Budget Transparency in Russia: Outcomes and Prospects for Development

1. Budget Transparency in Russia: Outcomes and Prospects for Development Anna A. Belenchuk Division Chief, Budget Analysis and Transparency Budget Policy Department Ministry of Finance of the Russian Federation

2. Russia’s performance in the Open Budget Index measured by the International Budget Partnership Russia’s performance in the Open Budget Index, 2006-2020 • The Russian Federation has kept its rating (74) unchanged since 2012, as well asits place in the second group of countries providing the public with “significant information on the budget process”. • Compared to 2012, in the 2015 ranking Russia narrowed its gap with the top performers (table). *targets as per the government targeted program Public Finance Management and Financial Market Regulation Russia’s Relative Performance in the Ranking

3. Scope of Information Provided on 8 Key Budget Documents

4. Public Engagement in the Budget Process IBP Public Engagement Best Practice Principles: - Put in place engagement mechanisms for the entire life cycle of the budget process; - Engage executive, legislative and supreme audit institutions; - Establish a regulatory framework enabling citizen engagement; -Announce government goals early; -Provide feedback. In 2015, the RF kept its score of 25 in the Index measured by the IBP since 2012. 43/100 0/100 25/100

5. Building a multi-dimensional framework for budget data transparency in Russia Transparency of key budget documents across all budget levels Budget data Public engagement in the budget process (participatory budgeting, community marketplace of ideas). Budget literacy

6. Citizens Budget – a Joint MOF – Open Government Project • 1. Transparency • Annual publication of a Citizens Budget brochure as an attachment to the draft federal budget and Budget Law • Design of a Citizens Budget module as part of the Unified Budget Portal of the Russian Federation • Methodological guidance on the Citizens Budgets for regions and municipalities • Annual design and publication of the Report on Best Practice in Delivering the Citizens Budget in regions and municipalities • 2. Public engagement • Promotion of participatory budgeting across the regions in the Russian Federation • Marketplace of community ideas to provide user-friendly budget data • 3. Budget literacy • MOF-World Bank joint project on Budget Literacyin Russia: implementation support

7. Annual Publication of Citizens Budget (Resumed in 2012) • Citizens Budget in Russia—benefits: • Substance captures all IBP recommendations (including information on the budget process, spending across sectors and programs, etc.); • Ample use of visuals and infographics; • Posted on the Internet as a supplement to the draft budget and Budget Law; • A more detailed version is attached to the annual report on budget execution. • Scope for improvement as per IBP recommendations: • Public feedback channels; • A wider audience (TV, radio, etc.); • Citizens Budget is not presented as a supplement to the Accounts Chamber‘s (Supreme Audit Institution)Opinion on the draft budget law and its execution.

8. Improving the Coverage of the Citizens Budget—Target Groups

9. Improving the Coverage of the Citizens Budget–Socially Important (High Profile) Events • Citizens Budget:Eligibility Criteria • Budget expenditures (at least Rub 10 billion) • National importance (relevant to several regions/territories of Russia) • Project approach to an event (one-time events) • Relevant to several target groups • Includes several programs

10. Citizens Budget Module as part of the Unified Budget Portal of the Russian Federation [currently being designed by MOF of Russia] • Module Objective: • Provide easy real-time access to budget information adapted to users’ needs. • Functions: • Educational (a database of best international budget practices) • Informative (reference materials, international benchmarking) • Explanatory (an easy-to-understand glossary, list of social services provided to a given target group) • Options for feedback and data compilation by user demand

11. Citizens Budget: Methodology Methodological guidelines for presenting easy-to-understand regional and local budgets in the Russian Federation and reports on budget execution MOF Executive Order № 145н of September 22, 2015 (new methodology) Joint executive order of MOF, MOED and Ministry of Regional Development of Russia of August 22, 2013 № 86н/357/468 • The definition of Citizens Budgets is widened to mean easy-to-understand information on the budget. • Principles for designingCitizens Budgets are defined. • Information on budget expenditures should be • Relevant to target groups • Relevant to socially important projects. • Estimates of “revenue shortfalls” from tax and non-tax expenditures should be presented. • Information on community-driven participatory budget should be included. • A new document designed in pursuance of the 2012 President’s Budget Address stressing the importance of publishing Citizens Budgets every year across all budget levels. • Citizens Budgets were delivered as presentations and brochures, information resources (portals) or sections thereof. • Regions and municipalities were advised to benchmark their results against other municipalities

12. Citizens Budget: Review of Preparation and Publication Across the Regions and Municipalities of the Russian Federation [carried out by MOF since 2013 ] Overall review of information presented by the regions of the Russian Federation on the budget and the budget system in 2015

13. Examples of best approaches to visualizing Citizens Budgets designed in the Russian regions Astrakhan Oblast Omsk Oblast Krasnodar Krai Kostroma Oblast

14. Russian Regional Budget Transparency Rating The first Russian regional budget transparency rating was compiled in 2013 by the Center for Applied Economics, an independent outfit. Since 2015, the MOF Research Institute in conjunction with the Center for Applied Economics, have been publishing the Russian regional rating using a specially designed evaluation method (92 questions in the questionnaire). Top Performers in the Russian Regional Budget Transparency Rating • 2015

15. Public Engagement in the Budget Process at the Local Level Participatory budgeting — a set of tools to engage citizens in the budget process enabling them to define and select types of expenditures and carry out post-implementation project control. Volume of raised extrabudgetary resources in 2015, Rub in millions The foundations of participatory budgeting in Russia were laid down in the World Bank-supported LISP project implemented across the Russian regions since 2007.

16. Local Initiatives Support Program (World Bank) LISP across Russian regions LISP seeks to promote participatory budgeting across Russian regions. Through LISP, regional budget resources are complimented by local sources – community budgets, citizens, and local businesses. The average share of community co-financing is 10%. • Stavropol Krai – since 2007 • Kirov Oblast – since 2009 • Tver Oblast - since 2012 • Nizhny Novgorod oblast –since 2013 • About 2,000 projects implemented between 2007 and 2014 • More than 500 projects every year • More than 1.2million beneficiaries annually • Khabarovsk Krai – since 2013 • LISP implementation effects: • Improved community satisfaction with social service delivery. • Easing community dependency and promoting closer involvement in local development, building mutual trust between communities and local self-governments. • Effective budget solutions: projects selected and financed by local communities prove to be more cost-effective than those financed without local community participation. • Republic of North Ossetia – Alania – since 2015 • Republic of Bashkortostan – since 2014

17. Improved Budget Literacy of the Public To elicit citizens’ interest in public finance and budget policy, there must be a demand for budget data.

18. Budget Literacy in Russia’s Secondary Schools Business Games – Lessons – Case Studies – Roundtables – Discussions – Success Stories – Student Presentations – Problem Essays – Competitions – Distance Learning

19. Thank you!