Using new datasets on public expenditure and budget transparency, this paper examines the relationship between budget transparency, budget allocations, and outcomes towards achieving the Millennium Development Goals (MDGs).
It finds that:
- MDG expenditure tracking is more feasible in more transparent countries.
- The link between transparency and MDG spending allocations is complex. Across the whole sample, more transparent countries do not necessarily allocate higher shares of their budget to education, health, and water and sanitation (WASH) than less transparent countries. However, countries that have seen the biggest improvements in transparency in the past decade have on average increased MDG spending more than countries that have not improved.
- Countries that are spending more on achieving the MDGs on average have better MDG outcomes, even after controlling for income per capita. However, when we break the results down by income group, these effects are weak. This may be due to data quality weaknesses.