Government budget documents are hardly page-flipping bestsellers. They usually consist of hundreds of pages of numbers and charts accompanied by technical jargon that even readers with advanced degrees find difficult to decipher. No wonder then that most citizens have hard time understanding what government budgets are about, despite the huge impact that they can have on their livelihoods. In many countries civil society and the media play an important role in “translating” budget information for a general audience. But governments should also lead on informing the public about budget processes and policies. One way to do so is to publish Citizens Budgets — shorter, simpler documents aimed at a general audience.
These kinds of non-technical documents have become more and more common over the last decade. In 2010 less than one in five countries covered in the Open Budget Survey published a Citizens Budget, by 2015 more than half did so. Institutions such as the World Bank and the OECD have also started encouraging governments to use them as a part of their strategies for presenting key fiscal information to the public.
There are numerous approaches to publishing and disseminating a Citizens Budget. We’ve put together a resource page to provide some useful guidelines on how they should be compiled, when they should be published, and how they can be disseminated. But there are two aspects worth exploring further: the importance of involving the public in developing a Citizens Budget, and the need for more innovative strategies to reach a wider audience.
The Importance of Citizen Input
Given that Citizens Budgets are aimed at the general public, it makes sense to ask what steps are taken to ensure they are relevant and accessible to a general audience. One way to do so is to involve citizens in the process, yet few governments are making an effort to do so. The Open Budget Survey 2015 found that only 17 out of the 102 countries surveyed had established mechanisms for public consultations on the Citizens Budget.
A number of countries are taking steps to get the public more involved, however, and such leaders can provide useful models for others to learn from. In Morocco the finance ministry published the Citizens Budget online and established a dedicated email address for citizens to submit ideas and recommendations on improving the document. The ministry carried out an external satisfaction survey in 2013 to better understand what citizens knew and thought about the objectives and content of the Citizens Budget. South Korea and Sweden have each established ways for citizens to provide suggestions, ideas, and comments on their Citizens Budgets. These are often web-based systems that are accessible and widely used by the public, and allow for comments on a wider range of issues beyond those strictly related to the budget.
Civil society organizations (CSOs) have been integral to the process in a number of countries. Since 2012, the Tanzanian finance ministry has worked closely with a CSO-led Budget Working Group to draft and publish a Citizens Budget. Tanzanian civil society has described the relationship as very collaborative and one that has driven many creative and inclusive ideas. The National Audit Office has also been producing Citizens Audit Reports (simplified versions of audit reports) each year, and has worked with CSOs to ensure they reach a wide audience and have an impact.
Other countries’ efforts to engage with citizens have been less constant, but nonetheless provide some original ideas that could be replicated elsewhere. The Brazilian Federal Budget Secretariat conducted a public opinion survey to improve the content, drafting process, and dissemination of the 2013 Citizens Budget. In the Dominican Republic, the budget office conducted surveys and held focus groups with CSOs, citizens, and experts to source improvements to the Citizens Budget Portal they were building. It is unclear whether the process has been replicated, but Citizen Budgets have been published in both 2015 and 2016.
Strategies for Reaching a Wider Audience
The Open Budget Survey also examines how governments disseminate Citizens Budgets to reach as wide an audience as possible. Governments should use a variety of means (such as the Internet, billboards, radio programs, newspapers) to get the word out. Of the 54 countries that publish a Citizens Budget, 34 disseminated the document in more than one way and 14 in more than three ways. This suggests that many governments are taking the task of reaching a wide audience at least somewhat seriously.
There’s a few notable examples to draw on. The government of Mexico posted Citizens Budgets for both the 2014 Executive’s Budget Proposal and the Enacted Budget on their transparency website. Hard copies of these documents were also made available and posters were displayed in some federal government offices. Until recently the budget department in the Philippines produced simplified versions of a number of key budget documents and posted them on a dedicated website. Hard copies were also made available to citizens upon request, and given to lawmakers, CSOs, business groups, journalists, local government units, and schools. Finally infographics and audio-video versions were also released. In Sierra Leone the 2014 Citizens Budget was made available and budget discussions were held in town hall meetings, on radio, and on television.
Improving the Reach and Impact of Citizens Budgets
An increasing number of countries are publishing Citizens Budgets. Many are also turning to citizens to help them improve the document and devising different ways of reaching a wider audience with the information they contain. There is, however, significant room for improvement. Governments can do more to strengthen their public consultation mechanisms, both as part of a wider process of engaging the public on budget matters and to make Citizens Budgets more useful, accessible, and understandable to all.
While our resource page provides some useful guidelines and highlights some examples of innovative practice, we are always on the lookout for new and different approaches to engaging citizens in budgets and making Citizens Budgets a more effective tool for doing so. Get in touch if you have any examples of your own!
The Open Budget Index — the part of the Open Budget Survey that measures transparency — assesses the public availability of eight key budget documents. To be considered publicly available, a document must be published by the government within an acceptable timeframe. For example, unless an Executive’s Budget Proposal is published before it is enacted into law, citizens have no chance to influence its content, and it would therefore not pass the threshold of public availability. Similarly, a Year-End Report published more than twelve months after the end of the fiscal year that it refers to loses its relevancy, and would not be considered publicly available.
Pre-Budget Statement: one month before the Executive’s Budget Proposal is submitted to the legislature for consideration.
Executive’s Budget Proposal: while the legislature is still considering it and before it is approved.
Enacted Budget: no later than three months after it is approved.
Citizens Budget: no later than three months after the publication of the document that it refers to.
In-Year Report: no later than three months after the reporting period ends.
Mid-Year Review: no later than three months after the reporting period ends (i.e., three months after the mid-point of the fiscal year).
Year-End Report: no later than 12 months after the end of the fiscal year that it refers to.
Audit Report: no later than 18 months after the end of the fiscal year that it refers to.
A deeper dive into the Open Budget Survey 2015 data reveals a number of interesting findings regarding the availability and timeliness of budget documents.
First, roughly one-third of all the documents examined in the Open Budget Survey 2015 were found to be not publicly available. As the figure below shows, 53 percent of these documents were not produced by the government, 34 percent were produced for internal use and not published, and 13 percent were published too late to be considered publicly available by international standards:
Public availability varies greatly across budget documents. Ninety-five percent of countries surveyed were found to make Enacted Budgets publicly available, while only 34 percent of Mid-Year Reviews met the minimum criteria. Differences also emerge when the stages of the budget cycle are compared: 72 percent of documents related to the budget formulation and approval stages were publicly available (the Pre-Budget Statement, Executive’s Budget Proposal, Enacted Budget, and Citizens Budget) compared to 63 percent of execution and oversight documents (In-Year Reports, Mid-Year Review, Year-End Report, and Audit Report). Governments seem to find it easier — or more convenient — to publish documents that contain planned, rather than actual, revenues and expenditures.
Turning to timeliness, relatively few budget documents (6 percent of all surveyed documents) were published too late to be considered publicly available. But the minimum standards are somewhat generous, often not enough to guarantee that information can be used effectively for accountability purposes. Data from the Open Budget Survey allow for a more detailed assessment of the timing of the publication of budget documents. The good news is when countries do publish documents, they tend to do so far enough ahead of the deadlines to be considered good or best practice; more than 80 percent of publicly available budget documents meet that mark.
This average, however, hides some more worrying findings. As shown in the figure below, 34 percent of the Executive’s Budget Proposals that are considered publicly available only meet a minimum standard for timeliness. These are published less than two months before the beginning of the budget year, with an even shorter period before parliament has to approve it, seriously limiting the public’s ability to meaningfully participate in shaping the contents of the budget:
Looking at how different regions perform is also revealing. As the figure below shows, less than a third of budget documents published by countries in the Middle East and North Africa meet best or good practice for timeliness. Sub-Saharan Africa and South Asia also do poorly, with less than half of published documents being published according to best or good practice standards:
To be useful, budget information needs to be made publicly available within a reasonable timeframe. Standards for the timeliness are therefore a critical component of assessing budget transparency. The Open Budget Survey 2015 shows that there is still much work to be done in making more government budget documents publicly available, and in improving the timeliness of different budget documents and across various regions of the world.
Supreme Audit Institutions (SAIs) are crucial government bodies that verify whether public money is being used effectively and lawfully, and assess whether the fiscal information being produced by governments is complete and reliable. Despite being fundamental to a well-functioning budget system, most citizens have a limited understanding of their role and functions.
The State of Public Auditing: Results From the Open Budget Survey 2015
The OBS 2015 found serious shortcomings in the conditions of how SAIs in many countries operate and report their findings. For example, a large number of SAIs lack independence from the executive government – the prime targets of their audits. This problem is particularly prevalent in the Middle East and North Africa (MENA) and in Sub-Saharan Africa, where the head of the SAI in many countries can simply be removed by the government without the approval of the legislature of the courts (see Figure 1).
The 2015 Survey also uncovered a lack of transparency in audit findings. In more than a third of the countries surveyed (35 of 102), audit reports are either not made available to the public or are published too late to have an impact. Countries in MENA and Sub-Saharan Africa are again the weakest performers: eight out of 10 MENA countries and 15 out of 27 Sub-Saharan Africa countries failed to publish audit reports within 18 months of the end of the budget year.
Legislatures in almost half of the countries surveyed (49 countries) did not hold public hearings to review audit reports. And more than half (55 countries) failed to publish a report tracking follow-up actions on audit reports. This means that, in a great many countries, the public is kept in the dark on both the findings of an audit and what the government is doing to address them.
It all Starts With Publishing the Audit Report
Results from the OBS 2015 reveal a strong link between making audit reports publicly available and other measures for improving the transparency and accountability of the audit system. Indeed, the data show that countries that publish audit reports are more than twice as likely to hold public discussions on audit findings and almost six times as likely to publish reports on corrective actions taken by the executive (see Figure 2). This makes it even more important that countries that are currently not publishing their audit reports take this first step towards bolstering the accountability system.
Are Legislatures Filling the Gap?
The OBS 2015 findings show that SAIs in many countries have not lived up to their potential to be an effective protector of the public purse. While weaknesses in SAIs are an important limiting factor, external factors can often play an equally important role in diminishing the impacts of audits. For example, most SAIs cannot use their findings to directly sanction governments or compel executives to take action. Instead, they typically submit their audit reports to legislatures, which are then responsible for using these reports to hold executives to account.
One of the measures we working to add to the OBS is an assessment of how legislatures use audit reports and how they interact with SAIs in this process. In the meantime, assessments conducted by the Public Expenditure and Financial Accountability (PEFA) program can help shed light on this issue. PEFA reports are available for 59 countries assessed in the OBS 2015. These reports reveal that legislatures are not effectively overseeing audit reports submitted to them. The main findings include the following:
Legislative scrutiny is conducted after major delays. In 47 of the 59 countries, audit reports are submitted to legislatures within 12 months of the end of relevant budget year. But in almost half of these 59 countries, audit reports are either never examined by legislatures or their reviews take more than 12 months to complete. Delays in legislative review are more prevalent in countries in South Asia (four of five countries) and Latin America and the Caribbean (six of nine countries) than in countries in Sub-Saharan Africa (13 of 22 countries).
Legislative scrutiny is weak. In 47 of the 59 countries, legislatures did not hold in-depth hearings with responsible officers from all or most of the audited entities that received an adverse audit opinion. In more than a third of these 59 countries, legislatures failed to issue any recommendations on actions that should be implemented by the executive. Latin America and the Caribbean is the weakest performing region with six of nine countries assessed exhibiting poor performance.
The executive ignores legislative recommendations. Because audit reports – when they are published – rarely receive much attention from the public or the media, governments often face little pressure to take them seriously. Powerful executives can undermine legislative accountability efforts by simply choosing to ignore audit recommendations. In the vast majority of countries (55 out of the 59) there was no evidence that the executive had implemented audit recommendations issued by legislatures.
The Way Forward
Ultimately, an important indicator of a well-functioning auditing system is that it produces findings that result in positive changes. Taken together, the OBS and PEFA point to three ways that executives’ accountability for the findings of SAI audits can be improved in different regions:
SAIs should be legally independent institutions. This is particularly relevant for countries in the Middle East & North Africa and in Sub-Saharan Africa.
National legislatures should hold timely and in-depth hearings on audit findings and issue recommendations on corrective actions to be implemented by responsible officers from audited entities. Changes to strengthen legislatures’ audit reviews are particularly critical in South Asia and Latin America and the Caribbean.
The public and the media should have access to timely audit reports and the discussions they prompt in legislatures. This is a problem widely confronting countries in the Middle East & North Africa and in Sub-Saharan Africa. The public should also be provided evidence on corrective actions taken in response to audit findings, something that is currently lacking in almost all countries.
Holding governments to account is no easy feat. The capability of citizens to monitor and influence how their governments manage public resources, and to ensure that their needs and priorities are adequately reflected in budgets, likely depends on two crucial ingredients:
access to detailed and timely information on all aspects of fiscal and budget policy; and
opportunities to engage state institutions in a constructive dialogue on defining policy priorities and assessing their implementation.
The former (transparency) has historically received a lot more attention than the latter (participation). Yet, as many of our case studies on when and how civil society campaigns have an impact on government budgets show, budget transparency alone is not sufficient to bring about positive change. Civil society organizations (CSOs) need to be able to use fiscal information to put pressure on governments. This often, though by no means only, happens through institutionalized participation channels.
In other words, if there are few avenues to participate in budget processes by presenting analyses and advocating for change, budget transparency may end up being irrelevant. On the other hand, participation without transparency risks being ineffective if demands and debates around budgets are based on limited information.
Measuring Opportunities for Participation
For this reason, the International Budget Partnership (IBP) has been encouraging governments to not only disclose more budget information, but also to open channels and opportunities for citizens and CSOs to participate in the budget process. Beginning with the Open Budget Survey 2012, we started measuring the extent to which governments provide such opportunities. A set of 16 questions gauge the extent to which the executive, the legislature, and the supreme audit institution provide opportunities for citizens, CSOs, and others to engage with the budget process.
As with the 109 transparency-related questions used to build the Open Budget Index, we can construct a similar index from the participation questions. The figure below plots transparency and participation scores for all 102 countries included in the Open Budget Survey 2015. The red line marks where transparency and participation scores are equal; the purple line marks where participation scores are 30 points below transparency scores:
What does this figure show us? First, the two measures are positively correlated – more transparent countries tend to provide more opportunities for participation. Second, it illustrates what we call the “participation gap,” a recognition that countries tend to do much better on transparency than they do on participation. In most cases this gap remains within 30 points — most dots appear between the red and purple lines — but in some cases the gap is greater than 40 points.
These differences should not be simply taken at face value; there are far fewer participation questions than transparency ones and the two indices measure very different (though interrelated) concepts. Looking at some examples may help to shed light on what happens in countries that show unusually large gaps between their transparency and participation scores.
Higher Transparency, Lower Participation
Mali and Russia are both extreme examples of the “participation gap.” Each perform far better on transparency than on providing opportunities for participation.
Mali’s OBI score is well above the regional average, yet the only opportunity for budget participation is when parliament invites a few experts from civil society to present their views during budget hearings. This situation is quite common across Africa, such as in Morocco and Mozambique, two other countries with large “participation gaps.”
In Russia, while the executive has taken some initial steps to introduce consultations with CSOs on fiscal matters, neither the legislature nor the supreme audit institution have created mechanisms for citizen engagement. In all of these countries, the public availability of budget information may not lead to accountability due to the lack of participation opportunities.
Higher Participation, Lower Transparency
Interestingly, a few countries present the opposite situation. Venezuela and Vietnam are both examples where participation is significantly stronger than transparency, despite the fact that both countries don’t fare very well on either dimension.
Venezuela, in particular, publishes only two of the eight key budget documents that the survey considers and even those contain limited details. Yet the 2014 Anti-Corruption Law now requires the executive to submit drafts of both the Multiyear Budget Framework Law and the Budget Law to public consultation before they are presented to the National Assembly. Citizens and CSOs also have the right to participate in the formulation, evaluation, and execution of the budget.
Vietnam does slightly better than Venezuela on the transparency front, publishing five out of eight budget documents. It also provides citizens with some interesting opportunities for participation, both through the legislature and the audit agency. The Grassroots Democracy Ordinance of 2007 established these opportunities by opening up spaces for dialogue and participation at local level, including on budgetary matters. The key challenge in both countries is to ensure that spaces for participation are backed up by adequate disclosure of relevant budget information.
High Transparency, High Participation
There are, however, two countries that exemplify more virtuous models of combining transparency and participation: South Korea and Sweden.
South Korea scores top marks on participation. It is one of the countries that best embodies the idea that multiple opportunities should exist for citizens to engage with the budget process at its various stages (see case study). The finance ministry has established an advisory council that includes civil society experts and runs an open suggestion system through which citizens can provide policy ideas and report cases of wasteful spending. Budget hearings at the National Assembly are televised, include testimony from the public, and result in published minutes. The audit institution, which runs a hotline for reporting fraud and irregularities, regularly conducts audits based on the tip offs it receives from the public.
Sweden is an example of a country with great levels of transparency — it ranks second on the Open Budget Index — coupled with reasonably strong participation mechanisms. These are not necessarily specific to budgets but do give citizens ample opportunities to engage with the government on budget matters.
In general, it makes sense for governments to start by improving budget transparency before they turn to participation. But they should be careful to not let the participation gap become too wide by striking a balance between the two as they gradually open up their budget processes.
Here are a few things governments can do to start addressing this gap:
Enshrine participation mechanisms for both budget formulation and execution in laws or regulations, and ensure they are implemented.
Provide the public with adequate information on available participatory processes and with feedback on how their inputs have been used.
Ensure that parliamentary budget hearings are open to the public and provide spaces for citizens and CSOs to comment and present testimony on all aspects of the government budget, including on audit findings and reports.
Create mechanisms for citizens and CSOs to contribute to the definition of the supreme audit institution’s audit plan, and to the actual audit investigation where possible.
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