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.”
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