS aspirations are progressive and broader democratization, poverty reduction and increased self-financing of our country’s budget and development priorities. If a country does not have its own financial muscle to determine its own budget priorities and actions, it cannot fully succeed in key areas of the OBS. We will therefore be pushing to increase our own revenue bases to finance our budget priorities, determine our own poverty reduction agenda and build our own capacities.
by Rajan Zaveri | Sep 23, 2022 | Budget Transparency, Citizen participation, Civil Society Organizations
Each month, we shine a spotlight on partners who are using budget advocacy to bring transformational change to their communities. This month we are spotlighting Andrea Larios, a researcher for Fundar in Mexico.
1. Give us a brief detail of your name, the organization you work at and what you do?
My name is Andrea Larios, I work at Fundar as a researcher for the Fiscal Justice Program. The focus of my work relies mainly on public expenditure and its impacts on human rights, gender equality and social justice.
2. What is the relationship between deviating from a country’s approved budget and achieving the Sustainable Development Goals (SDGs)? In other words, how does budget credibility affect a country’s progress on these goals?
When the federal budget is approved, resources are allocated towards different objectives. However, as the fiscal year goes by, reallocations are made and, in some cases, resources are over or under spent. Underspending makes it difficult to achieve the SDGs, as in many cases we see budget cuts affecting social services that can propel progress towards these goals. As we know, the budget is the most concrete display of a government’s priorities, and in absence of budget credibility, the achievement of goals, specifically the SDGs, becomes harder to obtain. Furthermore, budget credibility is not a topic that is discussed enough in public debates in Mexico.
3. How is the Mexican government prioritizing resource allocations to accelerate progress on the SDGs? And in what ways is it missing the mark?
Mexico’s Federal government is not prioritizing resource allocations towards SDGs, except on social protection. There are specific sectors that are constantly under spent and face consistent budget cuts. This raises concerns about the government’s commitment to the 2030 Agenda. In the health and education sectors, the government’s level of spending is below internationally recommended standards. There is an underinvestment of resources towards achieving gender equity goals and no clear methodology in place to attain them. Resources directed towards environmental protection have also been consistently falling since 2019.
4. Which sectors in Mexico’s economy routinely underspend and why is underspending a concern for reaching SDG milestones?
Society expects that when a public budget is approved, it is executed in a timely and appropriate manner. However, governments do not always comply with this by over or under spending. Underspending can cause delays in the achievement of goals as the delivery of public services and goods, as well as investments, is insufficient and not effective. When previously approved funds are not fully spent, the effectiveness of public programs and projects diminishes. Furthermore, government’s does not explain why these deviations take place. In Mexico, there has been recent underspending in food and agriculture and environmental protection. And while underspending for health, social protection, and water and sanitation is not the norm, it happened in 2018, 2019, and 2020.
5. How has the COVID-19 pandemic impacted spending patterns in Mexico, particularly when it comes to social protection?
The government outlined its economic plan to face the pandemic in 2020, and in it, austerity measures were put in place. This led to resources being taken from some sectors to increase the budget of others that the government considered more strategically important. Across the sectors we have examined, budget deviations were mostly found in health, social protection, environment and water and sanitation.: While resources were increased for health, water and sanitation, the environment suffered budget cuts, as did social protection. Underspending in social protection stands out as it happened amid the peak of the pandemic in 2020, a year in which household income dropped drastically and millions of people lost their jobs. This was counterintuitive and had a negative effect on the well-being of individuals and the economy as a whole and may have influenced the increase in the number of people living in poverty that year.
6. What has the Mexican government done to affirm its commitment to achieving the SDGs? And what more can it do?
While Mexico’s government has outlined its commitment towards the achievement of the 2030 Agenda through reforming the country’s Planning Law and the creation of documents and strategies to implement the agenda, in practice, it won’t be so easy to achieve. Public expenditure data, socioeconomic indicators and advances per SDG show that the allocation of resources towards the sectors that are aligned to SDGs has been insufficient, particularly in education, health and the environment. Mexico’s administration still has work to do to achieve the goals in the 2030 Agenda, including:
- The government should explain budget reallocations to prove its commitment to transparency and accountability
- Public debate around budget credibility and its impact on achieving SDGs should first focus on the need for progressive fiscal reform that enables the federal government to collect enough tax income to support the operation of public and social programs directly related to SDGs
- Improve transparency and data access related to programs and SDGs, specifically on the public database that links SDGs with public programs but does not disclose budget allocations per SDG.
by Dammy | Aug 29, 2022 | Budget Transparency, Citizen participation, Civil Society Organizations
Each month, we shine a spotlight on partners who are using budget advocacy to bring transformational change to their communities. This month we are spotlighting Edil Eraliev, the Chief Executive Officer at Precedent Partners, in Kyrgyz Republic, a partner of our European Commission funded project Collaborating for Open and Accountable Budgets.
1. Describe your organization’s role and how your mission advances open budgets in the Kyrgyz Republic.
Part of Precedent’s mission is to promote access to information and budget transparency. An open budget is one of Precedent’s key priorities. We have been working to promote open budgets since 2008 when we collaborated with IBP to conduct the first analysis under the Open Budget Survey. Kyrgyzstan received 8 out of 100 points on budget transparency at that time, but the country has steadily improved its transparency score and in the 2021 OBS, it earned 62 points.
Since the end of 2015, Precedent has been actively working with the Coalition for the Budget in the healthcare field, which encompasses more than 50 civil society organizations in Kyrgyzstan. Precedent prepares Coalition members for public and parliamentary budget hearings, monitors budget expenditures by ministries, and helps monitor public procurement plans. Precedent is actively working to educate the Coalition on the national budget and public procurement, thus expanding public engagement and expertise in budget matters and facilitating the participation of civil society organizations (CSO) in state decision-making.
Precedent’s role in promoting open budgets is to promote civil society and activists’ participation in the budget process and encourage citizens to actively engage with government and parliament.
At the core of each of our four areas of activity is solving specific problems and challenges. These four areas include: transparency (access to information, public procurement, and budget transparency), justice (campaigning for judicial reform and providing legal support to citizens), governance (developing connections to and actively engaging with the government) and civic education.
2. The Kyrgyz Republic is one of the biggest improvers in transparency since 2008 in the Open Budget Survey. Can you give us a snapshot of how your organization and other activist groups engaged the government to achieve this result?
The main goal of Precedent is to work with CSO’s and activists to promote the transparency and accountability of public authorities. After all, there is no such thing as public money; there is only taxpayers’ money. State authorities manage our money and the future of the country, and its residents depend on the effectiveness of their management.
Precedent has always followed the approach to build relationships with ministries, the government and the parliament in friendly and constructive ways. We continually improve our training programs with this in mind.
In working with Coalition members, Precedent pays close attention to the analysis of draft budgets. Based on that analysis, we prepare Coalition members to participate in hearings. In recent years alone, Coalition members have achieved incredible results, specifically:
In 2019, they prevented sequestering of the Mandatory Health Insurance Fund (MHIF) budget in the amount of 873 million soms.
In 2020, they helped boost Ministry of Finance funding for the health sector from 18 billion soms to 20 billion. In 2022, that allocation has now risen to 28 billion soms.
In 2021-2022, supported the Coalition’s request to the Government to allocate additional funding to the health sector by 1 billion soms for 2023-2024.
3. What role has IBP played in helping to improve budget advocacy and open budgets in the Kyrgyz Republic?
Since our collaboration on the OBS in 2008, IBP’s contribution to the transparency of Kyrgyz’s budget process and helping citizen advocacy has been significant. IBP has provided us with advocacy training and shared their experiences in other countries which helped persuade the Ministry of Finance to be more transparent with state budgets. In particular, an IBP training on budget transparency and accountability held at the end of 2021 and May 2022 which enabled Coalition members to use examples from other countries to improve their knowledge and new approaches and practices in their advocacy.
4. What role did your organization play in spotlighting the need for reform to expand public participation in the budget process? What has been achieved?
Since 2013, Precedent Partners has been actively working on budget transparency and participation through authoring such workbooks as Proactive Civic Control and the Budget Guide for Citizens. More importantly, our founder Nurbek Toktakunov is the co-author of the Constitution of the Kyrgyz Republic (2010), and he promoted and defended an article of the Constitution which gives every citizen the right to access information.
Access to information is now recognized as an exceptionally important human right. State and local self-government authorities are called to work towards the fulfillment and improvement of this right of access to information. Work in the Kyrgyz Republic on transparency of the budget system started with the right of access to information. As part of our budget advocacy, we actively conduct training seminars on the basics of budget law, its structure, and content for our partners who work in the field of budget advocacy. Precedent prepares Coalition members for public and parliamentary budget hearings, monitors budget expenditures by ministries, and assists in monitoring public procurement plans.
5. How do you see the role of civil society in adding value to the budgeting process and accountability ecosystem?
Civil society organizations are central to the budget process and accountability. It is the CSOs in Kyrgyzstan that promote the values of these two words “transparency” and “accountability.” CSOs in the budget process should have the role of a partner, helping state agencies in the formation and spending of public funds. Precedent strengthens its work in training CSOs on the budget process and monitoring public procurement. Together with Open Contracting Partnership, Precedent is working on building an information platform that will provide training, analytics, and up-to-date information on public procurement in the Kyrgyz Republic.
6. What do you think are the critical next steps the government should take in improving open budgets in the Kyrgyz Republic?
In the 2021 Open Budget Survey, a number of recommendations were given to the Kyrgyz government to improve open budgets. Among the most critical are annually holding public hearings on the approval of the National budget as well as ensuring civil society representatives’ right to speak during hearings on the budget’s execution. (For more on the recommendations, download Kyrgyz’s country report here).
In addition to the OBS recommendations, we would like to add a proposal that the government should consider disclosing the law enforcement bodies’ budget. Currently, it is kept under the “confidential” classification. We also think the government should hold a discussion or hearing on making changes or additions to the current budget. The government does makes changes to the budget during the year, but does not hold any hearings on it, which leads to changes being made without public input.
by Deirdre H | Jul 7, 2020 | Budget Monitoring, Budget Transparency, COVID-19, Revenue Raising
This piece is co-published with the International Centre for Tax and Development.
Since its onset, governments the world over have responded to the COVID-19 pandemic by ramping up spending and providing tax relief to ailing families and businesses, even in the face of dwindling revenues. This has inevitably led to widened fiscal deficits and ballooning public debts. For a crisis of such large and unknown proportions, these extreme measures are more than justified.
What is not clear, however, is what will happen once the health emergency subsides, and governments are left with the task of returning public finances to a more stable and sustainable path. Will they decide to continue providing basic income support to people living in poverty and widening access to health services, or will the response turn to strict austerity measures? Can the crisis open up space for a more equitable and inclusive approach to fiscal policy, recognizing and addressing the inequalities that the pandemic has made ever starker and more apparent?
The answers depend in part on how governments approach tax policy. Raising additional revenues will be a necessity for governments as soon as the worst of the crisis is over. Proposals on how to ensure new revenues are collected in a more equitable and efficient way are already being put forward. Mick Moore and Wilson Prichard of the International Centre for Tax and Development (ICTD) laid out a particularly clear and comprehensive agenda pointing to tax reforms that reflect a new fiscal contract, prevent a further worsening of inequality and help to address other societal problems like climate change. In their view, the crisis presents an opportunity to promote a more fundamental shift in the ways in which governments collect revenues.
The real challenge lies in understanding how best to overcome the political opposition that tends to accompany large-scale reforms for more progressive and equitable tax systems. In many countries, political and economic elites are likely to resist new or increased taxes on wealth, while corporations and high-net-worth individuals are likely to use various tactics—including political pressure—to keep their tax bills low. In the immediate aftermath of the crisis, the targeting of wealthy individuals and businesses may face particular political resistance as these groups cite recent economic losses as justification for their inability or unwillingness to pay. At the same time, there is a risk that increased pressure for revenue will simply lead to greater revenue extraction from those that are less politically influential and more vulnerable, including individuals and businesses in the informal sector.
If we are serious about promoting more equitable and progressive taxation as part of post-COVID recovery strategies, we need to start thinking now about how to build the coalitions that can put pressure on governments to make better choices and withstand inevitable opposition.
How can civil society-led coalitions support politically challenging tax reforms?
What might these coalitions look like? And what role can citizens and civil society organizations (CSOs) play in them? An ongoing project at the International Budget Partnership’s new Tax Equity Initiative is looking at successful civil society engagements on tax reform across the world. While the case studies will only be finalized later in the year, IBP recently convened researchers and CSOs to discuss preliminary findings and emerging cross-country themes and lessons.
Evidence from the eight cases suggests at least four ways in which civil society-led coalitions can help shift popular perceptions of taxation and move the political needle on reforms:
- Successful coalitions often go beyond the usual suspects to include a broad range of actors who support specific reforms: for example, parts of the business community supported tax reforms in Vietnam, Guatemala and Uganda. In the latter, civic actors and mobile money traders aligned against new taxes on mobile money transfers that would mostly hurt people living in poverty. In the United States, labor unions were critical to the success or partial success of so-called “millionaire taxes” (generally, income tax surcharges on high incomes) at the state level. CSOs therefore need to understand the interests of various groups, how interests may align in support of progressive tax reforms, and how messaging may be crafted to bring these groups into an effective coalition.
- Promoting a narrative linking taxes to the services they are meant to fund can be effective in building public support for tax reforms. In the Philippines, broad support for so-called sin taxes—that is, taxes on products on tobacco and alcohol—was possible as the reform was framed as a health issue, not just a fiscal one, with revenues committed to financing public health care expenditures. Likewise, in the case of state-level “millionaire taxes” in the United States, framing tax increases around the education and infrastructure services new revenues would fund was critical to ensuring popular support for the reforms. In the wake of COVID-19, committing new tax revenues to health expenditures, food security or other recovery priorities may be a particularly effective strategy to gain initial widespread support.
- Appeals to equity and fairness can also help ensure support for progressive reforms. Civic actors need to invest in learning more about how people think about fairness through surveys and focus groups where they can. This greater understanding of popular perceptions and expectations can help shape and strengthen public pressure campaigns. For example, when civil society organizations forced the tax administration to release details of the beneficiaries of tax amnesties in Mexico, data showed that well-known celebrities and large corporations were receiving generous tax relief without any clear need. This led to a public outcry and created political pressure on the government to stop these amnesties, which it eventually did. In France, the juxtaposition of cutting taxes on wealthy, urban elites while raising them on the rural working classes fueled impressions of unfairness that drove initial support for the Yellow Vests movement.
- Coalitions need to be ready to take advantage of political opportunities for change when they arise. When a corruption scandal in the tax administration agency rocked Guatemala and led to the dismissal and arrest of both the President and the Vice-President, a regional think tank, the Instituto Centroamericano de Estudios Fiscales (ICEFI), immediately called for an overhaul of tax administration and managed to get support from both business associations and peasant groups. ICEFI offered a roadmap which eventually led to a new law being passed to strengthen transparency and accountability in the Superintendency of Tax Administration (Superintendencia de Administración Tributaria). In Kenya, a progressive new constitution gave Tax Justice Network Africa (TJNA), a regional African coalition, an opportunity to challenge a double taxation agreement that the government had signed with Mauritius, eventually getting the courts to nullify it. Although the government then negotiated another similar treaty, TJNA successfully established a precedent that civic actors have legal standing to challenge tax policy decisions, creating the potential for more scrutiny around future deals across Africa.
It is clear that civil society has a critical role to play in both advocating for more equitable tax systems and supporting greater taxpayer engagement to support that advocacy. To get to post-crisis tax systems that are more equitable and that embody a shift in the terms of the fiscal social contract, the time to build broad coalitions in support of progressive tax reforms is now. Otherwise, a great opportunity to revolutionize how governments collect revenues and use them to reduce inequalities might go missed.
*Paolo de Renzio and Jason Lakin are senior research fellows with the International Budget Partnership. Vanessa van den Boogaard is a research fellow with the International Centre for Tax and Development.
