What are the Benefits of Budget Transparency?

1. The Open Budget Survey 2010Paolo de RenzioSenior Research Fellow IBPEast African Conference on Budget Transparency and Accountability23-25 May 2011

2. What are the Benefits of Budget Transparency? • Promotes engagement and accountability • Enhances legitimacy and credibility of policy choices • Improves effectiveness and efficiency of implementation • Reduces opportunities for corruption/leakages and controls wasteful spending • Attracts investment and reduces cost of borrowing www.InternationalBudget.org

3. What is the Open Budget Survey? • A comprehensive assessment that evaluates: • public availability and content of eight key budget documents, and opportunities to participate in the budget process • Role and strength of formal oversight institutions – national legislatures and external auditors • Based on guidelines developed by the IMF, OECD, INTOSAI, and the IBP, but different from both IMF ROSCs and PEFA assessments • 2010 Survey covers 94 countries (27 African), up from 85 countries in 2008 and 59 countries in 2006. www.InternationalBudget.org

4. Rigorous Survey Methodology Data quality assured through five-step process: • Survey completed by independent expert country researcher • Peer reviews provided by two anonymous expert reviewers in each country • IBP checks on internal consistency and accuracy against publicly available data • Government review (optional) • IBP referees differences in answers between researchers and reviewers www.InternationalBudget.org

5. Key Finding #1: Major Gaps in Budget Transparency Worldwide • Governments publish less than half of the required budget data (Average score 42/100, 28/100 for Africa) • Only 20 of the 94 countries provide their citizens with comprehensive budget data (only South Africa included). • 40 countries publish minimalor no budget information; 21 countries do not publish the budget proposal. • Published budget documents often lack essential information (e.g., data on poverty programs, extra-budgetary funds, contingent liabilities). www.InternationalBudget.org

6. Major Gaps Worldwide (cont.) • Public availability of certain budget reports is particularly poor (Pre-Budget and Mid-Year Reports). • Some published reports typically lack comprehensiveness (Year-End and Audit Report). • Low-scoring countries often share similar characteristics, such as dependence on extractive industries and/or aid, weak democratic institutions and administrative heritage. • However, none of these factors predetermine performance — there are countries with each of these groups that perform better. . www.InternationalBudget.org

7. Major Gaps Worldwide (cont.) www.InternationalBudget.org

8. Key Finding #2: Significant Improvements In Previously Low-Scoring Countries • Average score for 40 countries improved 9 points from 2006 to 2010. • 20 countries improved by more than 10 points. Most substantial improvements in Africa: Liberia (+37 points), Egypt (+30 points), and Uganda (+23 points) • Sustainability and deterioration: • Scores still very low for many improvers • Some countries deteriorated overall – Niger • Publication of individual documents often not sustained www.InternationalBudget.org

9. Why Did Improvements Occur? • Changes in government after elections or the appointment of a new official committed to greater transparency • Internal pressure from within a country from legislatures and civil society organizations • External pressure exerted by donors and from specific initiatives like HIPC and the OBI • Technical assistance provided to countries by donors www.InternationalBudget.org

10. Key Finding #3: Lack of Transparency Compounded by Weak Oversight Institutions • LEGISLATURE • Inadequate legal powers and time to review the budget • Limited powers to approve and monitor modifications of the enacted budget during budget execution • SUPREME AUDIT INSTITUTION • Lack of independence • Limited funding/resources • Institutions not maximizing use of existing powers and resources to involve citizens www.InternationalBudget.org

11. Recommendations - Short term • Governments can improve budget transparency immediately and at low cost • Budget documents should be widely available for free and on a timely basis. • Countries should publish all the budget documents they already produce for internal purposes or donors. • This offers opportunities for immediate, low-cost, substantial improvements. www.InternationalBudget.org

12. Availability of Key Budget Documents www.InternationalBudget.org

13. Recommendations – Short Term (cont.) • Legislatures and SAIs should make better use of current resources and powers • Provide the public with opportunities to attend and testify during budget discussions in legislatures; • Hold public consultations during the development, execution, and publication of audits by SAIs; and • Partner with CSOs and universities to improve access to analysts and communities • . www.InternationalBudget.org

14. Recommendations - Medium Term 1. Donors should promote budget transparency and engagement • Improve transparency of aid flows and compatibility with country budget systems • Emphasize transparency and engagement in all PFM reforms • Strengthen linkages between transparency performance and aid modalities • Increase parallel support to oversight institutions and CSOs • Use OBI to diagnose problems and target country reforms 2. Global norms on budget transparency and participation should be established www.InternationalBudget.org

15. THANK YOU! www.openbudgetindex.org 820 First Street, NE Suite 510 Washington, D.C. 20002 Phone: +1-202-408-1080 Fax: +1-202-408-8173 Email: info@internationalbudget.org www.InternationalBudget.org