International Budget Partnership Research Articles

Diagnostics of the level of openity and transparency of local budgets in Ukraine

The aim of the paper is to study the theoretical and normative principles of ensuring the transparency of local budgets in the context of the formation of an effective system of decentralization of financial resources. Analyzing and generalizing the scientific works of many scholars, the views of researchers are systematized on the definition of the concept of “local budget”. In accordance with the provisions of the legal acts, the organizational structure of local finances has been developed, taking into account the strengthening of decentralization and democratization processes in the modern conditions. In accordance with the provisions of the Budget Code of Ukraine, the essence of the principle of openity and transparency of the budget system is disclosed. The scheme of functioning of the informational-analytical system “Transparent budget” is proposed. The comparative analysis of the level of openness of the state budget of Ukraine with the budgets of other countries of the world is carried out according to the data of the International Budget Partnership. A diagnosis of the level of transparency, participation and integrity of local budgets in Ukraine is conducted. Prospects for further research in this area are improving the methodological approach to assessing the level of decentralization of financial resources of local budgets, as well as developing recommendations for increasing the level of openness and transparency of local budgets in Ukraine.

Fiscal transparency and the cost of sovereign debt

This article analyses the factors that seem to play an important role in determining the cost of sovereign debt. Specifically, we evaluate to what extent transparency, the level of corruption, citizens’ trust in politicians and credit ratings affect interest rates. For that purpose, we create a transparency index matching the 2007 Organisation for Economic Co-operation and Development/World Bank Budgeting Database items with the Organisation for Economic Co-operation and Development Best Practices for Budget Transparency sections. We also check our assumptions with the International Budget Partnership’s Open Budget Index and with a non-linear transformation of our index. Furthermore, we use several control variables for a sample of 103 countries in the year 2008. Our results show that better fiscal transparency, political trust and credit ratings are connected with a lower cost of sovereign debt. Finally, as expected, higher corruption, budget deficits, current account deficits and unemployment make sovereign interest rates increase. Points for practitioners The key implications for professionals working in public management and administration are twofold. First, despite the criticism raised by credit ratings, it is clear that poorer ratings are connected with higher financing costs for governments. Therefore, governments should enhance those indicators that impact the credit rating of their sovereign debt. Second, governments should seek to be more transparent, since transparency reduces uncertainty about the degree of cheating, improves decision-making and therefore decreases the cost of debt. Transparency reduces information asymmetries between governments and financial markets, which, in turn, diminishes the spread requested by investors.

The Republic of Kazakhstan Budget System Development and the Increase of its Transparency

The article discusses the Republic of Kazakhstan's budget system development and the increase of its transparency compared with other countries. The history of the budget legislation for the Republic of Kazakhstan as an independent state began with the Declaration of State Sovereignty and the Law “On the Budget System” dated 17 December 1991, the first document, which modeled the principles of the budgetary system and budgetary process of a sovereign republic by law. Using the Republic of Kazakhstan as an example, the budget system development and ways to improve its efficiency and transparency were analyzed in this study. More openness and transparency of the budget system becomes extremely urgent task in connection with all the greater focus of public finances to address specific tasks to achieve the objectives of social and economic development. The paper deals with the openness of the budget of the Republic of Kazakhstan. In 2012, it stepped out of the category of the countries that provide minimal information on the budget. The aim of this study is to investigate the causes of the low transparency of the budget in Kazakhstan that in 2012 the International Budget Partnership (IBP) rated 48 (above the average of the countries) and to make suggestions to improve the transparency of the budget, which will lead to the improvement of living standards, reduction of corruption and improvement of the efficiency of budget spending.

National budget transparency - a deterioration in the quality and comprehensiveness of government revenue and expenditure information

On September 10th, the International Budget Partnership (IBP), a non-profit organisation based in Washington, released the Open Budget Index 2015. Croatia's scored 53 out of 100 points, which, regretfully, represents a deterioration from the previous, 2012 Survey results, underscoring the need for improvements in the quality and availability of national budget information.

Improving the Budget Process in Fragile and Conflict‐Ridden States: Two Modest Lessons from Afghanistan

AbstractBoth the donor community and scholars have created a cottage industry studying “fragile” states. International nongovernmental organizations that have developed indexes measuring corruption or governance have been unkind to Afghanistan. One index suggests a different and more optimistic story. The International Budget Partnership measures transparency every two years with its Open Budget Index. Afghanistan demonstrated dramatic improvement on this index between 2008 and 2012. The authors use the improvement in Afghanistan's transparency score as an entry point to explore how donors try to intervene and promote transparency as part of broader efforts in public financial management development and how legislative strengthening has also contributed to budget reform. The analysis offers a modest corrective to the overly pessimistic assessments of fragile states by showing that a fragile state can improve its budgetary transparency and enhance governance by strengthening the legislature's involvement in the budget process.

Budget Transparency and Legislative Budgetary Oversight

This article attempts to evaluate the role the legislative budgetary oversight plays in enhancing budget transparency. This relationship has not been empirically tested so far. For a sample of 93 countries surveyed by International Budget Partnership in 2010, we show that, as expected, legislative budgetary oversight has a positive influence on budget transparency. Besides, the legal system, political competition, and economic level are also found to affect budget transparency. As an additional analysis, we investigate the determinants of legislative budgetary oversight along the budgetary process. In this vein, the type of legislature, legal system, Supreme Audit Institution’s budgetary oversight, economic level, and democratic level determine legislative budgetary oversight.

Are New PFM Reforms in Francophone Africa Working? Lessons from the Open Budget Survey

This paper revisits the evolution of budget transparency, government accountability, and citizen engagement in the budgetary process in WAEMU and CEMAC countries. We use the Open Budget Survey (OBS) to assess Member States' compliance with the new Harmonized Public Finances Framework and accordingly to measure good governance and budget transparency in the WAEMU and the CEMAC. The Open Budget Survey (OBS) conducted by the International Budget Partnership (IBP) is the only independent, comparable, and regular budget transparency and accountability assessment around the world; the OBS measures whether governments provide enough budget information to their citizens to allow them to be meaningfully part of the budget process in their countries.Our findings show that the state of budget transparency in WAEMU and CEMAC countries is far from rosy. Although significant progress has been made in recent years, most information on the budget process in these countries remains inaccessible to the public. According to the 2012 Open Budget Survey, the performance of the countries surveyed is particularly poor: their average score of 14 is three times lower than the world average score (43) and two times lower than sub-Saharan Africa’s average score (31).

Book Reviews

Robin Hodess of the Transparency International Secretariat reviews “Open Budgets: The Political Economy of Transparency, Participation, and Accountability”, by Sanjeev Khagram, Archon Fung, and Paolo de Renzio. The Econlit abstract of this book begins: “Eight papers explore the causes and consequences of fiscal transparency, participation, and accountability. Papers discuss the origins, sources of sustenance, and survival prospects of budget transparency in South Africa; accountability from the top down?—Brazil's advances in budget accountability despite a lack of popular mobilization; a mutually reinforcing loop—budget transparency and participation in South Korea; budget transparency and accountability in Mexico—high hopes, low performance; Guatemala—limited advances within advancing limits; the limits of top–down reform—budget transparency in Tanzania; the diversification of state power—Vietnam's alternative path toward budget transparency, accountability, and participation; and capturing movement at the margins—Senegal's efforts at budget transparency reform. Khagram is John Parke Young Professor of Global Political Economy, Diplomacy, and World Affairs at Occidental College and Young Global Leader at the World Economic Forum. Fung is Ford Foundation Professor of Democracy and Citizenship with the John F. Kennedy School of Government at Harvard University. De Renzio is Senior Research Fellow with the International Budget Partnership, Research Associate at the Overseas Development Institute, and Research Associate at Oxford University.”

Budget Transparency in Afghanistan: A Pathway to Building Public Trust in the State

This case study discusses major improvements in government budget transparency and public engagement in Afghanistan, presenting an analysis of the roles of the following actors in the trend toward more open budgeting: 1) the International Budget Partnership, foreign donors, civil society organizations, and the media; 2) the government; and 3) the legislature. This paper argues that by increasing its OBI score from 8 in 2008 to 21 in 2010, Afghanistan has made important progress, though it still remains below average. But donors, CSOs, and to some extent the media are putting increasing pressure on the government to improve its Public Financial Management system. A pragmatic and holistic approach that includes a legal and institutional framework will be required for budget transparency to become an instrument for confidence building in the Afghan state.

The Impact of the International Budget Partnership's Open Budget Survey and Its Partner Institutionss Advocacy on Budget Transparency in Honduras

This case study looks at how the preparation and publication of the Open Budget Survey 2010 in Honduras increased awareness of Honduras’ budget transparency problems. The increased attention given to these issues brought together local civil society organizations, the International Budget Partnership, the Millennium Challenge Corporation, and the government of Honduras to make progress on budget transparency. Also, the IBP’s technical assistance to the government of Honduras played an important role in the recent publication of budget documents, which combined with a strong government will have provided the basis for public finance management reforms. Although the main incentive for the government to improve its budget transparency was initially to increase foreign aid contributions, citizen-led efforts to demand reform are growing.

Health, Citizenship, and Human Rights Advocacy Initiative: Improving Access To Health Services in Mexico

When it comes to health care in Mexico, universal has never meant equal, particularly when it came to the access to adequate care for the country’s 52 million uninsured. Civil society organization Fundar reached out to grassroots organizations and policymakers to change this. The campaign had an impact on both health spending and on Fundar itself. The following case study describes how a research organization with a background in budgetary analysis developed a successful advocacy strategy on health policy in Mexico. This is a summary is part of the Learning Program of the International Budget Partnership’s Partnership Initiative. The PI Learning Program seeks to assess and document the impact of civil society engagement in public budgeting.

Determinants of Central Government Budget Disclosure: An International Comparative Analysis

This paper attempts to identify the socio-economic, political and institutional determinants of central government budget disclosure, both through the Internet and other media. It builds budget disclosure indicators based on the International Budget Partnership questionnaire for 93 countries. The findings show that Internet penetration, education level, relative central government size, budget surplus, administrative culture, political competition and incumbents' ideology determine central governments' budget disclosure. A cluster analysis finds three groups of countries: high, medium and low level of budget disclosure.

The Art of Getting in the Way: Five Years of the BNDES Platform

The following case describes the first efforts in Brazil, led by a network of civil society organizations, to demand accountability from the country’s opaque development bank, the Banco Nacional de Desenvolvimento Economico e Social. This is an in-depth study prepared by Peter Spink as part of the Learning Program of the International Budget Partnership's Partnership Initiative. The PI Learning Program seeks to assess and document the impact of civil society engagement in public budgeting.

The Open Budget Index (OBI) as a Comparative Statistical Tool

Since 2006 the International Budget Partnership (IBP) has conducted a biannual Open Budget Survey (OBS) to assess national budgets of around 90 countries in terms of their fiscal transparency. Responses from 92 of the 123 questions that constitute the Survey are used to construct the Open Budget Index (OBI) which ranks countries according to their budget openness. This article describes the OBS methodology in detail and explains how the Open Budget Index is constructed.

Budget Transparency In Afghanistan: A Pathway To Building Public Trust In The State

This paper discusses major improvements in government budget transparency and public engagement in Afghanistan, presenting an analysis of the roles of the following actors in the trend toward more open budgeting: 1) the International Budget Partnership (IBP), foreign donors, civil society organizations (CSOs), and the media; 2) the government; and 3) the legislature. The paper discusses background information going back to 2001; however, the empirical analysis focuses on the period from 2008 to 2011.

When Opportunity Beckons: The Impact of the Public Service Accountability Monitor's Work on Improving Health Budgets in South Africa

The Eastern Cape Province of South Africa struggles with high poverty, poor public infrastructure, and dysfunctional administrative systems. One result is that the Eastern Cape has the worst health outcomes in the country. This case study illustrates how a South African civil society organization has used its budgetary analysis to advocate for improvements in health service delivery. This case study is part of the Learning Program of the International Budget Partnership’s Partnership Initiative. The PI Learning Program seeks to assess and document the impact of civil society engagement in public budgeting.

Raising the Stakes: The Impact of HakiElimu's Advocacy Work on Education Policy and Budget in Tanzania

Tanzania has invested heavily in ensuring that all children have access to education. Civil society group HakiElimu stepped in to take the political commitment beyond enrollment and graduation targets to meaningful policy decisions that lead to higher quality schooling. The following case study illustrates how expenditure monitoring has been used as part of an advocacy strategy for realizing the right to education in Tanzania. This study is part of the Learning Program of the International Budget Partnership’s Partnership Initiative. The PI Learning Program seeks to assess and document the impact of civil society engagement in public budgeting.

Legislative Participation in Budgetary Systems: Is there Evidence of Convergence?

Concepts such as lesson-drawing, policy diffusion, policy transfer and, more recently, “isomorphic mimicry” have been used to suggest that, over time, administrative practices, policies and governance systems across countries are converging. Three different sources of data are used to examine the extent of convergence in the roles of legislatures in budget processes. Taken together, there is very limited evidence of convergence despite the efforts of entities such as the International Budget Partnership or and the Organization of Economic Cooperation and Development.

Budget transparency on maternal health spending: a case study in five Latin American countries

Progress in reducing maternal mortality has been slow and uneven, including in Latin America, where 23,000 women die each year from preventable causes. This article is about the challenges civil society organizations in Latin America faced in assessing budget transparency on government spending on specific aspects of maternity care, in order to hold them accountable for reducing maternal deaths. The study was carried out by the International Planned Parenthood, Western Hemisphere Region and the International Budget Partnership in five Latin American countries – Costa Rica, El Salvador, Guatemala, Panama and Peru. It found that only in Peru was most of the information they sought available publicly (from a government website). In the other four countries, none of the information was available publicly, and although it was possible to obtain at least some data from ministry and health system sources, the search process often took a complex course. The data collected in each country were very different, depending not only on the level of budget transparency, but also on the existence and form of government data collection systems. The obstacles that these civil society organizations faced in monitoring national and local budget allocations for maternal health must be addressed through better budgeting modalities on the part of governments. Concrete guidelines are also needed for how governments can better capture data and track local and national progress.

Unlimited Possibilities for Fiscal Transparency Improvement

Unlimited Possibilities for Fiscal Transparency Improvement