2012 Open Budget Survey Press Release

FOR IMMEDIATE RELEASE

Contact:
Enda Joyce, Hanover Communications, +44 207 400 4480
Delaine McCullough, IBP, +1 202 408 1080

 

Governments serving half the world’s population shut citizens out of budget decisions that affect their lives

Major biennial study finds three of every four nations analyzed fail to meet basic transparency standards; scarce budget information and inadequate public accountability undermine poverty reduction, including the Millennium Development Goals

LONDON, 23 January 2013 – The results of a major global assessment of government budget systems and practices 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. 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.

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.”

“Transparency is one of our most powerful weapons against corruption, waste and bad governance, providing the basis on which people can hold their politicians to account and demand change where change is needed,” commented Justine Greening, UK International Development Secretary. “The International Budget Partnership, through the Open Budget Survey, highlights some good examples of progress that show what can be done, but it also demonstrates how poorly many governments perform on budget transparency.”

“The poor state of affairs highlighted by this survey is hugely concerning. The UK will use its presidency of the G8 this year to fight for more transparency across the world. The UK Department for International Development is leading by example, using new tools and new technology to make our aid data available to all, and we were named by Publish What You Fund[1] as the world’s most transparent aid organization last year,” Greening said.

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.[2]

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 of the Survey 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.”

The complete Open Budget Survey 2012, including detailed analysis, methodology, and recommendations, can be found at www.internationalbudget.org. An infographic to illustrate the Open Budget Survey is available on request.

- Ends -

1. About the International Budget Partnership

The International Budget Partnership collaborates with civil society around the world to use budget analysis and advocacy as a tool to improve effective governance and reduce poverty. The Ford Foundation, the Open Society Institute, the Flora and William Hewlett Foundation, and the U.K. Department for International Development (DfID) provide funding for the Open Budget Initiative at the International Budget Partnership. The International Budget Partnership is not affiliated with and does not receive funding from the U.S. government.

2. About the Open Budget Survey 2012

The Survey consists of 125 questions completed by independent researchers in 100 countries, with a combined population of 6.1 billion (89% of the global population from 2010); the population of the 77 countries that scored 60 or less on the OBI 2012 is 3.41 billion (49.5% of the global population)[3]. The Survey is subject to an extensive review process, including two anonymous peer reviewers who are unaffiliated to the relevant governments. The bulk of the Survey’s questions focus on the amount of budget information in eight key budget documents. The answers to 95 questions related to these documents create an Open Budget Index score, a broad measure of a country’s budget transparency, which can range from 0 to 100.

3. About the Millennium Development Goals

In September 2000, building upon a decade of major United Nations conferences and summits, world leaders came together in New York to adopt the United Nations Millennium Declaration. This committed their nations to a new global partnership to reduce extreme poverty and setting out eight time-bound targets – with a deadline of 2015 – that have become known as the Millennium Development Goals. UN Member States, civil society organizations from all over the world, academia and other research institutions, including think tanks, are now engaged in a process of open, inclusive consultations on the post-2015 agenda. To find out more visit www.un.org/millenniumgoals.

 



[1] http://www.publishwhatyoufund.org/index/2012-index/

[2] Portugal’s government debt of US$26 billion, or 11% of GDP, has been hidden off-books in the firm of public corporations, public private partnerships and payment arrears. International Monetary Fund, “Fiscal Transparency, Accountability, and Risk,” 7 August 2012, available at: http://www.imf.org/external/np/pp/eng/2012/080712.pdf.

[3] Populations taken from the United Nations, Department of Economic and Social Affairs; 2010 revision (updated June 2011). http://esa.un.org/wpp/Excel-Data/population.htm

 

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