Toward more accountable public finance: budget transparency, participation, and oversight

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These are exciting times for those of us who believe in the potential of greater budget accountability to help tackle some of the world’s most pressing problems. The upcoming release of the Open Budget Survey promises to shed some light on three pillars of accountable budgets: transparency, participation, and oversight.
The importance of budget transparency is now well established. Recent years, however, have seen growing recognition that, along with access to information, it is critical that the public is provided with formal opportunities to engage in how budgets are managed.

​Public participation is becoming an increasingly well-established pillar for ensuring accountability. 

Budget transparency: established in theory, if not yet in practice 
Budget transparency, once viewed as potential threat to effective budget decision-making processes, is now almost universally endorsed to be essential to holding governments to account for the management of public funds.

International institutions such as the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) now recognize transparency as critical component of well-functioning budget systems.

Many national governments are also embracing transparency. Through the Open Government Partnership, 66 governments from all around the world have collectively made around 2,000 commitments for establishing more open governance systems – the largest portion of which are focused on budget issues, including transparency.
But while transparency is a necessary component of accountable budget systems, it is not sufficient to ensure more accountable budgets.

Meaningful opportunities for the public to participate in budgets, and strong oversight from the legislature and supreme audit institution, are also crucial. And here is where the good news lies.
Public participation: a growing consensus? 
While the importance of budget transparency, and what constitutes good practice, is now well established (in theory, at least, if not in practice), recognition of the importance of public participation is more recent.

In 2012, the International Budget Partnership (IBP) revised its Open Budget Survey to include indicators to assess the degree to which the public is provided with opportunities to participate in the budget process. In the absence of standards or guidelines on what constitutes good public participation practices, the inclusion of these indicators marked one of the first attempts to articulate how participation in the budget process at the national level should be structured, and to assess government performance.
The 2012 survey found that formal opportunities for participation were largely absent in most countries. The average score on public participation was just 19 out of 100.
Nearly three years later, however, there is reason for optimism. Since 2012 the international community has more fully embraced public participation as an important component of budget systems. Both the IMF and the OECD have revised their standards on effective public financial management to include language on the importance of public participation.

In addition, the Global Initiative for Fiscal Transparency, a multistakeholder initiative, has an ambitious agenda to document innovative examples of public participation from around the world. The goal is to develop a detailed set of guidelines for participation in national budget processes. Such work in building consensus and articulating ways progress can be made is heartening.
Moving from theory to better practices
Experience working to improve budget transparency has shown that, while consensus at the global level is an enabling condition for reforms, ultimately action by national governments is needed. Despite continued progress, transparency practices were poor in many of the countries surveyed in 2012 – among the 100 countries surveyed, the global average transparency score was just 43 out of 100.
What is the global picture of budget transparency, participation, and oversight in 2015? You’ll have to wait until tomorrow to find out. Or better yet, join us on for a discussion of the results on Thursday. But, while the results may give us a clearer picture of where we are at, the real challenge is spurring governments to make progress.  
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