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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.

Is it possible to follow the budget money in Slovenia with open data?

Follow Jorg K. Petrovic on Twitter

Slovenia is making a good progress in opening its data. The only area that is left behind is the data about the budget. But recently things are starting to develop rapidly also at the Ministry of Finance. Two years ago, the citizens budget was introduced. And in early 2019, activities started to open as much data as possible in a timely and user attractive and friendly manner. Decisively, coordination between the MoF, the Ministry of Public Administration (in charge of the IT cloud), Governmental PR services and the Court of Audit, has begun. As these institutions started to work on the project, promising outcomes are on the horizon.

1. Slovenia, as a member of the European Union, is obliged to develop a strategy on open data (EU regulation is behind that).

2. Slovenia reports to the EU and public institutions are evaluated about open data. Last report shown improvements, making Slovenia move from the 2nd group »Fast trackers« to the top #1 group of »Trendsetters« (as shown on the graphic, Slovenia holds the 7th position within the whole list).

3. We have many portals where info about open data (and also the very data sets themselves) is to be found:

– OPSi (Odprti Podatki Slovenije – Open Data Slovenia)

Manual on how to open the data.

Register of the entities that are bound by the Public Information Act, not just when being asked but also to be proactively transparent.

Publication of public sector transactions by the Public Payments Administration of the Republic of Slovenia.

– The Commission for the Prevention of Corruption’s public sector financial transactions records ERRAR, formerly known as Supervizor.

Publication of contracts.

Publication of metadata on public procurement for reuse.

Data on election campaigns.

Annual reports of political parties (within JOLP – Javna Objava Letnih Poročil – Public Publication of Yearly Reports).

– All papers of governmental sections
(http://www.vlada.si/delo_vlade/gradiva_v_obravnavi/ ; http://www.vlada.si/delo_vlade/dnevni_redi/ ; http://www.vlada.si/delo_vlade/seje_delovnih_teles/ )

Transparency and open data – info by MPA.

Looks like a significant amount of information, but only experts could make a complete assessment and I am not one of them in this field of open data. But I do know about budgets and I can say that other countries have more on budgets. Maybe after all the MPA website might not be at the top address for fiscal data? Sure some useful links are to be found there (ERRAR and OPEN DATA SLOVENIA) but in my opinion they lack direct link to the budget data! Through the presentations and discussions I have witnessed and been part of at GIFT meetings, I know there is a great room for improvement. I believe that, because I know that the evaluation I was presented (before mentioned EU – Open data maturity …) is only one of many. Just last week, OECD has published a new Open Government Data Report and in that case, Slovenia is below average – way behind South Korea, France, Japan, Great Britain and Mexico.

But I do not want to leave you without fiscal information. Let me just briefly take you to the webpage of the MoF. There, among other things, one can also find the following information:

Citizens budget.     All budgets in detail.     Where does your money go?

Midyear reports.

End-year reports.

The Tax office gives once a month information on collected taxes.

So, there is valuable information. But that is basically it. Some data can be found at the Statistical office (SURS). But statistics is, as it should be, aggregated information that does not allow to trace budgets…  (https://www.stat.si/StatWeb/Field/Index/1).

As you can see, Slovenia has data available, but we are still not even halfway compared to where some countries already are.

I think that »Where does your money go« could be a good point to start. But it should be the base to build up a system to provide online, up to date, budget data – both on income (tax office) and expenditure data (MoF – directorate of budget and directorate of public accounting). Transactions should get direct links to the documentation (data provider through ERRAR and Public Information Act), which could be achieved by using GIFT´s Open Fiscal Data Package, for instance. All data about transactions that result in assets should be presented with the data of those assets (parcel ledger data, geo location, etc.) We already have all the data – since otherwise linear ministries would not be able to function. I also believe that we have all the necessary legislation (Public Information Act, etc.). We only need a person at MoF (like Lorena Rivero del Paso in Mexico) to organize all the pieces of the puzzle in the proper way – and of course political support for that. Another option would be to work closely with the GIFT network, as it provides technical support for these type of challenges.

Short info about participatory budgeting in Slovenia

Follow Jorg K. Petrovic on Twitter

On participatory budgeting, we have started small in Slovenia a few year ago, but we have come pretty far in less than 5 years. There is a substantial interest among local communities and the Parliament has helped with legislation promoting participation.

The idea of participatory budgeting is not completely new in Slovenia. It has been around for some years. First »experiments« in this field started in city of Maribor in 2014 and 2015. Unfortunately, the project ended since there was not enough political will for full implementation.

A similar initiative started in local community of Ajdovščina in 2016 and it has been a success ever since. The same case is observed with the neighboring municipality of Komen.

In May 2017, the GIFT network and Court of Audit of the Republic of Slovenia organized a regional seminar on participatory budgeting which gave a new push to the movement. Addressing the GIFT public participation principles and having access to international experts and experiences, combined with discussions on the Slovenian mechanisms to engage communities in budgeting,  big organizations of local communities (i. e. SOS Skupnost občin Slovenije – Association of Municipalities and Towns of Slovenia) took part and started to promote the idea strongly.

By 2018, such promising idea had reached the high politics. The Government had prepared additional articles for the Law on Local Communities and among them was also the article on participatory budgeting.

In March and April 2018, the articles were already on the desks of the member of the parliament. The whole procedure in the Parliament is to be found here.

A Bill was signed into Law on the 25th of April 2018 and published a day later (https://www.uradni-list.si/_pdf/2018/Ur/u2018030.pdf Page 4491). The new article 48.b states:

»In the process of preparing the draft budget, the municipality may determine the amount of funds intended for financing projects proposed by citizens. On the proposed projects, the municipality conducts consultations with citizens no later than the submission of the budget to the municipal council for reception.«

In October 2018, local elections took place in Slovenia. The debate about participatory budgeting went on high gears. Many candidates for mayors and many politicians campaigning for the local councils stated participatory budgeting as one of their priorities in their political programs. »Danes je nov dan« reports, that 57 candidates, that have promised to support participatory budgeting have entered local councils (https://danesjenovdan.si/participativni-proracun/).

In 2019, we are starting to see the first results. Nova Gorica, Ankaran, Renče Vogrsko, Hrpelje Kozina, Šentilj and Razkrižje have already started with the participatory budgeting. And it looks like that Krško, Benedikt, Koper and Divača are going to start the procedures of participatory budgeting for the budget year 2020.

As such, and with the little help from the GIFT network and other international experts, and the decisive support from the Court of Audit and the National Parliament, some Slovenians are starting to be more engaged in the decisions and implementation about their budgets. The process in which community members directly decide how to spend part of the budget, enabling taxpayers to work with local governments to make the budget decisions that affect their lives, is taking place in Slovenia, which is a very meaningful happening for our democratic live.

Local communities

Maribor, 2014.     Ajdovščina, 2016.     Komen, 2016.     Logatec, 2018.     Nova Gorica, 2019.     Ankaran, 2019.     Renče Vogrsko, 2019.     Hrpelje Kozina, 2019.     Šentilj, 2019.     Razkrižje, 2019.     Krško, for budget of 2020.     Benedikt, for budget of 2020.     Koper, for budget of 2020.     Divača, for budget of 2020.     Kranjska Gora (just for young peple), 2018: https://obcina.kranjska-gora.si/dogodek/165559 & http://www.sodeluj.es/

 

Seminars

September 2015.     May 2017.     April 2018.     October 2018.

 

Literature

2015 and 2016.

 

Articles in newspapers

Delo, 2013.     Dolenski list, 2016.     Dnevnik, 2018.     Večer, 2018.     Primorske novice, 2018.     Novice, 2018.     Delo, 2018.     Mladina, 2018.     EKoper, 2018.

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

OBS_cover

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.

How are the GIFT Principles on Public Participation in Fiscal Policy being incorporated in international fiscal openness instruments?

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Summary:
Principle 10 of the GIFT High Level Principles on Fiscal Transparency asserts that citizens have a right to participate directly in fiscal policy design and implementation. GIFT has subsequently developed a set of Principles of Public Participation in Fiscal Policy.  The Principles have directly influenced the design of international instruments such as the Open Budget Survey, and are becoming recognized as an emerging norm on how governments should manage the public finances. Since 2014 GIFT has been working pro-actively through the OGP-Fiscal Openness Working Group to support the implementation of more ambitious commitments on open budgeting in Open Government Partnership Action Plans. The OGP and GIFT are partnering in release of a Guide on Principles and Mechanisms on Public Participation in Fiscal Policy at the Paris OGP Summit in December.

So what is public participation in fiscal policy?

Principle Ten of the GIFT High Level Principles on Fiscal Transparency, Participation, and Accountability establishes 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.’ [i] The basic idea is that fiscal transparency reaches its broader potential when people use fiscal information and get involved in decisions on the use of public resources.

This was the first time that such a right to public participation in fiscal policy had been asserted in an international normative instrument. It reflected the view of GIFT’s Lead Stewards that public participation is a potential game-changer: participation could, over time, fundamentally strengthen accountability, and improve the fairness, effectiveness and sustainability of fiscal policies. This in turn is expected to result in improved social, economic and environmental outcomes, the ultimate objectives of fiscal policy. Public participation also has the potential to improve the effectiveness and legitimacy of representative democracy and to increase public trust in government.

What is public participation? It refers to the variety of ways in which the public – including citizens, civil society organizations, business organizations, academics, and other non-state actors – interact directly with public authorities on policy design and implementation. Participation may be through face to face communication, deliberation or input to decision-making, or by written forms of communication including the internet. Participation ranges from one-off consultation to on-going and institutionalized relationships, such as regular public surveys, administrative review mechanisms, standing advisory bodies, or citizen representation on governing bodies.

Open and inclusive public participation processes stand in contrast to private negotiations or dealings of public officials. Open processes can give greater voice in a more transparent manner to a broader range of individual members of the public and civil society organizations that have a stake in, are affected by, or are intended to benefit from fiscal policies.

Public participation in fiscal policy, as defined by GIFT, covers participation across the whole annual budget cycle; 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; and in the planning, appraisal, implementation and review of public investment projects.

The potential of public participation has of course been hugely boosted by the ICT revolution that has dramatically lowered the cost of direct interaction between citizens and governments while also creating entirely new spaces for citizen input and deliberation.

Why is public participation in budgeting being described as ‘the next frontier in fiscal transparency’?

The first generation of international fiscal transparency reforms focused on the need for comprehensive information in budgets, forecasts and outturn reports. Experience has shown, however, that disclosure is a necessary but not a sufficient condition for accountability. Attention is now increasingly moving to translating public disclosure into more effective accountability by means of greater public engagement on fiscal management. ‘Public information and participation are mutually reinforcing. Access to adequate, timely, useful information is essential to informed, effective public participation. At the same time, opportunities for participation create the incentives for the public to request and utilize available information.’[ii]  And although public participation in budgeting is relatively new, the evidence attesting to its impact on resource allocation and service delivery, and development outcomes, is growing.

In recognition of the above, two major international institutions have endorsed the importance of public participation in budgeting as a complement to greater transparency. The International Monetary Fund’s revised Fiscal Transparency Code, published in 2014, includes the principle of direct public engagement in budget deliberations policy (principle 2.3.3). And the OECD’s Recommendation on Principles on Budgetary Governance, which forms part of the international law for member countries, stipulates that debate on budgetary choices should be inclusive, participative and realistic: ‘Parliament and citizens should be able to engage with and influence the discussion about budgetary policy options, according to their democratic mandate, competencies and perspectives’ (Principle 5).

What are the GIFT Principles of Public Participation in Fiscal Policy?

To make the right to public participation practical and meaningful, GIFT has since 2012 implemented a multi-pronged work program to generate greater knowledge about country practices and innovations in citizen engagement. Outputs include country case studies, draft principles of public participation in fiscal policy, and instruments to measure public participation in fiscal policy.

The Participation Principles have been workshopped since 2012, and have been the subject of public consultation.[iii] There are ten inter-dependent principles: public participation in fiscal policy should be accessible; open; inclusive; respectful of self-expression; timely; informative; proportional; sustainable; complementary; and reciprocal. Further explanation of the principles can be found at www.fiscaltransparency.net/ParticipationPrinciples_GIFT_30Mar2016_ENG.docx

How have GIFT’s participation principles influenced international instruments and actions?

The International Budget Partnership’s (IBP) Open Budget Survey (OBS) lead the way when it introduced a section on public participation across the budget cycle in the 2012 Survey. This was the first cross-country instrument to measure levels of public participation in budgeting. Following the development of the draft GIFT participation principles, the IBP (a lead steward of GIFT) fundamentally re-designed Section 5 of the survey, on Public Engagement in the Budget Process, to fully incorporate the GIFT principles.

‘The revisions to the indicators on public participation align them with Global Initiative for Fiscal Transparency’s new principles on public participation. These principles now serve as a basis for widely accepted norms on public participation in national budget processes.’[iv] (IBP).

Researchers began collecting data for the 2017 Survey in September, and will assess events, activities, and developments that occur before 31 December 2016. The 2017 survey and future surveys will therefore measure the extent to which country practices reflect the GIFT Participation Principles.

In addition, the IMF is revising its 2007 Guide on Resource Revenue Transparency, and will incorporate resource revenue issues in the Fiscal Transparency Code as a new Pillar IV of the Code. In its latest public consultation draft of Pillar IV, it has proposed incorporating direct public engagement ‘regarding the raising and utilization of resource revenues’ when completing a Fiscal Transparency Evaluation in a country dependent on natural resource revenues.[v]

What are some of the further channels through which the GIFT Participation Principles are gaining traction?

A key area of focus for GIFT is the Open Government Partnership. GIFT and the OGP established the Fiscal Openness Working Group in 2013 to provide a venue for ministries of finance, CSOs and others to deliberate, share experiences, and expand fiscal transparency and public participation in fiscal policy in individual countries and regions.[vi]

Public participation is in the DNA of the OGP, and GIFT is excited to be working closely with the OGP Secretariat to jointly promote public participation in budgeting, one of the core areas of the OGP. The OGP represents an opportunity for the institutionalization of the GIFT Participation Principles.

To that end, GIFT and the OGP are partnering to release a Guide on Principles and Mechanisms of Public Participation in Fiscal Policy at the OGP Summit in Paris from 7-9 December. The Guide will provide detailed information on country practices that illustrate the participation principles across different dimensions of fiscal policy. The Guide is intended for use by ministries of finance and line ministries, legislatures, Supreme Audit Institutions, and citizens, CSOs, private sector entities, research institutes and academics that are seeking to initiate or to engage in public deliberation.

In addition, the OECD, together with GIFT and leading international institutions, is developing a Budget Transparency Toolkit for the G20 Anti-Corruption Working Group. The Toolkit is intended to serve as a gateway to the range of recognized international standards and norms on budget transparency and participation. Reflecting GIFT High Level Principle 10, the framework for the Toolkit contains a section on ‘Openness and civic engagement,’ and the GIFT Public Participation Principles are cited in support of three of the good practices in the draft.

There are two further mechanisms through which the GIFT Participation Principles seem likely to generate impetus for increased public engagement in fiscal policy. The first is through a supplementary module that GIFT has designed for a PEFA (Public Expenditure and Financial Accountability) assessment.[vii] The module utilizes the PEFA approach to performance measurement to facilitate assessment during a PEFA mission and the integration of the results into a PEFA Performance Report as appropriate.  It comprises one indicator covering four discrete dimensions of public participation in fiscal policy covering both the legal framework for participation and actual levels of participation:

i. Public participation across the annual budget cycle.

ii. Public participation in the design and delivery of public services.

iii. Public participation in the appraisal and implementation of public investment projects.

iv. Participation in oversight processes.

The participation module is being piloted in the PEFA assessment of the Philippines.[viii]

Finally, the same indicator has been piloted by Global Integrity in a civil society assessment of public participation in fiscal policy in South Africa. Gary Pienaar, the Global Integrity in-country researcher, triangulated evidence by conducting desk research and interviews with government officials, civil society representatives, and academics. The study was peer reviewed by a National Treasury official. It provides an interesting illustration of the potential for detailed civil society monitoring and assessment in this emerging field, to complement the OBS.

Where to next?

Taken together, these developments represent the fairly rapid dissemination of a new international norm on how governments and other state entities should engage the public in the design and implementation of fiscal policies. GIFT will deepen this work through extending the Guide on Public Participation, and gathering more evidence of country practices and what works. In particular, GIFT’s work program will focus on connecting these initiatives more closely to the lives of ordinary citizens, by opening up the links between national budgets and the local delivery of public services, and by increasing the effectiveness of fiscal transparency in countering corruption.

 

Murray Petrie
Lead Technical Advisor
GIFT

[i] The GIFT High Level Principles were endorsed by the UN General Assembly in 2012. The UNGA Resolution is available at www.un.org/ga/search/view_doc.asp?symbol=A/RES/67/218
[ii] Participation is the next transparency frontier for OGP by Krafchik and Guerrero, at http://www.fiscaltransparency.net/blog/
[iii] [Link to ‘This is how your input helped us improve our new Public Participation Principles! ‘ http://www.fiscaltransparency.net/blog/]
[iv] http://www.internationalbudget.org/opening-budgets/open-budget-initiative/open-budget-survey/2017-news/
[v] See http://www.imf.org/external/np/exr/consult/2016/ftc/
[vi] See ‘How transparent and participatory budgets and budget processes are currently in OGP countries’, ….
[vii] See www.pefa.org
[viii] http://www.fiscaltransparency.net/eng/webinar_open_public.php?IdToOpen=20151006101

Mexico became the first country to formally adopt the Open Fiscal Data Package!

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Mexico became the first country to formally adopt the Open Fiscal Data Package, an international open data standard promoted by GIFTGlobal Initiative for Fiscal Transparency, in collaboration with Open Knowledge International and the World Bank, with the support of Omidyar Network.

 

The announcement was made during an event hosted by the Ministry of Finance of Mexico to present the Executive’s Budget Proposal for 2017. The Ministry also revealed that it published the 2008-2016 Federal Budget on its website. The data was prepared using the OpenSpending Viewer, a tool which allows the users to upload and analyze data, and create visualizations.

 

For the past few months, OpenSpending, in collaboration with the GIFT and WB-BOOST initiative  team, has been working with the Ministry of Finance of Mexico to pilot the OpenSpending tools and the Open Fiscal Data Package (OFDP). The OFDP powers the new version of the OpenSpending tools used to publish Mexico’s Federal Budget data. The OFDP helps make data releases more comparable and useful.

 

The data package, embedded on Ministry of Finance’s web page, enables users to analyse the 2008-2016 budget, to create visualizations on all or selected spending sectors and share their personalized visualizations. All data is available for download in open format, while the API allows users to create their own apps based on this data.

Explore the visualization!


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In the next few months, GIFT in collaboration with Open Knowledge International team will pilot the OFDP specification in a number of other countries. The specification and the OpenSpending tools are free and available to use to any interested stakeholder. To find out more, on how to engage with GIFT, the Lead Stewards and/or the GIFT streams of work, please contact GIFT’s Network Director, Juan Pablo Guerrero (guerrero@fiscaltransparency.net) or write to info@fiscaltransparency.net

 

Upload financial data, browse datasets and learn more about public finances from around the worldlet’s work together to build the world’s largest fiscal data repository.

How open are budgets in OGP member countries and what are the trends?

This post is the second in a short series that GIFT will be running to provide ideas for the 51 member countries currently preparing their next Action Plans. The first post discussed the steps OGP countries should take in their next Action Plans to increase fiscal transparency and participation. A third post will look at how well countries have implemented the OGP commitments on fiscal transparency in their first Action Plans.  The posts draw on a series of GIFT papers, ‘Fiscal Transparency in Open Government Partnership Countries, and the Implementation of OGP Commitments: An Analysis’, prepared for successive meetings of the OGP-Fiscal Openness Working Group, and on GIFT case studies of public participation in fiscal policy.

 

So how open are budgets in OGP member countries?

In summary, there are some outstanding examples amongst OGP countries of rapid increases in fiscal transparency in recent years, although the average score and pace of improvement are low, and some OGP countries have gone backwards. It is notable that many of the rapid gains came from publication of documents that governments were already producing for their internal use and for donors, but not making publicly available.

The best way to measure budget transparency is to draw on data from the Open Budget Survey (OBS) compiled by the International Budget Partnership (IBP) and used to compile country scores on the Open Budget Index (OBI). The OBS is the most comprehensive cross-country data on current practices with respect to fiscal transparency.[1] There have been five OBS surveys since 2006, with country coverage increasing from 59 countries in 2006 to 102 countries in 2015. The OBS is also the source of data on whether a country meets the minimum entry requirements for budget transparency for the OGP – which are the publication of the Executive’s Budget Proposal and the Audit Report.

So what does the Open Budget Survey tell us?

First, 29 of the 47 OGP countries are categorized in the OBI as providing insufficient budget information to the public. These 29 OGP members scored 60 or below in the 2015 OBS. Four of those countries provide minimal budget information, the second lowest category. In terms of OGP regions, average OBI scores were as follows: Africa 55; Asia 62; Europe 59; the Americas 58.

Second, on average, the pace of improvement in budget transparency is slow. Across all OGP countries in the Survey there was an average increase of only +2 on the OBI between the 2012 and 2015 surveys – which is lower than the +3 improvement on average for all countries in the OBS.

Third, progress is very uneven across OGP members. Figure 1 shows the distribution of absolute changes in OGP member country scores from each country’s first inclusion in the OBS to the 2015 survey, by size of change and number of countries.

OGP_post_Murray_01

 

 

Fourth, there are some outstanding examples amongst OGP countries of rapid increases in fiscal transparency. The maximum possible score on the OBI is 100, so the following increases in scores (drawn from the same data as in Figure 1) represent major step-increases in the level of budget transparency.

  • In Africa: Malawi +37; Liberia +35;
  • In the Americas: Honduras +31; Dominican Republic +39; El Salvador +25;
  • In Asia: Mongolia +33; Azerbaijan +21; Indonesia +17;
  • In Europe: Georgia +32; Tunisia +31; Bulgaria +18; Albania +13; Croatia +11.

Fifth, there are also some notable examples of backsliding on fiscal transparency amongst OGP members in the most recent period.  Notable reductions in OBI scores (falls of 10 or more on the OBI between the 2012 and 2015 surveys) include: United Kingdom (-13), Korea (-10), Slovak Republic (-10), and Honduras (-10). And there are four OGP members that, in the 2015 OBS did not meet the minimum fiscal transparency eligibility criteria for OGP membership in terms of the availability of the Audit Report: Malawi, Tunisia, Liberia, and Spain.

The OGP member with the greatest improvement between the 2012 OBS and 2015 OBS was Tunisia, which increased its score by 31 points by publishing the Executive’s Budget Proposal and Citizens Budget. Romania (+28) and the Dominican Republic (+22) both saw substantial improvements to their OBI score by improving the comprehensiveness of the Executive’s Budget Proposal. Peru, the Philippines, Sierra Leone, Italy, Malawi, Georgia, and El Salvador all improved by 10 points or more.

How well do OGP countries score on public participation in budgeting, and on the strength of legislative oversight?

The average public engagement score in 2015 for all 102 countries surveyed was only 25 out of 100, while for OGP member countries the average was 36. This means that OGP members are significantly more open than non-members, on average. However, in absolute terms a score or 36 means that on average OGP countries included in the OBS only provide weak opportunities for the public to participate in the budget process.

Table 1 shows the average participation scores by OGP region for OGP members.

OGP_post_Murray_02

 

The stand out performer on public participation across all 102 countries in the 2015 OBS was South Korea, with a score of 83. This is in sharp contrast to Korea’s record of public consultation in developing and implementing its first and second OGP Action Plans. The  IRM reports for this country found that it was unclear how, if at all, the government engaged the public in the development or implementation of the Action Plans.

Other OGP members that scored above 60 for public participation in the 2015 Survey were Norway (75), Brazil (71), USA (69), the Philippines (67), South Africa (65), and New Zealand (65).

With respect to the strength of legislative oversight, there is a very wide range of scores across countries, although, as illustrated in Table 2 below, there is limited regional variation.

OGP_post_Murray_03

 

Notable findings with respect to legislative oversight are that 19 OGP countries (40% of all OGP members) do not have a specialized budget research office attached to the legislature, and in 22 OGP countries (47%) there was a weak or no quality assurance system for audits.

So what steps should OGP countries take in their next Action Plans to increase fiscal transparency and participation?

As noted, many of the rapid increases in OBI scores achieved by a number of OGP members in recent years have come from publication of budget documents that were already produced for internal use and for donors, but were not being made available to the public. Simply deciding to publish such reports and documents would be a very effective and low-cost step that many countries should consider to rapidly increase transparency. The first post in this series looked in-depth at this and other specific actions that OGP members should be considering now to increase transparency and public participation in budgeting in their next Action Plans. The final post in this series will analyse how well countries implemented the fiscal openness commitments in their first Action Plans.

 

Murray Petrie

GIFT Lead Technical Advisor

 

[1] See ‘Defining the Technical Content of Global Norms: Synthesis and Analytic Review Revised Phase 1 Report for the GIFT Advancing Global Norms Working Group.  http://fiscaltransparency.net/wp-content/uploads/2012/03/GIFT-Defining-the-Technical-Content-of-Global-Norms-Synthesis-and-Analytic-Review.pdf

The Role of Fiscal Transparency in Combating Corruption – Joint Statement to the International Anti-Corruption Summit

GIFT FT_anticorruption

The Role of Fiscal Transparency in Combating Corruption

Joint Statement to the International Anti-Corruption Summit

May 13, 2016

 

Fiscal transparency is essential to fight corruption. Our experience, and that of many others like us, has shown that fiscal transparency reduces opportunities to misuse public money undetected and increases the likelihood that those who do so are held to account. While it is not the only factor needed to tackle corruption, it is absolutely a necessary condition. It incorporates some of the biggest sources of corruption in the public sector, including public procurement, tax administration, and the selection and location of major public infrastructure projects. The International Anti-Corruption Summit hosted by the United Kingdom this week provided an important moment to spread this message, and we welcome the Summit Final Statement, which both recognizes the importance of this factor in the fight against corruption and strongly encourages countries to work to strengthen their fiscal transparency.

 

Fiscal transparency means that governments publish high-quality information on how they raise revenues, borrow, spend, invest, and manage public assets and liabilities. Fiscal transparency, as we define it, covers fiscal activities that occur both inside and outside the government budget process, including quasi-fiscal activities undertaken outside the government sector by public corporations or the central bank. It also includes public reporting on the past, present, and future state of public finances and clarity about the structure and functions of government, fiscal policy intentions, public sector accounts, and fiscal projections.

 

Recently, cases of corruption in many countries have made national and international news. What these stories have not emphasized sufficiently is that the scandals had been uncovered largely due to the public availability of data on government finances. In each case, government audit agencies, local civil society watchdogs, or the media analyzed data on government finances to identify wrongdoings.

 

As we have seen in these cases and in our general experience, fiscal transparency is most effective in checking official acts of corruption when it is complemented by a system of effective checks and balances that includes institutional mechanisms for enforcement, investigation, and sanctions. This requires the presence of engaged legislatures, independent supreme audit institutions, a free press, and a robust civil society.

 

Government budgets are at the core of development and represent the most powerful tool at hand for meeting the needs of citizens. Whether it’s about health, education, or pensions, or about funding the activities of regulatory agencies, the most well-meaning public policy has little impact until it is matched with sufficient public resources, and then those resources are used effectively to provide public services. In this context, even beyond its potency as an anti-corruption tool, fiscal transparency helps governments communicate the economic and social impact of fiscal decisions, as well as how they plan to use limited public resources and the tradeoffs involved, thereby building trust with their citizens.

 

The good news is that we know what it takes to advance fiscal transparency. International standards are clear, shortcomings in budget transparency are known, and technical assistance and peer-learning mechanisms are available. This was acknowledged by governments at the International Anti-Corruption Summit through the recognition in the Summit Final Statement of the High-Level Principles on Fiscal Transparency, Participation, and Accountability that have been issued by the Global Initiative for Fiscal Transparency. We are encouraged by the commitments governments made to strengthen fiscal transparency, ensure legislative oversight of budget processes, and empower supreme audit institutions – all critical steps in ensuring that public resources are not wasted through misuse, including corruption.

 

Signed by

Federal Budget Secretariat, Ministry of Planning, Budget and Management, Brazil

Budget Office of the National Treasury, South Africa

Technical Secretary of Development Planning and Budget, Paraguay

Department of Budget and Management, Philippines

What steps to increase fiscal transparency and participation should OGP countries take in their next Action Plans?

OGP GIFT

This post is the first in a short series that GIFT will be running to provide ideas for countries preparing their next Action Plans. Two further blogs will look at how well countries have implemented their OGP commitments on fiscal transparency, and how transparent and participatory budgets and budget processes currently are in OGP countries. The posts draw on a series of GIFT papers, ‘Fiscal Transparency in Open Government Partnership Countries, and the Implementation of OGP Commitments: An Analysis’, prepared for successive meetings of the OGP-Fiscal Openness Working Group, and on GIFT case studies of public participation in fiscal policy.

Fifty-one countries are currently preparing their next OGP National Plans of Action, so this is a great time to look at what commitments they should consider on budget and fiscal transparency.
Budget transparency is a key area: it is one of the four requirements for membership of the OGP; and fiscal transparency commitments made up around one third of all the commitments in the first 51 Action Plans.
‘Fiscal transparency’ can sound dry and technical, something for the ‘experts’ rather than of interest to ordinary citizens.
Nothing could be further from the truth! Fiscal transparency is essential to fight corruption, which predominantly hurts the poor and marginalized. Transparency and broad-based public deliberation – as opposed to lobbying by elites behind closed doors – are important determinants of whether public infrastructure such as hospitals, schools, roads, electricity and water supply are well planned, well built, and well maintained; public services are of good quality and generally deliver what the public wants; and tax officials are honest in their dealings with taxpayers.
public_infrastructure
The importance of effective, accountable and inclusive institutions is also recognized in the UN’s 2030 Agenda for Sustainable Development, while the Addis Ababa Accord on the Third International Conference on Financing for Development established in its action agenda that transparency and equal participation in the budgeting process will be increased.

 

But aren’t OGP countries already transparent and open in how they manage fiscal policies?
No, they are not. Over 60% of the 47 OGP countries in the 2015 Open Budget Survey (OBS) were rated as providing ‘insufficient budget information to the public’. And the rate of improvement is very slow – in fact the average increase in budget transparency between the 2012 and 2015 OBS was even lower for OGP members than it was for non-members. Average OBS scores for public participation across the budget cycle are even lower – much lower – than the scores for transparency. Further details on levels and trends in budget transparency and public participation will be in a subsequent blog.

 

Countries should develop their OGP Action Plans in a much more open and participatory way.
In developing their next Action Plans countries should create more opportunities for meaningful public participation in the design and implementation of fiscal policies over the whole budget cycle, as well as in the delivery of public services and the construction of public investment projects.
In doing so OGP members should put into effect the GIFT Principles of Public Participation in Fiscal Policy as well as follow much more closely the OGP requirements for public participation in the development and implementation of Action Plans than has generally been the case to date.
Mexico and the UK provide interesting examples of how the process of Action Plan development can be made more participatory over time. Mexico set up a three-part governing system for its first Action Plan, headed by a tri-partite commission, the STT, led by the Ministry of Public Administration, the Federal Institute for Access to Information and Data Protection, and a coalition of CSOs. However, the first Mexico Action Plan went through two phases, and the initial Action Plan submitted in September 2011 lacked significant civil society participation. A second ‘expanded’ plan was made in close collaboration with civil society and released in early 2012.
In the UK, the first Action Plan was developed by government with very little public input (as was the case for most cohort 1 countries). The second Plan 2013-2015 was co-created with civil society over 12 months, and was intended to be a model of OGP principles and processes for developing an Action Plan. Recommendations made by the UK Civil Society Coordinators’ after the Plan was completed included that civil society should form a network to engage government; that government and CSOs should agree a process to develop the plan; that lead OGP officials should connect relevant policy officials with relevant CSOs to form working groups; and that both government and CSOs have responsibility for expanding group of stakeholders involved.

 

What are some of the outstanding fiscal transparency and public participation commitments in the first generation of OGP Action Plans?
A good way to answer this is to look at ‘OGP star commitments”: commitments that are measureable, have clear relevance to OGP goals, and that were assessed by IRM researchers to be moderate to high impact and to have been substantially completed or completed. There were 74 star commitments relating to fiscal transparency in the first 51 IRM reports, comprising 20% of all the fiscal transparency commitments in those Action Plans.
Examples of fiscal transparency star commitments include:

  • Brazil: implement the Land Management System to publish information on public lands.
  • Canada: introduce mandatory reporting of revenues from extractive industries.
  • Croatia: publish three Citizens’ Guides: on annual and semi-annual state budget execution, and on the annual budget proposal.
  • Ghana: publish in-year budget execution reports, and simplified budget guides, and hold consultative budget meetings with CSOs.
  • Israel: MOF to establish a central Unit for Government Service to the Public to set guidelines and standards to improve service quality across government.
  • Italy: ‘follow the money’, a web portal that contains data on spending by all government agencies.
  • Jordan: publish the annual reports of the audit bureau and the anti-corruption commission.
  • Liberia: conduct post-contract award audits of government contracts with companies in the oil, mining, forestry and agriculture sectors.
  • Macedonia: introduce a citizen portal for feedback on public services.
  • Philippines: introduce policy on transparency of extractive industries, and publish EITI report.
  • United States: expand EITI transparency; and introduce a range of initiatives to make federal expenditure more transparent, including on procurement.

What are some of the leading international examples of public participation in fiscal policy?
It is instructive to look outside the OPG to some of the new and innovative practices being implemented around the world to engage the public much more directly in discussing fiscal policies and/or monitoring how well they are implemented in practice.
Brazil’s Public Policy Management Councils: more than 50,000 on-going (bi-) monthly councils, at all levels of government, in which officials and civil society representatives deliberate and decide on new budget policies and monitor implementation.
Canada’s public consultations on new revenue or spending initiatives: systematic public consultations on new fiscal policy proposals, such as new infrastructure projects or new tax and spending proposals, through a range or mechanisms, with public inputs published.
Croatia’s Legislative Oversight: Parliament’s Finance and Central Budget Committee, that oversees all stages of the budget cycle, has up to six external non-voting members. The Committee conducts public hearings in which testimony is heard from the external committee members.
Kenya’s pre-budget consultations: the Ministry of Finance holds public hearings around the country during budget preparation, and there is a further two week window for public consultation on the Budget Policy Statement before it is submitted to the legislature.
Korea’s Advisory Committees of external experts and CSO representatives: Advisory Committees provide inputs both to the setting of sector ceilings, and to the allocation to programs within sector ceilings. All budget programs are subject to evaluation every 3 years and external experts and CSOs are involved in all evaluations.
Mexico’s school infrastructure program: Boards of officials, parents and local community representatives decide how to spend funds under a federal program to improve infrastructure in deprived rural schools.
The Philippines Bottom Up Budgeting: local Poverty Reduction Action Teams of officials and CSOs throughout the country identify projects to be funded by the participating national agencies from the national budget.
South Africa’s social monitoring pilots: citizen based monitoring of the quality of public service delivery through community perception surveys, discussions at community meetings, and development of community scorecards.
These are all examples of emerging good practices for OGP countries to emulate in their action plans.

 

What are some of the key general areas where OGP member governments, legislatures and Supreme Audit Institutions, and CSOs and activists should now be considering action to increase budget transparency?
The first point is extremely important: many OGP countries could achieve rapid increases in budget transparency just by publishing documents that are already produced for use within government. This is a matter of political will, and of citizens demanding information that they have a right to.
Based on data from the 2015 OBS, budget reports that were produced for ‘internal use’ but not published as at 2014 were as follows:
a. Pre-Budget Statement on fiscal strategy and priorities for the next budget: 4 OGP countries produced this for internal use only (Chile, Dominican Republic, Indonesia, and Sierra Leone).
b. Mid-Year Review of budget implementation: 4 OGP countries produced this for internal use only (Kenya, Macedonia, Sierra Leone, and Trinidad and Tobago).
c. The Year-End Report on how the budget was implemented in comparison to the original budget: 1 OGP member produced this for internal use only (Albania).
d. The Audit Report: 1 OGP member produced this for internal use only (Liberia).
A number of OGP countries also publish documents but do so too late for them to be considered ‘publicly available’ according to OBS standards of timeliness. From the 2015 OBS, 4 countries published the Pre-Budget Statement too late, 2 countries published a Citizens’ Budget too late, 1 country published its Mid-Year Review too late, and 1 country published its Audit Report too late.

Second, the 4 OGP members that do not meet the minimum fiscal transparency requirements for OGP membership should give priority to publishing the Audit Report. Malawi and Tunisia do not produce an Audit Report, while Liberia produces one for internal use only. Spain produces an Audit Report, but publishes it too late to be considered publicly available.

Third, those OGP members that have gone backwards on fiscal transparency in recent years should give priority to decisively reversing this trend. These include Macedonia (a change of -19 between the 2012 and 2015 OBS), Ukraine (-16), and Bosnia and Herzegovina (-7).

Fourth, there are some very important budget reports that can be produced and published with relatively little effort – such as a Citizens’ Budget (not published in 12 OGP countries at the time of the 2015 OBS), and a Mid-Year Review of budget implementation (not produced in 21 OGP members). Examples of OGP commitments to increase public understanding of budgets include:

  • Honduras: create a portal on the Secretariat of Finance’s web-site devoted to fiscal education (to complement the Citizens’ Budget).
  • Liberia: develop a platform that provides regular budget updates to all citizens via SMS and associated technologies through various local languages; and provide periodic support to rural radio stations to broadcast the messages of the Open Budget Initiative.
  • Paraguay: build capacity among citizens to monitor public sector budget management by explaining the general budget proposal in plain and accessible language and creating citizen access to budget information on indigenous beneficiaries and investment made.
  • The Philippines: create a People’s Budget interactive web site.

 

Fifth, transparency of spending on the delivery of core public services should be increased, and more direct input enabled from service users on their needs and on their perceptions of the quality of services. Examples of Action Plan commitments in this area include:

  • Costa Rica: strengthen the National System of Service Audits through a promotional campaign on its functions and the channels for citizen complaints and suggestions.
  • Dominican Republic: publish data on public complaints at the level of individual government agencies.
  • Indonesia: publish local service delivery-level budgets in health and education.
  • Macedonia: create a portal for citizen feedback on public services.
  • The Philippines: institutionalise social audits.

 

Outside the OGP, the World Bank’s BOOST tool for public expenditure analysis is a new data tool that allows users to trace and analyse budgets for public services down to the points of service delivery – where a country’s IT system contains sufficiently detailed data. For example, in Moldova, BOOST enables users to drill down on spending to the level of individual schools and universities to see how budgets are allocated and actually spent, by who, and whether funds are reaching the areas of greatest need.

Six, commitments should enable citizens to participate more in the planning and delivery of public investment projects. Examples include:

  • Honduras: opening up citizen participation in the monitoring of public procurement processes.
  • Mexico: building a public, open and interactive geo-referencing platform that allows citizens to track public resource allocation as well as the results of federal spending and public works.
  • Ukraine: special citizen panels to be created to monitor the design and implementation of public infrastructure; and Open City platforms in 18 local authorities allow citizens to report problems with local infrastructure.

More generally, commitments to strengthen public procurement are in many Action Plans. Those for which the IRMs reported reasonable implementation progress include Brazil, Croatia, Georgia, Hungary, Indonesia, Mexico, Moldova, Paraguay, Philippines, and Uruguay.
Seven, key oversight institutions should be strengthened. Legislative committee budget hearings should be opened up to the public, and consideration given to setting up an independent research office to advise the legislature on budget issues; the independence and resourcing of the Supreme Audit Institution should be ensured; and social auditing should be introduced or extended e.g. CSO monitoring of the quality of public services, as described above in South Africa.
Finally, countries should also:

  • Clearly demonstrate how each commitment in its Action Plan will advance open government. Many commitments in first Action Plans lacked relevance to OGP: they were about ‘good government’ or ‘e-government’ rather than open government.
  • Specify each commitment more carefully using SMART criteria, and create a clear boundary between existing policies and new commitments. The Philippines first Action Plan and the second UK Action Plan (where the template for each commitment included a section on progress to date to more clearly define what was new in the commitment) provide some good examples of well-specified commitments.
  • Consider some commitments framed in terms of outcomes rather than intermediate processes e.g. increase the country score on the OBS (one of Kenya’s OGP commitments), or align commitments to the achievement of specific UN SDGs, an approach being pursued by Mexico in the development of its third Action Plan.
  • For each commitment, designate the lead agency and the official responsible, as well as the CSO(s) working with government (as was done in the second UK Plan).

GIFT stands ready to assist countries with the design and implementation of their OGP fiscal transparency commitments. The OGP-Fiscal Openness Working Group, which is OGP GIFT FOWGcoordinated by GIFT, has since 2013 been providing regular venues for OGP ministry of finance officials and their country counterpart CSO representatives to engage in-depth on topics of common interest, providing a platform for peer to peer sharing and learning, offering access to international good practices, tools, and technical expertise, and supporting OGP members to develop more ambitious fiscal openness goals and commitments. GIFT has specifically offered its assistance to the cohort of countries currently preparing their next Action Plans. Please contact us and let us know what issues you are grappling with in your country or the areas where you could do with some additional technical support.

Murray Petrie – GIFT Lead Technical Advisor