Open Data Tutorial: Opening and promoting use of budget data

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The Global Initiative for Fiscal Transparency, in collaboration with one of its Lead Stewards, the Ministry of Finance and Public Credit of Mexico, invites publishers and consumers of budget data to participate in the tutorial “Open data: Opening and promoting use of budget data “.

The tutorial concentrates tools that enable the data opening process to contribute to a successful budget transparency policy. As a result, budgetary data publishers, particularly teams from finance ministries at any level of government, are expected to know the minimum steps for the opening process and the concepts to differentiate public data from open data, identify potential users and recognize the sources from which information come. It also provides practical guidance on topics such as the debugging and cleaning of data sets, the use and linking of national and international standards, as well as about user licenses, to protect users. Finally, recognizing that this process entails a challenge for many governments, it also incorporates considerations on human and other types of resources necessary for the process and its sustainability.

With this, once again the importance of cooperation between peers to advance the creation and strengthening of capacities within the network, through the use of technology, stays confirmed and strengthened.

We invite you to open budget data!

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In this video we welcome you to the tutorial and explain how to build an multidisciplinary team in order to implement a budget transparency policy.

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This video explains what is open data and its distinction with other concepts such as open government and transparency. Likewise, it provides detail on the levels that serve as a reference regarding data openness.

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The publication of budget information in open formats increases the inputs available to the public. This video will introduce some successful cases of open data use to influence the improvement of public policies, analysis of public spending and fostering of administrative efficiency in the governmental sector.

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Here you will find the minimum steps to bare in mind while in a budget data opening process. These will be properly fleshed out in our following short videos, review documents and the webinar.

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.Data only has value to the extent it is used. This video presents recommendations to identify people and organizations interested in your information, the target audience, with the purpose of facilitating decision-making on budgetary data.

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This video explains aspects to take into account regarding the origin of the data and its format, how to identify the areas involved in the process, analyze the starting point of the quality of the information, etc.

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Debugging-and-cleaning

Details of some common errors during the processing of the information and how to correct them.

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This video explains what a data standard is, the advantages of using them and some strategies to standardize budget information.

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Think-about-sustainability

This video explains factors that, when not taken into account, can jeopardize the medium and long-term success of the openness process, such as updating, periodicity, technological infrastructure, temporal and human costs, among others.

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In this video you will know what to consider to open budget data with a license that allows both its commercial and non-commercial use and reuse without restrictions.

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Prepare your questions about the entire Tutorial!

Here comes the webinar!
We will discuss last topic of the #OpenData Tutorial: Opening and promoting the use of budget data.
—> Spread and promote the use of your data <—

Next Thursday, August 23

The IMF Fiscal Forum brings the OECD, IMF and GIFT together to launch the IMF Fiscal Transparency Handbook and OECD Budget Transparency Toolkit

Screen-Shot-2018-04-25-at-19.06.26Corruption and public sector governance were the issues of discussion at the 2018 Fiscal Forum of the IMF Fiscal Affairs Department, as part of the Spring Meetings. At the center of the conversation around Institutional reforms to fight corruption was fiscal transparency. As It becomes an increasingly complex, vast and challenging matter, the official launch of the IMF Fiscal Transparency Handbook and the OECD Budget Transparency Toolkit at the Forum comes as timely and relevant. Vitor Gaspar (Director, Fiscal Affairs Department, IMF), Luiz de Mello (Director, Policy Studies Branch, Economics Department, OECD), and I had the honor to present these new tools to the Forum’s public in a reception that took place on April 21, 2018.

These new resources aim to answer two basic questions: How is my country doing regarding fiscal transparency? And how to move forward? by providing elements that will help better understand the dimensions of these challenges and what countries around the world are doing in the field.

The OECD Toolkit is a user-friendly gateway to the fiscal transparency instruments. It introduces the various standards and guidelines that are available and explains how these complement each other, allowing users to move beyond the level of principles and theory, towards action and impact. The IMF Handbook gives a safe route towards improved levels of fiscal transparency. It is robust and rigorous guidance for disclosure of information about public finances. Together, the Toolkit and the Handbook provide an exhaustive, accurate, systematic and comprehensive mapping of fiscal transparency today. Responding to the long-standing and justified discontent in various ministries of finance in the face of the excessive number of norms and standards on fiscal transparency, the Toolkit and the Handbook work together to provide a complete geo-referenced understanding of the field.

The Global Initiative for Fiscal Transparency is honored to be part of this effort. GIFT is a global network that facilitates dialogue between governments, civil society organizations, international financial institutions and other stakeholders to find and share solutions to challenges in fiscal transparency and participation.  Some of its most important work takes place through advocacy and high-level dialogue for norms and standards harmonization. GIFT was founded by the IMF, OECD, the World Bank and the International Budget Partnership, and the budget departments of Brazil and the Philippines. The breadth and depth of this network membership provided a unique perspective to discussions on preliminary versions of today’s feature presentations, Toolkit and Handbook.  These tools are a product of consultations and discussions involving relevant stakeholders in the field, including civil society organizations and independent users of fiscal information, such as the International Budget Partnership.

Users of these new documents will find many novel features.  The argument of linking openness with civic engagement stands out as a turning point in the history of the way international financial institutions have been addressing fiscal transparency. This refers to the principle of direct public participation in fiscal policies. Direct public participation in the budget process? Yes!

As a matter of fact, the GIFT High Level Principles, endorsed in 2012 by the IMF, the World Bank and the OECD, and subsequently acknowledged by the General Assembly of the United Nations, established, along with the right to access to fiscal information, the right to direct participation in fiscal policies. More recently, in 2017, IBP’s Open Budget Survey shows that, although there are few opportunities around the world for citizens to exert this right, more than 80% of the countries surveyed (94 out of 115) have some form of participatory mechanism in place.

Civil engagement is already taking place, in budget formulation, in execution, in monitoring, in infrastructure investments, in tax collection, in service delivery, and control of corruption, with many positive outcomes. It is not a substitute for existing legitimate institutions related to democratic representation, but rather a complement to such institutions, including the line ministries using public resources, the parliaments and the supreme audit institutions, in order to help them to better do their work.

After more than two decades of non-stop work to advance the agenda of fiscal transparency, I find two facts to be undebatable. One, the  work never ends. Resistance to change will always be a natural characteristic of institutions, and of the people in them. So, the effort to advance fiscal transparency needs to be tireless. It is just like pushing a cart uphill: the instant you stop pushing, the cart starts to roll back down. You just can’t take a break.

For example, according to the results of the Open Budget Survey 2017, many governments around the world are making less information available about how they raise and spend public money. The reversal of transparency gains is particularly discouraging given roughly three-quarters of the countries assessed do not publish sufficient budget information (a score of 61 or higher), seriously undermining the ability of citizens worldwide to hold their government accountable for using public funds efficiently and effectively.

The second fact is related to this “uphill law”: for fiscal transparency reforms to last, to endure, and to be sustainable, countries need to have a strong domestic demand. Nothing can take the place of the domestic ownership of the right to know, and the right to participate. The role of the taxpayers, and of civil society in general, is irreplaceable. Only the taxpayers, who are investors and beneficiaries of the public services they pay for, can ensure the sustainability of fiscal transparency reforms. That is why public participation is so crucial. It means that fiscal transparency is used and therefore relevant, meaningful and potentially impactful. If acknowledging and exercising the right to information has been our goal in the last 20 years, establishing the right to participation in fiscal policies is this generation’s primary task.

And talking about participation, I would like to acknowledge the outreach effort of the OECD and IMF throughout the process leading to the publication of the Toolkit and the Handbook. As mentioned, these documents, actually, living documents, have been subject to discussion, scrutiny and dialogue among independent civil society users, members of the GIFT network, and through other organizations. Thus, these institutions have already put into practice what they preach on openness and participation, and the result is of course an incredibly solid and relevant contribution to our field, and an example to such efforts going forward. Congratulations!

You can download the IMF Fiscal Transparency Handbook here and the OECD Budget Transparency Toolkit here.

The 2017 Open Budget Survey: What the results for public participation mean

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The latest round of the Open Budget Survey (OBS 2017) includes a new set of measures of public participation based on an emerging international consensus about what participation in the budget process should look like. The participation questions were fundamentally redesigned for the 2017 survey, so it is not possible to assess changes since the 2015 survey.

Budget participation scores are low overall, with the global average score being 12 (out of 100). This average masks considerable variation across countries and across stages of the budget cycle.

First, the survey finds that public engagement takes place more during the budget preparation stage than during budget implementation; more when the budget is approved by the legislature than when the legislature considers the Audit Report; and in a significant number of countries the Supreme Audit Institution engages publicly on the setting of its audit program.

Secondly, a small number of countries are engaging the public across the whole budget cycle and exhibit many good practices (Australia, New Zealand, the Philippines, and the United Kingdom). A much more diverse group of countries achieved the top score for public engagement by the executive branch on at least one of the ten questions in the survey, including Afghanistan, Bangladesh, Botswana, Bulgaria, Canada, Democratic Republic of Congo, Egypt, Fiji, Ghana, Guatemala, India, Kyrgyzstan, Kenya, Madagascar, Malawi, Malaysia, Mexico, Poland, South Africa, and Ukraine. More than 80% of the countries surveyed (94 out of 115) have some form of participatory mechanism in place.

Open Budget Survey 2017 results for public participation: countries scoring 20 and above
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Source:   https://www.internationalbudget.org/open-budget-survey/

It is clear, however, that all countries need to enhance the inclusiveness, openness, and depth of existing public engagement mechanisms and implement similar mechanisms in other stages of the budget cycle.

What are the low average scores telling us?

First, direct public participation in the budget process is, in general, a very recent element in fiscal transparency. Budgeting has traditionally been conducted within government institutions, and the first generation of international fiscal transparency initiatives was essentially confined to the disclosure of fiscal information. While there is a clear move towards more openness in budgeting – reflected for example in the formation of the Open Government Partnership – this trend is from a low base and, as noted, is uneven across different stages of the budget cycle.

Secondly, although based on experiences around the world, one needs to recognize that some of the GIFT Principles of Public Participation are aspirational. They flow from the assertion, in the 2011  GIFT High Level Principles of Fiscal Transparency, Participation and Accountabilityendorsed by the UN General Assembly – that direct public engagement in the design and implementation of fiscal policies is a right of citizens and taxpayers. This view goes back at least as far as the French Declaration of the Rights of Man and Citizen, 1789, which stated: ‘All citizens have the right to ascertain, personally or through their representatives, the necessity of the public tax, to consent to it freely, to know how it is spent, and to determine its amount, basis, mode of collection, and duration.’ (Article 14).

Reflecting an emerging consensus, International fiscal transparency standards have very recently started to incorporate a few elements of direct pubic participation e.g. in the IMF’s Fiscal Transparency Code[1], and OECD instruments.

There are, however, few specific standards yet on what constitutes a recognized practice in engaging the public in central government budget management. The OBS is playing a pioneering role in helping to define the sorts of practices that reflect sound principles. The OBS is also now collecting invaluable information on what is taking place on the ground in 115 countries. This will prove a valuable resource for practitioners and researchers in government, legislatures, Supreme Audit Institutions, civil society, international institutions, and indeed standard setters, to draw on in strengthening public engagement.

Thirdly, some of the main reasons the participation scores are generally so low is that most countries are not making the effort to engage with even a minimally diverse set of citizens and interests, and are not providing feedback to the public on how their inputs were considered or used. The GIFT Participation Principles stress inclusiveness and respect for self-expression for a very good reason: to try to avoid public participation being dominated by the ‘usual voices’, the best connected, lobbyists, the wealthy, or narrow elites. Warren Krafchik, director of the International Budget Partnership, has described budgets as sitting ‘at the nexus of democracy and inequality.’ Governments can easily go through the motions and claim to be listening to the public when their intention is the reverse. In a change from the 2015 Survey, the 2017 OBS therefore measures efforts to engage widely and with the marginalized and vulnerable. One effect of this change is that countries such as South Korea that rely more on expert-based participation rather than broad public participation, score considerably lower in the 2017 Survey. While open external expert scrutiny, input and deliberation is a valuable form of public participation, it is not a substitute for wide engagement across society.

If more governments do not become more inclusive in how they design and implement taxation and public spending, we are much less likely to counter the negative trends with respect to inequality, willingness to pay taxes, and trust in government. One challenge from OBS 2017 is to work much harder on inclusive public engagement in the management of public finances. As GIFT’s founders recognized in 2011, direct public engagement has the potential to transform the disclosure of fiscal information into more effective accountability and better development outcomes. And the ICT revolution has given it a major shot in the arm, by dramatically cutting the cost of direct interactions between governments and citizens, as well as by making possible entirely new forms of public participation.

It also needs to be recognized that, like any survey, the OBS has to contain its scope to be manageable. With respect to public engagement by the executive branch of government, the 2017 Survey for the most part measures direct interactions between central finance ministries and the public. We know that a lot of direct public engagement is implemented by line ministries and agencies that actually deliver public services or make payments to citizens (as revealed by the findings for the question in the OBS that applies to line ministries). There is again limited practical guidance on what constitutes good practice in this area. GIFT is compiling examples of public participation across the whole budget cycle in a Guide to Public Participation. GIFT’s strategy for 2018-2020 is to ‘put the citizen at the centre of fiscal transparency’, by focusing, for instance, on the availability and accessibility of budget information at the individual service delivery unit level (e.g. school or health center), to foster citizen monitoring, on-going direct interactions with service recipients and local communities, and more effective accountability.

Finally, looking ahead, it is interesting to note that, while OBS results suggest that progress on increasing the disclosure of budget information has stalled for the first time since the launch of the Open Budget Index (OBI) in 2006, this is less true for countries that are members of the Open Government Partnership (OGP). For the 102 countries that were in both the 2015 and 2017 surveys, the average change in OBI scores was -2% – although this decline in part reflects the fact that the 2017 survey introduced a more demanding requirement that all documents be available on government web sites rather than in hard copy[2]. Leaving that aside, for the 52 OGP member countries covered by the OBS the average change in score was -0.7, while for non-OGP members the average change was – 3.1.[3] The relative difference across the two groups remains largely the same even if OECD countries are removed from both groups.

 

The significance of this with respect to public participation is that the OGP is built on a co-creation model in which governments and civil society work together. Around a third of all the commitments made by OGP member governments are fiscal transparency commitments, many of which involve direct public engagement in one form or another. The OGP recognizes that fiscal transparency resides at the very core of open government.  GIFT and the OGP Support Unit have been working together since 2012 through peer to peer technical collaboration workshops (Fiscal Openness Working Group), bringing ministry of finance officials and in-country CSOs together to encourage the adoption of more ambitious commitments to fiscal openness, and to support them in implementing their commitments. In a world where there has been some shrinking of civic space, expanding membership of the OGP, and providing more support for OGP members, offers an important way forward.

Murray Petrie, GIFT Lead Technical Advisor

 

[1] See Principle 2.3.3 in the IMF Code, and the section on Openness and Civic Engagement in the OECD Budget Transparency Toolkit.

[2] To the extent that countries have shifted from hard copy publication of budget documents and fiscal reports to web-based publication, there has been an unmeasured increase in the accessibility of budget information. Some countries also published hard copy documents for the first time that would previously have been recognized by the OBS. In addition, some countries have improved the accessibility and ease of understanding of fiscal information on web sites through setting up Fiscal Data Portals (See: Materials used during the Fiscal Transparency Portals Workshop, Jakarta 2016).

[3] This analysis excludes the three countries that have withdrawn from the OGP.

International Practices to Promote Budget Literacy

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The World Bank Global Governance Practiced just published the study “International Practices to Promote Budget Literacy, Key Findings and Lessons learned”, by Harika Masud, Helene Pfeil, Sanjay Agarwal and Alfredo Gonzalez Briseño. I was invited to share some comments on the study at a seminar in the Bank. One first remark about the study is that the reader, even if a specialist on public finance management, will by surprised by the amount of very exciting information on budget literacy at the school level around the world! Indeed, I learned very much about the international practices of a very relevant topic.

The way the subject is treated is very illustrative, informative and useful for practitioners. This is music for the ears of the GIFT community as it is directly related to the crucial issues of access to budget information, citizen engagement and public participation. A global trend of increasing fiscal transparency is resulting in expanding opportunities for citizens to participate in the budget cycle, and governments are increasingly recognizing the role and long-term benefits of budget literacy. This is a relevant topic about which there was very little knowledge until this work was undertaken and published.

 

Why is this study so important?

Many reasons explain the importance of this review of practices.  It addresses the demand side of fiscal information. For many years, policy makers, legislators, decision makers, have been working on the supply side of budget information. Years of proactively disclosing significant amounts of fiscal information. And yet, there has been little use of it. This refers to what the authors call the budget transparency feedback loop, when citizens are not budget-literate and when they lack the capacity to analyze and discuss budgets, which “is necessary for them to engage in meaningful dialogues with their governments”.

As such, it makes the case about the role that governments must have in sharing not only information, but also sharing knowledge, which entails training public servants and the public, for public participation. The Russian experience, for example, documents well how crucial it is to develop the competences of the teachers for success.

The study also shows that budget literacy education has different objectives, pedagogic approaches, and from there, different outcomes: from tax compliance to civic awareness, including accountability pressure, and practical skills for daily life issues. There are different results of budget education, depending on approaches and methods, the same way there are different motivations, approaches, and results, of citizen engagement. This is something specialists and policy makers tend to forget.  Different ways of citizen engagement take us to community control, better understanding the demand of public services, better allocation and implementation or resources, so on and so forth.

Very importantly, the study also shows that governments, even when they are actively addressing the strategic issue of budget literacy education, rarely address the objective that, from my perspective, should be at the core of fiscal transparency and citizen engagement: to provide better public services, to include and ensure access to the goods and services citizens are entitled to, to improve people’s lives.

 

Main features of the study

The study provides a review of illustrative examples of initiatives promoting budget literacy among young students in selected countries. It aims to raise the profile of budget literacy in discussions about curricula and fill the existing literature gap by documenting a variety of practices that promote budget literacy in a collection of 35 case studies from 34 countries.

The document provides a comparative perspective, as it analyses systematically the national context, curricular content, learning outcomes, pedagogical approaches, and materials used for school-based initiatives to promote budget literacy. Aimed at practitioners, experts and policy makers, it emphasizes the pedagogical approaches, results and implications of literacy initiatives intended to strengthen citizen’s awareness and engagement on budget. To the question on the incentives for the governments to embark in such complicated project, the authors respond: the need to educate citizens on tax compliance and the idea of citizen co-responsibility on good management of public resources.

The study shows that budget-literacy education can have various important outcomes. Better knowledge of public budgets, practical skills for daily living, economic competence, civic awareness, including a preference for tax compliance; and improved competency in analytical and numerical skills, among others. Also, development of values and attitudes, such as thinking proactively about participating in the discussion of economic issues and decision-making.

The document illustrates the various approaches for budget literacy education, various pedagogic strategies, with numerous and different objectives and a wide range of materials and methods: Lectures, enquiry learning, simulations and role playing, scenarios analysis, fact-finding and analysis, etc. including field visits, games, cartoons, and media programs. Quite remarkable are the exercises of participatory budgeting at the school level in France, Canada. Germany and Poland, as well as the example of the Russian Federation with various strategies at play. From this perspective, coalitions are crucial for shaping projects that end up delivering good results: the role of non-governmental actors in these efforts (parents, CSO, etc.) and in pushing the agenda for budget literacy education, including the curricula, are very important.

On the chapter of lessons learned, the document makes a series of very practical and evidenced based recommendations.  A central one is to clearly establish the objectives of budget literacy education. I found the most compelling to be the one links budget literacy and public service delivery. In addition to the value of their educative implications, the document makes the case that emphasis should be put in better management of public resources and improved service delivery as a result of informed citizens engagement, closing of the budget transparency feedback loop over progressive budget cycles.

 

A final thought for the discussion

Let me go back to the feedback loop here. It is true that there is generally insignificant interest on budget information; I also agree that there is little capacity for independent analysis and for a subsequent productive engagement. But the dialogue is only possible when the conditions on all sides are propitious. In fact, there are little points of contact between supply and demand: few points of entry, lack of a common language and sometimes, too much information that makes little sense. There is not really a dialogue between producers and users of fiscal information, and this cannot only be explained by the lack of an informed and analytical stands on the demand side. Other studies have shown that the demand exists, it is strong, structured, and consistent. (see to study of Mastruzzi and De Renzio, here)

As you know, GIFT has developed principles for public participation, which is defined as a fundamental right. This document is very relevant to public participation, as it underlines the importance of an informed public that is capable to engage in a meaningful way in the dialogue with authorities on budget issues. But the open avenues, the required civic space, the inclusiveness, the timeliness, the accessibility and sustainability of citizen engagement are also required. We know that participatory budgets work because they are processes that empower communities to decide on how to spend public resources. We know communities, when compelled to have access to public resources, try to find the ways to express their preferences. And we know that the most informed and educated people will not engage, unless they really need to, and it is possible. In all cases, what is crucial for the fiscal transparency loop to become a virtual circle, where the right to public participation is observed, is to include the institutional arrangements to ensure than anyone, when needed, can effectively exercise such a right.

 

Juan Pablo Guerrero Amparán, GIFT’s Network Director.

How public institutions and CSOs are changing the game: the GIFT Public Participation in Fiscal Policy and Budget Making Award

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GIFT is honored to announce the results of the Public Participation in Fiscal Policy and Budget Making Award. The network ‘s Coordination Team received 16 submissions documenting quite varied and amazing experiences coming from all range of actors in the fiscal transparency and accountability ecosystem, from 13 countries (Brazil, Chile, Georgia, Germany, Guatemala, Kenya, Mexico, Nepal, Nigeria, Paraguay, Papua New Guinea, Philippines, and Portugal). We were very pleased to have received proposals coming from both government and civil society organizations, and that winners came from both types. This reflects the interest in public participation from all actors. Of these 16 cases:

  • 11 were implemented by state institutions (MoF, local governments and Supreme Audit Institutions), and 5 by civil society organizations;
  • 6 are subnational level only (4 of which are participatory budgeting);
  • 3 are participation with respect to public services
  • 3 involve Supreme Audit Institutions

We are very happy to announce that the top considered mechanisms were proposed by a local government in Portugal, the Court of Audit of Georgia, and a CSO in Mexico. Congratulations!

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Taking home the top prizes were the Cascais Participatory Budgeting, implemented by the Municipality of Cascais, Portugal; the Farm Subsidies: Public participation to improve the situation of small farmers in Mexico, executed by the CSO Fundar, Center for Analysis and Research; and Georgia’s Budget Monitor, implemented by the State Audit Office. These cases are invited to attend the Open Government Partnership Regional Meeting in Argentina (Buenos Aires, November 20-22) to present their experience. We will see you there!

The GIFT Selection Committee had a very hard task selecting the best 3 cases. A Special Mention Award from the Jury went to the Citizen Participatory Audit case of the Commission on Audit of the Republic of the Philippines, another case presented by a Supreme Audit Institution, that has already been documented in GIFT’s Guide on Public Participation Principles and Mechanisms (see http://guide.fiscaltransparency.net/case-study/citizen-participatory-audit/) and published as part of a case study produced as the GIFT effort to share with practitioners, success experience on public participation in fiscal policies.

GIFT was so pleased with other cases that we will try to document, in the coming months, many more. We will be in touch with other fantastic proposals, aiming at publishing soon at least 3 additional cases, besides the 3 finalists.

The Municipality of Cascais, with a population of 206.000, has ran the Participatory Budget for 6 years, involving more than 150.000 citizens, implementing 88 projects (works) worth 15.820.000€ and has strengthened people’s confidence in their governors.  Moreover, their methodology has been replicated in more than 10 cities and observed by different continents. Farm Subsidies (Subsidios al Campo) is a public participation case led by a public interest group, a peasant organization, and a group of academics and technical experts that uses Mexico‘s Freedom of information laws to obtain official data on the recipients of agricultural subsidies, which is analyzed and disseminated widely through a user-friendly website (www.subsidiosalcampo.org.mx).  Through this online public database, Subsidios al Campo improved the transparency of government farm subsidies, and identified a disproportionate, and inequitable, concentration of subsidy recipients in the wealthiest 10 percent of farmers. The analyses helped explain how this happened, and the advocacy supported by this evidence contributed to reforms in the subsidy programs. Georgia´s Budget Monitor is a recent initiative that offers a unique analytical web-platform with comprehensive information about public finances, designed from an auditor’s perspective via different data visualization tools, such as interactive and user-friendly diagrams, info-graphics and tables. Further, to engage the public constructively throughout the audit cycle, through the Budget Monitor platform, citizens can send audit requests, suggestions, and proposals, inform the SAOG about the deficiencies in the PFM system, and suggest the priority spheres for future audit(s). Additionally, the Jury awarded a special mention to the Citizen Participatory Audit of the Commission on Audit of the Republic of the Philippines, a practice that involves citizens as member of the Commission audit teams in conducting audits.

Fiscal transparency and public engagement: the role of learning from peers

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When it comes to learning, few methods surpass learning from experience. Practice, trials and errors, help people become experts. Unfortunately, such learning by trial and error can be an expensive way to design public policy, in terms of institutional resources, as well as in terms of social and political implications. For the introduction of new policy practices, a second best method can involve learning from peers. A peer who deals with similar tasks and institutional objectives, such as advancing fiscal transparency, might very well find comparable obstacles and lessons along the way. The shared experience of peers offers important components of the learning process and integrates crucial elements of teaching, such as methods, approaches and lessons learned. At the same time, the peer-to-peer rapport gives significant value and credibility to the experiences shared and exchanged.

With the above in mind, the Global Initiative for Fiscal Transparency (GIFT) network has invested strongly in peer-to-peer learning activities since 2014. GIFT is a multi-stakeholder action-network whose value proposition is achieving sustained, measurable improvements in fiscal transparency, public participation and accountability in countries around the world, by advancing incentives, norms, peer-learning, technical assistance and new technologies. The 37 members of the network, called stewards, see in GIFT meetings an opportunity to exchange their experiences on the subject and learn from others.[1]

Within the fiscal transparency community, one challenge is outstanding and omnipresent: although an increasing number of governments are now publishing more fiscal information, citizens seldom use that information to hold authorities accountable to improve the quality of government services. GIFT network members continue to search for ways in which governments, in dialogue with citizens and civil society groups, can provide budget data that can be used to engage citizens in the effort to improve public services. And peer-to-peer settings provide favorable learning conditions for such objectives.

GIFT has facilitated the exchange of experiences and technical expertise on peer-to-peer activities mainly in the framework of the Fiscal Openness Working Group (FOWG) of the Open Government Partnership (OGP). The network constantly organizes workshops and meetings, in which budget officials and follow-the-money civil society organizations interact, and exchange practical methods. Since 2014, the network has been working with more than 40 countries to establish ambitious fiscal transparency commitments, as well as to improve implementation efforts.

 

It has worked specifically on the following activities:

1.Design, redesign or introduce a fiscal transparency portal. Portals are collections of freely available data and tools that also provide visualizations, data dashboards, tables, charts, and maps, and access to all the underlying fiscal data. Since the early 2000s, Brazil and Mexico, to name a few countries, have introduced fiscal transparency portals with mixed results. After years of experience, they have come to realize how to connect with the public that actually uses fiscal information. The Brazilian and Mexican budget offices have shared many years of attempts, and some very useful simple lessons with other network members, such as South Africa, El Salvador, Uruguay, Indonesia, Dominican Republic and Guatemala. As we know, the disclosure of fiscal information aimed for users should be accessible, free, open, shared and built-on by anyone, anywhere, for any purpose, and responding to the demand and need of the users of such information. But to get to that point demands time and experience. Learning from peer experiences has certainly proven to be an effective step forward.

2.Introduce the Open Fiscal Data Package, composed by the World Bank Open Budget Initiative (BOOST) with Open Knowledge International (OKI) visualizations and a technical specification to ensure an open source platform. The GIFT Data Package allows the disclosure of fiscal information in open source formats, which means that the data can be freely used, re-used and redistributed by anyone. Mexico has adopted it successfully at the federal level since the 2016 Federal Budget was presented (datos abiertos). Key benefits of the specification include ensuring budget information publication in a high-quality open data format; reliability of the published budget information disclosed; comparability of the data, both between different periods and between national, sub-national and international data. Following the Mexican Government lead, the finance ministries of Croatia, Uruguay, Guatemala and Paraguay decided to follow suite. In June 2017, Paraguay published budget, program and performance data as well. Taking a step further, Mexico has started working with GIFT Steward Open Contracting Partnership to link the federal budget data with procurement information. From there, citizens and CSOs should be better able to use budget information to monitor budget implementation.

3.Introduce open contracting standards: the Open Contracting Partnership (OCP), a GIFT steward, is an international initiative to increase transparency and integrity in public procurement. It has three main elements: making procurement contracts open by default; providing procurement data in machine readable open data format; and creating opportunities for direct public participation across the procurement cycle. OGP Countries such as Mexico, Guatemala, Colombia and Paraguay have been implementing the Open Contracting Data Standard for the full public procurement process, including the planning, tenders, awards, contracts, and implementation phases. Sharing their experience in the network has connected practitioners with highly technical knowledge and provided access to practical technical assistance.

4.Work on public participation and discuss and learn about the GIFT Principles on Public Participation in fiscal policies and learn about implementing public participation in various phases of the budget cycle. Within this stream of work, network participants have learned about the Public Policy Councils in Brazil, which provide a comprehensive form of institutionalized civil society participation for designing, implementing, and monitoring budget implementation, providing an avenue of dialogue between civil society and government to promote public participation in public policy management and decision-making. Other experiences have been exchanged, such as the bottom-up budgeting process on the Philippines, to deliver basic social services to the poor, while empowering local communities, by forming assemblies established by members from both government and CSOs. Similarly, they have learned about the efforts to improve the infrastructure and equipment of the most vulnerable basic schools in Mexico, with the active engagement of parents, teachers and directors throughout the process, including an interactive website that allows users to monitor project status (see these and more examples in the GIFT Guide on public participation).

 

As such, on portals, open data, open contracting and public participation, the network has convened various stakeholders committed to share their experience and learn from others, bringing key actors together, challenging them and encouraging them to work in a coordinated way, in order to deal with common challenges in a collaborative way and with innovative solutions.

[1] The lead stewards of the network are the World Bank, the International Monetary Fund, the International Budget Partnership, The International Federation of Accountants and the budget departments of Brazil, the Philippines and Mexico.

OECD launches new Budget Transparency Toolkit

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On July 7, 2017, the Budget Transparency Toolkit. Practical steps for supporting openness, integrity and accountability in Public Financial Management  (Division of Budgeting and Public Expenditures Organization for Economic Cooperation for Development, OECD) was presented, before the Senior Budget Officials of the Central, Eastern and South Eastern Europe region, at the OECD headquarters in Paris. As part of the GIFT coordination team, it as a privilege to witness the formal launch of the Toolkit along with representatives of the GIFT network such as the International Federation of Accountants, the World Bank, the International Monetary Fund and the Ministry of Finance from Croatia.

Participants were enthusiastic to welcome this important, timely, practical resource for decision makers around the world interested in advancing budget transparency. The toolkit delivers a new comprehensive resource which comes from the guidance produced by the international community in the last five years (found in the navigating standards section). It presents a synthesis of insights gained from the complementary work of the different bodies active in the field. And it serves as a gateway to the various reference materials that are available. Furthermore, it helps countries self-assess their level of budget transparency and provides ways forward.

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This work is the result of the engagement, coordination, patience, tolerance and leadership of Jon Blondal, Ronnie Downes and their team at the Division of Budgeting and Public Expenditures of the OECD. They achieved what at some point was characterized as very difficult: maintaining consistency with existing standards, focusing on key and common issues, while at the same time including specific items which are “work in process”. One of these new elements, perhaps the most controversial one, refers to public participation in the budget process.

In effect, the role of public participation to improve the provision of public goods and services, empower citizens and produce sustainable development more broadly, has become a central pillar of good governance. Public participation involves the creation of new opportunities and rules that induce government officials, non-state organizations, and citizens, to engage each other in novel ways. And public participation is also now being linked to the “Open Data” and transparency movements. On these components, the Toolkit refers to the multidimensional map of budget transparency which includes openness, civic engagement and working with the private sector. Today, we can firmly state: transparency, without users, is useless.

Corruption has become a major concern for voters and governments all around the world. In many electoral processes, at local or national level, it is one of the most important issues, since it undermines the foundations of trust in political leadership and weakens development. Although controlling corruption is extremely difficult, evidence shows that budget transparency is a precondition for effectively fighting it. We also know that without transparency, corruption spreads.

Given that context, fostering budget transparency in a way that helps combat corrupt practices, as the toolkit does, is vital. It is a way to introduce practitioners to the various standards and guidelines that are available, help them understand how these materials complement each other and allow users to go beyond the level of principles and theory, to action and impact.

The reader has a very useful tool to serve as a guide to basic questions and crucial issues, while also reinforcing some key practical messages about budget and fiscal transparency, drawn from this extensive corpus of material.

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The GIFT network is pleased to have worked with the OECD in producing this Toolkit. The Toolkit illustrates one of GIFT’s objectives in action: the promotion of more comprehensive and coherent efforts to extend fiscal transparency in pursuit of the GIFT High Level Principles on Fiscal Transparency, Participation and Accountability. It is especially important that the Toolkit acknowledges that citizens and taxpayers need to be placed at the core of efforts to increase transparency and accountability for the management of public resources. Opening up budgets and public financial management, and providing spaces for direct citizen engagement, can reduce corruption and waste, and increase the odds of taxes being used to deliver quality public services and to achieve real improvements in living standards and in social, economic and environmental outcomes. As such, this Toolkit is a meaningful response and a very valuable contribution to the search for practical and sustainable solutions to reduce corruption.

 

Juan Pablo Guerrero

Network Director

Global Initiative for Fiscal Transparency

What is public participation in fiscal policy and why is it important?

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Direct engagement between citizens and governments is increasingly recognized as a critical link in the chain between fiscal transparency, more effective accountability for public financial management, and better fiscal and development outcomes. The importance attached to public participation reflects the acceptance that citizens and civil society organisations are important agents of good governance and sustainable development, alongside markets and the state.

So, what is public participation in fiscal policy?

Public participation in fiscal policy refers to the variety of ways in which the public – including citizens, civil society organizations, community groups, business organizations, academics, and other non-state actors – interact directly with public authorities on fiscal policy design and implementation The participation may be invited by an official entity, such as a ministry of finance, line ministry or agency, a legislature, or a Supreme Audit Institution. Participation may also be ‘invented’ – initiated by a non-state actor.  In either case, public participation as advocated here is intended to be open and to stand in sharp contrast to back-room lobbying that risks subverting the public interest to private interests.

While people often think of public participation in fiscal policy as being about the annual budget, it is much broader than this, encompassing engagement in four main domains:

  • Across the whole annual budget cycle, from budget preparation, legislative approval, budget implementation, and review and audit.
  • In new policy initiatives or reviews (e.g. on revenues or expenditures) that extend over a longer period than the window for preparation of the annual budget.
  • In the design, production and delivery of public goods and services.
  • In the planning, appraisal, and implementation of public investment projects.

Public participation covers both macro-fiscal policy – the main fiscal aggregates, the appropriate size of the deficit and so on – as well as more micro issues of tax  design and administration, and the allocation and effectiveness of spending.

Participation in fiscal policies  may be through face to face communication, deliberation or input to decision-making, through written forms of communication including via the internet, or by combinations of different mechanisms. It ranges from one-off public consultation or invitations for submissions, to on-going and institutionalized relationships, such as regular public surveys, standing advisory bodies, or administrative review mechanisms. Participation can be through broad-based public engagement as well as deliberations involving experts, or combinations of the two. It could potentially include ‘participatory budgeting’ – where citizens vote on and decide how a specific line in the budget will actually be spent – although, the Philippines aside,  this has generally only been implemented at sub-national government level, and public participation in fiscal policy refers to a much wider range of practices.

To make the right to public participation more practical and meaningful, the Global Initiative for Fiscal Transparency (GIFT) has implemented a multi-year work program to generate greater knowledge about country practices and innovations in citizen engagement. Outputs include country case studies, a set of Principles of Public Participation in Fiscal Policy, a Guide on Public Participation, and instruments to measure public participation in fiscal policy.

Table 1 sets out selected examples of public participation in fiscal policy, to illustrate the broad range of mechanisms. Details of many of these mechanisms are available in the GIFT Participation Guide.

Table 1: Selected examples of public participation in national fiscal policy by stage of budget and policy cycles

1.  As advocated for example by Flyvberg, Holm and Buhl (2004) to counter optimism bias in the appraisal of large infrastructure projects.

Where did the recent push for increased public participation in fiscal policy come from?

Starting with the IMF’s 1998 Code of Good Practices on Fiscal Transparency, the first generation of international fiscal transparency standards focused on the need for comprehensive disclosure of fiscal information. More recently, open fiscal data developments are greatly expanding the scope of information available publicly. Experience has shown, however, that disclosure is a necessary but not a sufficient condition for accountability. Attention has recently moved to translating public disclosure into more effective accountability by means of greater public engagement on fiscal management, greatly facilitated by developments in ICT. Reflecting these developments, Principle Ten of the 2012 GIFT High Level Principles on Fiscal Transparency, Participation, and Accountability established that: ‘Citizens and non-state actors should have the right and effective opportunities to participate directly in public debate and discussion over the design and implementation of fiscal policies.’ This reflected the view of GIFT’s Lead Stewards – including the IMF, the World Bank, and the International Budget Partnership – following the GFC, that public participation is a potential game-changer: participation could, over time, fundamentally strengthen accountability, and improve the fairness, legitimacy, effectiveness, and sustainability of fiscal policies.

Requirements for public participation have since been incorporated in:

  • The 2014 IMF Fiscal Transparency Code (principle 2.3.3),
  • The OECD’s Principles of Budgetary Governance 2014 (Principle 5),
  • Some PEFA indicators (PI-13 (iii) on the existence of a functioning tax appeals mechanism, PI-18.2 on legislative review of the budget, and PI-24.4 on procurement complaints mechanism),
  • The forthcoming OECD-GIFT G20 Budget Transparency Toolkit (Section 4, Openness and Civic Engagement).[1]

The 2017 Open Budget Survey includes an expanded section on public participation by the executive, the legislature, and the Supreme Audit Institution, and will provide a detailed source of information on practices in the 115 countries covered by the survey.

Public participation in public policy generally is a key element of the Open Government Partnership, a multilateral initiative launched in 2011 in which 75 governments have made specific commitments to develop and implement action plans to increase transparency and public engagement in collaboration with and monitored by civil society. One of the OGP’s working groups, the Fiscal Openness Working Group, brings together ministries of finance and civil society organisations to promote peer learning and more ambitious fiscal openness commitments.[2]

Public participation is also key to some of the Sustainable Development Goals, including Goal 5 (gender equality), Goal 10 (reducing inequality), and Goal 16 (Peace, justice and inclusive institutions), while enabling public participation throughout the budget process is  reflected in the 2030 Sustainable Development Agenda and Financing for Development Resolutions.

More recently, the World Bank’s World Development Report 2017 stressed the potential of participatory processes to increase the contestability of policy design and implementation, leading to higher levels of legitimacy and cooperation and more equitable policies[3].

What is the evidence supporting positive impacts from public participation?

While there is a significant body of empirical evidence supporting a plausible causal link between the disclosure of fiscal information and fiscal (and to a much lesser extent) development outcomes, at this stage rigorous evidence on the impacts of public participation is more limited. It is essentially confined to sub-national government, particularly to participatory budgeting in Brazil but more recently also to other types of participatory interventions in a number of mainly developing and middle income countries (e.g. India, Indonesia, Afghanistan, Mexico, Peru, USA). In a systematic review of the rigorous empirical literature on fiscal transparency and participation, de Renzio and Wehner find that there is strong evidence linking different types of participatory mechanisms in budget processes to shifts in resource allocations (increased share of social sector spending corresponding to citizen preferences) and to improvements in public service delivery.  In Ghana, where businesses are involved in the design of tax policies, they are more likely to pay their taxes (World Development Report 2017).  Wampler, Touchton, and Borgues, in a study of 5,550 Brazilian municipalities over the period 2006-2013, find a strong and positive relationship between the presence of participatory institutions and improvements in infant mortality, and that participatory institutions, social programs, and local capacity reinforce one another to improve well-being.

While, as noted, this evidence is at sub-national level, the underlying causal mechanisms – increased contestability of fiscal policy design and implementation, a reduction in elite influence, and more effective accountability – are the same as for the central government-level mechanisms outlined in Table 1. The challenge now is to undertake research at the national level to test the effectiveness of different types of participation mechanisms implemented in different ways.

Possible objections to increased public participation in fiscal policy, and responses

While direct public engagement in budgeting has fairly rapidly become established as an international norm, it is worth considering possible objections to it, which include:

  • Public participation is costly: but the ICT revolution has dramatically cut the cost of direct engagement with citizens, and created completely new possibilities for interactions. Public participation is a means for government to tap into the information, insights and perspectives distributed throughout society, potentially lowering the cost and improving the effectiveness of official research, policy development, service delivery, monitoring, review, and evaluation. Some ministries of finance e.g. in South Africa, Mexico, are pursuing increased public participation to promote improved performance by line ministries in delivery public services and implementing public investment projects. In addition, proportionality is one of the GIFT Participation Principles, recognizing the need to tailor participation exercises to the size and importance of the issue concerned.
  • Direct public engagement could undermine the role of existing decision making and accountability structures, including the legislature in representative democracies: but direct public participation is designed to add to, complement, and strengthen existing governance arrangements – and increase trust in government – not to set up parallel processes. Calling for public submissions during consideration of money bills is a long-standing and widespread practice that illustrates well the complementarity between direct public participation and legislative oversight.
  • Fiscal policy is too complicated for the general public, and should be left to the experts: but open engagement of external experts is one of the participation mechanisms proposed. In addition, fiscal policy involves ethical and distributional choices that should not be the sole preserve of ‘experts’, it is inherently political and will not be left to experts in any case.
  • There is a culture and long-standing practice of budget secrecy: but policy making in general has become much more open over the last few decades, and budget secrecy can be retained in the narrow range of cases where pre-disclosure could result in adverse behavioural response.
  • Public engagement takes time, and slows down the policy process: but participation is a citizen right, similar to and complementary to the right to information. In addition, it can help improve policy quality, avoid policy reversals, and thereby save time and cost.
  • Public engagement exercises can be dominated by more influential or well-placed groups and individuals at the expense of the poor and marginalised. This is a real risk – although the counterfactual is continued traditional policy development and implementation that may often be captured by very narrow elites. The GIFT Participation Principles emphasize efforts to ensure a diversity of inputs, including from traditionally excluded voices, and how public engagements are conducted in practice will directly influence how diverse the inputs are. For instance, evidence from randomised controlled trials of community interventions in Afghanistan and Indonesia has found that elite preferences are less likely to dominate where decisions on local project selection are taken by secret voting rather than in open local council meetings.[4]

Where to next?

Direct public participation has emerged as an important new international norm on how governments and other state entities should manage and oversee fiscal policy. GIFT will continue to support the implementation of this norm through extending and deepening the Guide on Public Participation, gathering more evidence of country practices, what works, and the impacts of different types of participation mechanisms, and supporting assessments of public participation against the various international instruments in which the norm is now embedded. We would be pleased to receive additional country examples of effective public engagement for inclusion in the Guide – and in fact we are offering prizes for compelling stories of viable approaches to public engagement in central government fiscal policy submitted by 25 August 2017 (see http://www.fiscaltransparency.net/giftaward/). GIFT’s work program will also focus on connecting public participation initiatives more closely to the lives of ordinary citizens, by opening up the links between national budgets, public engagement, and the  delivery of local public services such as education and health care, and by increasing the effectiveness of fiscal transparency and public engagement in countering corruption.

 

Murray Petrie

Lead Technical Advisor

GIFT

petrie@fiscaltransparency.net

 

[1] In addition, GIFT has developed an indicator measuring public participation in fiscal policy that is being piloted as a voluntary supplement in a PEFA assessment
[2] See https://www.opengovpartnership.org/about/working-groups/fiscal-openness
[3] http://www.worldbank.org/en/publication/wdr2017
[4] De Renzio and Wehner, 2017.

 

Building Budget Democracy: Fiscal Openness Reforms in South Africa

post_SABy Paolo De Renzio

This post is part of the “In Their Own Words: Reform Champions Speak About Incentives for Fiscal Openness” series. The original interview was conducted in 2015 as part of a Global Initiative for Fiscal Transparency (GIFT) and International Budget Partnership (IBP) research project.


Trevor Manuel was South Africa’s Minister of Finance from 1996 to 2009, serving under three different presidents. During his long tenure, he built South Africa’s Treasury into a strong and well-respected organization and introduced wide-ranging budget reforms – including many that greatly improved budget transparency, thrusting South Africa to the top ranks of the Open Budget Index.

In this interview with Paolo de Renzio, Senior Research Fellow at the International Budget Partnership, Mr. Manuel looks back at some of the reforms he introduced that turned South Africa into a world leader in budget transparency.


What were the fiscal openness reforms that were introduced in South Africa, and what was their impact?

During the apartheid regime, public finances were very opaque and fragmented, making it difficult to have a clear idea about what public resources were being spent on. This led to lots of waste and misuse, and kept citizens in the dark. The ANC [African National Congress] government that came to power in 1994 sought to overturn these practices and open a new stage of transparency and openness. When I became finance minister in 1996, we immediately set about drafting a new Public Finance Management Act, and introduced a series of other reforms to improve fiscal transparency and accountability.

“Apartheid was a system that was based on very high levels of secrecy. In order to demonstrate transparency, we started announcing the government’s spending plans four months before the budget was tabled in Parliament.”

Let’s start with budget documents. The government started publishing a Medium-Term Budget Policy Statement (MTBPS) in October of each year to set out fiscal policy targets and get parliament involved at the early stages of the budget process. Detailed Estimates of National Expenditure were then prepared by each government department to detail not just how much money they were going to spend but also detailing their objectives and expected results. We also started producing monthly budget execution reports which were published within three weeks of the end of each month.

Apart from these publications, the Auditor General’s office was reformed so that it could play a more effective role in providing independent scrutiny of government spending, and a number of initiatives were undertaken to promote a better informed debate around the budget. For example, we conducted a workshop for the media every year to explain to journalists where to find specific budget information, how to interpret it, and so on.

 

What were the key factors that shaped government incentives in adopting and sustaining these fiscal openness reforms?

First of all, I would not say that international actors played as crucial a role as they play in other African countries. Although we looked at relevant international experiences and promoted learning through peer exchanges, we did not borrow from the World Bank or the IMF, and levels of foreign aid were also negligible, which meant that international pressure was not a significant driver. In 1995 we started raising money on international financial markets, so of course it was important to have fiscal information available for that purpose. On the other hand, we always saw parliament as our key audience and aimed at ensuring that legislators — and the people whom they represent — had access to all relevant information and data, both on planned and executed budgets. This was part of our efforts to build strong institutions, and respect, and put into practice constitutional and legal provisions around public finance management — including the democratic principles that underpin them.

“The way in which budget debates are structured does not focus sufficient attention on evaluating actual performance. We applaud the policy intent but do not interrogate the policy outcome.”

Unfortunately, budget information is not always fully utilized by parliament, especially in terms of closing the loop by using annual reports and audit reports to assess what public money actually bought, and what benefits it brought. In fact, we often felt frustrated by the lack of engagement with the budget process by various actors. Parliament has strong budget powers, but it is poorly equipped to analyze and use budget information. Newspaper reporting on the budget is weak, except for when a large corruption scandal breaks out, and universities and think tanks also do not play an important role in budget debates. For about a decade, we also had something called the People’s Budget Initiative, which brought together various social actors who marched on parliament on budget day to present an alternative budget proposal. Of course their timing was very unfortunate, because their proposals came too late for us to include them in the actual budget proposal.

That might be one of the key challenges that South Africa’s budget transparency reforms face. The Treasury has developed sophisticated systems and skills, but those are not matched by other actors, both within and outside government, limiting the potential impact of budget transparency. The Treasury might therefore need to spend more time in educating other actors on the budget process and on the content of budget documents to ensure the quality of public debate improves.

 

What is the role that international initiatives like gift could play in promoting fiscal openness?

We have many indices at international level to measure many different things — from budget transparency to income inequality — but we still lack good measures of the quality and efficiency of public spending, to help guide budget decision making and to provide citizens with ways to judge whether public resources are being well spent. GIFT could look at this matter and develop some interesting new measures, which could add a lot to existing debates moving beyond a focus on public availability of budget information.

 

***

The interview took place on 6 October 2015.

For more details on South Africa’s fiscal openness reforms, see:

Cole, N., A. Shah and G. van der Linde (2016). “Increasing Budget Transparency.” In Alam, A., R. Mokate and K.A. Plangemann (eds.) Making It Happen: Selected Case Studies of Institutional Reforms in South Africa. Washington, DC: World Bank. (pp. 37-54) (https://openknowledge.worldbank.org/bitstream/handle/10986/23739/9781464807688.pdf)

Friedman, S. (2013). “What We Know Can’t Hurt Them: Origins, Sources of Sustenance, and Survival Prospects of Budget Transparency in South Africa.” in Khagram, S., A. Fung and P. de Renzio (eds.) Open Budgets: The Political Economy of Transparency, Participation, and Accountability. Washington, DC: Brookings Press. (pp. 51-75).

Supply, Demand, and Sustainability: Tracking Budget Transparency Reforms in Afghanistan

postBy Paolo De Renzio

This post is part of the “In Their Own Words: Reform Champions Speak About Incentives for Fiscal Openness” series. The original interview was conducted in 2015 as part of a Global Initiative for Fiscal Transparency (GIFT) and International Budget Partnership (IBP) research project.


Dr. Mustafa Mastoor has been Deputy Minister at the Ministry of Finance of Afghanistan since 2008. Previously, Dr. Mastoor served as Director General for Budget in the same ministry. In these functions, he has promoted a series of budget transparency reforms that resulted in impressive improvements in Afghanistan’s Open Budget Index score.

In this interview with Paolo de Renzio, Senior Research Fellow at the International Budget Partnership, Dr. Mastoor reflects on Afghanistan’s budget transparency reforms trajectory, and the challenges encountered along the way.


What were the fiscal openness reforms that were introduced in Afghanistan, and what was their impact?

Fiscal transparency and openness reforms in Afghanistan date back to the Constitution of 2002 and to the PFM [Public Finance Management] law and regulations that were introduced in 2004/5. Those provided the basis for the reforms we started introducing shortly after I joined the Ministry of Finance as Director General for Budget in 2005. The situation was not very encouraging. Budget reporting was very fragmented and often delayed — information from the provinces came by post and had to be re-entered at the central level — and it was difficult to find complete and accurate budget information. Large amounts of donor-managed funding (on-budget as well as off-budget) complicated the picture, meaning that a large share of the budget was effectively managed by expatriates. We therefore set out to ensure that: 1) responsibility for managing budgets was handed over to Afghan officials; 2) the quality and accessibility of information in the budget documents improved, so that line ministries, donors, Members of Parliament, and civil society could better understand what was happening with public money; and 3) technology was utilized to improve access to budget information.

“The information we were providing was not understandable even by ourselves. If you are not able to interpret budget information yourself, how can you ensure that it is accessible and user-friendly for others?”

At the beginning, demand for budget information was limited to line ministries and donors. More recently, as we started publishing more documents routinely, including budget proposals, financial statements, audit reports, and the Citizens Budget, we are seeing more interest coming from other actors as well, including civil society organizations.

Of course we also faced important challenges. While the legislative framework was favorable to transparency, the capacity of various actors to effectively use budget information was weak, which meant we were often faced with questions that showed that people did not really understand how to read a budget document. In some cases, budget information has been misused for political reasons, causing problems for the government. We have therefore learned that a clear and effective communication strategy is very important.

 

What were the key factors that shaped government incentives in adopting and sustaining these fiscal openness reforms?

First of all you should understand that we interpreted transparency and openness as a way to provide clarity to different actors, including other parts of government, about the availability of public financing for various services and activities. Secondly, transparency was important for us to argue with donors in favor of providing foreign aid as budget support. And donors wanted to make sure that the budget was transparent, so that they could see where resources were going. Recent improvements did in fact convince many donors — especially bilateral ones, as multilaterals were already on board — to provide more resources through the government budget, or to provide us with better information on their spending.

“We rarely faced questions from civil society. Sometimes questions came from the media, but mainly from parliament and sometimes unions or interest groups.”

Parliament has been the source of most demand for budget information. In presidential systems like ours, parliament has a particular interest in double-checking what the executive branch does with public resources. Usually, requests from parliament were related to such information as allocations to specific constituencies. In general terms, we did not face political hurdles and significant resistance to transparency reforms. The resistance was mostly bureaucratic and related to changing systems and practices, rather than to transparency per se.

“In our case, transparency reforms were spearheaded by technicians in the Ministry of Finance, based on conviction that transparency can be helpful in many ways, and responds to the needs of different clients.”

International assessment tools like the Open Budget Survey and the PEFA methodology were also useful for us to understand global norms and standards, and see what we could do to improve, even though clearly each country context has its own characteristics, and in certain ways various tools could be made more complementary. Our recent up-and-down performance on the Open Budget Index might be a signal that we need to do more to institutionalize our reforms — for example through legal reforms — rather than promote ad hoc improvements.

 

What is the role that international initiatives like GIFT could play in promoting fiscal openness?

I think that the most important role for GIFT is still that of advancing international norms and standards around fiscal openness, while at the same time recognizing the peculiarities of each country. GIFT should work on norms that are general enough to accommodate differences in country contexts.

Two other areas that deserve GIFT’s attention are building the capacity of civil society organizations to make effective use of budget information — in order to put further pressure on governments to open up budgets — and promoting the use of new, “proper” technologies that can facilitate access to fiscal information and promote accountability.

 

***

The interview took place on 5 October 2015.

For more details on Afghanistan’s fiscal openness reforms, see:

Bizhan, N. (2012). Budget Transparency in Afghanistan: A Pathway to Building Public Trust in the State. Washington, DC: International Budget Partnership.

(http://www.internationalbudget.org/wp-content/uploads/OBI-case-study-Afghanistan.pdf)

Guinn, D. E. and J.D. Straussman, (2016). ‘Improving the Budget Process in Fragile and Conflict-Ridden States: Two Modest Lessons from Afghanistan’. Public Administration Review, 76: 263–272.

(http://onlinelibrary.wiley.com/doi/10.1111/puar.12397/full)

 

This post also appears on IBP’s blog here