Advancing Aid and Budget Transparency for Development: Five Things You Need to Know
At the core of the relationship between citizens and the state are decisions about how public resources are raised and spent. Budgets are the most important economic policy tool available to governments to promote inclusion and redress inequality. The availability of comprehensive, timely information, with meaningful opportunities for citizen engagement in budget processes, can lead to substantive improvements in service delivery and governance.
In countries where a significant portion of the budget comes from external actors, such as major international donors, then it is crucial that these actors and their finance flows are transparent. This will ensure that available resources are allocated and spent in a manner that responds to citizens’ needs. More broadly, greater levels of transparency around both aid and budget data help to illustrate a government’s commitment to allocate sufficient resources to reduce poverty.
To bring more attention to these critical issues, Publish What You Fund and the International Budget Partnership are bringing together governments, donors, civil society organizations, and oversights institutions for a discussion this week at the Open Government Partnership Summit in Tbilisi, Georgia. Based on the Open Budget Survey 2017 and the 2018 Aid Transparency Index, both published earlier this year, here are five things you need to know on aid and budget transparency:
1. Progress has been made over the last decade on aid and budget transparency
The 2018 Aid Transparency Index and Open Budget Survey 2017 reports highlight that the picture of aid and budget transparency is clearer today than it was ten years ago. Countries on average are providing more budget information and 75% of the organizations assessed in the Aid Transparency Index now publish information on their development activities on a monthly or quarterly basis. This is particularly encouraging and demonstrates that progress on these fronts is achievable.
2. These transparency gains are not irreversible
The Open Budget Survey 2017 found that budget transparency has stalled overall since 2015, with the most pronounced decline in sub-Saharan Africa. This also echoes disappointing performances from some donors who have previously championed transparency in the Aid Transparency Index. This suggests a possible complacency and risk of backsliding that must be urgently addressed. Institutionalising transparency efforts and open government practices, including going beyond legislation to focus on implementation, ensuring transparency in broader reform efforts, using digital tools, and introducing institutional measures for coordination, can help sustain transparency and achieve openness dividends.
3. Aid and budget transparency is still lacking when it comes to the detail
The 2018 Aid Transparency Index found that 20 out of 45 organizations provide an outlook for up to 2019 or beyond, which should be useful information for partner country governments when planning their national budgets. However, disaggregated budget information containing financial breakdowns for the different lines of individual activities is less extensively published. This makes it particularly difficult to follow the money and figure out what it is spent on once it leaves donors’ accounts. This also echoes previous technical work on aligning aid information with budget classifications from partner countries. Without donors publishing sector codes that are mappable to partner country budgets, it remains difficult for them to produce accurate budgeting, accounting and auditing of both external and domestic resources.
4. Gaps also exist when looking beyond financial flows to project impact
Basic information needed to track sector spending, budget implementation, and the goals and outcomes of these are also missing. According to the Open Budget Survey 2017, 59% of countries make data available on actual spending against budget during implementation but only 45% make final spending against budget available. Further, 74% of the 115 countries surveyed failed to provide details of expenditures, such as by sex, by age, by income, or by region, to illustrate the financial impact of policies on different groups of citizens. On the aid front, the pieces of information critical to assess project and donor impact – beyond the money – are the most difficult to find – when available at all. Collectively, donors assessed in the 2018 Aid Transparency Index only scored 27% on average for the performance component (which includes results and evaluations, for example). Without access to this information, donors, partner country governments, civil society, and citizens cannot monitor projects effectively, assess whether objectives were met, or learn from them.
5. Problems associated with transparency are exacerbated by few opportunities for the public to engage and use information
The Open Budget Survey 2017 found that there are very limited opportunities for citizens to participate throughout the budget process. While most countries have at least one formal mechanism for budget participation, practices can be more inclusive and structured to allow for more meaningful citizen engagement. The 2018 Aid Transparency Index included a number of case studies demonstrating the use of information such as proposed project data and outlining why transparency matters to community-based organizations, journalists, and governments in partner countries. Progress will only be truly achieved once the information is being used by all stakeholders to hold decision-makers to account and deliver on development goals.
Conversations across sectors can help stakeholders share experiences and practical ways to connect aid and budget information for accountability and development. We look forward to further engaging with governments, civil society organizations, donors, and oversight institutions to better understand challenges and opportunities to advance aid and budget transparency for more effective development planning, spending. and outcomes.
This post also appears on Publish What You Fund’s Blog here.