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FINANCE: Most Citizens Kept in Dark on Govt Spending

Jim Lobe

WASHINGTON, Jan 31 2009 (IPS) - The vast majority of the world’s governments effectively deny citizens basic information they need to understand how public monies are being spent, according to a new report released here Sunday by the International Budget Partnership (IBP), a Washington-based project that works with civil society groups to promote government transparency and improve accountability.

Of the 85 countries surveyed by the IBP, only five governments provided what the study called “extensive” information about their budgets, while another dozen made “significant” information available to their publics.

Best performers – those with scores over 81 on a 100-point scale – included Britain, South Africa, France, New Zealand and the United States, in descending order.

But 68 of the countries – or 80 percent – do not provide the public with comprehensive, timely and useful information that citizens need to understand, participate and monitor the use of public funds, according to the “Open Budget Index” designed by IBP to measure budget transparency.

And nearly half of the countries provided so little information publicly as to make it virtually impossible to uncover waste, gross mismanagement, or corruption.

The worst performers – those scoring zero or one on the scale – include Sao Tome e Principe, Equatorial Guinea, the Democratic Republic of Congo (DRC), Sudan, Rwanda, Saudi Arabia, and Algeria, according to the index.

“…(O)verall, the state of budget transparency around the world is deplorable,” the 55-page report found. “In most of the countries surveyed the public does not have access to the comprehensive and timely information needed to participate meaningfully in the budget process and to hold government to account.”

“This lack of transparency encourages inappropriate, wasteful, and corrupt spending and – because it shuts the public out of decision making – reduces the legitimacy and impact of anti-poverty initiatives,” among other government programmes, according to the report, entitled “Open Budgets. Transform Lives”.

The survey found that more developed countries tended to offer a higher degree of transparency in their budgetary practices than less developed countries, although there were significant exceptions.

Not only did South Africa rank second among all countries surveyed, but Brazil took eighth place, just behind Norway and Sweden. Peru, Sri Lanka, Botswana, Colombia, Papua New Guinea, and India were also ranked among the top 20.

“The high, good, and poor performers include low-, medium-, and high-income countries,” said Warren Krafchik, the IBP director. “In other words, being poor or being dependent on aid or oil and gas revenues is not a sufficient excuse to fail to provide adequate budget transparency.”

The survey also found that many poor countries that currently provide insufficient information to their publics are capable of doing so at little or no cost because they already produce that information for their aid donors or for internal purposes.

“All these countries have to do is put the information they already have available on the internet,” he told IPS. “The problem is not really the production of information or the capacity to produce it. The problem is the political willingness by the governments to disseminate that information to their publics,” he added.

Indeed, he said, many countries have already taken steps to improve their performance, compared to two years ago when the IBP produced its first survey. Among them were Croatia and Bulgaria, whose accession to membership in the European Union (EU) required them to increase transparency; Sri Lanka and Kenya, where new governments proved responsive to demands reforms by civil society groups; and Egypt, where a new constitutional amendment boosted the budgetary powers of parliament.

“Whether the parliament will be able to use those powers effectively or not remains to be seen,” Krafchik said about the constitutional change in Egypt, whose government has long been regarded as both corrupt and authoritarian.

The survey is based on a detailed questionnaire of more than 120 questions focused on the contents and timeliness of eight key budget documents that all governments should issue, according to generally accepted good-practice criteria developed by multilateral organisations, such as the World Bank. The documents cover the government’s initial budget proposal through the final audit report when the monies included in the budget have been spent. The survey was limited to the budgets of national governments and did not include sub-national units.

The questionnaires were completed by independent researchers in each of the countries surveyed, and their answers were subject to peer review to ensure their accuracy. Each answer was then given a score, and the combined scores determined the final rankings. As the questionnaires were submitted at the end of September, 2007, the survey does not cover governments’ performance since then.

The worst performers were mostly located in the Middle East and North Africa, followed by sub-Saharan Africa. In the Middle East and North Africa, the best performer was Jordan with a score of 52, more than twice the regional average of 24. The average of sub-Saharan Africa was 25, despite the strong performance of South Africa (87) and Botswana (62). The average score for all 85 countries was 39.

The worst performers also tended to be low-income countries and often heavily dependent on revenues from foreign aid or oil and gas exports. Altogether, 21 oil- and gas-producing countries were surveyed. Their average score was 23, despite relatively strong showings by Colombia, Norway, and Mexico. Of the 13 worst performers, nine – Sao Tome, Equatorial Guinea, Sudan, Saudi Arabia, Algeria, Angola, Cameroon, Bolivia, and Chad – are oil or gas producers.

By contrast, the 34 countries in the survey that are heavily dependent on mineral wealth, such as gold, platinum, and silver, averaged a score of 44.

The survey also found a correlation between transparency and democratic systems, with all of the 17 countries that provided either extensive or significant budget information assessed as either “full” or “flawed” democracies by the Economist Intelligence Unit’s Index of Democracies. Most of the worst performers, on the other hand, were classified as “hybrid” or “authoritarian” regimes.

The report called for governments not only to publish more information about their budgets, but to also produce “Citizens Budgets” that would be easily understandable to the public. Seventeen governments, including Angola, Ghana, India, and Uganda, currently produce them, although they vary considerably in how much information they provide.

The report also urged donor agencies to do more to encourage governments to inform their citizens both by increasing the transparency of their own aid and avoiding funding that is not included in the recipient’s budget.

“Wherever possible, aid should flow through country budgets,” said Krafchik, who added that this would not act as leverage for increased transparency, but also ease the burden on governments themselves that receive aid from multiple sources and must account to each of them. “This would reduce the incredible strain on the monitoring and reporting capacities of the recipient governments,” he said.

Donors should also increase technical assistance for civil society, legislatures, and audit institutions to improve accountability and oversight, the report said.

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