Lessons from the Open Budget Survey research BCOP Working Group on Budget Literacy and Transparency Learning from International and PEMPAL Experiences in Citizens’ Budgets & OBI Success Factors Elena Mondo February 23, 2016

Presentation Outline The Benefits of Open Budgeting (transparency and public participation) The Open Budget Survey 2015: methodology and global findings + recommendations Good practices and examples of Public Participation in the Budget Process from around the world Producing Citizens Budgets: what information should they include? How to produce them? Examples from around the world. Useful available resources 2

What are the BENEFITS of Open Budgeting? Helps attract cheaper international credit Improves debt management and fiscal discipline Exposes corruption and waste and improve efficiency/effectiveness of public expenditures Fosters equity by matching public resources with public priorities Helps build trust in government and provide citizens with voice and dignity Keep in mind that Open Budgeting includes both budget transparency and public participation in the budget process. 3

4 Open Budget Survey: THE BASICS Independent Comparable Biennial Based on international standards (IMF, OECD, IBP) Assesses three fundamental pillars of the budget accountability system : Transparency Participation Oversight 16 indicators on opportunities for public participation 109 indicators on transparency (the Open Budget Index) 15 indicators on the strength of the legislature and auditors

Open Budget Survey: METHODOLOGY Civil society based research Each country survey is conducted by an in-country independent civil society research organization with PFM expertise Evidence-based Each answer to the survey is supported by evidence (chapter, page, section of a document, web link, cross referencing…) Peer and Government review Each country survey is reviewed by a non-government country expert, and – where governments agree – a government official, usually from the MoF Consistency checks and quality/rigor insurance During the research, IBP staff weekly checks and discusses data against methodology and across countries. Overall, the research process lasts 18 months 5

6 There are serious gaps in budget information o Average global score is 45 out of 100. o 78 countries score 60 or less, meaning they provide insufficient information. o One-third of budget documents that should be publicly available are not published. o Even when budget documents are published they often lack important details Global progress has been modest, but some countries have improved remarkably o Global average score on the OBI increased from 43 to 46 between 2012 and 2015 in the 100 comparable countries o The 41 countries at the bottom of the 2012 OBI increased their scores by an average of 10 points  Biggest gains made by countries that are the least transparent Despite progress, enthusiasm should be tempered o Improvements have come from a low base. o Some countries have regressed (Afghanistan, Honduras, Nepal, Lebanon). o 12 countries have remained at the bottom of the OBI since they were first surveyed o In many countries, there is considerable volatility in disclosure practices. OBS 2015: Global findings on Transparency

International trends/consensus on Public Participation In the 2012 Open Budget Survey, IBP developed and assessed for the first time a set of guidelines and principles on what constituted good practice in public participation in national budget systems. Since then, knowledge and norms on public participation have progressed. The Global Initiative for Fiscal Transparency (GIFT) Principles on Fiscal Transparency, the OECD’s Principles on Budgetary Governance, and IMF’s 2014 Fiscal Transparency Code (translated and provided to PEMPAL members in former events) all include public participation in their set of good international budgeting practices. IBP is currently refining its Open Budget Survey indicators on public participation, to reflect the latest thinking on and improved understanding of what effective participation in the budget process looks like. The work of GIFT has been pivotal in this sense: a public consultation has recently been launched: consultation/ 7

8 Most countries do not provide adequate opportunities for Public Participation o Average score is only 25 out of 100. o 82 countries are weak in providing opportunities for the public to participate in the budget process. o Only 7 countries adequately provide opportunities for public participation. o However: pioneering countries have introduced innovative public participation mechanisms (Brazil, India, New Zealand, Philippines, South Korea, UK, US) Formal oversight is generally lacking o In more than half of the countries surveyed, legislatures lack access to independent research capacity. o In one-third of countries, legislatures are not given enough time to review the budget proposal before it is passed. o In the majority of countries, supreme audit institutions have weak or nonexistent quality assurance systems. OBS 2015: Global findings on Participation & Oversight

Public participation: some path-breaking ideas Brazil : sector Public Policy Management Councils. Elected members (citizens, union officials, civil society organizations) discuss and approve the relevant agency’s annual budget and year-end report at municipal, state, national levels. Kenya : legally established public participation in developing the Pre-Budget Statement (sector public hearings with citizens’ input and questions before the document is presented to Parliament), and during budget approval (civil society can make submissions to the committee at public hearings) India : social audits to assess the implementation of the National Rural Employment Guarantee program in certain states. New Zealand : individual government departments and agencies use client surveys to obtain public input on various aspects of budget implementation and service delivery. Philippines : Grassroots Participatory Budgeting, and consultations at the national level with civil society organizations facilitated by Budget Partnership Agreements. South Korea: 1) Committee of policy experts and civil society + line ministries conduct an assessment of the ministry’s programs and identify wasteful spending, and programs that receive poor ratings can face budget cuts. 2) website to collect public input on wasteful spending and budget misappropriations with financial reward. 9

OBS 2015 recap: Few countries perform adequately across all OBS pillars of budget accountability 0 out of 41 out of 42 out of 43 out of 44 out of 4 Afghanistan Algeria Azerbaijan Benin Bolivia Burkina Faso Cambodia Cameroon China Dem. Republic of Congo Egypt Equatorial Guinea Fiji Iraq Jordan Lebanon Liberia Morocco Mozambique Myanmar Papua New Guinea Qatar Rwanda São Tomé e Príncipe Saudi Arabia Sudan Tanzania Tunisia Yemen Zambia Zimbabwe Albania Argentina Bangladesh Bosnia and Herzegovina Chad Croatia Dominican Republic Ecuador Ghana Guatemala Honduras Hungary India Kazakhstan Kenya Kyrgyz Republic Macedonia Malaysia Mali Namibia Nepal Nicaragua Niger Nigeria Pakistan Senegal Serbia Sierra Leone Slovakia Spain Sri Lanka Thailand Timor-Leste Turkey Venezuela Botswana Bulgaria Chile Colombia Costa Rica El Salvador Indonesia Malawi Mexico Mongolia Poland Romania Tajikistan Trinidad and Tobago Uganda Ukraine United Kingdom Vietnam Czech Republic France Georgia Germany Italy New Zealand Peru Philippines Portugal Russia Slovenia South Korea Sweden Brazil Norway South Africa United States 32 Countries35 Countries18 Countries13 Countries4 Countries NOTE: “Adequately” refers to scores above 60 on the three Budget Accountability Ecosystem Pillars: Transparency, Participation, and the two measures that comprise Oversight (Legislative strength and SAI strength). 10

Global and country-specific OBS Recommendations The OBS global report is available in English as well as another 5 languages (including Russian): Russian.pdf English.pdf Detailed country level recommendations and the 2015 Open Budget Survey report (eng and rus) provides innovative public participation case studies: budget-initiative/open-budget-survey/country-info/ budget-initiative/open-budget-survey/country-info/ Example: Georgia country summary available in English and Russian initiative/open-budget-survey/country-info/?country=ge 11

OBS 2015: Recommendations for PEMPAL Network Publication of the all 8 key budget documents. Russia and Kyrgyz Republic succeeded in publishing all of them in a timely manner, so any PEMPAL country can do it. Increasing the comprehensiveness of budget documents. Publishing documents is a crucial first step to increase transparency, but the information included therein must be sufficiently detailed to allow users to understand, analyze, discuss, ask questions, and increase awareness, dialogue and trust. Peer learning about: o Production and publication of documents (process, timeline and timing) o Mechanisms and legislation for public participation o Interaction with the oversight institutions (SAI and Legislature) Consultation with civil society as to what type of public participation they think could be useful in the country. Mechanisms can and should be adapted from other countries, but there are a number of options to choose from, so it’s important to identify the most appropriate ones. 12

Looking back at the ideas discussed in the previous PEMPAL meeting on this… Transparency Initial steps: Publish the EBP, Audit Report, MYR and Citizen’s Budget Intermediate steps: Improve the comprehensiveness of the EBP, and Year-end Report, with special focus on transparency of SOE Advanced steps: Publish public servant salaries, asset disclosure; beneficial ownership of extractive industries Participation Initial steps: Open the legislature to public debate; SAI to introduce Fraud hotlines Intermediate steps: Executive to establish formal forum to gather citizen input on budget priorities, and citizen feedback on service delivery Advanced steps: SAI to establish joint or parallel audits with CSOs 13

An introduction to CITIZENS BUDGETS DEFINITION: a Citizens Budget is a simpler, less technical version of a government’s budget specifically designed to present key information to the public. FORMAT: Citizens Budgets can vary widely in focus, content, and length and be presented in a number of ways, ranging from a simple brochure to a comprehensive report. EXAMPLES: the OBS uncovered excellent examples of Citizens Budgets that showcase different approaches and styles. GUIDELINES: general guidelines on how to produce a Citizens Budget are available in The Power of Making it Simple: making-it-simple-a-government-guide-to-developing-citizens-budgets/ 14

What INFORMATION should Citizens Budgets include? KEY INFORMATION Economic assumptions and trade-offs underlying the budget: expectations on economic growth and inflation, and predictions about whether the budget will run a surplus or deficit. Revenue collection: amounts and explanation of where the government’s money comes from. Spending allocations: amounts and explanation of how/why the money is being spent. Significant policy initiatives: an explanation of sizable increases or decreases in revenue or spending. Contact information: details of who to contact for further information. ADDITIONAL INFORMATION: Budget process: details on how the budget is formulated and executed and who is responsible at each stage. Sector policies: government policies in specific sectors (health, education…), and clarify which level of government (national, state, local) is responsible for providing them. 15

The PROCESS for developing a Citizens Budget There is no unique process to follow, but general key points to consider Consultation: understanding what the public wants to know is a crucial first step. Consulting civil society and the public can help governments to better appreciate the aim and audience of a Citizens Budget, and foster trust between government and the public. Languages: translating technical budget documents and financial jargon into language that is accessible to ordinary people is a key challenge. Visualizations and illustrations can help to articulate key information. Dissemination: Governments should disseminate their Citizens Budgets as widely as possible, using local languages & different forms of media Timeliness: a Citizens Budget is the simplified version of a more technical budget document. For it to be useful, it is therefore essential that the it is published in a timely manner, i.e. at the same time of the document that it refers to. 16

Examples of Citizens Budgets Citizens Budget can have different formats: Brochure: Mali, content/uploads/mali-citizens-budget-2015.pdf Comic format: Dominican Republic, content/uploads/dominican-republic-citizens-budget-2015.pdf Newsletter: South Africa, content/uploads/south-africa-citizens-budget-2014.pdf Poster: Indonesia, content/uploads/indonesia-citizens-budget-2014.pdf PowerPoint: New Zealand, content/uploads/new-zealand-citizens-budget-2014.pdf 17

Comic format

Poster format

Brochure format

Examples of Citizens Budgets cont. The length of a Citizens Budget can vary. There are excellent examples of comprehensive yet accessible documents:  Ghana: content/uploads/ghana-citizens-budget-2015.pdf  Philippines: content/uploads/philippines-citizens-budget-2015.pdf Graphics and data visualizations as well as comics and illustrations are very useful to make the data more accessible.  Peru: content/uploads/peru-citizens-budget-2015.pdf  Tanzania: content/uploads/tanzania-citizens-budget pdf 21

22 Useful information Examples of CBs available here: budgets/examples/ The Power of Making it Simple: A Government Guide to Developing Citizens Budgets, available here: it-simple-a-government-guide-to-developing-citizens-budgets/ Open Budget Survey Calculator, to see how the Open Budget Index score changes if improvements are made:

Thank you! For more information, please contact: And visit: International Budget Partnership 820 First Street NE Washington DC Tel: