We need greater transparency over aid budgets | Jonathan Glennie and Claire ...
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Without budget information, the poor and marginalised find it harder to hold the powerful to account and donors can't properly assess the impact of aid
There are few commonly accepted truths in international development and that, perhaps surprisingly, may be a fairly good thing. Too much certainty about the drivers of growth and poverty reduction, on both left and right of the political spectrum, has led to more development disasters than successes. Far better an attitude of humility, a groping towards what works, based on principles of fairness and well-being.
But there is one area where there is consensus across the board, from donors to recipients, civil society to private sector (at least in public): that budget information (income and expenditure) should be put into the public domain. It is hard to think of anything that is more important for poverty reduction and development, in either short- or long-term, than this.
There are two groups of people who tend to be against this sort of transparency: bureaucrats and politicians. For a certain type of bureaucrat it is a hassle, when other priorities are so pressing, to devote time and money to sharing information with the public. Politicians realise what those calling for transparency also realise: information is power. If you know what is going on inside government, you can start to mobilise to support or oppose it.
Without information on budgets, the poor and marginalised find it harder to hold the powerful to account. The most famous example is in Ugandan education. Studies revealed that money assigned to schools from Kampala was not arriving at its destination. When spending decisions were published in the national media, villagers realised how little of the money allocated to them was arriving, and began to insist on change. In six years the amount of education spending (excluding salaries) reaching schools increased from 20% to 80%.
In a similar way, greater transparency allows people in donor countries to help ensure their governments' aid spending has maximum impact.
So two indices published recently should be welcomed by those who believe in transparency as a key plank of accountable governance (an index on corruption levels published on Tuesday is also worth a look).
The first on aid transparency was published yesterday by Publish What You Fund. Its Aid Transparency Assessment is the first of what the organisation claims will be many global surveys to push the case for "aid transparency rhetoric" to be "transformed into action."
The assessment compared the transparency of 30 major donors, ranking their commitment to aid transparency, the transparency of aid to recipient governments and transparency of aid to civil society organisations. The weight given to these three areas can be adjusted, but when weighted equally, the World Bank appears the most transparent donor, while Japan ranks as the least.
The Netherlands and the UK come second and third respectively, while France, the US and Italy languish in the bottom 10.
One of the assessment's major findings was the "lack of comparable and primary data available". Even if donors publish information on aid, each may do so using different data formats, sources and timeframes, making comparisons difficult.
The organisation would like to see all public and private aid donors, contractors and NGOs adopt four "aid transparency principles": that information on aid should be published proactively; information on aid should be comprehensive, timely, accessible and comparable; everyone can request and receive information on aid processes; and the right of access to information about aid should be promoted.
"Aid, used well, has enormous potential to contribute to positive changes. While some aid is helping address some of the most difficult problems in the most challenging places in the world, we also know that aid is not always delivering the maximum impact possible. Lack of transparency in the aid system is a critical challenge to improving the impact of aid, undermining our ability to assess what is contributing to change most," said the report.
"Most importantly, lack of information means aid activities might actively undermine one another, therefore limiting the contribution to the common goal of fighting poverty."
It is actually scandalous that aid transparency is not yet routine, but bureaucratic lethargy is hard to break when there is not serious political pressure. Perhaps if domestic budget cuts continue in donor countries, more pressure will be put on governments to open up about their foreign aid spending.
Open budgets
Publishing clear information on aid is one of the main recommendations made last week by the International Budget Partnership (IBP), in its latest Open Budget Index (OBI), which looked more generally at budget transparency. The index is based on a survey carried out in 94 countries, measuring access to national budget processes and opportunities to participate, and the strength of formal oversight institutions.
Overall the state of budget transparency is very poor. Despite progress being made, with almost all countries improving a little or a lot (there is always more information being published) 74 of the 94 countries do not provide comprehensive budget data to their citizens. The most improved countries are Egypt, Liberia and Mongolia. After the 2008 survey was published, Brazil sent an official to the IBP offices to ask for advice and now publishes a citizens' budget report. Peer pressure works.
The most striking finding is that countries can improve their ranking simply by publishing the documents they produce anyway. The work is done, the data is known, but it is not shared. Only 72 of the 94 countries publish the executive's budget proposal, with the others finding lame excuses for not doing so.
So who does well? A number of middle-income countries do better than richer countries, including South Africa, which tops the index, meaning it has the most open budget in the world. Latin America also does well (except for Bolivia and Honduras, which do terribly) and India and Sri Lanka are also near the top, beating Spain and Italy for budget transparency.
It won't be easy or quick to improve government accountability. Transparency is only one step towards accountability. Colombia comes a creditable 20th in the OBI, but no one would call it an accountable state. Civil society groups that try to challenge the status quo in Colombia are liable to disappear or be thrown in jail.
In Uganda, plenty of other policies were needed to ensure that poor people's views were heard and acted on. Nevertheless, sometimes issues come along which are so obviously a good thing for progress on development, that we should throw money and time at keeping up the pressure. International aid transparency is one of those issues.
See the country rankings below:
• DATA: download this as a spreadsheet
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