1. Public Participation in Fiscal Policy
Principles, Mechanisms and Country Practices
Juan Pablo GUERRERO
Jakarta, INDONESIA
September 14, 2016
#FiscalTransparency

2. Overview of presentation
GIFT’s work program on public participation in fiscal policy
What is public participation in fiscal policy?
The GIFT Participation Principles
Country practices
Towards a global commitment on public participation (implementing the principles) 2

3. public participation in fiscal policy
GIFT’s work program on
public participation in fiscal policy
Originated with GIFT High Level Principle 10
Eight country case studies
A series of workshops
Public consultation in 2015
GIFT Participation Principles approved December 2015
Preparation of Guide to help implement the Principles
Development of indicators to measure participation in fiscal policy
Ongoing work with OGP Fiscal Openness Working Group 3

4. Why a new set of principles on public participation?
Post-GFC: renewed emphasis on open budgets + fiscal transparency + participation = accountability
Going beyond disclosure to direct public participation:
Participation as a right
To improve quality of every phase of public policy (design, implementation, monitoring, etc)
Participation is key to SDG Goal 16 and building inclusive institutions, and critical to achieving all the SDGs
Real and meaningful public participation is critical to success and sustainability of OGP – But how, exactly, should states engage their citizens? 4

5. GIFT High-Level Principle 10
GIFT’s 10 High-Level Principles of Fiscal Transparency, Participation and Accountability were endorsed by UN General Assembly in 2012 (UNGA Resolution 67/218), which called on governments and UN system to:
“Intensify efforts to enhance transparency, participation and accountability in fiscal policies, including through the consideration of the principles set out by GIFT.”
Principle 10 establishes that “Citizens and non-state actors should have the right and effective opportunities to participate directly in public debate and discussion over the design and implementation of fiscal policies.” 5

6. What is public participation in fiscal policy?
The variety of ways in which citizens and the general public, including CSOs and other non-state actors, interact directly with public authorities with respect to the design, implementation, and review of public policies
Includes any form of invited interaction without excluding autonomous activities
Records of these interactions are publicly available
Ranges from one-off consultation to on-going and institutionalized relationships
IAP2 spectrum of public participation:
Inform
Consult
Involve
Collaborate
Empower 6

7. What is the scope of public participation in fiscal policy?
Covers all fiscal policy and budget making activities:
The annual budget cycle: all stages
Fiscal policy reviews and new policy initiatives outside the annual budget cycle (revenues, expenditures, financing, asset, liability management)
The design and delivery of public services
The planning, appraisal & implementation of public investment projects
Far wider and more varied than ‘participatory budgeting’ 7

8. 8

9. Openness Principle 1: Openness
Provide full information on and be responsive with respect to the purpose, scope, constraints, intended outcomes, process and timelines, as well as the expected and actual results of public participation. 9

10. Principle 2: Inclusiveness
Pro-actively use multiple mechanisms to engage citizens and non-state actors, including traditionally excluded & vulnerable groups & individuals, & voices that are seldom heard, without discrimination on any basis including nationality, race, ethnicity, religion, gender, sexual orientation, disability, age or caste; & consider public inputs on an objective basis irrespective of their source. 10

11. Principle 3: Respect for self-expression
Allow and support individuals and communities, including those directly affected, to articulate their interests in their own ways, and to choose means of engagement that they prefer, while recognizing that there may be groups that have standing to speak on behalf of others. 11

12. Principle 4: Timeliness
Allow sufficient time in the budget and policy cycles for the public to provide inputs in each phase; engage early while a range of options is still open; and, where desirable, allow for more than one round of engagement. 12

13. Principle 5: Accessibility
Facilitate public participation in general by disseminating complete fiscal information and all other relevant data, in formats and using mechanisms that are easy for all to access, understand, and to use, re-use and transform, namely in open data formats. 13

14. Principle 6: Transparency
Support each public engagement by providing all relevant information, highlighting and informing key policy objectives, options, choices and trade-offs, identifying potential social, economic, and environmental impacts, and incorporating a diversity of perspectives; provide timely and specific feedback on public inputs and how they have been incorporated or not in official policy or advice. 14

15. Principle 7: Proportionality
Use a mix of engagement mechanisms proportionate to the scale and impact of the issue or policy concerned. 15

16. Principle 8: Sustainability
All state and non-state entities conduct on-going and regular engagement to increase knowledge sharing and mutual trust over time; institutionalize public participation where appropriate and effective, ensuring that the feedback provided leads to revision of the fiscal policy decisions; and regularly review and evaluate experience to improve future engagement. 16

17. Principle 9: Complementarity
Ensure mechanisms for public participation and citizen engagement complement and increase the effectiveness of existing governance and accountability systems. 17

18. Principle 10: Reciprocity
All state and non-state entities taking part in public engagement activities should be open about their mission, the interests they seek to advance, and who they represent; should commit to and observe all agreed rules for engagement; and should cooperate to achieve the objectives of the engagement. 18

19. Country Examples: the GIFT Case Studies
Countries covered: Brazil, Canada, Croatia, Kenya, Korea, Mexico, the Philippines, South Africa, (+ India).
Overall findings:
Countries with newer Constitutions place more emphasis on direct public participation in fiscal policy e.g. Brazil, the Philippines, Korea, South Africa, Kenya.
Three broad types or ‘families’ of public participation in fiscal policy:
Expert-based: e.g. Korea
Top-down: e.g. Brazil
Bottom-up: the Philippines 19

20. Bottom Up Budgeting (BUB) in the Philippines
Launched in 2012 with 515 communities and small budget
Aims: deliver basic social services to the poor, reduce the influence of local elites and empower the citizenry
Local poverty reduction action teams (LPRAT) determine local priority projects
A general assembly: half members from government, half from CSOs, recommends projects to the LPRAT
Suggested projects are submitted for incorporation in the budget of the participating national agencies
CSOs can engage in the monitoring of the BuB projects
In 2016: BuB included 1,514 cities and municipalities and a budget 3 times bigger than in 2012 20

21. Education Reform Program in Mexico
Launched in to improve infrastructure and equipment of most vulnerable basic schools.
Parents, teachers and directors form a committee and decide how to prioritize federal funds that have been allocated to their school
Public engagement takes place at all stages of the process, from allocation of resources, to implementation and monitoring
Interactive website allows users to monitor project status
The program has benefited over 20,138 schools, renewed for 2016 21

22. Public Policy Councils in Brazil
Permanent collegiate bodies creating, implementing, and monitoring public policies
Operate at all three levels of government (federal, state, municipal), in various thematic areas
Membership is based on parity (government and CSOs)
Councils must approve the budget in their policy area
In 2012 municipals councils in health, social care, and rights of children fully operational in 99% of municipalities.
75% of national council members consider they have a significant impact on policy.
Number of councils grown exponentially over the past 20 years. 22

23. Canada: Pre-budget Consultations through the House of Commons Standing Committee of Finance
A mechanism for Parliament to evaluate government policy
Adds quality and legitimacy to the budget process
The Finance Committee receives witness testimony and online submissions
An annual public report is drafted, highlighting recommendations tied to the consultation exercise
In 2014, the Finance Committee received testimony from more than 100 people and groups and more than 400 online submissions
The 2014 Finance Committee Report contained 47 recommendations in six priority themes identified by the Committee 23

24. Top-Down Budgeting System in South Korea
Two-step process:
Central budget agency sets sector ceilings
Line ministries allocate the budget within those ceilings
At each step, an Advisory Committee consisting of CSO and expert members is consulted
Budget programs are evaluated every 3 years, with the involvement of the Advisory Committee
The Committee can provide oral and written suggestions and can vote for or veto proposals
Considered to have resulted in shift to a more welfare-oriented budget 24

25. The Principles in practice: some country examples
Openness
Brazil and Kenya: inclusion of public participation in Constitution and laws provides clarity about expectations and processes
Inclusiveness
Kenya: multiple mechanisms publicise budget participation opportunities, with range of geographic locations and means of providing input
Philippines: Community-driven development program engages marginalised communities
Respect for self-expression
South Africa: citizen-based monitoring
Philippines: bottom up budgeting
Timeliness
Canada: engagement by executive during budget preparation and on new fiscal policies; by legislature during budget consideration; by executive in program evaluation; and by SAI in audits.
Accessibility
Mexico: creation of the Transparency Portal for fiscal data. 25

26. The Principles in practice: some country examples (2)
Transparency
Mexico: Education Reform Program
Proportionality
UK Cabinet Office requirement; principle in EU law on consultation
Sustainability
Brazil: Public Policy Councils, National Conferences routine part of institutional framework.
Complementarity
Many legislatures provide for public testimony during budget oversight, and in consideration of fiscal policy Bills
Reciprocity
The Philippines DBM-CSO Principles of Engagement 26

27. Implementing the participation principles
Launch a practical Guide/manual at the OGP Paris Summit in December 2016
Support development of tools to measure public participation in fiscal policy
Provide practical support to MOFs and civil society actors in designing and implementing public participation mechanisms, in particular to address the feedback loop (soliciting citizen feedback on whether they got the services the budget was supposed to deliver)
Promote a joint high level public participation commitments at the OGP Global Summit in December 27

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