Politics, rights and accountability in the budget process

1. Politics, rights and accountability in the budget process Andy Norton, Diane Elson

2. Source: What’s Behind the Budget? • Guide to the budget literature for non-specialists • Approaches to analysing politics and rights in the budget process • Review of pro-poor & gender budget initiatives in developing countries

3. 1. Key Issues in Understanding the Budget Process • Have to understand accompanying processes of policy and planning • Essentially a political process – purely technocratic approach inadequate • Holistic understanding of PEM includes macro and revenue issues, and issues of efficiency/effectiveness • Should not assume that allocations translate accurately into spending…

4. 2. Political Dimensions of Budget Processes • Means examining the ways in which the distribution of power within the budget process affects the distribution of public resources

5. unequal power relations may be expressed by: • Inclusion/exclusion/proximity of different social groups to the formal decision-making process • Norms and values embedded in priorities and assumptions contained in the process, structure and content of the budget • Dominant norms and assumptions about ‘expertise’ and knowledge (mystification)

6. Key areas for understanding: • Formal structure of roles and responsibilities • Formal rules governing decision-making, political choice & accountability • Networks of stakeholder power and influence which influence budget outcomes • Incentives for action (covert/overt) affecting decision making during formulation and execution • Latitude for bureaucratic discretion at all levels of the budget execution process • Dominant norms and values in key institutions

7. Challenges… • Budget offices tend to be closed, defensive, even secretive – reluctant to reveal their strategies for fighting off claims • Honest account of incentives might touch on illegal/publicly unacceptable practices • Hard to analyse and describe the operation of power through ‘informal’ processes

8. Some sources of obfuscation in budget processes • Information exists but not released • Nobody knows what is actually disbursed or spent (or deliberately mis-recorded…) • Structure of the budget makes it impossible to tell who benefits • Budget is changed so often during the year that original intentions no longer matter • Key expenditure is off-budget

9. An operational method – politics of budget execution • Compare allocations with expenditures over an extended period (e.G. 10 years) • Are there any areas of the budget critical for poverty reduction which consistently lose out in budget execution? • If so, analyse why and what can be done about it – formulate strategy • Monitor the trend… has it changed?

10. When we tried this in Jamaica (through MoF…) • Found one part of the budget which was consistently under-spent (social and community capital expenditures) • Concluded that this was a result of budget practices and procedures rather than overt political manouevering • This was a significant problem for both social impact and governance

11. Why….? • ‘…a strongly held belief in the budget division that the costs of postponing Economic Services expenditures were greater than those of postponing Social expenditures..” • Social ministries don’t prepare their case well enough, and don’t contest resources effectively throughout the cycle • Projects tend to be small, localised and benefit those without political clout….

12. Recommendations… • Officials in S&CS ministries need to improve quality of project preparation • Engage with the budget division throughout the budget cycle • Make officials in the BD more aware of the real costs of postponing or cancelling social and community expenditures through ‘comprehensive and convincing’ argument

13. Other approaches to pro-poor change … • Strengthening demand/capacity of service users, and local level officials, to ‘draw down’ resources from the centre through: • Transparency, information dissemination • Public expenditure tracking • Enhancing the clarity of rights and entitlements • Capacity building for civil society/local action

14. Rights, Entitlements and Policy Arguments for: • Empowering for the poor and marginalised • Human Rights framework – international normative and legal framework stressing inclusion, participation, obligation • Political development – moving from patronage to citizenship and rights (basis for collective action)

15. Formal Entitlements • Entitlement = claim or right defined by reference to a custom or established procedure. Provide concrete, specific content to rights. • Benefits: More transparent, equitable, secure - less likely to be stigmatising, promote collective action on the basis of citizenship • Potential difficulties: mechanisms of redress may not be accessible for all; if unaffordable, rationing may occur; restrict flexibility of policy response

16. Helpful Conditions for Pro-Poor Impact • Entitlements provided on a citizenship basis, non-discriminatory in intent • Legal or administrative systems of redress are sufficiently effective/accessible for equitable impact • Can be realistically provided on sustainable basis • Established through relatively accountable, democratic process

17. 3. Pro-Poor/Gender-Sensitive Budget Initiatives • Research-based advocacy initiatives aimed at influencing policy to better fulfill rights • Government-led gender analysis initiatives • Government-led consultation exercises (e.g. PPAs) • Transparency and information initiatives • Participatory budgeting initiatives • Developing a rights-based approach to public provision (including direct assistance to the disadvantaged to effectively make claims)

18. Broad Lessons from the Experience… • Importance of networks and partnerships (parliamentarians, civil society, political parties, technocrats, social movements) • Many successful initiatives have benefited from donor support – capacity building or provision of resources (e.g. HIPC) • Successful initiatives are often facets of a broader political movement or project • Strong pro-poor policy or constitutional frameworks increase space for engagement

19. 4. Conclusions • PEM literature focuses largely on technical/procedural adjustments to policy and budget systems. As well as technical approaches we need: • Better understanding of the political dimensions of the BP • More emphasis on spaces for pro-poor engagement and the capacity of poor people to make claims

20. 7 Key Factors…. • Constitutional framework and political culture oriented to citizenship & rights • System of issues-based political competition • Sufficient fiscal resources for wide-scale delivery of some basic services • Clear, inclusive, framework of policy goals • Transparent system of allocation/execution • Active, engaged civil society • Active, informed citizens able to draw down services/hold officials to account.