The Road to Budget Transparency: Four Things Governments Can Do

Imagine you’re a politician or senior official in a developing country, and you are part of a recently elected reform-oriented government that has come to power. Your party has promised, as part of a broader set of public sector reforms, to put more budget information in the public domain so that citizens can more effectively participate in decisions about what happens to public resources — and monitor how those decisions are carried out on the ground. So, what can your new government do to turn its commitment to open and accountable budgeting into reality? And which country examples might serve as inspiration?

First, you need to know where you’re starting from. Every two years since 2006, the International Budget Partnership conducts the Open Budget Survey, the only independent, comparable, and regular assessment of government budget transparency, public participation, and formal oversight in over 100 countries around the world. From a subset of survey questions on the amount and timeliness of budget information that governments make publicly available, each country surveyed earns a score between 0 and 100 on the Open Budget Index (OBI), that can be compared across countries and over time. According to OBS data, past governments in your country were not completely opaque, but over time they have not managed to substantially increase the country’s OBI score.

Looking at OBI data tells us that quite a few countries face a similar situation: they manage to increase their levels of budget transparency from a low base, but then get stuck in the middle ranks of the OBI, without ever reaching a score of 61 or higher. IBP has argued in a previous paper that 61 is the threshold above which governments can be considered to be publishing sufficient information to enable public accountability. Why are countries getting stuck? And what does it take for a government to manage to break through that barrier?

In a recent comparative study carried out in collaboration with country-based researchers, we looked at three countries — Mexico, the Philippines, and Uganda — that managed to push their OBI score above 60 and compared them to another three — Argentina, Ghana, and Indonesia — that, despite improving, did not. The study highlights four specific initiatives that successful governments took to reach higher levels of budget transparency:

  • Improving legal frameworks and focusing on their implementation. All countries introduced changes in their legal frameworks that helped increase the amount of budget information that governments are required to publish. In practice, however, outcomes varied: strong legal frameworks like those introduced in Uganda and Mexico resulted in substantive improvements in budget transparency, while weaker ones like those established in Argentina and Ghana did not. Also, the governments that succeeded were those that ensured proper implementation of the legal requirements, and in some cases went beyond what was mandated by law, publishing additional budget information.
  • Purposefully pursuing the “transparency dividends” of broader budget reforms. Broader budget reforms were also important in facilitating transparency improvements in some countries. These included: a) the development of medium-term budgetary frameworks; b) the introduction of systems that produce program and performance data that link spending with results; c) the introduction of budget classification systems that allowed for a more detailed breakdown of revenues and expenditures; and d) the adoption of IT-based financial management systems that made tracking public resources at different stages of the budget process quicker and more effective. While these reforms facilitate transparency, successful governments purposefully pursued the “transparency dividends” that these reforms generated, ensuring that the newly available data were incorporated in budget documents and published.
  • Developing transparency innovations like online transparency portals. Countries that were successful in achieving greater levels of budget transparency — Mexico, the Philippines, and Uganda — all went beyond the publication of budget documents and set up open budget portals, which provide the public with online access to budget information, in open formats and in real time.
  • Introducing institutional measures to coordinate transparency efforts and ensure reform implementation. In Mexico, the Philippines, and Uganda, finance ministries introduced institutional changes and new practices that helped signal the importance of transparency and focus the attention of officials on making it happen. These included: a) setting up dedicated units tasked with coordinating efforts to improve the timely publication of budget information; b) formulating ad hoc strategies to clarify objectives and facilitate monitoring and implementation; and c) introducing mechanisms for dialogue with civil society on transparency issues.

Of course, these initiatives and their positive impact on budget transparency depended on a host of contextual factors, for example, those linked to levels of political commitment to reform and of technical capacity to implement them. In the case of successful governments, they also relied on the presence of reform champions, who were key in building momentum for the reforms and overcoming resistance to them. Regardless of whether some or all these factors are present, governments interested in improving their levels of budget transparency could certainly do worse than try and follow these countries’ example.

The findings of this study are particularly relevant as we get closer to the global release of the Open Budget Survey 2017 results – planned for the end of January 2018. It will be interesting to see how many other countries in this latest round of the survey will have managed to achieve satisfactory levels of budget transparency, earning OBI scores of 61 and higher, and to test the extent to which the lessons from past reformer governments can be useful to pave the road for future budget transparency improvements.

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Further Reading



Paolo de Renzio

Senior Research Fellow, International Budget Partnership

Paolo de Renzio joined the International Budget Partnership in October 2010 as Senior Research Fellow and is based in Rio de Janeiro, Brazil. His research agenda covers a broad range of topics, including budget transparency and accountability, equity and justice in budgeting, taxation and tax expenditures, among others. He also supports the team producing the Open Budget Survey. Prior to joining the IBP, Paolo worked as a Research Fellow at the Overseas Development Institute; as an economist and policy advisor in Papua New Guinea’s Ministry of Finance; and as a UNDP public sector specialist, lecturer, and independent consultant in Mozambique. He has been a consultant for the World Bank, the Organization for Economic Cooperation and Development, the European Commission, and for a number of bilateral donor agencies and international NGOs. Paolo holds a PhD in International Relations from the University of Oxford, where his research focused on the impact of donor policies on budget reforms in developing countries. He also holds an MSc in Development Studies from the London School of Economics and a Bachelor’s degree in Economics from ‘Bocconi’ in Milan, Italy.

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