An investigation based on budgetary data evidences significant reductions in food policies for children in Argentina

by ACIJ (Asociación Civil por la Igualdad y la Justicia)

In February 2019, ACIJ Argentina, together with the Global Initiative for Fiscal Transparency, organized a Dataquest for the international day of open data. There, a group of organizations and activists met in order to analyze the data of the Argentine budget and make visible its impact on equality.

The work was carried out in teams and one of the groups found that the Mother and Child Care program of the Ministry of Health reduced the delivery of fortified milk powder to girls and boys between zero and two years old in the 2014-2018 period, and the kilos of milk planned to be delivered had been sub-executed, affecting thousands of children.

This is a program that aims to ensure that all children in the country can achieve a state of integral health and its impact is greater on children in poverty. Based on this finding, the journalist who, together with her group, discovered this information in the Dataquest, initiated an investigation with other journalists, to find out the reasons for the reduction.

It was necessary to make multiple requests for access to public information and interviews to know the reasons: delays in tenders, lack of coordination with the provinces, management problems with supplier companies, among others. The investigation also showed that some provinces were more affected than others due to deviations. For example, the province of Chaco, one of the most impoverished in 2018, with 41% of its population below the poverty line, received 30% less than the expected milk.

The results of the investigation can be consulted in the regional research “The Promised Milk”, led by the newly formed network of Latin American Journalists for Transparency and Anti-Corruption (PALTA Network).

63.4% of girls, boys, and teens in Argentina see at least one of their rights infringed. This means that they are poorly fed, sleep in houses without drinking water or sewers, do not access education on equal terms, and/or suffer from poor or poor levels of health care. In this context, it becomes essential that the State prioritizes the effectiveness of social spending in policies aimed at guaranteeing the right to health and food for girls and boys, being inadmissible sub-executions of available resources.

This investigation demonstrates the importance of having clear, disaggregated and accessible information to monitor the performance of public policies aimed at guaranteeing rights, and that the State better justifies and explains the reasons for budgetary deviations.

This situation is replicated in other countries of the region such as Uruguay, El Salvador, Peru, Colombia, Mexico, and Guatemala.

How is one national ministry of finance engaging directly with the public?

There is considerable interest amongst officials in national ministries of finance in how they can directly engage the public in the design and implementation of fiscal policies. GIFT’s Guide on Public Participation contains numerous individual case studies of public engagement mechanisms across a number of countries.

We decided to drill down further into one MOF – the NZ Treasury – to get a better understanding of the range of public engagements recently completed or under way, and to explore with the responsible managers/senior analysts how the Treasury managed them. Table 1 lists them, and the GIFT public participation principles they best illustrate.

Table 1 Public Engagements by the NZ Treasury 2018-19

Individual engagement Stage of policy cycle Mechanism type Participation principle illustrated
1. Tax reform Policy design Time-limited Working Group Openness, inclusiveness, respect for self-expression, timeliness, depth, proportionality,
2. Independent Fiscal Institution Institutional design One-off consultation Openness, depth
3. New Infrastructure Agency Institutional design One-off consultation Openness, depth
4. Open budget Budget preparation One-off consultation Accessibility, openness, timeliness
5. Social Investment Panel Budget preparation Regular in-year consultation* Openness, depth
6. Earthquake Commission review Design and implementation Multi-year consultation Openness, timeliness, depth
7. Long term fiscal statement Policy design Every 4 years Openness, inclusiveness
8. School and university outreach Design and implementation Annual exercise Openness

* Not operating since early 2018

Two general points stand out from Table 1:

  • With only one exception, these engagements took place outside the annual budget cycle and are therefore not measured by the Open Budget Survey.
  • The topics on which public engagement took place are much broader than how government spending is allocated. Consultations spanned macro-fiscal policy, tax policy, the design of fiscal institutions, current expenditures, public investment, and government-provided insurance.

The relatively large number of public engagement exercises reflects a combination of long-standing government practice to consult on significant new policies (engagements 1 and 6), a new government’s agenda (1,2,3), an initiative by the previous government (5), and Treasury’s own operational practices (4, 7, and 8). In one or two cases the government directed the Treasury to consult, in one or two cases the Treasury recommended to Ministers that consultation should take place.

With respect to the GIFT Principles of Public Participation in Fiscal Policy, the Tax Reform Working Group best illustrates the range of principles, reflecting that it was a major consultation exercise. Over all the engagements the principle of proportionality is broadly reflected in the relative effort and time devoted to each. The principle of complementarity is illustrated by those exercise where the executive engaged during the development of policy, to be followed by public consultation by the legislature on draft legislation e.g. engagements 2 and 3. An area of relative weakness is the provision of feedback on how public inputs are used, which is often subject to quite long delays and is generally lacking in detail.

What are some of the practical elements in each of these public engagements?

  1. Tax policy reform: in the mid-1990s NZ introduced a Generic Tax Policy Process which includes public consultation, publication of an annual tax policy work program, scheduling of two tax Bills per year outside the annual budget to avoid budget secrecy and time constraints, frequent consultations on small policy and changes to tax administration, and occasional major external reviews of tax policy. A Tax Working Group (TWG) was set up in November 2017 chaired by a former deputy P.M/Minister of Finance. The other ten members spanned tax law practitioners, academics, business, community, Maori community, and sustainable development. The TWG was supported by a secretariat of officials from Treasury and the Inland Revenue Department acting independently from their in-line responsibilities. A two-month public consultation (March – April 2018) was followed by other public engagements following release of an interim report in September 2018. The final report was published in February 2019. Box 1 describes the special efforts the TWG made to consult Maori (NZ’s indigenous people).
Box 1: Inclusive engagement in tax reform

 Maori comprise about 15% of NZ’s population, their rights are established in the Treaty of Waitangi 1840 and have been recognized in law in recent decades. Consultation and partnership with Maori is now an essential part of public policy in NZ. Recently government has introduced central Guidelines on engaging with Maori.

Tax reform engagement with Maori started with informal ‘soft testing’ of the planned consultation process with 8-10 Maori leaders (identified on the advice of Treasury’s Principal Advisor Maori, and from established networks). Based on this, formal meetings were held around NZ on selected tribal marae (meeting grounds).

Efforts made to recognize the specific cultural context were important for successful engagements: terminology (‘partners’, not ‘stakeholders’); personal connection; consultations held on Maori ‘home ground’; appropriate catering; attention to giving personal feedback.

The importance of positive engagement was recognized: ‘we want to hear your views’, not ‘ we are required to consult you’.

  1. Establishing an Independent Fiscal Institution (IFI): an election commitment of the new government. The Treasury produced a draft public consultation document drawing on existing Treasury, OECD and IMF networks and publications. The document required staff time of 2 FTEs over 2 months plus the time of a contractor to edit. The consultation document was published on 12 September 2018, and submissions closed on 24 October. Two consultation workshops were held in Wellington, and officials visited the IFI in Australia for 2 days of discussions. 25 submissions were received, 24 of which were published in March 2019 together with a summary. The government has yet to announce its decisions. The Treasury would have liked more time to consult e.g. consult outside the capital city, and more cross-agency consultation.
  2. Consultation on new infrastructure body: an initiative of the new Minister for Infrastructure, concerned about a major infrastructure deficit and the need for better information and coordination. The Treasury published a consultation document on 8 October 2018, disseminated via the web and social media, which included a questionnaire (using Likert scales for some questions). Submissions were required by 26 October via an online survey or submission template or other written form. Meetings were held during October with stakeholders in the three main cities, plus Sydney, Australia (hosted at individual business premises), and at the Treasury. Invitees were identified from mailing lists and were also asked to pass the invitation on to other interested parties. An Expert Review Panel supported the Treasury throughout. 130 submissions were received, which were assessed individually by one analyst, the themes extracted, and a summary compiled and reported to Ministers. Some Treasury advice was based on what was in the submissions. The submissions and brief summary and the Cabinet paper were published in February 2019. The Treasury indicated that if it had more time it would have gone back to more individual submitters to explore interesting ideas. In February 2019 the Government announced the form, functions and name of the new body, legislation was introduced into Parliament in April with an opportunity for public submissions, and the new Infrastructure Commission is expected to be operational later in 2019.
  3. Consultation on open budgets: a commitment in NZ’s 2016-2018 Open Government Partnership Action Plan to ‘make the budget more accessible and open.’ Due to a tight timeline, and the need for specialist research skills, Treasury commissioned a survey research company to seek stakeholder views (tendered at a cost of NZ$42,000, funded within Treasury’s existing budget baseline). Treasury compiled a list of stakeholders (seeking both the ‘usual voices’ and ‘new voices’), which was finalised in discussion with the contractor. 35 qualitative in-depth interviews were conducted: Media (5), industry reps (4), analysts (3), financial orgs (3), academics (3), international organisations (2), indigenous groups (4), social and community service groups (6), and professional network groups (4). The contractor prepared the interview questions which were finalised in discussion with Treasury. Interviews were up to one hour, took place over two months, half were conducted face-to-ace and  half by phone. The contractor’s report contained recommendations, was discussed by Treasury’s senior management group, and reported to the Minister.  Changes were introduced in the 2018 Budget documents partly as a result of the consultation: new “Economic and Fiscal Update Basics” and ‘Budget at a Glance’, more data in open data formats, and more historical data.
  4. Social Investment Panel: convened by Treasury in recent years to assess selected line ministry budget proposals. It met in two stages: to determine which proposals should be further developed for the next budget; and 4 months later, to prioritize proposals for inclusion in the budget. The Panel included NGOs, academics, a Maori representative, other external organisations, and senior officials from Treasury and selected agencies. Panel members were selected by an informal process based on what perspectives were needed, not what organizations should be represented. There were rules to manage conflicts of interest. A report was submitted to Treasury senior management and relevant ministers (posted on Treasury website) with the Panel’s assessments of proposed policy initiatives. It is considered that the Panel helped the Minister of Finance deal with spending ministers. However, the Panel has not met since early 2018 following a change of government (2017 Open Budget Survey of NZ, Q. 125).
  5. Earthquake Commission review: EQC is a government entity that provides homeowners with disaster insurance. Following a major 2011 earthquake the government announced a review in 2012 of EQC’s insurance claims management and insurance coverage issues. The consultation process was led by the Treasury: initial informal ‘soft consultation’, listening, to identify and understand the issues; used the general Community Advisory Group set up for all post-earthquake issues; needed careful stakeholder management with multiple points of engagement with different interests. Officials talked in detail to insurance companies and the Insurance Coucil, enabling them to develop initial ideas in confidence. There were potential Competition Policy (anti-trust) constraints on individuals’ comments at group discussions amongst competing insurance companies. Treasury maintained a high degree of openness, giving formal feedback to all participants at group meetings to avoid mixed messages. The consultation document was not published until 2015, containing 22 specific proposals, 62 submissions were received. Due to a long delay in government decisions, submissions were withheld under the Official Information Act (issue still under active consideration), and not released until 2017. Initial legislation was prepared in 2018, public submissions were heard by Parliamentary Select Committee, and the Bill passed into law in February 2019. Other elements of the review are on-going.
  6. Long term Fiscal Statement 2016: the Public Finance Act requires the Treasury to report to Parliament every 4 years on the long term fiscal position. Treasury’s public engagement process for the 2016 Statement included a national representative survey of over 1,00 people e.g. on trade-offs between a range of things that people value, such as OECD Better Life Index dimensions. The Treasury also facilitated a series of small workshops and discussions with people from various cultures, occupations, ages, and regions.
  7. Treasury outreach to schools and universities: The Treasury regularly sets challenges and competitions aimed at secondary schools and at universities.

General observations

  • The topics on which public engagement took place are much broader than how government spending is allocated. Consultations spanned macro-fiscal policy, tax policy, the design of fiscal institutions, current expenditures, public investment, and government-provided insurance.
  • With one exception, these engagements took place outside the annual budget cycle and are therefore not measured by the Open Budget Survey.
  • Where the Treasury itself initiated public consultation, it did so to increase its understanding of policy problems and to improve the quality of its policy advice to government.
  • The public engagements utilised a wide variety of engagement mechanisms:
    • one-off exercises, time-limited working groups, and regular annual mechanisms (e.g. the Social Investment Panel)
    • single stage consultation (at times preceded by informal ‘soft consultation’/listening) and multiple rounds of consultation
    • expert-based consultations and consultations with the general public
    • calls for submissions, public surveys, and in-depth focus group discussions
    • formal government consultation as well as operational decisions by the Treasury to consult.
  • Some public consultation was done with very short time frames reflecting political imperatives, but in one case consultation in a policy area has run for seven years and is not yet completed due again to political circumstances.
  • The Treasury engages the public in the context of well-established non-government actors and patterns of interaction with civil society.
  • Most of the work in researching and drafting public consultation documents, engaging with stakeholders, and assessing public submissions and advising ministers was performed by Treasury staff, within Treasury’s existing budget baseline, with limited contracting out of specific functions.
  • The Treasury conducted these exercises on the basis of limited centralised guidelines for its staff (although there are protocols to manage confidentiality and privacy issues and potential conflicts of interest). There is a reliance on experienced staff that understand how government operates together with a strong culture of informal cross-Treasury discussion and sharing of experience.
  • There are systematic delays (sometimes long) in publishing submissions and summaries of submissions; the general practice is not to publish submissions until government has made its decisions, which reduces the impact of submissions and the openness of the process.
  • Specific efforts have been used to engage Maori (indigenous people) illustrating the GIFT principle of inclusive engagement (Box 1), and Treasury has institutionalised capacity to provide policy advice on and to engage with Maori through creation of the position of Principle Advisor Maori.

GIFT Webinar Series Season 2 – Public Financial Management for Sustainable Development

One of the key learnings from the adoption of the Millennium Development Goals was that States need to strengthen their means of implementation to address the challenges posed by sustainable development. Such a challenge is even more significant when addressing the Sustainable Development Goals (SDGs), due to their increased scope and interrelation of objectives. To address this task, the States should have robust Public Financial Management systems that enable them to have responsive institutions.

During this webinar series on SDGs composed by four webinars, we will cover different aspects of the institutional principles embedded in SDG 16 -access to information, transparency, accountability, anti-corruption, inclusiveness of decision-making processes, and non-discrimination- in respect to Public Financial Management. Additionally, we will analyze how the budget process is instrumental to the fulfillment of the SDGs, as well as experiences on how countries are progressing in linking their budget process with the SDGs. Finally, we will present innovative experiences using budget analysis to inform policy-making as well as the role that civil society can have in the process.

This set of webinars responds to a poll on social media asking GIFT followers their priority topics, where budgeting for SDGs was number one, followed by gender budgeting.

Target public: Experts from ministries of finance, civil society organizations, and academia.

 


Representatives from UNDESA presented the findings on the World Public Sector Report of 2019. The report surveys global trends in the implementation of the institutional principles, documenting both the availability of information on those trends and the status of knowledge about the effectiveness of related policies and institutional arrangements in different national contexts. It also demonstrates how the institutional principles of SDG 16 have been informing the development of institutions in various areas, including gender equality and women’s empowerment (SDG 5).

Download the presentation used during the webinar or the UNDESA World Public Sector Report.

• Representatives from UNDESA

Aranzazu Guillan Montero Senior Governance and Public Administration Officer, UNDESA

David Le Blanc Chief, Development Management Branch, UNDESA

• A brief introduction from Juan Pablo Guerrero Network Director, GIFT

 


This webinar will present different methodological approaches that countries are using to link the budget with the SDGs, including considerations of the dissimilar progress and challenging contexts. With that context, two cases of linking the budget with SDGs will be presented by the experts in charge of the implementation. The first one is the case of Mexico, which is considered to be a pioneer in the comprehensive implementation of SDG tagging of the budget and linking with performance indicators. The second one is the case of Nepal (TBC), which has developed a form of informing prioritization of budget decisions towards the SDGs.

• Lorena Rivero Manager for Technical Cooperation and Collaboration, GIFT

Suren Poghosyan International Public Financial Management Specialist at UNDP

Ramón Narvaez WHT Scholar, University of Oxford. Former Deputy Director of Performance Monitoring in the Ministry of Finance of Mexico, developing the methodology to link the budget to the SDGs.

Download the presentation used during the webinar: Lorena RiveroSuren PoghosyanRamón Narvaez

 


Civil society organizations and academia are important actors to measure the progress towards SDGs, and can be, at the same time enablers of achieving the goals. Their role goes from external monitoring and evaluation, to active advocates and bridges of marginalized communities towards fiscal and spending policies. In this webinar representatives from civil society and academia will present how they use and could use the inputs from SDG budgeting to strengthen the sustainable development agenda.

• Ricardo Barrientos, Senior Economist, Central American Institute of Fiscal Studies (ICEFI).

• Walter Figueroa, Senior Economist, ICEFI.

Moderator: Claire Schouten, Senior Program Officer, International Advocacy, International Budget Partnership (IBP).

Download the presentation used during the webinar.

 

 


If we are looking to achieve the SDGs, we need to think big, bold and different. We need to consider the opportunities that present technologies and innovations around the world provide for the development of better budgets, including service delivery, and fiscal policies, as well as the needs of the future in mind. During this webinar we will explore innovations towards achieving the SDGs through the UNDP acceleration labs and projects that use machine learning to improve public policy:

The UNDP acceleration labs seek to transform the collective approach to find radically new approaches that fit the complexity of current development challenges. They will introduce new services, backed by evidence and practice, and by accelerating the testing and dissemination of solutions within and across countries.

The Policy Priorities Inference (PPI) computational framework being developed in the Alan Turing Institute, builds on a behavioral model of the policymaking process, including the learning process of public officials, coordination problems, incomplete information, and imperfect monitoring mechanisms. PPI simulates the complex and uncertain dynamics observed in development-indicator data.  If governments provide a detailed account of their allocations at the level of each development indicator, PPI can be tuned to match expenditure patterns. This would represent a major improvement in the estimation of policy priorities.

 Who:

Omar Guerrero Senior Research Fellow, Alan Turing Institute

Lorena Rivero Manager for Technical Cooperation and Collaboration, GIFT

Download the presentation used during the webinar: Lorena RiveroOmar Guerrero

 

Are we making chocolate or what? An interim reflection of the alchemy that is public participation.

By Zukiswa Kota (IMALI YETHU Lead Coordinator, Public Service Accountability Monitor)
Article originally published in OPEN, Edition 3.
.

An open data project involving both civic and state actors was always going to elicit varying – and various – perspectives on a range of issues.

The Vulekamali team consists of government officials, members of civil society, academics and the project implementing agent. Recently – our team discussions have begun to feel somewhat microcosmic of our broader national context where robust, honest and ultimately constructive discussions about governance and decision-making are concerned. I was reminded of a statement from a 2005 book entitled Budget Transparency and Participation;

“Openness in government decisionmaking, the availability of budget and outcomes data and the effective management of government constituencies in budget debates are inseparable. The release of better information by the executive branch will not mean much unless coupled with efforts in the legislature and civil society to use that information. Similarly, it is difficult for the executive to establish accurately what information and institutional provisions are most urgently needed in the absence of a dialogue with legislatures and civil society. Only through a vibrant budget debate will the potential benefits of transparency be realised”[1]

As the Vulekamali project team, circumstance often prompts us to factor our heterogeneous perspectives into our work. This has encouraged[2] a number of us to reflect on the objectives and related assumptions we held prior to joining the team. We’ve also come to share a number of buzzwords; some novel, others well-used. These include the concepts of accountability, project agility[3], transparency and public participation. The latter in particular is undeniably central to the development of Vulekamali. It is both a means to an end and arguably an end in itself.

We hope to inspire the participation of a multitude of actors in Vulekamali’s development as well to use Vulekamali to promote public participation in South Africa’s budget process. In the past year, we’ve had a number of frank, sometimes painful but always constructive project discussions about the process of ensuring wider public participation. These have often revealed what occasionally feels like a gaping chasm between our shared commitment to the process and our actual practice to ensure meaningful participation.

Have we made some risky assumptions about public participation? Do we even have a shared perspective of what meaningful participation looks like? My sense of the answers to these questions is that we’ve made very many such assumptions and that we don’t have a common definition of this kind of participation. This, however, is not necessarily a negative thing. In fact, if interrogated in a robust and solutionoriented manner, these differences may serve to allow the progressive, robust development of Vulekamali.

The project charter sets out some very ambitious objectives including ensuring public participation across all nine provinces of South Africa, building a 1000 beta user group and encouraging the contribution of government and civic actors beyond the project team. Time consuming? Yes. Budget intensive? Certainly. Politically complex? Inescapably. Energy intensive? Undeniably.

A former member of the project team, Dr. Kay Brown once used the following analogy to explain the complexity and novelty of the project; ‘it’s a bit like trying to make chocolate from scratch when you have no idea what chocolate is or what it’s actually supposed to taste like’

This can lead to some frustration even when guided by the best-laid plans. At the core of this are relationships founded on mutual trust and respect. Building such relationships that encourage vibrant debate takes time. The same is true for the kind of participation we seek from communities across South Africa. Fostering meaningful participation is resource intensive. It involves a degree of trust-building and like the bitter cocoa bean – it can yield wonderful results with some careful, patient alchemy.

In keeping with the project’s ethos of accountable and prudent use of public resources; the question of value for money in public participation activities is central.

What isn’t easy to determine is how to measure this. What trade-offs will we ultimately need to make to ensure this balance? What is certain is that we are collectively accountable for ensuring that we respect the integrity of participation that is inclusive, rigorous and genuinely accommodates diverse views.

This is an opportune moment to bring other role-players into the fold. We seek to reiterate the call for other civic actors and public officials to join us in making ‘the circle’ wider and more inclusive. President Ramaphosa has on several occasions emphasized the importance of state-civic partnerships. We call on other government departments, parliamentarians, and civic actors to share concrete experiences of successful public participation. Can we learn from the Department of Planning, Monitoring and Evaluations’ Community Based Monitoring initiatives, for instance? Are there secret ingredients that could add the richness and quality we seek?

With more reflection and input – we will confidently grind, winnow, and conch towards good quality, value-for-money African ‘chocolate’!

 

 

[1] Matemba, L., Kgampe, L. and Claassens, M. South Africa in Claassens, M. & van zyl, A. (Eds) 2005. Budget Transparency and Participation 2: Nine African Case Studies: Botswana, Burkina Faso, Ghana, Kenya, Namibia, Nigeria, South Africa, Uganda and Zambia. IDASA, Cape Town. p.270
[2] Yes – this is indeed a euphemism
[3] I suspect the concept of the project using an ‘agile’ approach means different things to different people

Averting environmental catastrophe: what would real accountability for environmental stewardship look like? And why it has a lot to do with fiscal policy.

There are three inter-related areas where action is urgently required to avert further rapid environmental degradation:
  1. Mandatory environmental target setting and the integration of environmental targets into medium-term government strategy and fiscal policy setting.
  2. National State of Environment reporting.
  3. ‘Green budgeting’ – the use of the budgetary system to improve environmental outcomes.

The twin climate change and environmental degradation crises show emphatically that current approaches to environmental stewardship are failing miserably. While myopically protecting the over-consumption of natural capital and imposing increasing negative effects on current generations, especially the poor, we are leaving a legacy of mind-boggling cost and risk for the generations that will follow. UNEP’s 2018 Global Environment Outlook (GEO 6) ‘provides the evidence that…without a fundamental redirection, most environmental domains will continue to degrade, threatening the economic and social progress achieved to date and the fate of the multiple species that share planet Earth.’

Many factors contribute to global environmental degradation, but one that has received surprisingly little attention is the lack of government transparency and accountability for environmental stewardship compared to other policy domains, such as fiscal and monetary policy, and the systematically weak integration of environmental stewardship into overall government strategy.

While international initiatives such as the Paris Agreement on Climate Change, the Aichi Bio-diversity Targets, and the UN Sustainable Development Goals (SDGs) are crucial to galvanise coordinated action, international treaties and agreements can in general only be implemented by sovereign states passing and implementing domestic laws.

However, compared to the way in which many governments now manage the public finances – based on commitments in domestic law to publish goals, targets and progress reports – the arrangements for environmental stewardship are primitive.

Many governments get away with longer-term unquantified ‘feel good’ goals for the environment – such as ‘reversing loss of biodiversity’, ‘or cleaning up waterways’ – without the discipline that comes from being required to regularly report to the legislature on the intended path to the goals, interim milestones, recent progress, and what they are doing now to promote their achievement.

In other cases, such as climate change, governments sign up to ambitious quantitative targets, but ‘the vast majority of countries have [national] targets that are woefully inadequate and, collectively, have no chance of meeting the 1.5°C temperature goal of the Paris Agreement’ (Climate Action Tracker, 2019).

‘A goal without a plan is just a wish’ – Antoine de Saint-Exupéry.

Or a political deceit.

Imagine any government today telling the electorate that it will reduce public debt by 20 per cent of GDP in twenty years’ time but providing no report on last year’s budget outturn, no current data on public debt, presenting no forecasts and no budget for next year, and talking only in general terms about how it will achieve the goal!

Of course, environmental outcomes result from the complex interplay of natural processes, human activities, and central, regional and local government actions. They cannot be managed in the same way that a government can manage its finances.

Nevertheless, there is an urgent need to apply to national environmental stewardship a broadly comparable underlying framework of mandatory transparency of goals and targets and ex post accountability. Prompted by international climate change treaties, this approach is being applied by a few governments to carbon emissions following the UK’s pioneering Climate Change Act 2008, with its statutory requirements for 5 yearly carbon budgets, an independent watchdog, and comprehensive reporting. This general approach is required across all environmental domains.

Environmental goals and targets must then be integrated  into overall government strategy and the medium-term strategy process that drives the annual budget. While government regulation is critically important to environmental outcomes, there is no regulatory policy cycle or equivalent of the annual budget as a focus of coordinated policy action and prioritisation. And in countries with multi-year national planning frameworks, these must be implemented in large part through annual budgets.

The budget is therefore typically a government’s single most important expression of its actual strategies and priorities, and potentially its most powerful cross-sector policy integration tool. If environmental goals and targets are to mean anything, they need to be more effectively mainstreamed i.e. incorporated in the (medium-term) strategy process that drives or shapes the annual budget – as recognized by the Helsinki Principles adopted in 2019 by the Coalition of Finance Ministers for Climate Action.

Yet fiscal strategy setting around the world remains dominated by assessment of macroeconomic and fiscal statistics and associated risks. Information on environmental outcomes and risks, and interactions between the environment and the economy, (such as the UN System of Environmental–Economic Accounting), needs to be integrated into decisions on the medium-term fiscal strategy. In New Zealand an amendment to the Public Finance Act under consideration would require every Government to draw a connection between its wellbeing objectives and its fiscal policy and to report on environmental and social indicators alongside macroeconomic and fiscal indicators.

The setting of targets for environmental outcomes should be based on national State of Environment Reports (SoERs). The regular publication of SoERs followed the call by the 1992 UN Conference on Environment and Development in Rio de Janeiro for nations to issue reports on the environment that would complement traditional fiscal policy statements, budgets, and economic development plans. The 1995 UN Commission on Sustainable Development introduced the ‘Drivers, Pressures, State, Impact, Response’ (DPSIR) model of environmental reporting widely used today.

Most advanced countries, including all members of the European Environment Agency (EEA), many middle-income countries, and some developing countries publish national SoERs, typically 3-5 years. These reports contain a large number of physical outcome indicators across all environmental domains, including biodiversity loss, land degradation, air, land and water pollution, water and natural resource management, and climate change. The data is captured mainly by national and sub-national environmental monitoring systems.

However, SoERs invariably have gaps in the data and/or its analysis of varying severity reflecting resource and capacity constraints. There may be concerns about technical independence of the reports (e.g. with respect to NZ’s 2007 SoER). Many of them are backward-looking, reflecting the DPSIR framework, although some include assessments of outlooks and/or scenarios, and a few contain policy recommendations e.g. the Dutch SoER 2014. The reports often fail to highlight the areas of critical concern amongst a large number of environmental indicators. Nor are governments required to respond to each report or to indicate what they are doing and will do to avert further environmental degradation. SoERs may be largely ignored or quickly forgotten.

The importance of national capacity for data collection and monitoring is recognized in Sustainable Development Goal (SDG) 17 on strengthening the means of implementing the SDGs. Reflecting this, UNEP calls in GEO 6 for improved national environmental monitoring and reporting systems using a combination of enhanced national data collection and better use of existing data, remote (satellite) observation systems, and citizen environmental monitoring. UNEP has a current project assessing country needs in environmental statistics collection and reporting.

National environmental reporting should be introduced in countries that do not yet publish SoERs – especially in megadiverse countries – and focusing particularly on critical environmental indicators. And where environmental reporting is in place the framework should be progressively strengthened in a number of ways:

  • Each report should be compiled by an entity with technical independence from government (as is the case, for example, in the Netherlands).
  • Each report should include forward-looking data on outlooks and scenarios, including risks and tipping points with respect to critically important indicators (for example, the Australia SoER 2016 contains information on resilience, risks, and outlook scenarios).
  • The environment ministry should provide timely and comprehensive policy advice to government in response to the data and analysis in the SoER.
  • There should be a legislative requirement for the government to respond to each SoER stating its assessment, its top priority environmental outcomes, strategies, targets, milestones, and recent progress. For example, Sweden has since 1999 pioneered transparency of national environmental goals, targets, and progress reports based on a system of environmental quality objectives (EQOs) set by Parliament (although not in law). The prospects for achieving the EQOs are assessed each year and are incorporated in the government’s annual progress report to Parliament.
  • Each SoE report should in the normal course of events be published within a certain time prior to each national election – similar conceptually to the pre-election fiscal update required by the OECD Best Practices in Budget Transparency 2002, intended to strengthen public accountability.

Thirdly, all governments should progressively introduce ‘green budgeting’. Fiscal policies – taxation and government spending – have major environmental impacts. Green budgeting will help to realise Principle 4 of the GIFT High-Level Principles of Fiscal Transparency, Participation and Accountability: ‘Governments should communicate the objectives they are pursuing and the outputs they are producing with the resources entrusted to them, and endeavour to assess and disclose the anticipated and actual social, economic and environmental outcomes’.

Some of the environmental impacts of fiscal policy are positive: funding for management of the public conservation estate, and environmental protection expenditures. Public spending also has indirect positive impacts on environmental outcomes through the level of funding for environmental regulation, and public funding of environmental monitoring, reporting and research.

Other environmental impacts are negative, such as those from fossil fuel and agricultural subsidies or subsidised water and electricity consumption, and from large public infrastructure projects. The OECD has assessed that between 2010 and 2015 direct government expenditure on subsidies to fossil fuels amounted to US$373-617 billion annually across 76 economies which collectively contribute 94% of global carbon emissions. In contrast, the amount those governments spent on biodiversity was only around one tenth of that amount. There is also the risk of lock-in of environmentally damaging technologies through new public infrastructure investment e.g. in electricity generation.

In addition, the tax system is an important tool to ‘correct’ the prices of activities that generate unpriced social costs (externalities), such as the social costs of carbon emissions or of pollution. Yet formal carbon pricing schemes (carbon taxes and emissions trading systems) cover only about 15% of global emissions (World Bank State and Trends of Carbon Pricing 2019), although existing road fuel taxes and royalties imposed for non-climate policy  reasons imply taxes equivalent to US$33 and US$10 per tonne of CO2 respectively (IMF 2019).

What does green budgeting comprise? The OECD launched the Paris Collaborative on Green Budgeting in December 2017. The objective of green budgeting is to use the tools of budgetary governance to help drive improvements in the alignment of national expenditure and revenue processes with climate and other environmental goals. This requires establishing clear connections between public finance and environmental impacts.

The OECD has identified a potential set of specific components of green budgeting, to be progressively developed and introduced. These might all be included in a single annual ‘Green Budget Statement’, or some elements may be incorporated in existing budget documents depending on what is appropriate in individual country settings. As defined by the OECD the components  include:

  • A description of the anticipated environmental impacts of the new policies being introduced in the annual budget.
  • An analysis of the environmental impacts of various areas of the revenue and expenditure baseline (on-going policies). This should cover direct spending, grants, loans, contingent instruments, revenue policies including tax expenditures, and other fiscal opportunity costs e.g. non-auctioning of rights to pollute.
  • An assessment of the use of the tax system to ‘price’ environmental externalities (including carbon emissions).
  • Cross-national benchmark indicators of progress.

The OECD also recommends periodic (less than annual) supplementary reports:

  • A Green Budget Fiscal Sustainability Report incorporating prospective environmental impacts into long term fiscal sustainability analysis;
  • A Green Balance Sheet, to report the value of natural assets and liabilities in the context of the government’s financial balance sheet.

In addition to these elements, consideration should be given to production and publication of:

  • An annual Green Performance Budget Report linking the programs/outputs funded in ministry budgets through intermediate progress indicators to the high-level environmental outcome targets.
  • The interactions between fiscal policies and environmental regulation e.g. adequacy of funding of environmental regulation, the revenue potential of cap and trade schemes and any foregone revenues from differential treatment of sectors, ‘feebate’ approaches to reducing environmental externalities, and the fiscal and distributional impacts of greenhouse gas liabilities.
  • An assessment and, to the extent feasible, quantification of the economic impact of recent degradation of ecosystem services at the margin in a selected high priority sector, and the estimated cost of restoration of ecosystem services.
  • As feasible, an assessment of environmental resilience, and short to medium term risks around critical environmental outcomes, and threats to long term sustainability.
  • A periodic monitoring and evaluation (M&E) stocktake of the evidence on the efficiency and effectiveness of government interventions in achieving environmental objectives, and identification of research priorities. Sweden publishes a four-yearly environmental M&E stock-take.

All budget documents should incorporate all public funds, including all climate and other environment finance flows that may be ‘off-budget’ and all public receipts of international climate change mitigation or adaptation funds (International Budget Partnership 2018).

Technical work is underway to support better understanding of the impacts of fiscal policies on the environment, including the OECD’s Cost-Benefit Analysis and the Environment 2018, and a spreadsheet tool developed by the IMF incorporating domestic externalities from fuel use  to help countries evaluate progress towards their Paris mitigation pledges.

Pulling the three priority areas together, Figure 1 illustrates the combination of initiatives put forward in this article.

Figure 1: Comprehensive Framework for Environmental Accountability

Some governments have started on this path. As noted, the UK’s Climate Change Act 2008 represents this type of self-imposed mandatory target setting/verification/reporting approach applied to one (major) environmental outcome. The approach in Figure 1 would see this extended across all environmental domains. This would be similar to Sweden’s approach to setting environmental quality objectives. Other countries to take steps in this direction include the Netherlands where the SoER contains an evaluation of the degree to which short-term quantitative environmental targets set by the Cabinet are projected to be achieved through current policy; and England where there is regular reporting on progress against 24 indicators from the government’s Biodiversity 2020 Strategy.

Other governments have started to integrate climate change and wider environmental sustainability into the budget process. Norway‘s 2016 Budget contained a detailed section on Sustainable Development and Green Growth, including a discussion of the use of taxes to improve resource efficiency, the country’s performance on climate change, the state of ecosystems, and management of renewable resources. France is introducing a comprehensive reporting structure for climate economic analysis in its annual budget documents and intends to add data on public and private expenditures aligned with environmental targets. Prompted by the requirements for issuing Green Bonds,   Ireland is identifying the amount of government spending dedicated to addressing climate change and intends subsequently to introduce assessments of the environmental impacts of public spending. The 2019 Budget in New Zealand was presented as a ‘well-being budget’ in which a wider set of social and environmental indicators and objectives was integrated into budget decision-making

There is a huge opportunity to build on these developments. A renewed international effort is needed to expand and deepen national SoER reporting and to build the national capacity for environmental data collection. There is an important role for the UN system and multilateral and bilateral development agencies to finance national capacity development in environmental statistics collection as well as remote measurement systems. International organizations such as the OECD, World Bank, and the IMF, international multi-stakeholder networks such as GIFT and the Open Government Partnership, and environmental NGOs can promote the development and diffusion of common international norms and country commitments on environmental reporting, green budgeting, and the integration of the environment into medium term government strategy setting. GIFT, as a multi-stakeholder network, is well-placed to promote a role for national CSOs in norm development and in assessing the quality of environmental governance in their countries.

Taken together, the proposals illustrated in Figure 1 are obviously ambitious. They are intended to suggest the type of comprehensive framework needed to guide a series of progressive steps towards better environmental stewardship, phased in depending on starting points and national priorities. The proposals reflect the call in SDG 16 for accountable and transparent institutions that ensure public access to information and inclusive decision making. The capacity for national environmental monitoring and reporting comprises core infrastructure for sustainable development, and for measuring achievement of a number of the SDGs, many of which are high level aggregate outcomes that must be measured by in-country environmental monitoring systems. This requires progressive capacity building consistent with SDG 17.

Comprehensive application to environmental stewardship of the tools of mandatory transparent target setting and systematic independent reporting, and green budgeting, may well be key changes required if we are to begin to turn around the potentially cataclysmic decline in the state of the environment. It is only thirty years ago that few would have ever imagined that many sovereign governments would pass laws obliging themselves to fiscal transparency and fiscal responsibility or to setting inflation targets with delegation of monetary policy implementation to independent central banks.

Today we urgently need a similar leap of imagination, and crucially also of citizen demands and engagement, and of political leadership, to protect the natural environment for future generations.

Is Fiscal Transparency Really Relevant to Improve Public Spending?

by GIFT Team

As members of the Public Financial Management community, we are frequently confronted with the question: is fiscal transparency really relevant for improving public spending? There is no easy answer it, as there is no easy or unique path transforming fiscal transparency into a public good. For many years, governments have published information about their finances without it being used. And we know that most of the success stories on fiscal transparency are related to transforming disclosed information into something relevant for the public. We do know that fiscal transparency is not a solitary requirement or sufficient condition that leads to improved social, economic and environmental outcomes (for examples read de Renzio and Wehner 2015). However, it is a steppingstone that helps improving the quality of spending and in some cases, accountability. The following diagram displays GIFT theory of change which links fiscal transparency linked with direct and informed public participation can lead to more accountability, improved budget outcomes and impact in people’s lives.

In few words, fiscal transparency can result in better use of public resources, when the data is actually used by its citizens. Dialogue and participation in the budget are necessary to help ensure that the disclosed information responds to the public needs. To date, one of GIFT’s contributions has been to encourage this dialogue between ministries of finance and civil society organizations, resulting in the disclosure of more meaningful information in more friendly and accessible formats.

The following stories do not intend to be an exhaustive compendium on how GIFT members and partners have used fiscal transparency to have an impact and achieve better results, but they provide elements that describe and illustrate the above change relation in different contexts and topics. 

Gender violence based spending in Argentina

How many governments promote their policy choices by means of discourse to satisfy public claims, but do not back-up such promises with the funds needed? It is a common political practice that affect all subjects, from environmental protection and poverty alleviation to gender issues. The publication of budget and spending data and informed public debates on the matter can limit this possibility throughout the budget cycle.

The Asociación Civil para la Igualdad y la Justicia (ACIJ), an organization with a specialized track record of analyzing public policies to guarantee human rights, joined the GIFT network in 2017. Meanwhile, another GIFT steward, the Ministry of Finance (MoF) of Argentina, opened a significant  amount of disaggregated data in a new user-centered fiscal transparency portal called “Presupuesto Abierto”, which discloses on a daily bases information about the execution of the budget. In the next video, Renzo Lavin, Co-Director of ACIJ, explains how the accessibility to this data has facilitated their work and enabled them to hold an informed discussion with the MoF. Among other benefits it has led to corrections in the proposed allocations for gender-based violence policies by identifying and exposing publicly the mismatch between the political promise to invest in programs to help address gender violence and its consequences, and the actual budget allocations.

ACIJ hosted a Better Budget Dataquest with GIFT in February 2019, an open event for civil society data experts to link fiscal open data with government programs and policies information. The Argentinian MoF participated in the event with presentation of how to use the open data and providing technical assistance to the participants. A few months later, ACIJ started a budget and data literacy effort directed to organizations focused on gender aspects, which includes a guide and videos on how to analyze budget with a gender perspective, expanding the abilities of the CSO community to use the open spending data published by the government for incidence. Budget and data literacy efforts are some of the most popular actions to be implemented among Stewards in 2019. As a result, SCOs came up with the claims that more fiscal resources were needed to back up the political claim of a government supporting anti violence gender programs.

 

Budget Allocations for HIV in Indonesia

The Ministry of Finance of Indonesia was among the first countries to introduce a budget open data portal as part of their fiscal transparency efforts. The GIFT Network was part of this important step, back in 2016, which included a workshop with GIFT Stewards from around the world hosted in Jakarta by the MoF. With more accessible budget information, CSOs such as Seknas-Fitra (GIFT Steward), have been able to engage in constructive conversations with the MoF and local governments as well on budget issues.

With new and relevant information, Seknas-Fitra has also been able to act as intermediary with grass-roots organizations to facilitate their understanding of the published information and how it can be used to better focus their agenda. A specific result of these actions has been changes in the allocation of budget directed to HIV in different regions of the country. In the next video Yenti

Nurhidayat explains this chain of events that have led to better protection of vulnerable groups.

The dialogue between the MoF, Seknas-Fitra and other CSO has also derived in budget and data literacy efforts. As such, together they organized the GIFT Better Budget Dataquest in early 2019 in two Indonesian universities, expanding the capacity to use the budget open data to analyze public policies. This has already triggered a better informed debate on budget allocations and ways to engaged the public in fiscal policies.

 

Budget for sustainable urban mobility in Mexico

Mexico has been one of the early adopters of mainstreaming fiscal transparency reforms in different topics though digital tools, including open data and digital platforms. The MoF has been part of GIFT since its initial phase back in 2013, and became a Lead Stewards in 2017. As such, it has been a key actor to showcase how user-centered fiscal transparency efforts can benefit organizations with a variety of backgrounds and interests, such as regional development, maternal health, inclusion or human rights. Linking relevant budget data with the government information which they are familiar with, these organizations have led to several stories to improved efficiency, efficacy and impact of the public resources.

In the blog post that can be consulted here, Lorena Rivero, a former Director General for Transparency and Evaluation at the Mexican Federal MoF, describes how fiscal transparency led to a simpler analysis of the implications of budget distribution in sustainable urban mobility by the Institute for Transportation and Development Policy, which urged the way of transforming the whole approval process of investment projects of a specific fund from amount orientation to quality of investment and sustainability considerations.

The case reflects the fact that a discussion cannot be really balanced, productive and constructive if the government officials and public representatives do not have access to equivalent amounts of quality of information. The provision of the relevant data in the correct formats can help an informed discussion and open for real opportunities in the way public resources are allocated and executed.

 

Some conclusions to be drawn from these examples

There are still multiple complexities in the numbers of relations that go from the publication of fiscal data, to its conversion into a public good as a result of its utilization, to social impact. Among other conditions, relevant data should be available in the right formats and at the right time. Other necessary conditions must be present, such as having, on the demand side, specific interested organizations willing and capable to analyze it and understand the implications for their sectors. Furthermore, a propitious public space where the analysis can be heard and discussed by public officials is also needed to close the feedback loop, which in many cases will become an iterative process.

Organizations working with GIFT are helping amplifying the community based organizations and thematic focus organization that can benefit from fiscal transparency. This is important, as it is not always budget and public finance organizations that have exert influence in Public Financial Management in a broad sense. The opportunities opened by transparency and public utilization of relevant fiscal information can go deep into public policy performance considerations that can have repercussions in many people’s lives. A better allocation and use of public resources will be crucial when addressing the Sustainable Development Goals and having data available for different expert organizations to analyze is a first step to allow a more profound discussion to take place.

From Fiscal Transparency to More Sustainable Cities: Case in Mexico

Some public programs are designed as the result of the political realm, besides any possible  technical propositions and considerations. Pork barrel funds are a reality, in developing countries, as well as in developed ones. This was the case of the Metropolitan Development Fund in Mexico.

The fund started before 2011 changing forms and structure but, continued growing throughout  the years during the approval phase of the budget cycle. In Mexico, a presidential system, each year the executive power, through the Ministry of Finance and Public Credit (MoF), presents to Congress the budget proposal for the next fiscal year, which is then analyzed, amended and finally approved. Year after year, this program returned from the legislative in the approval phase of the budget process with significantly more resources than proposed by the executive branch, as a result of political negotiations, to the point of being implemented during the fiscal year in projects unlinked to the development and sectoral priorities. Organizations and researchers started noting the lack of a clear objective and inefficient allocation of these resources, resulting in the financing of projects that encouraged the use of private transport, rather than more sustainable cities (see for example the The Institute for Transportation and Development Policy (ITDP) of Mexico report “Diagnosis of federal funds for transportation and urban accessibility: How we spend our resources in Mexico in 2011 by Javier Garduño”). Furthermore, organizations trying to engage and study the effects of such resources encountered significant problems in following the money. In 2013-2014, the legislative management of this fund, finally led to a big scandal involving congress members engaging in corruption to include and approve projects in such fund.

Before public opinion, it is usually hard to separate different levels  of government when such scandals arise, as the public condemn politicians as a whole. Therefore, the MoF decided to take action through fiscal transparency, so the public could distinguish the process and its outcomes. While it might not be the most obvious solution, it was a form of clarifying that although the MoF managed the delivery of the funds, it was not taking part of the corruption and was taking actions to expose it, as a way to tackle it. With such goals, in 2014 the MoF presented a platform publishing the details of the approved projects expecting the public to be able to monitor approval and implementation. As the Mexican MoF was a member of GIFT, the network was part of the public launch of these changes,  highlighting the importance of such actions to lead to public participation and social impact.

Conversation shifted to discuss in depth the approval of the projects and what needed to be changed in the design of the fund to achieve sustainable cities. With the data available, civil society organizations such as the Urban Cycling Network (BICIRED) and ITDP were able to engage in the approval process of the budget cycle with an informed social media campaign (money for the humane city- a catchy phrase in Spanish “Lana para la Ciudad Humana”) and lobbying actions for the 2015 budget. That year, the approved Budget Decree included a new clause, stating that the Metropolitan Development Fund should consider non-motorized mobility to finally include in subsequent years that at least 15% of resources should be directed to public transport and non-motorized mobility.

In 2017 a complete redesign of the program was possible with some milestones achieved by different ministries and with the findings of an external evaluation to the program. For the 2018 fiscal year the operating rules of the program changed completely, creating a collegiate body to approve the projects, conformed by the MoF, the Ministry of Territory and Urban Development and the Ministry of Environment. The approval of the projects would now require better pre-investment studies, depending on the cost of the project a cost-benefit evaluation or others, and an opinion sheet filled out by the collegiate body, highly focused on awarding points to sustainability, urban mobility and resilience projects.

Cutting with inertia of how projects are presented is not easy and therefore a more paused approval of spending happened, but slowly more of the expected projects started to flow from the local governments to the MoF.

This case reflects how opening spending data can lead to changing relations among different powers in government (executive, legislative, audit and national-local governments); it can improve the quality of the discussion between civil society and government (when the government is open to listen and act!), highlighting that it is not always organizations expert in public finances that can induce results from fiscal transparency; and finally it can lead to more effective public spending. As such, fiscal transparency and public participation triggered policy changes that replaced the previous pork barrel system in favor of better public spending through policies for sustainable development.

Coupling AI and Sustainable Development Goals through Public Expenditure Data: Why Fiscal Transparency is Crucial to Achieve the 2030 Agenda

Since their establishment in 2015, the Sustainable Development Goals (SDGs) have become the leading international agenda to promote social, economic and environmental development. The 2030 Agenda has encouraged the construction of numerous development indicators through which governments can track and evaluate their progress towards the SDGs. For example, the United Nations provides open access to the official SDG database; alternatively, the World Bank has collected enough indicators to build an ‘unofficial’ SDG database; and countries like Mexico are producing comprehensive indicators at the subnational level (agenda2030.mx). Indicators, however, are only one side of the development equation: they constitute the output. However, realistic strategies to reach specific goals of a government cannot be properly designed without information about the input side: public expenditure.

To a reasonable degree, a government’s development strategy can be captured by its allocation of resources across different policy issues. The aim of such strategies is transforming the relevant indicators to, eventually, reach the government’s goals. Ironically, while we have plenty development-indicator data, there is scant information on public expenditure. However, in recent years, the Global Initiative for Fiscal Transparency (GIFT) has been trying to change this shortfall. But, even if fiscal data would become available, the complexity of the policymaking process obfuscates our understanding on how public expenditure translates into development outcomes. This is so because, for example, government agencies may have different goals from those of the central authority (misalignment of incentives), there may be inefficiencies due to corruption or lack of capacity and, on top of that, there are spillover effects between public policies (synergies and trade-offs). Fortunately, cutting-edge Artificial Intelligence (AI) research is trying to cope with this challenge. In this post, we argue that these technological advances in conjunction with open fiscal data can enable governments to fully exploit SDG indicators in the pursuit of worldwide development. For this reason, it is crucial that governments focus their efforts in two fundamental tasks: (1) producing granular open fiscal data and (2) linking it to development indicators.

 

AI for Sustainable Development

At The Alan Turing Institute, we are developing the computational framework of Policy Priority Inference (PPI). PPI builds on a behavioral model of the policymaking process. Among the most relevant aspects considered, we can find the learning process of public officials, coordination problems, incomplete information, and imperfect monitoring mechanisms. PPI simulates the complex and uncertain dynamics observed in development-indicator data. In parallel, it takes into account the network of interdependencies between development indicators, which describes positive and negative policy spillover effects. The method can be used with datasets that have more indicators than observations; such as those built by most governments. Likewise, it does not require an insurmountable collection of information, so it is scalable to big or small data.

The innovation of using an AI tool such as PPI is that, by explicitly modeling the policymaking process that generates development indicators, we can simulate data that is not observable in the real world. One such data is precisely public expenditure on SDGs. In addition, PPI can also estimate, at the level of each indicator, how efficiently are the resources being used. In a recent paper (arxiv.org/abs/1902.00430), we use this technology to measure policy coherence, a topic that has not been properly quantified and yet, is central to multilateral organizations such as the OECD (oecd.org/gov/pcsd). PPI reproduces empirical development indicators and, as a byproduct of its behavioral model, it simulates the distribution of resources that gives place to the observed indicator dynamics. We use these distributions to construct a policy coherence index that can be used to compare how consistent are the policy priorities of a government in relation to its development goals. Our index can be extremely valuable to assess how committed are governments towards the 2030 Agenda –or any other– and to identify those policy issues that should be prioritized.

 

AI + Open Fiscal Data

So, in absence of open fiscal data, PPI simulates budgetary allocations that generate real-world development indicators. However, we can do much better if we feed this technology with public expenditure data. For example, if governments provide a detailed account of their allocations at the level of each development indicator, PPI can be tuned to match those expenditure patterns. This would represent a major improvement in the estimation of policy priorities. To get a clear picture of why this would be the case, let us provide some context on the tools that are currently being used to advise governments.

Traditionally, development consultants have attempted to approximate the effects of improving specific indicators by measuring their level of association. That is, by looking at metrics such as correlations or regression coefficients, analysts try to disentangle how, for example, improvements in the aquatic environment (SDG 14) relate to changes in GDP growth (SDG 8). These associations, while illustrative, are not informative about how to produce environmental improvements. In other words, by solely focusing on the output side of the problem (indicator data), we can only learn how an indicator in SDG 14 relates to another one in SDG 8, not how a specific budget program translates into effective policy contributions, then into development, and subsequently into spillovers. Ironically, the whole point of providing policy advice is to know the instruments that have dedicated recourses, i.e. the input side. In principle, public expenditure data can ease this problem. This is why AI tools such as PPI are so important to produce reliable policy advice.

Going back to our main discussion, open fiscal data plays a crucial role for the SDG policy prioritization through AI. This shows the importance of making fiscal data publicly available, an endeavor that GIFT has pursued forcefully in the last decade. There is, however, an additional challenge that needs to be tackled: linking expenditure to SDGs. As we have explained, the output side of the development process consists of indicators, not expenditure programs. This translates into a mismatch between inputs and outputs, something that requires the attention of every government. The Mexican government, for example, assembled a team of specialists from the Treasury and from the United Nations Development Program to produce the first fiscal-SDG linked data in the world. This experience should provide guidelines to other countries that are serious in attempting to reach the 2030 Agenda.

 

The Future of Open Fiscal Data

A systematic effort to publish fiscal data and link it to development indicators is necessary if governments want to exploit AI for reliable policy advice. Nevertheless, there will still be other challenges ahead that need to be overcome. One of them is that, even if comprehensive fiscal-SDG linked data becomes available, we need to identify transformative expenditure. That is, just because we observe a substantial amount of resources in a specific policy issue, it does not mean that those resources correspond to transformative policies (those that improve indicators). The best example is the highway infrastructure of the industrialized nations. In these countries, extensive road networks have already been created, so most if the expenditure in this topic is dedicated to maintain them. Thus, indicators such as road coverage will not change as a result of this expense. In contrast, a developing country where new highways are being constructed is effectively devoting resources to produce a transformation, pushing the relevant indicator upwards. In one of our papers, we have found a related –and paradoxical– example in the topic of education. While developing countries have not prioritized this issue (which they urgently need to do), the developed nations keep investing to transform it (e.g., Finland is currently transforming its curricula in profound ways: ind.pn/2wfIgdB).

In conclusion, if governments are serious about meeting the SDGs by 2030, or any other future development agenda, they need to embrace what AI methods have to offer and combine them with development-indicator data. However, these efforts will eventually reach a bottleneck if governments only care about the output side of development. Thus, it is crucial to start building data for the input side, in particular, fiscal-SDG linked data. Only then, governments will be able to take advantage of the current technological revolution when designing and implementing policies.

 

For countries interested in applying for this model, who are committed to opening their public spending data and advance the link between the budget and SDGs, contact GIFT Coordination Team through lorena@fiscaltransparency.net.

 

Bios

Omar A. Guerrero (@guerrero_oa) is a Senior Research Fellow at the Department of Economics in University College London and at The Alan Turing Institute, the UK’s national institute for data science and AI. He has been a fellow at the Oxford Martin School, the Saïd Business School and the Institute of New Economic Thinking at the University of Oxford. Currently, Omar works in the intersection of development economics and sustainability, trying to understand how policy priorities translate into effective development. For this, he employs techniques such as agent-computing models, machine learning and natural language processing.

Gonzalo Castañeda is Professor in Economics at the Center for Research and Teaching in Economics (CIDE), Mexico. He is also a member of the National Research System, level III (i.e., the top rank granted by the National Council of Science and Technology). Gonzalo works on Complex Adaptive System with issues related to economic development, and has a forthcoming book written in Spanish and English with the title “Social Complexity: An Innovative Approach for Understanding Socioeconomic Phenomena”.

Publishing Budget and Spending Open Data

    by Lorena Rivero del Paso (GIFT) and Oscar Montiel (Open Knowledge International)

Increasingly, we see examples where lack of transparency and accountability from governments affects trust. Being able to follow public money flows is an important step to recover trust and aim towards more effective governance of public funds. Despite this, according to the most recent edition of the Open Data Barometer, the number of national governments that publish their budget and spending reports and figures as data isn’t growing consistently.

Considering the lack of progress in such publication and the relevance of fiscal data, from Open Knowledge International (OKI) and Global Initiative for Fiscal Transparency (GIFT) we have partnered to support governments in the publication of budget and spending open data, through the Open Fiscal Data Package (OFDP). This specification allows publishers to structure their data in a way that makes its description and use as easy as possible and provides visualizations and developer tools for publishers and users with the OpenSpending platform.

As a follow up to the -Towards a schema for spending Open Data, Helpdesk included- blog post where you can read more in detail about the characteristics of the (OFDP), in this post we will guide you through, for a successful publication.

First: what information is expected in a budget/spending file?

Any budget and spending open dataset should have four basic components 1) fiscal year presented 2) budget classifications 3) source of funding and 4) amounts for each stage of the transaction. Additionally, the dataset can be complemented with other relevant data and classifications included in the Financial Management Information Systems (FMIS).

1) Period

  • Fiscal Year- The fiscal year is the framework in which the approved budget is executed. While some countries have already developed the annual budget within a multiyear perspective, through the preparation of medium-term fiscal and budget frameworks, these frameworks are usually established at a higher level of disaggregation than the annual budget and expenditures.

The dataset can include several past and future years according to data availability. For this, each fiscal year can be a separate dataset.

2) Budget classifications

Regarding the second component, budget classifications, we refer to those indicated in the Fiscal Transparency Code of the International Monetary Fund. Furthermore, for those countries who have progressed in incorporating program classification, it should be included as well. These are:

  • Administrative unit (government ministries/agencies and departments/divisions within agencies).
  • Economic type (“inputs” such as salaries, transfers, other non-salary current expenditures, capital spending) (following the international classification if available)
  • Functional and subfunctions (following the international classification if available)
  • Program/subprogram/activity/project; alternatively outcomes and/or outputs.

Some of these are cross-classifications, mainly in respect of the Program classification.

3) Source of funding

It serves to distinguish, in the financial statements, the origin of the domestically- financed expenditures (on-budget, extra-budgetary, counterpart fund), as well as from project aid financed expenditures.

4) Stages of the transaction

For the stage of the transaction, there is not a unique form of registration, but it is important to register clearly the type of data presented and which phase of the budget the user is looking at. The Expenditure Control: Key Features, Stages, and Actors[1] identify the next seven typical stages of the expenditure cycle, which should be considered for the dataset, according to the availability in the country:

  • Authorization of expenditure- A fundamental principle of public finance is that expenditure and revenue proposals must be legally authorized to ensure accountability.
  • Apportionment of authorization for specific periods and spending units- The purpose of apportionment is to prevent spending agencies from incurring obligations at a rate which would require the authorization of additional funds for the fiscal year in progress.
  • Reservation- Once the apportionment of expenditure authorization is made and the spending authority has been released, some countries’ Public Financial Management (PFM) systems include a stage at which funds are reserved for a specifically known expense but for which no contract has yet been issued. At this stage, there is no legal commitment, but it is known that the expense will be incurred during the budget year and, therefore, the reserved funds should not be used for other activities.
  • Commitment- The commitment stage is the point at which a potential future obligation to pay is established. A commitment occurs when a formal action, such as placing an order or awarding a contract, is taken that renders the government liable to pay at some time in the future when the order or contract is honoured by its counterpart.
  • Verification (or certification)- after goods have been delivered and/or services have been rendered by a supplier, an authorized officer within the spending unit concerned verifies their conformity with the contract or order, and that liability and due date of payment are recognized.
  • Payment order- Once checks are made to ensure that all previously stipulated controls have been performed and documented, a payment order is issued.
  • Payment- Once a payment order has been issued, payments are made through various instruments including checks, electronic funds transfer (EFT), and sometimes cash, in of a supplier or other recipient to discharge the liability. In line with internationally accepted good practice, the payment should be made through a Treasury Single Account (TSA) system- 

5) Additional data and classifications

  • Geographic classification-

A representation of which part of the country benefits from each of the government financial operations. This classification is difficult in most cases, so adaptations have taken the form of classifying by location of administrative units, taxpayers, recipients of government transfers, among others.

  • Investment projects-

Authorized public investment projects, including Public-Private Partnerships, if available. Data over these projects can be paired with geolocation by including its latitude and longitude. Furthermore, if more data is available in the Ministry of Finance systems, such as description or links cost-benefit analysis among others, we can analyze on a case to case basis.

  • Contracts-

Between 15 and 25 per cent of public expenditures are exercised through contracts. These data is useful data for complete traceability of the related part of the transactions. The number and detailed data of the procurement process and/or the awarded contract can be included as part of the file. If the Country has already implemented the Open Contracting Data Standard (OCDS), an additional column can be included with the Open Contacting ID (OCID), linking both data structures without the need for duplicating data (Learn more about the OCDS here). The information on contracts in a standardised form will also allow us to link beneficiaries of these contracts and where the money goes.

Second: Structure of the Dataset

Disaggregation

The classifications should be disaggregated to the lowest level available so users can do a more specific use of the data.

Codes and descriptions

All of the classifications mentioned in the section above should always include one column for the code and one for the description for each level of disaggregation as displayed in the example below. These fields will allow the users to know what bits of the budget the dataset refers to. A clear data structure will allow the users to understand the different levels of the budget, how the programs, projects, etc are built and how money is allocated to them in the different stages of the budget.

Having these IDs and descriptions clear, will also allow mapping to the specification in a way that will later make it easy to visualise and navigate the data set once it is uploaded to the Open Fiscal Data Package.

The following image exemplifies the structure of ID + Description of the different levels of economic classification.

Horizontal structure

After analyzing use cases of the dataset and overseeing users interact with different structures, for the stages of the transaction it has been defined that each stage should be structured in one column (the other option is one column for all stages and only one column with amounts).

Third: Extension of the file

It’s common for budget or spending reports to be PDF files directly from the data. This might be easy to read for a human, but it’s not very easy to process by a computer. This is why data uploaded to OpenSpending should be produced or saved in a comma separated value (CSV) file. A CSV is the simplest machine-readable file that requires no special software to be used, like XLS that requires Excel or similar programs. It’s very light and allows you to use software that your computer may already have to start working with it. A CSV can be managed with scripts but it’s also very friendly for beginners to navigate, filter and modify without specific knowledge about databases.

You can see an example of the data from Mexico’s Federal Government below.

We have also prepared a data template where you can see the classifications and other data that will ensure quality data being published.

Fourth: Uploading the dataset using OFDP?

There are two ways of getting your budget data into OpenSpending. Both are available to everyone and can be tried today. We will discuss the two options and then compare under which circumstances you can best use which approach.

1. Upload directly with OS Packager

If you have a budget file already available as a tabular file in CSV form, you have everything you need to start using the Packager. You just need to create an account here and you will be able to start uploading the data. If you have already published data using CKAN or any other open data platform, you can link directly to the CSV and start working with that data.

The packager tool divides the publication task into 4 steps:

  1. Data upload
  2. Data mapping/description
  3. Metadata input
  4. Data use

Each of these steps will guide you and in the end, you will have a data package. That is, a CSV file with the fields you originally had, as well as a JSON file with the description of these fields, mapped to the specification. This can be directly used in the OpenSpending Viewer.

2. Set up an Open Spending pipeline

While moving towards a more timely and disaggregated publication that would in turn be more useful for the users, there are different kinds of needs than for one time publishers. For example, to publish time series of spending we need all years spending data merged into one dataset, with this the size of the complete dataset will also be bigger. In these cases of governments that have progressed to a more advanced publication, we can use a pipeline.

A pipeline is basically a set of instructions that we provide to map the data to the specification while keeping some of the nuances of our data. This process implies writing pieces of code to perform data processing and loading to selected endpoints. This option will give a more flexible publication but would require to define the best approach along with the Helpdesk.

Which option is best for you?

There is no unique answer to this, but there are a few questions that might help guide the initial decision to begin publishing using OpenSpending.

For example,

  • Has your government implemented a Financial Management Integrated System in which budget and spending are registered?
  • Are budget and spending data stored in different systems?
  • Is there any human intervention to consolidate the budget and/or spending data?
  • How often does the government present spending reports to the legislature? Does the system allow this periodic data extraction?
  • Does the country have historical data on budget and spending? How far in time is it available either in systems or in stored files?
  • Do you follow any standardised publication patterns at the moment?

If you’re interested in pushing for better publication, please contact us, we’re happy to help. Our Helpdesk can be reached at openspending-support@okfn.org.

 

 

 

[1] Pattanayak, Sailendra. Expenditure Control: Key Features, Stages, and Actors Prepared by Sailendra Pattanayak Fiscal Affairs Department. International Monetary Fund, 2016.

Towards a schema for spending Open Data, Helpdesk included

        by Lorena Rivero del Paso (GIFT) and Oscar Montiel (Open Knowledge International)

Having data for budgets and spending can allow us to track public money flows in our communities. It can give us insights into how governments plan and focus on programmes, public works, and services. So the Global Initiative for Fiscal Transparency (GIFT), along with Open Knowledge International (OKI), have been working on new tools to make this data more useful and easier to understand.

Two of these are the Open Fiscal Data Package (OFDP) specification and OpenSpending platform.

The OFDP is a data specification that allows publishers to create a literal package of data. This package includes fiscal data mapped onto either standardised or bespoke functional, economic and administrative classifications. Additionally, the different stages of the budget can be mapped, and other fields that are relevant to the publisher. This seeks to reduce the barriers to accessing and interpreting fiscal open data.

One of the main benefits of the OFDP is that data publishers can adopt it no matter how they generate their databases. The flexibility of this specification allows publishers to improve the quality incrementally. There is no need to develop new software. Having this structured data allows us to build tools and services over it for visualization, analysis or comparison.

The second tool is actually a set of tools called OpenSpending.

This is an open-source and a community-driven project. It reflects the valuable contributions of an active, passionate and committed community.

OpenSpending enables analysis, dissemination, and debates for more efficient budgets and public spending. It allows anyone to create, use, and visualize fiscal data using the Open Fiscal Data Package in a centralized place with small effort.

As part of this collaboration, OKI and GIFT have been working with different government partners to publish using OFDP. But we want to see the adoption of the Open Fiscal Data Package grow even more. This is why we have set up the Fiscal Data Helpdesk to help you in the publication process!

How to engage with the Fiscal Data Helpdesk

Maybe you are already publishing fiscal data through an open data portal? Or maybe you have a platform and want to make it more useful for a larger number of users? Perhaps you have heard about standardization but it sounds complex and you think it might not be for your office? The Helpdesk is around to answer all your questions and support you through the process of getting data up and running in OpenSpending.

There are a few good examples of what we want you to get doing. We’ve worked with the Mexican federal government to publish their data from 2008 to 2019 using the OFDP and OpenSpending to make it easier to access. You can navigate their data here.

We’ve also worked to get datasets from many countries in the World bank BOOST initiative on OpenSpending. Currently, there are data from countries like Burkina Faso, Guatemala, Paraguay, and Uruguay.

In the coming weeks, we will publish some resources and a series of blog posts to give you more information about publishing your data in OFDP and using OpenSpending.

Interested? You can visit the OFDP section or send us an email at openspending-support@okfn.org. We will get back to you to help get your budgets out in the open!