International Budget Partnership Research Articles

Democracy, Freedom, and Budget Transparency: A Multinational Analysis

The article examines the importance of democracy and freedom to budget transparency that contributes to government responsiveness and accountability to citizens. It investigates the question: What are the effects of democracy and freedom on budget transparency? Using the 2019 data from the International Budget Partnership that scored countries’ budget transparency practices and ordinary least squares multivariate regression, findings show that countries that score high on democracy and freedom tend to report higher budget transparency scores. The study attests to and validates the importance of democracy and freedom and the recognition that these principles should be incorporated as core values in government administration.

Public auditing: What impact does the quality of the institutional framework have on the level of corruption?

Supreme audit institutions (SAIs) are a component of a nation's institutional system. This article defines the concept of an institutional anti-corruption system centered on the SAI through four main characteristics: independence, accountability, mandate and collaboration. The article aims to assess the impact that the quality of the anti-corruption system has on perceived levels of corruption. Data from the 2019 International Budget Partnership Open Budget Survey covering 117 countries are used for this purpose. The regression results show that the quality of the institutional anti-corruption system centered on the SAI is associated with a low level of perceived corruption. However, other elements must be implemented to create an anti-corruption environment, such as citizens’ involvement as controlling actors. Points for practitioners It is important that policy makers recognize and leverage the potential of SAIs in reducing corruption. Contemporary governance and the complexity of corruption require the protection of SAI's independence, but also call for the establishment of collaborative mechanisms that engage civil society and the media.

ПОРІВНЯЛЬНИЙ АНАЛІЗ РІВНЯ ТРАНСПАРЕНТНОСТІ БЮДЖЕТНОГО ПРОЦЕСУ В УКРАЇНІ ТА СВІТІ

This article is devoted to issues of ensuring the transparency of public finances, namely their key link – the budget system. The purpose of the work is to generalize methodological and methodical approaches to assessing the level of transparency and publicity of the budget process and to determine the place of this indicator in the system of indicators of transparency of public finances. It was determined that the issue of publicity and transparency in the budget process is an important factor that contributes to increasing the efficiency of the country's budget system, reducing the level of corruption, and increasing the competence of the authorities in meeting the needs of the public. Analysis of the latest research and publications in this direction showed the presence of significant interest in the issues of ensuring the transparency of the budget process and assessing its level. Methodological approaches to assessing the level of transparency of the budget process, used in its activities by the leading global organization International Budget Partnership, whose goal is to promote more responsible, efficient, and fair management of public funds, are considered. The components of the Open Budget Survey research tool, which is used by this organization in its research on the transparency of the budget process around the world, are analyzed. The trends and dynamics of changes in the components of this instrument in relation to the budget process in Ukraine have been determined. The conducted analysis showed that in the period from 2015 to 2021, the level of transparency of the budget process in Ukraine has increased significantly, and currently exceeds the indicators of neighboring countries that are members of the EU, such as Romania, Poland, and Hungary. It was determined that the level of transparency of the budget process in Ukraine is negatively affected by the lack of publication of the previous draft budget. Possible ways to increase the role of the public in the budget process, in order to ensure its publicity and transparency, which is especially relevant in the conditions of martial law, are considered. Based on the results of the work, appropriate conclusions were drawn and prospects for further research in this direction were outlined.

Budget transparency and financial sustainability

PurposeThis study investigates the transparency of budgets by examining its relationship with financial sustainability, which is a central area of research in the public-sector context.Design/methodology/approachReferring to the public value framework, a large sample of 110 countries has been investigated, implementing econometric models where the dependent variable is the Open Budget Index (OBI), published by the International Budget Partnership (IBP), and the test variables are different indicators of financial sustainability.FindingsThe results that emerge from the analysis suggest that budget transparency could be positively associated with the financial sustainability of governments, beyond the traditional aims of enhancing citizens' trust and participation.Originality/valueThis research offers important insights for policy areas, suggesting that improving budget transparency could be beneficial for public administrations because of the positive association with financial sustainability.

THE IMPACT OF STATE BUDGET TRANSPARENCY AND INFORMATION DISSEMINATION TO MAINTAIN PUBLIC TRUST

Based on Open Budget Survey 2019 held by International Budget Partnership, Indonesia set new record by getting score 70 in 2019 for budget transparency. However, Indonesia’s score for public participation is only 20 out of 100. Responding to that issue, information dissemination to public is held to create better understanding of the data available. This research will perform multiple linear regression method and in-depth interview to test the significancy of the relationship between public trust and the implementation of budget transparency and information dissemination. This research found that there is a significant effect of the implementation of budget transparency and information dissemination to public trust in Directorate General of Budget, Ministry of Finance Indonesia. This study provides a useful suggestion about transparency and information dissemination in budget data which still needs some improvements related to the wording used in information media, popularity of the publication, access and reusability of the data and the attractiveness of the events.

Unsustainable inequalities: Social justice and the environment, LucasChancel, Harvard University Press, Cambridge, MA, 2020. 184 pp. $29.95 (cloth)

GovernanceVolume 34, Issue 4 p. 1281-1283 BOOK REVIEW Unsustainable inequalities: Social justice and the environment, Chancel, Lucas, Harvard University Press, Cambridge, MA, 2020. 184 pp. $29.95 (cloth) Paolo de Renzio, Paolo de Renzio pderenzio@gmail.com International Budget Partnership, Washington, District of Columbia, USASearch for more papers by this author Paolo de Renzio, Paolo de Renzio pderenzio@gmail.com International Budget Partnership, Washington, District of Columbia, USASearch for more papers by this author First published: 24 August 2021 https://doi.org/10.1111/gove.12637Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat No abstract is available for this article. Volume34, Issue4October 2021Pages 1281-1283 RelatedInformation

Methodological Aspects of Compiling Open Budget Rankings

Budget transparency is an effective tool in improving the quality of public budget executions. Ranking countries, regions and municipalities based on budget transparency is of interest for scientists and professionals in the whole world, including Russia. Methodologies behind budget transparency are a rather complex tool, the quality of which largely affects the results. This paper analyzes the available and applied ranking methodologies — in particular, the Open Budget Index (OBI) by the International Budget Partnership (IBP), transparency indices of local budgets in Kazakhstan and Croatia, and the ranking of the Russian Federation’s constituent territories by the level of budget data openness. During the analysis we identified the methodological principles of each of the considered approaches, their differences and similarities. Special attention was paid to problematic issues of the International Budget Partnership’s methodology. It is especially important to specify these problems, as the IBP methodology is a model in measuring the level of budget transparency. By using the ranking of Russian regions in terms of budget transparency levels, we demonstrate how to use special techniques and methods targeted at improving the quality of managing public fiscal performance.

ВНЕШНИЙ АУДИТ И ФИНАНСОВАЯ ПРОЗРАЧНОСТЬ: ЭМПИРИЧЕСКИЙ АНАЛИЗ

The aim of this study is to examine the socio-economic, institutional, and political factors affecting external audit, with the use of an international comparison. In addition, the effect of external audit on fiscal transparency was analyzed. Although many empirical studies in the literature handle the factors affecting fiscal transparency, there are only a few empirical studies that focus on the factors affecting external audit and the impact of external audits on fiscal transparency. However, there is not one study dealing with the factors affecting external audit through making use of international comparisons. In this study we attempt to discover the factors affecting external audit and examine, using an international comparison, the impact of external audits on fiscal transparency. The Open Budget Survey published by the International Budget Partnership in 2017 was used to measure external audits. In the study, consisting of 115 countries, the effect of democratization level, government debt level, government balance, gross domestic product (GDP) per capita, legislative budget oversight, the SAI's audit diversity and the effect of a judicial model of the SAI on external audit were investigated. The effect of external audit on fiscal transparency is tested for 115 countries using the Two-Stage Least Squares Method (2SLS). According to the analysis, it is determined that the level of democratization, gross domestic product (GDP) per capita, budget oversight of the legislature, audit diversity of supreme audit institution and judicial model of supreme audit institution have significant and positive effects on external audit. It is also determined that external audit has a significant and positive effect on fiscal transparency.

Online Openness and Transparency of Local Budgets in Belarus

AbstractWorld experience shows that public participation in the budget process and openness in the public sector are the necessary conditions for a proper economic strategy of the State. Financial openness contributes to the efficient collection and distribution of public resources. It expands the responsibility of governments, strengthens the trust of citizens and prevents opportunities for corruption. Researchers around the world (Alt, Lassen, Skilling, Bernick, Gandía, Yannacopoulos, Darbyshire, Slukhai and others) and international organisations such as the International Monetary Fund, OECD, the World Bank, the International Budget Partnership (IBP), the Global Initiative for Financial Transparency and the Open Government Partnership have shown growing interest in financial openness issues in recent years. This paper attempts to develop and test a methodology for the operational analysis of online information openness and transparency of the budget process at the local level. The developed methodology used two criteria: (1) the level of transparency of the local budget and (2) an assessment of authority's efforts in ensuring transparency of local budgets. It is based on expert assessments of the informational significance of particular elements of websites of local authorities in issues of local finance and budget. We interpret the resulting assessment of the information content of the site with the local budget and finances data as the online openness and transparency of local budgets Online Local Budget Index of Transparency (OLBIT).

Have budget funds allocated for mitigating corona crisis been spent in an open and accountable manner?

International Budget Partnership published the results of its research on openness and accountability when spending central government budgetary funds for alleviating COVID-19 crisis. The research covered the period between 1 March and 30 September 2020 and analysed 120 countries, including Croatia, whose fiscal measures that had been implemented for the purpose of mitigating healthcare and economic consequences of the crisis partially satisfied international standards of timely provision of information and consultation with interested stakeholders. The Government and the Parliament should, therefore, ensure that crisis measures are adopted and implemented in a more open and higher-quality manner. For instance, all details of public procurement contracts should, whenever possible, be published in machine readable form on relevant websites. In addition, members of the public should be allowed to take part in designing, adopting and implementing crisis measures.

Central government budget transparency in Croatia: in spite of noteworthy achievements, there is still a lot of room for improvement

The International Budget Partnership (IBP), a non-profit Washington based organisation, on April 29 released the Open Budget Index 2019. Croatia scored 68 out of a possible 100, thus ranking among countries that release substantial information on the central government budget. However, regardless of considerable progress from the previous round of the research (2017), there are still many areas that can and should be improved.

Open Budget as an Element of Open Governance

Nowadays, open governance is not just a recommendation or a fashion trend, but an urgent requirement. Open budget is an element of open government and it also means publication of citizens budgets and involving citizens in the decision-making process. Citizens budgets are published at all levels of government: federal and regional, and, are also evaluated at all these levels. There is Open Budget Index Ranking of the International Budget Partnership and that of the territorial entities of the Russian Federation. The article analyzes the place of the Russian Federation in the international ranking and the places of the territorial entities of the Siberian Federal District in the national ranking. Recommendations on improving citizens budget of Tuva Republic have been developed.

Budgetary Governance In Light Of The Open Budget Index (OBI 2017) –Case Study Of Algeria-

The aim of this study is to define the governance in the field of public budget, based on an important index, which is the Open Budget Index. The embodiment of governance in the financial dimension is only by strengthening the standards of transparency and financial practices. Financial transparency plays an important role in the assessment and management of financial risks. We also try to know the Algeria's classification within the principles of governance in the field of the public budget. And we will analyze the causes of weak governance indicators in Algeria using an analytical approach to the statistics provided by the International Budget Partnership. And then we try to make recommendations to improve the Open Budget Index, whether related to financial transparency, participation, or Oversight mechanisms.

New Zealand's 'Wellbeing Budget' Approach

This paper: (1) describes New Zealand's 2019 Wellbeing policy and process reforms, including the Living Standards Framework policy analysis tool; (2) assesses the potential for New Zealand's recent budget process changes to lead to transformative policy change; and (3) assesses the extent to which the New Zealand approach can be replicated or adapted by other countries. Background working paper/research draft for International Budget Partnership paper “New Zealand’s ‘Wellbeing Budget’: A New Model for Managing Public Finances?”. All errors, omissions, and views in this draft are mine alone and not attributable to the International Budget Partnership.

Transparency of Public and Local Finances: Foreign Experience

In modern conditions, the role of transparency of both public and local finances is growing significantly, which is a tool to increase the efficiency of financial resources, which confirms the analysis of Ukrainian and foreign studies. In Ukraine, the level of transparency is improving every year and as of 2019 is assessed by international organizations as the minimum allowable. At the same time, the level of transparency of local budgets differs significantly in different regions. To improve the situation and implement best practices in the field of transparency of public finances at both the state and local levels, it is important to analyze the foreign experience of those countries that are leaders in ratings of transparency of public authorities and transparency of the budget process. The paper analyzes the experience of the Office of the Public Accountant of Texas (USA), the Treasury of New Zealand, and the Treasury of the Republic of South Africa, which according to the open budget rating provided by the International Budget Partnership are among the 10 most transparent countries. Analysis of the content of the information portal of the Texas Public Accounts Controller Office showed a separate section “Transparency” with a detailed presentation of information in terms of key blocks of revenues and expenditures, state budget and finances, information on the formation and use of funds in all localities, information on budget deficit as well as information on transparency at the level of individual settlements, school districts, etc. A comparative analysis with the state of transparency of Ukrainian government agencies responsible for the development and implementation of fiscal policy and identifies weaknesses and strengths in terms of their transparency. It is established that the openness of the process of using public finances in Ukraine is gradually increasing, while the positions in the world transparency rating are also improving. However, the conceptual difference between building sites in the countries analyzed is that they report to taxpayers in a form that is accessible to them, rather than simply covering available information without comment or explanation. Keywords: open budget, participation, public finances, rating, fiscal policy.

Yasama Organının Bütçe Gözetim İşlevi ve Mali Saydamlık Arasındaki İlişkinin Ekonometrik Bir Analizi

The transformation in the public fiscal management in recent years has made legislative budget oversight and fiscal transparency more important. The main purpose of the study is to determine whether the actualization of efficient budget oversight by the legislature would increase fiscal transparency or not. The relationship between the budget oversight of legislature and the fiscal transparency is tested empirically with the 2-Stage Least Squares Method (2SLS). In the analysis of International Budget Partnership dated 2017 and in which the Open Budget Survey data is used, 115 countries are given place. According to the results of the analysis it is determined that in case of an efficient budget oversight by the legislature, fiscal transparency would increase. Furthermore the factors that affect legislative budget oversight and fiscal transparency are determined in the study. 

THE EFFECTS OF SUPREME AUDIT INSTITUTIONS’ INDEPENDENCY ON PUBLIC DEBT SUSTAINABILITY: AN INVESTIGATION FOR TURKEY

In this study, the effects of Supreme Audit Institutions’ (SAIs) Independency, which are crucial in budget process by auditing public recources for legislature, on public debt sustainability is analysed. For this reason Independency of SAIs’ Index, formed by International Budget Partnership (IBP), and primary surplus (the measurement of debt sustainability) datas of Turkey for the years 2006 to 2013 is examined by using descriptive analysis. At the end of the study, it is reached that when Supreme Audit Institutions work independent, public debt decreases and this helps to ensure public debt sustainability.

National budget transparency: public access to budget information remains limited despite slight improvement

The International Budget Partnership (IBP), a non-profit Washington-based organisation, on January 30, released the Open Budget Index 2017. Croatia scored 57 out of a possible 100, thus ranking among countries with limited online access to national budget information. Despite the slight improvement over the country’s 2015 Index score, there is an urgent need to upgrade the quality and accessibility of online national budget information.

Providing the Budget Transparency and State Projects Efficiency Monitoring in Russia

JEL Classification Codes: H11, H40, H50 1. Introduction Switching to the programme based budget development in Russia causes extra requirements to the budget framework sustainability towards covering costs with funds and transparent allocation of funds. It's a certain way of proper programme based state policy application that provides a strong basis for complex increasing of the budget costs' efficiency and focusing on efficient allocation of funds. Increasing of programme based funding coupled with monitoring of state (municipal) project implementation is still relevant due to Budgetary Code of Russian Federation implementing which provide standard and legal support of state (municipal) projects (Vovchenko et al., 2016). The key-note of programme budgeting is increasing the budget costs' efficiency. Here we consider budgeting as a set of measures to increase the efficiency of state authorities' policy. Advantages of programme budgeting are: 1) Providing the transparency of budget development, implementation, and verification if all the planned goals were reached completely; 2) Arranging the activity of budget administrator by exact responsibility assigning; 3) Increasing the budget funds' allocation efficiency; 4) Exact budget costs categorizing according to the global standards. However we emphasize the issues that need urgent resolution. There we mean: 1) Poor quality of state projects i.e. lack of legal and strategical support; 2) Issues in state projects framework i.e. projects' milestones violation, specific procedure of FTP (Federal Target Programme) development; 3) Incomplete indicating of funds' and state policy methods; 4) Incomplete integration of state projects into the budget framework i.e. separated planning of capital and current costs, lack of objective state projects' costs limits, incomplete coverage of federal budget costs, partial budget compliance with state projects; 5) Issues of actual state projects' implementation. Executive authorities' activity could not be completely associated with state projects; 6) Extremely limited budget funds reallocation options; 7) Perfunctory in state projects' efficiency evaluation i.e. poor projects' reporting framework, lack of external projects' performance audit and administrators' responsibility for implementing projects. 2. Theoretical, Informational and Empirical, and Methodological Grounds of the Research Providing the transparency of state and municipal funds' management is still of a high priority in the state budgeting reform process. However, we should stress some restrictions connected with the reform such as the lack of legal support in defining the state share in institutional segments, causing obstacles in proper financial analysis. Increasing the transparency of the budget framework becomes an actual objective connected with creating the open state authorities' activity framework (Pociovalisteanu and Thalassinos, 2008). This framework is aimed at increasing the openness and accessibility of data concerned with the budget performance, state procurements, projects, investments, and their control (Ivanova and Bikeeva, 2016; Ivanova, O. et al., 2015; Kosinova et al., 2016; Nechaev and Antipina, 2016). The world experience in providing the openness of budgets is based on the set of standards such as: Code of Good Practices on Transparency in Monetary and Financial Policies by IMF (International Monetary Fund), Best Practices for Budget Transparency by OECD (Organisation for Economic Co-operation and Development), Open Budget Index by IBP (International Budget Partnership) and others. Global initiatives in providing the transparency of fiscal activity have significant response in economic, social, and ecologic performance all around the world and increase the quality of state fiscal policy, reduce corruption, strengthen the power and its trust, cause state policy's sustainability and international cooperation' positive outcome. …

The Influence of Democracy and the Rule of Law on National Auditing Quality—Based on Experience Research on 96 Countries

Based on the rule of law and democracy, this paper illustrates the influence of system on the national auditing quality. Meanwhile, it appraises the auditing quality through utilizing the project database of Open Budge Survey issued by International Budget Partnership. The survey on the empirical research has found that democracy, the rule of law and its mutual adaptability can significantly increase national auditing quality. Difference of systems is the important factor leading to differences of the national auditing quality across countries. Besides, economic state and income level play a positive role in increasing national auditing quality.