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An overview of Lagoro IDP camp in Kitgum District, northern Uganda, 20 May 2007. Manoocher Deghati/IRIN
Thu, 07/25/2013 - 16:32 -- Anonymous (not verified)

Can fiscal transparency lead to better accountability and development?

31 May 2013
Paolo de Renzio

For people interested in transparency, these are very interesting times. The last few years have seen a flurry of new international initiatives aimed at promoting transparency in a variety of areas of government action. The Open Government Partnership, launched in 2011, already has over 50 member governments who have undertaken to promote transparency and openness and to allow for independent reviews of their efforts. Transparency initiatives have existed for longer in the extractive industries and foreign aid sectors, two areas that are both sensitive and very important for international development. In the more specific and fundamental area of fiscal transparency, the Global Initiative for Fiscal Transparency has brought together key actors – governmental, non-governmental and inter-governmental – to design and promote improved global norms for transparency and citizen participation in the management of public resources.

All of these efforts stem from two inter-related convictions. First, that having access to government information – including budget information – is a right of every citizen, as enshrined in Article 19 of the Universal Declaration of Human Rights. Second, that transparency and access to information will allow citizens to engage with policy processes and monitor government action, leading to improved accountability and better development outcomes. While the first statement comes from a belief that governments have a duty to fulfil individual human rights, the second one needs to be demonstrated in practice, and backed by credible evidence.

Over the past few years, the International Budget Partnership (IBP) has been hard at work on both fronts. Since 2006, we have been carrying out a bi-annual survey to assess and compare levels of budget transparency across a wide range of (mostly developing) countries. The Open Budget Index has contributed to denounce the difficulties that citizens face in accessing budget information, and to put pressure on governments to open up their books. Given the overall dearth of existing research on these matters, in 2009 we decided to team up with some of the best researchers in the field to look deeper into how improvements in fiscal transparency and participation come about, and under what circumstances they lead to more government responsiveness, improved accountability and better development outcomes. The results of our three-year efforts, including both quantitative analyses and in-depth country case studies, are summarised in a recently published volume, Open Budgets: The Political Economy of Transparency, Participation and Accountability, which we will launch at ODI in London this week.

Our research shows that four main factors stand out as contributing to improvements in fiscal transparency and participation. These are: (a) processes of political transition towards more democratic forms of political contestation and alternation; (b) fiscal and economic crises that force governments to put in place enhanced mechanisms for fiscal discipline and independent scrutiny; (c) widely publicised cases of corruption that give reformers political space to introduce reforms that improve public access to fiscal information; and (d) external influences that promote global norms and empower domestic reformers and civil society actors.

Evidence of how greater transparency and participation in fiscal matters may affect government accountability and quality of service delivery is more limited. In the countries studied, there are various examples of legislators becoming more demanding vis-à-vis the executive, and of civil society campaigns achieving significant but isolated success, but the positive impacts of fiscal transparency remain far from systematic or definitive.

Additional case studies supported by the IBP have started producing more convincing evidence of the possible positive outcomes that more transparent budgets allow for. They document how civil society groups have used available budget information in campaigns that successfully challenged and influenced government policies. For example, the Subsidios al Campo  campaign in Mexico obtained and published official data on the recipients of agricultural subsidies, focusing attention on how inequitably they were being distributed and challenging a powerful agricultural industry in the process. As a consequence, the government reformed the system to ensure that subsidies reached needy farmers. In South Africa, the Treatment Action Campaign used budget analysis, mass mobilisation and litigation to push the government to massively increase the distribution of anti-retroviral treatment. Finally, the National Campaign for Dalit Human Rights in India undertook sustained monitoring of funds of a programme designed to provide direct benefits to marginalised groups, pressurising the government to admit to diverting these resources and then commit to repay the money.

This emerging body of research shows that while fiscal transparency can – and sometimes indeed does – contribute to positive development results, such results and transparency itself cannot be taken for granted. Many governments continue to resist calls for more transparency and responsiveness to their citizens. And transparency’s impact on accountability relations and development outcomes depends on a host of additional factors, from active oversight by institutions, to a free and engaged media, to smart interventions by international actors.

Two encouraging trends provide reasonable ground for hope. The international context of players, norms, and incentives has dramatically evolved and is increasingly contributing to changing domestic dynamics on the ground. There has also been a notable increase in civil society’s interest, capacity and engagement with fiscal and budget issues, making it better able to take advantage of enhanced opportunities for participation and accountability. Additional research, however, is still needed to improve and sharpen our understanding of how transparency, coupled with citizen engagement, can deliver on the promise of improved governance and better development results.

Paolo de Renzio is Senior Research Fellow at the International Budget Partnership  and Research Associate with ODI’s Centre for Aid and Public Expenditure. He is co-editor of Open Budgets: The Political Economy of Transparency, Participation and Accountability.

This post features the author's personal view and does not represent the view of ODI.

Centre for Aid and Public Expenditure