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The Budget Transparency Toolkit: The 5 Key Entry Points to Budget Transparency
by Ronnie Downes, Deputy Head, Budgeting & Public Expenditures, OECD | September 26, 2017 |
Budget transparency is a timely and important topic, fundamental to questions of accountability between government and citizens. It helps us answer such basic questions as: How much money is the government raising? Are national finances on a sound and sustainable course? Are civil servants using public money efficiently, wisely, and well?
Recent events have given us more reason to value budget transparency. In the wake of the global economic crisis, confidence in the ability of governments to manage public finances has been shaken. We now have a greater appreciation of the hidden risks to public finances—for example, contingent liabilities in the financial sector or state-owned enterprises, vulnerabilities in the tax base, and accumulation of annual financing costs from public-private partnerships. A transparent approach to recognizing and managing these risks can help us to steer clear of these dangers in the future.
The fallout from the crisis has also involved difficult decisions about expenditure cutbacks and tax increases. In debating and weighing these measures, it is necessary to have transparency surrounding their impact upon different groups of people. To complicate matters further, many countries have to deal with high levels of corruption and misappropriation of public funds, which further undermines trust in the workings of government and erodes business confidence, investment, and economic growth. Using the tools of budget transparency to shine a light on all of these areas can help root out corruption.
Given its systemic importance, it is not surprising that international organizations have developed official standards and guidance on budget transparency over the years. The Organisation for Economic Co-Operation and Development OECD has Best Practices on Budget Transparency and a Recommendation on Budgetary Governance. The IMF recently updated its comprehensive Fiscal Transparency Code. IFAC’s Accountability. Now. initiative promotes the benefits of modern financial accounting and reporting practices to improve financial management in the public sector. The global PEFA Framework is used for assessing the robustness and transparency of countries’ budgeting frameworks, and is supported by the World Bank Group and other international stakeholders. The International Budget Partnership compiles the independent Open Budget Index, which scores budget transparency in over 100 countries using a range of criteria. Bringing all of these bodies together is the GIFT Network (Global Initiative on Fiscal Transparency), which helps coordinate global action in this area and maintains High-Level Principles on Fiscal Transparency.
Budget practitioners and civil society scrutineers, therefore, have no shortage of international standards and guidance to draw upon. If anything, making sense of this “alphabet soup” can prove confusing: it is natural to ask, How do the standards relate to one another? and: If I want to improve budget transparency in my country, where should I start?
To answer these questions, the OECD, working closely with all of the institutions listed above, has compiled a new Budget Transparency Toolkit. The Toolkit does not replace official standards or guidance; instead, it serves as a gateway to these materials, and as an aid to orientation and navigation within this busy landscape.
The aim of the Toolkit is to keep things as clear and simple as possible. Part I of the Toolkit introduces and presents the standards and guidance documents from the various international bodies. Part II makes this material accessible in a new way, organized around five key “entry points” to budget transparency:
- Government reporting of budgetary information throughout the budget cycle—what might be regarded as “traditional” budget transparency
- Parliament’s role in budgetary scrutiny and engagement, including the functions of “parliamentary budget offices,” which are becoming more prevalent globally
- Independent institutions of oversight and control, including the role of supreme audit institutions and fiscal councils
- Openness and civic engagement, covering topics such as citizens’ budgets, participative budgeting and open data; and
- Working with the private sector to promote integrity and transparency, including via public procurement, managing resource endowments, and handling the challenges surrounding infrastructure investment.
The Budget Transparency Toolkit is intended as an accessible and comprehensive introduction to the wealth of useful material that is available, and represents a refreshing collaborative effort among the international community of budget transparency experts and advocates. Our aim is to keep the Toolkit updated regularly, and we hope it will improve the openness, quality, and use of budget information in policy making and accountability around the world.
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