COVID-19 poses heightened challenges for public budgets

Warren Krafchik, IBP executive director— Apr 07, 2020

Tune in April 30 at 9 a.m. EDT (UTC-4) to hear experts from around the world announce and discuss the latest Open Budget Survey results.

As I write, the COVID-19 pandemic is wreaking havoc around the world. The threat to public health, the damage to national economies, and the disruption to daily life is jarring and frightening as countries struggle to contain the virus and blunt its impact. At this troubled time, we are thinking about our many colleagues around the world, wishing them good health and safety.

informal settlement
Communities living in poverty must be prioritized.

In this environment, open and accountable public budgets are not a luxury; they are more crucial than ever.

Budgets will play a central role in government responses to this virus and its fallout. We strongly support aggressive government action and, like others, we believe leaders should pay special attention to the needs of those living in poverty, who are particularly vulnerable to COVID-19’s devastating health and economic impacts. To meet these unparalleled challenges, governments must rapidly shift priorities and realign tax and spending policies. The rush to act may tempt some leaders to forego informing and engaging the public on the steps they take. However, while the crisis demands swift and decisive action, it nevertheless requires honesty, transparency, engagement and, in the end, public trust.

IBP’s latest Open Budget Survey (OBS), the results of which will be released April 29, shows there is reason for concern. Drawing on independent research in 117 countries, we find that most governments lack the accountability systems and policies to make their budgets fully open to the public. Gaps in budget transparency exist throughout the budget cycle, especially in how governments publicize changes to budgets during implementation. These shortcomings are compounded by the weak oversight of legislatures and auditors and scarce opportunities for public input. In addition, sector budgets do not typically include the detail necessary to show public spending improves the delivery of critical services, including health care services central to resolve this pandemic.

mass protest
The pandemic will further intensify public frustration with levels of inequality and poor government accountability. 

These deficiencies concern us because to raise living standards, public spending must deliver results. Our previous research has found that many governments do not fully spend their budgets or publicly explain variations. For example, underspending of vaccine budgets is especially high, even in countries with recurring stockouts. Corruption and inefficiencies will likely worsen in this crisis at just the time when governments should be most under the microscope for misuse of funds.

The consequences of today’s budget decisions will be felt for years to come. This crisis unfolded at a time of simmering public frustration over stark public inequities and governments’ failure to address them. Public trust could be further undermined if governments respond to the pandemic with actions that seem arbitrary or that favor certain interests over others.

Fortunately, a different outcome is possible. Our work of the last two decades clearly shows that open budget practices are linked to greater equity and efficiency. Our latest OBS also demonstrates that many governments have been able to take immediate steps to open their budgets to public scrutiny. Their actions point the way for others. However, all governments have a long way to go to provide meaningful opportunities for public input into budgeting processes and thus secure better outcomes. Civic organizations are vital sources of insight, information and networks that can boost the effectiveness of government services and build public accountability and trust. Now, more than ever, governments must think creatively about how to invite and facilitate public participation and harness its benefits.

civil society workers
Civil society workers in a South Africa informal settlement

Civil society will prove an innovative partner. IBP in South Africa, for instance, is providing data to residents of informal settlements in the major metropolitan centers so they can provide real-time feedback about government services during the pandemic, such as whether public toilets were cleaned. This information allows government officials to understand community needs and the quality of services, and, when necessary, help communities hold government accountable.

Elsewhere, IBP’s partner in Argentina, ACIJ (Asociación Civil por la Igualdad y la Justicia), is working with allies to assure that homeless people in Buenos Aires are protected during the pandemic. More than a third of these “invisible people” suffer from one or more health conditions; in fact, the most common are respiratory in nature. In addition, 10% of those who live on the street are over 60 years old, the age group with the highest risk of death from COVID-19. Yet preventive measures such as regular handwashing and social distancing are luxuries without reliable shelter and public services.

In our latest OBS report, we launch a global Call to Action for governments to work with civic organizations, the private sector and donors to make sustained advances in budget transparency, inclusion and oversight. We call on governments to urgently adopt budget policies that mitigate the harmful effects of COVID-19 and, in doing so, embrace budgeting processes that restore public trust and shape a more inclusive future. (For more information on the global call to action, email Claire Schouten at IBP: [email protected].)

No one knows precisely how this pandemic will play out. To be sure, open budget systems alone cannot prevent its negative effects. But they can strengthen the bonds between citizens and government, so needed right now, and in the process improve the delivery of essential public services.

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