1. Fiscal Transparency & Public Participation in the Budget Process: Lessons from Around the World
Public Participation as a New Component of Public Financial Management Systems
Ulaanbaatar, MONGOLIA
March 28, 2019
Juan Pablo Guerrero @jpga63
Network Director

2. Presentation Outline
Public Financial Management (PFM) Governance & Public Participation: how they related?
Public Participation objectives: concrete examples
GIFT work on Public Participation in Fiscal Policies
Public Participation in the Budget Cycle around the World 2

3. Why engage directly with the public?
Global Financial Crisis in 2008: publishing information insufficient for accountability.
To gain information and insights from citizens, business, experts.
To improve the design and implementation of tax and spending policies.
To improve the efficiency and effectiveness of line ministries.
To increase trust in government, willingness to pay taxes.
Participation is key for Sustainable Development Goals: 1-poverty, 5-gender equality, 10-reduce inequality, 16-peace, justice & inclusive institutions.
Government data at reach: big data, open data & information technologies. 3

4. Definition of Public Participation
Public participation refers to the variety of ways in which citizens and the general public, including civil society organizations & other non-‐state actors, interact directly with public authorities with respect to the design, implementation and review of public policies by any form of communication.
Participation ranges from one-­off consultations to on-going and institutionalized relationships that leave records & documentation (subject to access to information). 4

5. GIFT Public Participation Principles - 2015

6. Respect for self-expression Complementarity
Accessibility
Depth /
Relevance
Openness
Proportionality
Inclusiveness
Sustainability
Respect for self-expression
Complementarity
Timeliness
Reciprocity 6

7. Core considerations
Publish information accessibly + meaningfully (address demand)
Clarity on the rules of engagement in order to ensure clear expectations
Add value & relevance to the process: inform well, on time, get feedback (speak to users), try to institutionalize, ensure a fair engagement
Reach out to those usually quiet (INCLUSION)
Seek that public participation complement what government institutions do

8. PP mechanisms across the budget cycle
- Consultation on Policy Statement + annual proposal
- Public consultations & hearings (expert feedback)
- Independent Fiscal Institutions
- Complaint mechanisms & feedback
- Bottom Up budgeting / Participatory Budgeting
- Citizen engaging & monitoring online
- Pre-budget hearings / consultations / submissions
- Public Councils
- Tax policy reviews & consultations
- Bottom-Up consultations
- Online mechanisms
- SAI engagement on audit planning, and conduct of performance audits (budget monitor)
- Legislative consultation on departmental reviews
- Social audits of revenues +expenditures
Audit and oversight
Executive Budget Preparation
Legislative
approval
Budget Implementation 8

9. Mechanisms in the Executive formulation phase
Audit and oversight
Executive Budget Preparation
Legislative
approval
Budget Implementation 9

10. 1. Pre-Budget Consultations
South Africa: Tips for the Minister: general public invited to submit proposals for next budget on Treasury web site or hand them in. Over 500 tips per year. Treasury Communications staff vet them for Minister, submit shortlist of 10 to Treasury executive team. Minister considers those that are closest to government priorities and refers to them in Budget Speech.
Canada: since 1990s, pre-budget consultations with the public organized by Dept. of Finance to gather inut on government's areas of focus for upcoming budget. Use of social media (Google Hangouts, Facebook), dedicated website. Purpose, scope and process outlined in press release on launch of consultations. 10

11. 2. Pre-Budget Consultations
Ireland: A National Economic Dialogue is held in June after the government has determined (from its spring budget semester) the level of “fiscal space” available in the coming year, and before line ministries have submitted budget proposals. The forum brings together civil society and parliamentary stakeholders to discuss priorities for the October budget. The Forum is moderated by an independent chairperson and all of its sessions are held in public.
Kyrgyz Republic: Open invitation by MinFin to participate at the Budget Hearings on proposed Budget,as required by regulation. Hearings in the capital Bishkek and 2 regional cities, with representatives of all relevant ministries and MinFin. Discussion are open to all; the public's questions and proposals are addressed and recorded. 11

12. 3. Pre-Budget Consultations
Guatemala: The Open Budget is a tool developed by Red Ciudadana (Citizen Network) in support of the MoF Open and Participative Budget of Open Government (OGP) This is an electronic platform that was used during the budget formulation. For submissions (produced by each Institution to display each item in detail), people could tune in the live presentation, and allowed users to comment via Facebook. This platform allowed thousands of participants to observe the formulation phase of the budget process
The Philippines: National Budget Memo requires each Agency Central Office to collect and consolidate CSO recommendations and feedback/inputs from the Agency led consultations, and submit to the Department of Budget & Management. A Budget Preparation Form is used for CSO’s inputs on ongoing and new spending projects and activities. 12

13. UK Tax Consultation Framework
Requires early and continuing engagement on all tax changes
Where possible, the Government will engage interested parties, minimize the occasions on which it consults only on a confidential basis, set out its strategy for consultation (including informal discussions), and set out clearly at each stage of the consultation the policy objectives
To enable legislation to be properly scrutinized, draft clauses for the Finance Bill will be published for scrutiny at least three months before the Bill is introduced to Parliament and the period for comment will be at least eight weeks 13

14. Legislative mechanisms in the formulation phase
Audit and oversight
Executive Budget Preparation
Legislative
approval
Budget Implementation 14

15. Ex-Ante Parliamentary Engagement
Allows including parliament’ views to inform the budget formulation process
Provide opportunities for public input through mechanisms such as public hearings & consultations
Rely on analysis & feedback from Independent Fiscal Institution 15

16. Expert CSO pre-budget consultations in other countries
Example
Expert CSO pre-budget consultations in other countries
Observatorio Fiscal in Chile: Contingent liabilities & Fiscal Risk 16

17. Expert CSO pre-budget consultations in other countries
Example
Expert CSO pre-budget consultations in other countries
INESC in Brazil: Incidence of fiscal policy 17

18. Expert CSO pre-budget consultations in other countries
Example
Expert CSO pre-budget consultations in other countries
FUNDAR in Mexico: inclusiveness of social policy 18

19. Expert CSO pre-budget consultations in other countries
Example
Expert CSO pre-budget consultations in other countries
CBPP in USA: incidence of fiscal policy & social programs 19

20. Public participation mechanisms in the implementation phase of the budget cycle  
Audit and oversight
Executive Budget Preparation
Legislative
approval
Budget Implementation 20

21. New Zealand: A Social Investment Panel
Convened by Treasury to assess selected line ministry budget proposals
Includes NGOs involved in the delivery of social services, university-based science advisors, a representative from Maori/iwi (tribal) community-based organisations, other external organisations, and senior officials from Treasury and selected departments and agencies
The Panel considers a selection of proposed budget initiatives across "social sectors", including health, education, social welfare, justice and other areas.
A report to Treasury senior management and relevant ministers with their assessments of proposed policy initiatives publicly available on Treasury website as part of a "Budget pro-active release". 21

22. Mexico: School Infrastructure Program
Poor state of rural school buildings (2013 infrastructure census)
Min. Public Education, MOF initiative: fund each school directly (debit cards).
School body meeting (principal, teachers, parents and students) decides and signs off on agreed investment priorities and monitors construction at each school.
Ministry of Education in charge, MOF involved in design of operating rules
New School Infrastructure Platform on Fiscal Transparency Portal (photos /school/year taken before/during/after construction, citizens can upload information).
Independent annual evaluations by academic
organisations (first one by World Bank). Better
school director managerial capacity, increased
parental participion in school and in student
learning, mixed impact on student learning. 22

23. Public participation impact
WHAT FOR?
Public participation impact
Paper produced by De Renzio and Wehner for GIFT (2015):
Better resource allocation & improvement of the provision of public services
Better response to the preferences of the beneficiaries of the services & the constituencies
Opportunity for marginalized groups to exert some influence in decisions that affect them
Better impact of actions that affect communities in social policies: health sector, community level public works, education 23

24. 1. Main Takeaways .
PFM governance frameworks now put citizens at the center of reforms: if fiscal transparency is not used, it is useless
Public participation serves different policy objectives: better allocation, better provision of services, better control of funds, better response to society needs, improved efficiency, more informed decision making process
Defining the policy objectives is key for public participation 24

25. 2. Main Takeaways .
Partnerships between Governments and Civil Society are critical, aligning incentives & establishing productive collaboration formats
Need to move beyond an adversarial approach and establishing a constructive engagement between CSOs and Government reformers, as part of broader coalitions of stakeholders to push & sustain reform agendas aimed at sustainable development goals 25

26. Collaborative thinking

27. How do you picture yourself and your organization in fiscal openness (promoter, re-user, enabler…)?

28. What fiscal data would you consider priority for engagement to take place?

29. What capacities need to be developed for a better independent evaluation?

30. What challenges and opportunities do you identify for a more collaborative environment on the fiscal transparency agenda?

31. Stay tuned! @fiscaltrans @fiscaltransparency