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Great Ideas for OGP Action Plans: Opening Budgets

David Robins|

This post is part of a blog series we are running over the next few weeks to highlight core open government issues and give you ideas to consider as you develop your new action plan. Last week, we focused on natural resources governance. This week we take a look at how budget processes can be opened up for increased citizen participation.
-The OGP Support Unit

The budget is the single most powerful tool that a government can use to improve the lives of its citizens. It is where policy meets public resources — where decisions about raising and spending public money turn promises and commitments into real investments in programs and services. Not only do the people have the right to know how their government is spending their money, they can play an essential role in improving budget decisions, implementation, and accountability. In other words, if open and effective governance is your goal, countries must have open and accountable budgets.

Fiscal transparency alone, however, is not enough — to truly open budgets governments must also provide meaningful opportunities for citizens and civil society to engage in budget processes and ensure strong, independent formal oversight institutions.

We now have a huge opportunity to advance open budgeting and open government. Fifty-one countries will be drafting new national action plans (NAPs) for the Open Government Partnership (OGP) by June 2016. This is a chance for these countries to make concrete and ambitious commitments to increasing fiscal transparency and public participation throughout the budget cycle, and we at the International Budget Partnership (IBP), with the Global Initiative for Fiscal Transparency, are ready to help countries craft commitments that will make a difference in the lives of their citizens.

The state of transparency and public participation in the budget of OGP countries

Analysis by the Global Initiative for Fiscal Transparency (GIFT) of the first 51 independent review mechanism (IRM) reports that assess OGP countries’ progress on their commitments showed that roughly one-third of all commitments related to fiscal transparency, though the proportion of fiscal transparency commitments to other commitments varied by country. Several countries, such as the Philippines, Croatia, and Ghana, have already fulfilled fiscal transparency and participation commitments they made in their previous NAPs.

But there is still plenty of room for countries to improve. Data from the Open Budget Survey 2015 (OBS) showed that 30 of the 48 OGP countries evaluated in the survey provide insufficient budget information to the public, receiving an average score of 58 out of 100 on the Open Budget Index. Additionally, OGP countries are not immune to the volatility seen in the public availability of budget information, i.e., governments are inconsistent in what information they publish from budget cycle to the next. The OBS also finds that six OGP members – Liberia, Malawi, Papua New Guinea, Spain, Sri Lanka, and Tunisia – fail to publish their Audit Reports in a timely way, or at all. Publishing these reports is a key component of OGP eligibility.

When it comes to public participation, OGP countries scored an average of 36 out of 100, which means that they provide few opportunities for citizens or civil society to engage in budget processes. There are, however, some bright stars among the OGP countries. South Korea and the Philippines have both utilized innovative practices to provide opportunities for their citizens to participate in budgeting. South Korea provides a website on which citizens can submit reports of budget misuse and wasteful spending, while the Philippines has instituted a program called “Grassroots Participatory Budgeting” that collects broad-based feedback on budget priorities from the local level and incorporates that into the national budget.

Recommendations

OGP members that no longer meet the eligibility criteria on fiscal transparency should commit to publishing their Audit Report. Audit Reports provide the public with an authoritative and independent accounting of how the government collected revenues and spent public funds in line with the budget. Making this information available to the public and the legislature is a crucial step in ensuring accountability.

Looking forward to the new NAPs that will be drafted throughout the first half of 2016, there are a number of commitments that countries should consider making related to transparency and public participation in the budget.

  1. OGP members should commit to publishing more budget information and improving the comprehensiveness of documents that are already published. Of the countries drafting new NAPs that were also included in the OBS 2015, 24 scored below 60 out of 100, which means that they provide insufficient budget information to the public. Typically, these countries could improve transparency by providing more information on the composition of debt; the government’s macroeconomic assumptions for the budget year; expenditure data for all government programs; nonfinancial data on program performance; tax expenditures; and detailed information on off-budget activities, such as extra-budgetary funds and quasi-fiscal activities. Such information is important for a fuller understanding of the effectiveness of government policies and the state of public finances.

    We further encourage OGP countries to improve disclosure practices through innovative online platforms, like the budget information portals established in a growing number of countries, and by adhering to open data standards.

  2. OGP members should commit to institutionalizing gains in transparency by embedding transparency practices into laws, rules, and procedures. This can consolidate gains in budget transparency, including both the publication of previously undisclosed documents or improving the comprehensiveness of budget documents. Preserving these gains would prevent backsliding and ensure that the budget transparency of OGP members remains on a positive trajectory.
  3. OGP members should commit to providing mechanisms and opportunities for the public to engage in budget processes. Members of OGP should be vanguards of innovative and inclusive governance, and the budget process is ripe with opportunities for public participation.  A number of OGP countries have already launched exciting models of public engagement in budgeting, such as participatory budgeting, social audits, and citizen councils. While other countries will need to develop mechanisms to fit their specific context, these examples can provide valuable models. We encourage OGP members to use the GIFT Principles for Public Participation as guidance.

The new NAPs are an opportunity for governments to make concrete commitments to improve the openness of their budget, and there is a wealth of resources and support available to them.

We encourage OGP members to join the Fiscal Openness Working Group, where they will have access to peer-to-peer learning and technical assistance for understanding international standards and good practices.

IBP, together with GIFT, has a wealth of resources, case studies, and guides available to governments, and we are ready to provide assistance, guidance, and advice in crafting commitments to budget transparency and public participation. Interested governments or civil society can contact us here. 

Filed Under: Challenges and Solutions Fiscal Openness Public Participation Publication of Budget/Fiscal Information Right to Information
Open Government Partnership