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Transparency and Participation in the Budget Process


 

 

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A large and growing number of civil society budget groups have taken up work to improve the transparency of their budget processes, as well as to open up avenues for participation.  This section of the website consists of two parts.  The first part contains general information on the topic of budget transparency and participation, including introductory information on why groups have focused on this issue and how the IBP can help assist in this work.  It also includes general resources in this area, and who to contact for further information.

The second part contains information on the work to date in this area, covering the work of civil society groups as well as international institutions such as the IMF.  This part includes a general description of civil society work in this area, links to the various study approaches used, as well as links to country reports.

General Information Work to Date

 

 

Why Focus on Budget Transparency and Participation

Civil society researchers have focused on budget transparency and participation for four sets of reasons.  The first is that as civil society researchers and organizations have begun to enter into budget work they have realized quite quickly that the absence of information and closed processes can thwart their efforts.  They have recognized that transparent and participatory budget systems are the building blocks upon which they can conduct their other budget work, such as taking the available information, analyzing it, and then integrating that analysis into the budget debate.  Opening up the budget process, sometimes by necessity, becomes the first challenge facing those elements of civil society interested in budget issues.

Second, the idea of promoting open budgets is one that can gather support from a wide range of actors, leading to a coalition not available on other issues. Business interests often favor open budgets because they provide a better understood context in which to invest.  International organizations support them because they feel open budgets are essential to good governance.  Civil society organizations favor open budgets reflecting their general support of more open and democratic societies.   Governments find them hard to oppose.

Third, in part because of pressures from the sources cited above, a number of governments have themselves placed the issue of budget transparency and participation on the agenda.  The trend is apparent in developed countries, where broad budget reforms adopted in recent years included great emphasis on transparency.  This trend is also apparent in many developing countries, as part of their transformation toward a more open and democratic society.

Last, and hardly least, transparency and participatory budget systems have several advantages.  Good governance dictates that government operations and decisions should be made openly, and with the active participation of those people influenced by them.   The budget is the primary economic policy document of the government; for this reason transparency and participation in the budget are particularly important.   Indeed, it can be argued that the public has the basic right to information about the budget and to have its views considered in budget decisions.

The benefits of transparency include:

  • Transparency facilitates the identification of the weaknesses and strengths of policies, thereby promoting needed reforms. Transparency, for example, contributes to macroeconomic and fiscal stability as it prevents the build-up of a crisis in secret, bringing about smaller adjustments sooner. 
  • Transparent governments can be held accountable; legislatures, the media, civil society and the public are better able to hold government to account if they have information on government policies, practices, and expenditures.  Elected office holders and public servants may be more likely to act in a responsible manner if their decisions are open to public scrutiny. Holding governments accountable can provide a check on corruption.
  • An adherence to transparency can increase trust in governments and commitment to policy trade-offs. It thus builds social cohesion. For instance, if the public can better understand what their governments are doing and why, they may have more confidence in government and be prepared to accept and trust difficult compromises.

  • With a clear understanding of governments' policies and actions, international and local investors may be willing to invest more resources into a country.

The Links Between Transparency and Participation

To fully reap these benefits of budget transparency, participation of legislatures and civil society in government decision-making is required.   Transparency and participation are mutually reinforcing and both are needed for better budgetary outcomes.

  • Information may allow legislatures to monitor executive decisions and performance, but if they do not have sufficient opportunity to act on the information they receive, their oversight will remain ineffective.
  • While transparency alone engenders consensus on policy and allocation decisions, this consensus will be deepened if both the legislature and civil society are allowed significant inputs into the debate.
  • Involvement of actors outside of the executive branch can improve policy and allocation decisions by bringing different perspectives and creativity to budget debates.

The IBP's Role

Because of the widespread interest in open budget issues among the groups with which we have worked, and reflecting the importance of these issues, the IBP makes a special effort to be of assistance to groups or researchers who want to explore these issues.

We see our roles as the following:

  • Providing technical support to civil society organizations that are undertaking budget transparency and participation studies.
  • Promoting country/regional budget advocacy and the creation of networks on open budget issues.
  • Promoting information sharing among applied budget organizations that have issued budget transparency and participation reports and conducted country/regional advocacy.

The IBP also may produce a short handbook to guide studies on transparency and participation in the budget process.   It is also discussing with other civil society organizations the possible launch of an international Campaign for Open Budgets.  The goal of the Campaign would be to secure open and participatory budget processes by replicating measurement studies and by supporting advocacy of minimum standards for budget transparency and participation.  For instance, the Campaign could prepare a biannual study of budget transparency and participation that uses one instrument to assess and compare progress in as many countries as possible.

General Resources

The research section of this website includes a list of websites and publications on issues related to budget transparency and participation. Click websites or publications to be transferred to those parts of the IBP website.

Who to Contact

Vivek Ramkumar
International Budget Partnership
ramkumar@cbpp.org

Civil Society Work: Past, Current, and Future

At the first international conference of civil society budget groups and researchers, held in 1997, the topic of budget transparency and participation was returned to consistently.  This led the IBP and the Institute for Democracy in South Africa (Idasa) to develop a methodology (adopting and expanding upon a methodology developed by the IMF) to measure budget transparency and participation in the budget process.  The IBP hoped that the method would help budget groups to compare budget transparency in their own countries with other countries.  Idasa was concerned with documenting the significant improvements in transparency in South Africa and establishing a yardstick for future improvements.  Both organizations thought that the scorecard might eventually be used by broader civil society and legislatures in developing countries to pressure for greater transparency.  This methodology was applied to South Africa, in the report Transparency and Participation in the Budget Process:  South Africa, A Country Report.  More information on the early development of this work is described here.

The IBP and Idasa also organized the second international conference of budget groups around the theme of transparency and participation in the budget process.  At this February 1999 conference, the initial results from the South Africa study were presented, as was a description of the IMF's methodology.  Several of the conference attendees decided to undertake open budget work in their own countries.

In Russia, the group Strategia has organized a series of conferences focusing in large part on budget transparency and participation and sparked considerable research in this area.  The focus of this work has been at the sub-national level in Russia.  Assessments have been conducted at the local level in Murmansk, Petrozavodsk, and Velikije Luki, and at the regional level in St.Petersburg, Novosibirsk, Pskov, Samara, and Yuzhno-Sakhalinsk oblast.  The experts surveyed, who included legislators, members of NGOs, journalists, and scholars, generally found the level of budget transparency to be "medium" but the level of public participation to be "low".  The following link contains more information on this work.

In Poland, the Gdansk Institute for Market Economics produced a report on openness and transparency of public finances.  It relied on the IMF Code of Good Practices and the IBP/Idasa methodology, conducting its study through a detailed questionnaire to government officials.  One of the co-authors of the report spent several weeks at the IBP working on the study and collecting background information.

In December 2001 civil society research on budget transparency and participation took a large step forward with the release of a study examining these dimensions in five Latin American countries.  The researchers engaged in the study came from some of the leading academic and non-profit institutions in Latin America: Citizen Power in Argentina; the Brazilian Institute for Social and Economic Analysis (IBASE); the Economics Department at the University of Chile; the Research Center of the Pacific University in Peru; and, in Mexico, the Center on Research and Teaching in Economics (CIDE), and the groups Fundar and Gender Equity.

The researchers met several times to develop a common methodology – including the development of a unique budget transparency perceptions index – and then administered a survey in each of their countries.  Individual reports were prepared for each country, as well as a synthesizing report for all the countries.  The reports were released through a simultaneous press conference in the Latin American countries, drawing widespread attention, and then through a series of briefings in Washington, D.C. organized by the IBP.  The findings of the study included:  "Three important areas in the governance of all countries are citizen participation, accountability, and the accessibility and timeliness of government information.  The weaknesses we found in all three areas and in all five countries suggest the fragility of the fundamental democratic relationship between the government and society."  The reports themselves, in Spanish, can be found here.  Summary documents in English can be found here.

In June 2002 another cross-country transparency civil society study was released. This study, covering five African nations, used a similar methodology to that employed in the IBP/Idasa examination of South Africa. The following groups conducted this study: Isodec in Ghana, Transparency International in Kenya, Integrity in Nigeria, Idasa in South Africa, and the University of Zambia, Women for Change, and Catholic Commission for Justice and Peace in Zambia.  The Africa study was coordinated by the Africa Budget Project at Idasa, which gathered the country researchers to refine the methodology and discuss preliminary results.  The survey was based on a review of available documentation and personal interviews with experts drawn from civil society, the media, academicians, the private sector, and members of the executive, auditing and legislature branches of government.

The results were released at a press conference in Nairobi, Kenya on June 25, 2002.  The major finding was that although there were significant gaps in budget transparency and participation in each of the countries surveyed, some fared much better than others.  South Africa scored significantly higher than the other countries, with Ghana and Kenya comprising a second group, while Nigeria and Zambia were found to score the weakest on these dimensions.  The synthesis results and detailed individual country studies are available in a book published by Idasa.  An executive summary of the results and summary country studies can be found here.

In the United States, several civil society groups working at the sub-national level are engaged in budget transparency reports.  With the assistance of the Center on Budget and Policy Priorities these groups have developed their own questionnaire designed to be of particular use in the U.S. context.  One of these reports - covering the budget process for the locality of Washington, D.C. - was released in July 2002.  The report was prepared by the D.C. Fiscal Policy Institute and found that Washington D.C.'s budget process was marked by a lack of transparency and that a common refrain was "We cannot figure out what the budget means."

Civil society budget groups have now completed country studies on transparency and participation in the budget process in at least 13 countries.  The number of groups preparing budget transparency and participatory studies is likely to continue to swell over the next several years.  The IBP will continue to stimulate and support the adaptation and application of country/regional scorecards.  As noted, the IBP also is engaged in discussions with civil society groups around the issue of whether to launch a formal International Campaign for Open Budgets.  One aspect of such a campaign might be to design and implement a biannual worldwide survey to assess budget transparency and participation.

Study Approaches

The best way to measure transparency and participation in the budget process is not yet clear.  Three basic methodologies have emerged: the IBP/Idasa approach; the IMF approach; and the approach used in the Latin American study.  The methodology used by the U.S. state groups might also be of interest.

The IBP/Idasa scorecard covers five basic areas of transparency and participation in the budget system.

A legal framework for transparency: The legal framework typically dictates the nature of the budget system; to the degree that governments advance transparency only in an informal fashion, such advances are more likely to prove transitory.

Clarity of the roles and responsibilities of the national and provincial governments:  Clarity of roles and responsibilities in the management of public finances is essential to the electorate's capacity to hold specific parts of government accountable for budget policy and decisions.

Public availability of budget information: A fundamental requirement of fiscal transparency is that comprehensive, reliable, and useful budget information made available.

Independent checks and balances of budget execution and government data:   Legislatures and civil society must have the opportunity to influence the budget and assess whether government undertook what it planned.  Checks and balances on the data used in the budget process also should be established.

Budget decision-making process:  A key issue is whether the legislature and civil society are able to participate effectively in the budget process.  By effective participation the study refers to the opportunities for the legislature and civil society to make their viewpoints known and to have these views taken seriously.

The research approach was to gather information from interviews with members of the executive branch, the legislature, and civil society.  This information was supplemented by the in-house expertise of Idasa.  Please go to the Idasa/IBP questionnaire (see Appendix 2) for the questions examined by this method.

The Idasa/IBP method (see pages 6-8 of the link) drew heavily from the IMF's methodology for assessing fiscal transparency.  The primary two distinctions between the approaches are that the IMF does not examine issues of participation in the budget process, and reflects an emphasis on questions of interest to the international financial community.  The IMF's research approach is to either have countries administer the IMF questionnaire themselves or for the IMF staff to a for the questions it examines and IMF explanation for a speech describing its methodology.

The Latin America methodology (see pages 13-17 of the link) combined a survey with a research study (see link).  The first part of the study consisted of an index of perceptions.  Legislators, civil society, and other key users of the budget outside the executive branch were asked to rate their country's performance on a host of budget transparency-related issues, ranging from opportunities for citizen participation in the formulation stage to the impact of audit reports on budgets.  Their responses were tabulated to form the budget transparency index.  Those surveyed were asked 66 questions that made up 14 variables.  The 14 variables, in turn, were grouped into five areas:  participation, development of the budget, oversight, accountability, and access to information.

The second part of the study consisted of an independent review of the legal framework for budget transparency in each country.   This study examined the individual stages of the budget process, using an instrument of 85 questions.  Numeric scores were again compiled.  Neither the IBP/Idasa methodology nor the IMF methodology produced numeric scoring although the IBP/Idasa study did provide overall assessments for each broad area assessed.  The IMF methodology stays away from summary measures.

The method (see pages 13-21 of the link) developed for use by groups working at the sub-national level in the United States begins with a series of 131 questions.  These questions are specific, for which objective answers can generally be provided.  None of the questions require subjective answers.  The answers to the questions are compiled through research of the budget process.

Country Reports

This section is divided in two parts.  The first part includes country and regional civil society reports for Africa, Europe, and Latin America.  The second part is divided into general IMF country reports on the Observance of Standards and Codes, - which include a fiscal transparency section - and more detailed IMF reports exclusively on fiscal transparency.  All of the IMF's country reports can also be found on its own website, see here.

CIVIL SOCIETY REPORTS

Africa  2001

Latin America

 
Other Reports Latin America 2001
GENERAL IMF REPORTS
These reports include sections or updates on fiscal transparency.



 







 









 








 



 Argentinaarrow.gif (845 bytes)Experimental Report on Transparency Practices, April 1999.

 Cameroonarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), September, 1999 and reissued in May, 2000.

Czech Republicarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), July 2000.  Report on the Observance of Standards and Codes – An Update including the following topics: Data Dissemination and Fiscal Transparency, July 2001.

Bulgariaarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), August 1999.  Reissued in March 2000. Report on the Observance of Standards and Codes (ROSC),-Update, March 2001.

 Greecearrow.gif (845 bytes)IMF Staff country report, December 1999.
 Report on the Observance of Standards and Codes (ROSC), February 2001.  An updated factual report on the 1999 report.  Update to the Report on Observance of Standards and Codes, 2002 – Fiscal Transparency, March 2002.

 Hong Kong SARarrow.gif (845 bytes)Experimental IMF Report on Observance of Standards and Codes: People's Republic of China--Hong Kong Special Administrative Region, August 1999.

 Tunisiaarrow.gif (845 bytes)Experimental IMF Report on the Observance of Standards and Codes, September 1999.
 Report on the Observance of Standards and Codes –Update, January 2001.

 Ugandaarrow.gif (845 bytes)Experimental IMF Report on the Observance of Standards and Codes, August 1999.

 United Kingdomarrow.gif (845 bytes)Experimental IMF Report on the Observance of Standards and Codes, March 1999.

DETAILED IMF REPORTS
 These reports entirely focus on fiscal transparency issues.

 



 




























































 

Armenia, Republic ofarrow.gif (845 bytes)Report on the Observance of Standards and Codes — Fiscal Transparency Module, February 2002.

 Australiaarrow.gif (845 bytes)IMF Staff Involvement in the Preparation of a Pilot Transparency Report for Australia, April 1999.

Azerbaijan Republic ofarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), November 2000.

Canadaarrow.gif (845 bytes)Report on the Observance of Standards and Codes, December 2001.

 Brazilarrow.gif (845 bytes)Report on the Observance of Standards and Codes, July 2002.

 Burkina Fasoarrow.gif (845 bytes)Report on the Observance of the Standards and Codes – Fiscal Transparency Module, March 2002.

 Estonia, Republic ofarrow.gif (845 bytes)Report on Observance of Standards and Codes – Fiscal Transparency, July 2002.

 Francearrow.gif (845 bytes)Report on the Observance of Standards and Codes, October 2000. Report on the Observance of Standards and Codes – Fiscal transparency: An Update, October 2001.

 Hondurasarrow.gif (845 bytes)Report on the Observance of Standards and Codes-Fiscal Transparency Modules, February 2002.
Hungaryarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC)- Fiscal Transparency, April 2001.  Report on the Observance of Standards and Codes (ROSC) - Data Modules and Fiscal Transparency – Updates, June 2002.

Indiaarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), February 2001.

Japanarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC) – Fiscal Transparency Module, August 2001.

Korea, Republic ofarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), January 2001.

Kyrgyz Republicarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC) – Fiscal Transparency Module,March 2002.

Latvia, Republic ofarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), March 2001.

Malawiarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), August 2002.

 Maliarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC)-Fiscal Transparency Modules, February 2002.

Mongoliaarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), December 2001.

Mozambiquearrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), August 2002.

 Nicaraguaarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), April 2002.

 Pakistanarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), November 2000.

 Papua New Guineaarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC)- Fiscal Transparency Module, October 2000.

 Polandarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), February 2001.

 Slovenia, Republic ofarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC)- Fiscal Transparency Module, June 2002.

 Swedenarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), August 2002.

 Tanzaniaarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC) - Fiscal Transparency Module, March 2002.

 Turkeyarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), June 2000.

 Ukrainearrow.gif (845 bytes)Experimental IMF Report on the Observance of Standards and Codes, September 1999.

 Uruguayarrow.gif (845 bytes)Report on the Observance of Standards and Codes (ROSC), March 2001.

                 

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