Government budgets responding to crisis: what we can learn from the Ebola emergency

Government budgets responding to crisis: what we can learn from the Ebola emergency

As governments continue to implement COVID-19 response and recovery programs, many civil society groups are asking how the crisis will impact governments’ ability to spend money effectively and deliver essential services. For civil society groups that are following the COVID-19 money trail, there are critical questions about budget credibility, or whether governments will actually spend the money allocated in their budget during their fiscal year.

The unpredictable impact of the COVID-19 crisis on government revenues and expenditures could create understandable reasons why governments may deviate from their planned or adjusted budgets in the coming months and years. At the same time, a lack of budget credibility can increase the risk that shifts in spending priorities may also result in cuts to essential funding for non-emergency services that people need—such as for education and routine health services.

One way of identifying potential risks for budget implementation in the current context is to look at the impact of previous health emergencies, such as the Ebola crisis that impacted several West African countries in 2014 and 2015. Reviewing lessons from two of the most impacted countries—Sierra Leone and Liberia—can help understand how government budgets change in response to a crisis and how these changes can impact budget credibility. Drawing on available budget documents and PEFA assessments that cover the Ebola crisis years, here are three key lessons about what we see—or do not see—in terms of government budget credibility during that crisis.

1. Transparency is needed to understand budget credibility during a health emergency.

During the Ebola emergency, governments were making critical decisions about where to spend and where to cut. But what were those decisions and how did they impact government services?

These questions should be answered in government budget documents that provide an official account of how public resources were raised, allocated and spent, along with explanations of changes and deviations in the budget during the year. Unfortunately, good practices on budget transparency were not in place for the countries impacted by the Ebola crisis. The Open Budget Survey (OBS) assessment covering this period in Liberia and Sierra Leone found that both countries’ transparency scores declined as compared to the previous assessment. Moreover, critical budget execution documents were not published online or were published late. In Liberia, the government was producing these documents but released them only years later, far too late to be of use to civil society organizations (CSOs) that were monitoring the government response.

Availability of budget execution documents assessed in OBS 2017

Even published budget documents had significant gaps in information, such that they did not allow comparisons between actual spending and budgeted allocations. For example, Sierra Leone’s In-Year Reports, the monthly Statement of Fiscal Operations, showed expenditures by overall sectors (functional classification) and type of spending (economic classification), neither of which is comparable to the initial budget, which is approved by each ministry (administrative classification).

One area with stronger accountability during the Ebola crisis was the rapid auditing of emergency spending. The supreme audit institutions (SAIs) in both Sierra Leone and Liberia conducted and published rigorous audits of emergency funds, which uncovered waste and mismanagement of spending during the crisis and led to governments addressing some of the problems identified. In contrast, regular audits of government spending did not fully investigate impact of the crisis. Neither of the audit reports for government financial statements in Sierra Leone or Liberia explained changes made to budgets, in part because the SAIs did not receive this information from the government. In Liberia’s case, the regular audit report for 2014/2015 was also delayed in publication, undermining transparency for the rest of government spending – released only four years later.

2. Credibility is an ongoing issue during a crisis.

As governments responded to the Ebola health emergency, they adjusted their budgets in similar ways to what we see in recent months in response to COVID-19, prioritizing the emergency response and economic stimulus efforts. Even with these revised priorities, budget implementation practices followed similar trends as in earlier years.

Budget execution data for the years of the Ebola crisis can be found in in the PEFA reports for Sierra Leone (2018) and Liberia (2016). PEFA assessments examine budget credibility in terms of aggregate expenditures and the composition of the budget (spending by ministries) from the central government: in Liberia, this included on-budget donor expenditures, while in Sierra Leone donor expenditure data was not available.

The PEFA report shows that the government in Liberia struggled with accurate revenue forecasts before the crisis that led to underspending, but budget credibility trends varied by sector. In spite of more pronounced underspending in the health ministry when compared to education or defense, the overall execution rate in Liberia actually improved during this period.

For Sierra Leone, the PEFA report shows that overspending was the norm before the crisis, and this continued to a lesser degree during the Ebola response years. Like Liberia, deviations varied by sector – for example, despite overspending in health and defense sectors in Sierra Leone, the budget for the education ministry was underspent.

At a more detailed level, budget variances can become extreme. For example, official data indicates that an administrative unit known as “Miscellaneous Services,” which includes contingency expenditures, was significantly overspent during the crisis, but no explanations were provided to explain why this happened or how the money was spent.

Sierra Leone PEFA: Actual spending in key sector ministries as a share of the initial approved budget

Liberia PEFA: Actual spending in key sector ministries as a share of the initial approved budget

Thus, on an aggregate level, the Ebola crisis for Sierra Leone and Liberia resulted in slight improvements in budget execution rates, rather than increased fluctuations, as might be expected.

However, these aggregate values can mask large shifts within budgets that potentially can undermine credibility. For example, In Sierra Leone, official data indicates that an administrative unit known as “Miscellaneous Services,” which includes contingency expenditures, was significantly overspent during the crisis, but no explanations were provided to explain why this happened or how the money was spent.

Contingency expenditure in Sierra Leone (in millions, PEFA)

In the same time period, Sierra Leone also increased their accumulation of payment arrears from one percent of expenditures before the crisis to 17 percent of expenditures in 2016. These arrears, which are obligations where the government is late or delayed on payment, are often not reported in budgets and can potentially hide overspending practices. Such changes make it hard to track in government reports where the money goes and how it is being used and can mask credibility problems in the overall budget or specific programs.

3. Altered systems for emergency spending make it harder to track budget credibility.

The need for a rapid response in the Ebola crisis led governments to use different public financial management arrangements during their response. In both countries, the PEFA reports document shifts that governments made in their budgets during the emergency response, but with varying degrees of accountability and transparency. In the case of Liberia, these shifts were discussed with the legislature before being implemented and were not large enough to warrant a formal supplemental budget. In Sierra Leone, overspending was large enough to require a supplemental budget from the legislature, but after 2014 no supplemental budgets were submitted or approved.

In addition to revising public spending, governments were also setting up extra-budgetary funds to manage emergency spending. Extra-budgetary funds promised rapid delivery of services that could circumvent the slower machinery of government systems, including normal oversight practices. In many cases, new extra-budgetary funds were created due to the demand of donors. However, such funds also obscure the total amount of public resources directed to the crisis. By the end of the crisis, only 23 percent of donor financing was disbursed directly to all affected countries public finance systems, with the majority channeled either in extra-budgetary funds or implemented directly through development partners. Off-budget donor funding also has the additional challenge that government auditors in Sierra Leone and Liberia either did not have the mandate or access to donor accounts to audit where and how donor funding was spent.

How should lessons from the Ebola emergency inform the COVID-19 response?

As governments begin implementing their COVID-19 response efforts, often using similar tactics to those used during the Ebola response, we should watch out for similar pitfalls. These include:

  • Lesson 1: Transparency can regress. Lack of transparency makes it very challenging for CSOs and other stakeholders to conduct timely analysis of emergency spending practices and thereby seek remedial actions from the government during the period of the crisis. CSOs and other stakeholders must insist that governments prioritize transparency and the timely publication of data—transparency and accountability build the trust that is needed to combat the virus.
  • Lesson 2: Governments tend to use new instruments and PFM arrangements during a crisis. These include supplemental budgets, extra-budgetary funds, contingency reserves or funds and increases in expenditure arrears. Civil society should track these changes and monitor potential risks in these new systems. A special series of notes on COVID-19 from the IMF is a good resource for learning about how PFM systems are changing and what good practices should be adopted.
  • Lesson 3: Prioritized audits of emergency spending measures can come at the cost of routine audits of government spending. Auditors should formulate audit plans that ensure that all public funds are assessed. Routine audits of government financial statements—which will still account for most government spending—should look at spending deviations during the crisis. Additional support and funding to SAIs will allow them to take on this expanded mandate. CSOs and other stakeholders that are demanding that SAIs conduct expedited audits should also insist that regular audits continue, especially for programs at risk of mismanagement.
  • Lesson 4: Trends in deviations can continue during times of crises. Importantly, these trends hold true not just for aggregate budgets but also for the budgets of individual ministries and sectors. CSOs can use evidence of previous spending patterns to push back against unjustified claims made by government that budget deviations are only due to the crisis.
Overcoming barriers that limit accountability of public spending

Overcoming barriers that limit accountability of public spending

This piece was originally posted on the World Bank blog.

Countries around the world have responded to the COVID-19 pandemic and the ongoing economic crisis by expending trillions of dollars to support their economies and provide relief to their populations. Governments are following expedited procedures to quickly channel funds to relief and recovery programs. Still, a key challenge that countries are facing is ensuring that funds contribute to recovery and reach intended beneficiaries. This is a serious concern as cases of misuse and mismanagement of COVID-19 funds have been  reported on every continent.

Supreme audit institutions are key

Fortunately, countries already have organizations such as the supreme audit institutions (SAIs) that are responsible for providing independent assurance on the effective and lawful use of government monies, improvement in public service delivery, and response to disasters. In fact, in the aftermath of the tsunami that hit South and South-East Asia in 2004, the International Organization of Supreme Audit Institutions (INTOSAI) issued special standards on disaster-related expenditures. Further, during the Ebola pandemic in 2014, the SAIs of Liberia and Sierra Leone were lauded for their audits of emergency programs, which received extensive coverage in the national and global media.

Civil society’s involvement is necessary

Simultaneously, civil society organizations (CSOs) have also developed innovative methodologies to monitor government expenditures during emergencies and  ensure that  remedial measures are instituted based on audits conducted by SAIs. For example, in the aftermath of the devastating earthquakes that hit Mexico and Nepal in the past few years, local CSOs used audit reports issued by their national SAIs to demand that their governments implement reforms in relief programs.

CSOs have now joined calls made by various international bodies and financing agencies for SAIs to be more involved in the monitoring of COVID-19-related funds. These are positive developments but more needs to be done to ensure that audit findings foster the efficient and effective use of public resources for the benefit of citizens.

Effective oversight relies on an ecosystem

In November 2020, the International Budget Partnership (IBP) and the INTOSAI Development Initiative (IDI) are releasing a joint report that assesses the adequacy of national oversight systems based on data from 117 countries in the latest Open Budget Survey.

Audit and oversight are an “ecosystem,” consisting of a set of interconnected actors, conditions and processes that need to be in place and function well for the system as a whole to perform effectively. Although SAIs lead the charge, the success of their audits in upholding accountability and enhancing performance in large part depends on the actions of legislators, civil society, the media and ultimately the executive.

Overcoming barriers that limit accountability

Too often, SAIs suffer from deficiencies that are compounded by weak legislative oversight, inadequate responsiveness from executives to reports, and few opportunities for public engagement in the audit and oversight process. These challenges preceded the pandemic and are likely to be exacerbated by the crisis.  The IDI-IBP report suggests that all partners of the oversight system need to take action to strengthen accountability. Recommendations include:

  • Increasing the mandate, independence and resources of SAIs to audit public funds, including special funds established to channel resources emergency programs,
  • Improving the quality of audits by strengthening systems and independent quality checks,
  • Enhancing transparency with timely publication of audit reports and tracking executive responses to recommendations,
  • Ensuring that legislatures scrutinize SAI reports, including the ones on emergency spending measures, and
  • Expanding opportunities for public engagement during the formulation of plans, legislative discussions, and crucially, executive implementation of audit recommendations.

It is very important that governments and other stakeholders use audits to ensure that public funds are expended in a manner that will best save lives and reduce hardships caused by the coronavirus pandemic.

*Martin Aldcroft is Senior Manager of the Strategic Support Unit of the INTOSAI Development Initiative, Vivek Ramkumar is the Senior Director of Policy at the International Budget Partnership and Edward Olowo-Okere is Director of the Global Governance Practice at the World Bank.

* * In 2019, IBP and IDI signed a strategic partnership agreement out of mutual recognition of a shared vision and fruitful synergies while supporting effective engagements between SAIs, legislatives and civil society in order to enhance accountability, audit impact and make a difference to the lives of citizens. This joint report “Harnessing accountability through external public audits: An assessment of national oversight systems” is one product resulting from the partnership.

Part Three: From challenge to advocacy: how Social Justice put children at the heart of the budget

Part Three: From challenge to advocacy: how Social Justice put children at the heart of the budget

This is the last in a three-part series on the budget analysis and advocacy learning journey of IBP’s civil society partner, Social Justice, in Cote d’Ivoire. Part one is available here and part two is available here.

This post is also available in French.

The word was out. Social media conversations on YouTube, webinars with journalists and bloggers and meetings with high-level government officials were all centered around the issue of school canteens across Cote d’Ivoire. The Minister of the Budget recognized the need for better funding of and accountability for the canteens that help kids stay in school. But how did we get here?

We first wrote about Social Justice Cote d’Ivoire- a civil society group focused on transparency and good governance in Cote d’Ivoire – in an earlier blog and their evolution from a group working on broad transparency issues to one focused on rigorous budget advocacy and analysis. In partnership with the International Budget Partnership (IBP), Social Justice had sharpened their vision and focused on analyzing the government budget and identifying non-functioning or subpar school canteens as a critical issue facing their country. As they dove deeper into the issue, they were able to link the problem directly to the budget and a lack of community involvement and oversight in the functioning of these canteens. But that was the easy (ish) part. The next step was to figure out what to do with the information they gathered, who to share it with and how to create a plan to close the school canteen gap.

Developing an evidence-based advocacy plan

In our previous blog, we learned how Social Justice Cote d’Ivoire began capturing evidence of the problem with their budget analysis report. This was a critical step in understanding the entirety of the public finance system as well as laying the foundation for an evidence-based advocacy plan. They soon learned that the school canteen issue was about much more than just the canteens – they also had to look at issues of nutrition, food security and the political ecosystem of critical stakeholders. School canteens are infrastructures that fall under the responsibility of the state at the central level as well as local authorities. As such, the relationship between the central and local governments is a complex and important one – the influence of the central state is needed to promote the consideration of school canteens at the local level. This implies, if necessary, an increase in the resources allocated by the state to local authorities. This in turn means there will be an additional expense in the community budget requiring new taxes or the redirecting of certain expenditures to school canteens, making the local community’s political will vital. To gain the support of local authorities, it’s important that the Ministry of Budget increase the resources allocated to community budgets to take on better funding of school canteens.

The need for allies

At this juncture, Social Justice recognized the need for powerful allies who could carry the message and navigate the discussions among state and local government officials. Due to the high-quality of their budget analysis, Social Justice Cote d’Ivoire was able to secure major development partners such as the World Food Programme (WFP), UNICEF and the United Nations Development Programme, in addition to local budget officials at the Departmental Budget Directorate. Additionally, Social Justice Cote d’Ivoire knew that the involvement of cooperatives would be essential to reducing the costs of taking over school canteens in community budgets and thus alleviating any reluctance at the local level to take on the financial burden.

Pivoting during COVID-19

With critical partnerships in place and their analysis report validated, Social Justice Cote d’Ivoire knew it was time to get the school canteen message out far and wide – press releases were drafted, and press conferences were planned. And then COVID-19 hit. Like so many other civil society partners IBP works with, Social Justice Cote d’Ivoire had to quickly find new ways of working – and they did. In light of the quarantine and travel restrictions, the national analysis report, as well as the locality report, were sent to a directory of 22 local civil society organizations to inform and assist in local dissemination and advocacy.  Social Justice Cote d’Ivoire also partnered with three local radio stations to broadcast debates on the problems and to find national solutions and local alternatives to finance school canteens.

Social Justice also held an online press conference and invited reporters to a webinar to discuss the findings of their investigation and to encourage wide reporting on the issue. It is also important to note that working online in this way is no easy task in Francophone Africa. Spotty or nonexistent Wi-Fi is a challenge many face but Social Justice approached it with a spirit of collaboration and shared or donated airtime for those who needed it. As a result, several blogs, newspapers and a radio station ran stories on Social Justice’s investigation, with more planned. Additionally, Social Justice has established key relationships with the media and is working with a group of bloggers on tips and strategies on publishing compelling online content. Moving forward, Social Justice can be an expert resource for the media on budget matters and help carry the message of budget transparency and accountability.

Successes and lessons learned

Social Justice’s hard work to explore the challenges affecting school canteens is by no means over. While widespread awareness of the issue has been achieved and partnerships forged, they will have to continue to pressure national, regional and local stakeholders to ensure school canteens benefit the community’s children.

However, it’s important to highlight Social Justice’s wins and the long-term skills and competencies they gained throughout this project, including:

  • The strengthening of Social Justice’s capacity for budget analysis;
  • The availability of budgetary and statistical data generated by the project, which will contribute to continued advocacy in the sector;
  • Significant partnerships with allies such as the WFP, UNICEF, the Ministry of the Budget and the Ministry of National Education;
  • Awakening local actors (cooperatives, associations, local authorities, etc.) to the alarming situation of school canteens through awareness campaigns;
  • Involvement of the media on the issue of school canteens.

While Social Justice Cote d’Ivoire will focus on other issues in their country, the experience of building their budget analysis and advocacy skills will strengthen their ability to fight for transparency and good governance.

The author would like to thank Carol Kiangura, IBP Senior Program Officer, Sub-Saharan Africa, Training, Technical Assistance & Networking and the Social Justice staff for their invaluable help in writing this post.

Part Two – From challenge to advocacy: how Social Justice put children at the heart of the budget

Part Two – From challenge to advocacy: how Social Justice put children at the heart of the budget

This is part two of a three-part series on the budget analysis and advocacy learning journey of IBP’s civil society partner, Social Justice, in Cote d’Ivoire. Part one is available here.

This post is also available in French

Service delivery challenges are often the impetus for a civil society group or movement to start engaging in budget work. Gaps in services such as health care, education or sanitation can be obvious signals that something is wrong but determining if the root problem is related to the budget requires specific skills and competencies.

Stretching to learn new skills
Social Justice Cote d’Ivoire, a civil society group focused on transparency and good governance in Cote d’Ivoire, had already been engaged in budget work – specifically budget monitoring – and has been a longtime partner of the International Budget Partnership (IBP). As an Open Budget Survey (OBS) researcher, Social Justice Cote d’Ivoire is already well-versed in assessing the components of the budget accountability system including public availability of budget information; opportunities for the public to participate in the budget process; and the role of formal oversight institutions, including the legislature and the national audit office. However, it’s important to note that this was the first time Social Justice Cote d’Ivoire had practiced budget analysis and that no other civil society group in the country had embarked on such analysis. Analyzing data in the context of a specific problem to arrive at an advocacy strategy was a shortcoming that limited their contribution to fiscal policy. With our more focused partnership with Social Justice Cote d’Ivoire as part of the Francophone Africa Network (FAN), we supported them in sharpening their vision, focus and skills.

Meeting with the Minister of the Budget

Once Social Justice Cote d’Ivoire had focused on the issue of insufficient or non-working school canteens, the next step was to identify if the challenges were in fact due to a budget problem and if engaging in the budget ecosystem was an effective solution. Public finance systems are often complex, sprawling and bureaucratic labyrinths that can be difficult to understand and penetrate, even for an experienced group like Social Justice Cote d’Ivoire. Combine that with the unique system of the West African Economic and Monetary Union (WAEMU) and a highly centralized service delivery process and it’s easy to understand how complex it can be to find a root cause. But Social Justice Cote d’Ivoire was determined to do the analysis to understand why the school canteens were failing the community’s children. IBP’s support in this area was two-pronged : 1) direct capacity building around how to determine if there’s a budget problem (i.e., mismanagement, lack of resources, lack of value for money) and 2) through IBP’s grant, working with a former Ministry of Finance official who strengthened their capacity to understand budget processes, documents and relevant actors and stakeholders.

This learning process was essential for Social Justice Cote d’Ivoire to not only analyze an important aspect of social policy in relation to the government’s budgetary policy, but to also highlight service delivery gaps and make constructive proposals for improvement. Additionally, this learning benefits the entire field of civil society as Social Justice Cote d’Ivoire shares its learning and helps build a field of groups experienced in budget analysis.

Is this a budget problem?

Social Justice Cote d’Ivoire initially set out to examine the national education sector since it’s such a vital part of society and is a strategic lever for sustainable development, specifically achieving quality education as part of the Sustainable Development Goals set forth by the United Nations. Additionally, the Ministry of National Education has the largest budget in the state – about 17.6 percent as of 2017. Social Justice Cote d’Ivoire wanted to explore how the Ministry’s budget was impacting essential services within the education sector.

To explore this issue, Social Justice Cote d’Ivoire conducted a survey of primary education directorates, civil society groups working in education and parents’ associations in three targeted regions to identify important services that are underfunded. On the whole, school canteens emerged as an important means to keeping children in school. With additional analysis of certain budget documents, Social Justice Cote d’Ivoire discovered dismaying facts about school canteens, including: 67 out of 100 schools do not have canteens and of those that do, only 10 percent are functional. According to the survey respondents, these issues are a result of a lack of funding resources and served as a starting point for Social Justice’s budget analysis.

The start of budget analysis

The next phase of Social Justice’s work was to inform a budget analysis report through the identification of localities to focus their analysis and the stakeholders and issue areas they would need to engage in the process.

As part of their budget monitoring work, Social Justice Cote d’Ivoire had five committees in place for monitoring public policies at the local level. They knew that the budget analysis would need to include localities, so they decided to focus on three municipalities where they had planning committees that could contribute to information gathering and advocacy: Bouaflé, Bondoukou and Hiré. The local committees already had budget tracking and advocacy experience, however they also received additional training in local budget analysis. Additionally, these localities are mining areas which benefit from a Local Development Fund financed by 0.5 percent of the revenues of each mining company. The fund is managed by a committee) comprised of local authorities, representatives of village heads and young community members) in charge of using the funds to carry out community projects. Geographical distribution was also an important consideration in choosing where to focus their work to ensure a diverse scope of the challenge.

Once Social Justice Cote d’Ivoire had their local budget analysis for the three localities, they were able to start working on the high-level report that would inform their advocacy strategy to address the school canteen issue. This work included conducting a literature review on national education, school canteens and the state budget and a field survey phase for interviews and discussions. Drawing on the training from IBP and other partners, Social Justice Cote d’Ivoire was able to extract statistical data, process and analyze it and draw conclusions to formulate their final budget analysis report.

Social Justice Cote d’Ivoire knew the country’s children faced a problem with a lack of sufficient and operational school canteens and went from budget monitoring to budget analysis to get to the heart of the issue. Embarking on a learning journey with IBP and other partners, they were able to engage stakeholders and analyze the gaps affecting this critical infrastructure to help keep kids in school.

In the third and final post in this series, learn more about what Social Justice Cote d’Ivoire uncovered in their budget analysis and how they built public awareness around the school canteen issue.

The author would like to thank Carol Kiangura, IBP Senior Program Officer, Sub-Saharan Africa, Training, Technical Assistance & Networking and the Social Justice staff for their invaluable help in writing this post.

From challenge to advocacy: how Social Justice put children at the heart of the budget

From challenge to advocacy: how Social Justice put children at the heart of the budget

From challenge to advocacy: how Social Justice put children at the heart of the budget

This is part one of a three-part series on the budget analysis and advocacy learning journey of IBP’s civil society partner, Social Justice in Cote d’Ivoire. Read part two and part three.

This post is also available in French.

Why budget work? This is a question we hear a lot at the International Budget Partnership (IBP). The answer can be complex, but in short, budgets directly impact people’s lives and their ability (or inability) to access the resources and services needed to thrive. At the core of this work are our partnerships with civil society groups around the world. We work with them to bolster their capacity to engage in their country’s budget ecosystem to affect transformational change. One of those longtime partners is Social Justice in Cote d’Ivoire – a group that in just 18 months, significantly deepened and focused their budget analysis skills to take on a challenge affecting children across the country.

Context matters: the Francophone Africa Network
In IBP’s 20 years of budget work, we’ve seen our partnerships with government actors, civil society groups and social movements result in significant policy and process changes that improve the lives of the most marginalized people. These successes inspired us to expand our work and partnerships to other countries, but we know that replication is often not possible given a specific region or country’s context. One such region is Francophone Africa, where we have intensified our work with the establishment of the Francophone Africa Network (FAN) – comprised of 14 civil society groups from nine countries in Central and West Africa. The goal is to strengthen learning and practices on budget work so FAN members can execute ambitious but realistic advocacy strategies that contribute to more inclusive and equitable budget processes and outcomes in their countries. IBP has successfully convened this network through workshops and other events but also decided to go deeper and offer dedicated resources to three groups from FAN, including Social Justice Cote d’Ivoire. Having worked with them as an Open Budget Survey researcher, IBP knew they were well-positioned to take their budget advocacy and analysis work to the next level. Established in 2009, Social Justice Cote d’Ivoire advocates and works on issues of transparency, corruption and good governance and has used budget monitoring as a tool to achieve their goals. However, to go deeper into this work, both IBP and Social Justice Cote d’Ivoire knew they would need to pivot from issues of broad transparency to budget analysis and advocacy to narrow their focus and achieve significant change.

Understanding the ecosystem
The first step was to better understand the overarching public finance ecosystem in Francophone Africa to identify what they could focus their efforts on. Eight countries, including Cote d’Ivoire, are part of the West African Economic & Monetary Union (WAEMU) that share the same currency and one central bank. As a result, public financial management reforms happen at the regional level, requiring an understanding of the ins and outs of WAEMU. IBP’s support of Social Justice Cote d’Ivoire included a deep dive into WAEMU’s reforms to understand how Social Justice could best approach their budget analysis. They learned that as part of WAEMU’s reforms, they had transitioned to program-based budgeting (PBB) which aims to make budgets more transparent, ensure that public money is spent on the right priorities and links budgets more closely to the purposes of spending. This meant that Social Justice Cote d’Ivoire would need to understand how PBB works to engage in the budget process. It is this kind of region-specific context that makes it difficult to replicate successful budget work from other countries and requires a dedicated network such as FAN.

An emerging problem
Beginning with the 2014-2015 school year, the Ivoirian government had made school compulsory for six to 16-year-olds and recognized the importance of school canteens in keeping children in school and in turn improving success rates. In fact, according to the Ministry of National Education, the school performance rate increased from 62 percent in 2012 to 74 percent in 2015 in primary schools with canteens and the average success rate for the Certificate of Primary Elementary Studies is 68 percent in these schools, compared to 59 percent in schools without canteens. Social Justice Cote d’Ivoire decided to evaluate the effectiveness of school canteens in improving student performance. As Social Justice Cote d’Ivoire dove into their analysis, they focused on a key question: are there functioning school canteen programs in the country? They noticed a disturbing trend which would become their focus during our partnership: of the 12,537 existing public primary schools, 7,115 did not have school canteens, and of the 5,422 canteens, some were not operational or functional. Social Justice Cote d’Ivoire scrutinized budget allocations and determined that despite their importance, state and local authorities were not prioritizing or allocating sufficient resources to the canteens. It soon became clear that there were several factors contributing to this issue:

  • School canteens are overwhelmingly dependent on support from donors, namely the World Food Programme;
  • A lack of specific funding for school canteens by the central state and local authorities;
  • A weak oversight system for monitoring and accessing information on school canteens;
  • Minimal community involvement in the management and supply control of school canteens;
  • No involvement of cooperatives or other food production groups in the management and supply of school canteens

Based on its analysis, Social Justice Cote d’Ivoire focused on a critical issue facing its community that was consistent with its goals as an organization: transparency, good governance and social justice. They picked up the school canteen issue and ran with it, building their capacity to examine the problem through a budget analysis lens and identifying the right stakeholders to help them champion success for school-aged children.

The author would like to thank Carol Kiangura, IBP Senior Program Officer, Sub-Saharan Africa, Training, Technical Assistance & Networking and the Social Justice staff for their invaluable help in writing this post.

Understanding the role of citizens in promoting equitable taxation: A peek at upcoming IBP publications

Understanding the role of citizens in promoting equitable taxation: A peek at upcoming IBP publications

Even before the global pandemic, the international community was increasingly focused on domestic resource mobilization, as aid budgets were set to shrink while countries had affirmed ambitious targets in the Sustainable Development Goals. COVID has brought into even sharper relief the need to resource emergency responses and support aggregate demand. The fiscal costs of the current crisis require a mix of revenue sources, but ultimately will be paid for mainly with taxes.

Alongside the growing attention to taxation in general, interest in the role of civic actors in tax reform in low- and middle-income countries has also grown. This is due in part to a recognition that without a strong grass-roots voice in tax, some of the goals of progressive tax reform—such as equitable tax systems that are based on strong reciprocal ties between taxpayers and the state—may not be met. Civic actors have a vital role to play to ensure that tax systems are redistributive, and that tax compliance is part of a bargain in which citizens demand state performance and services in exchange. This is no easy task, as it means mobilizing the public to take on powerful interests that oppose progressive tax reform.

As part of IBP’s new Tax Equity Initiative, we have developed some resources to help civic actors deepen their engagement with tax reform and learn from each other.  We spent most of 2020 working on three exciting new projects:

  • A review that explores lessons for civic actors from the academic literature on the politics of tax reform. This project resulted in two publications: an extensive literature review paper and a much shorter guide for civic actors to reflect on the main findings from the literature review. Both were released Friday, October 9.
  • A global scan of the civil society tax field, in which we catalogued the major civil society organizations around the globe that are working on tax, the topics they are working on, their main approaches and the constraints that they face, among other things. Products include a summary paper with a broad overview of our findings, as well as a searchable online database that will be available to everyone, which will be published in early November.
  • The first ever set of in-depth case studies on how civic actors have engaged in tax reform, covering seven cases of CSO-led tax reform campaigns in Latin America, Africa and Asia. A synthesis of these cases, and short summaries of each, will be available later this year. In addition to highlighting emerging findings from across the case studies, this project will generate lessons for other civic actors interested in engaging with tax reforms.

Taken together, we think these products will fill a gap in our understanding of how civic actors can and do engage in tax reform.

Our review of the academic literature on the politics of tax reform surveys the literature on the political economy of domestic tax reform, with a focus on low- and middle-income countries. The review looks at the main players involved in the politics of tax reform, the way in which the substance of tax reform shapes political forces, and the process by which taxes are eventually reformed, including how the reforms are framed and understood.

Tax reform is fundamentally political. It is about governments and the bargains that governments strike with taxpayers over how much will be paid and in exchange for what. Of course, states do not bargain with an undifferentiated mass of taxpayers, but with an array of interests, including powerful business interests, donors and creditors, civic actors and individual taxpayers that may or may not be organized. These actors may react to tax reform in different ways depending on their interests and perceptions, including their views not only about the taxes themselves, but what those taxes will be used for.

The literature review demonstrates that while states may generally seek revenue, and business and other elites generally seek to avoid shouldering the burden of paying tax, there are important divisions within these actors and groups. For example, ministries of finance may seek greater revenues to support expenditure, manage debt repayment, and ensure overall fiscal balance. But they may also promote foreign investment and other specific economic activities. This can lead to the pursuit of tax exemptions or tax treaties that reduce revenue, bringing ministries of finance into potential conflict with revenue authorities.  Thus different parts of the state have divergent views on how much revenue to collect and how to use tax policy and administration to further their goals.

While business associations frequently oppose tax increases, they are also often divided over their interests. For example, formal sector business generally likes to see informal businesses enter into the tax net because they believe this leads to fairer competition. In Ghana, larger traders that were part of the Ghana Union of Traders’ Associations supported a turnover tax that brought smaller and more informal business into the tax net because it ensured fairer competition between these larger and smaller traders. Smaller firms may wish to see incentives or exemptions removed for larger firms for the same reason. These examples point to strategic opportunities for civic actors to exploit: opportunities to create alliances with state actors or powerful interests that may not typically be friendly to citizen agendas.

Tax reform is not only about fixed interests or incentives, but also about the way in which such reforms are structured and framed. Different ways of designing and talking about reform also matter. For example, when taxes are closely linked to popular expenditure programs, and when taxpayers trust the government to collect taxes fairly and use them for spending in the public interest, there may be more support for tax reform even from those who have to pay more. This suggests the importance of sound tax administration for tax policy: where there is high trust in tax authorities, there is likely to be more willingness to support progressive tax reform.

These points are just a taste of what is covered in the literature review paper. The shorter reflection paper is organized around guiding questions that civic actors can use to reflect on their strategies. We hope this is a useful starting point for supporting more and better civic engagement with tax, but we also want to hear from you! We know we are only beginning to scratch the surface of this exciting and dynamic field, and we want to keep improving the materials we are developing to make them more accurate, insightful and useful. So please: read and reflect, and also share your thoughts with us.