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Tuesday
Jan292013

How to consolidate budget transparency in fragile countries

Author: Albert van Zyl is the Research Manager at the International Budget Partnership. He tweets at @albertonbudgets

The International Budget Partnership’s (IBP) 2012 Open Budget Survey  shows that the global average Open Budget Index (OBI) has improved from 41 to 46 between 2008 and 2012.  If, for the same period, we look at the OBI for 18 countries that the OECD classifies as ‘fragile’, we see an improvement from 25 to 36. A closer look suggests however that these improvements are erratic and prone to stagnation and backslide. Support to local champions of transparency and accountability is required to consolidate these gains and help them past the minimum level of transparency, where many countries stagnate. Without such support to emergent accountability actors, budget transparency reforms in fragile countries are unlikely to progress past a basic level.

The state of budget transparency in fragile countries

The table below summarizes OBI scores for 18 fragile countries from 2008 to 2012 and provides an average OBI score for each of the three years measured. Surprisingly, fragile states are improving faster than their non-fragile brothers and sisters. Granted, such averages hide huge amounts of variation, such as the rapid improvement of Angola from 4 to 28 and the spectacular decline of Niger from 26 to 4. However, even if one removes the most rapid improvers like Afghanistan and Liberia from the average, fragile countries still out-improve the non-fragile.

 

2008

2010

2012

Afghanistan

8

21

59

Angola

4

26

28

Bangladesh

42

48

58

Bosnia and Herzegovina

44

44

50

Cameroon

5

2

10

DRC

1

6

18

Georgia

53

55

55

Kenya

58

49

49

Kyrgyz Republic

8

25

20

Liberia

3

40

43

Malawi

28

47

52

Nepal

43

45

44

Niger

26

3

4

Nigeria

19

18

16

Pakistan

38

38

58

Rwanda

1

11

8

Uganda

51

55

65

Yemen

10

25

11

Average OBI for 18 Fragile states 

25

31

36

Despite these encouraging and surprising signals, we should guard against blind optimism. Yes, fragile countries seem to be improving more rapidly than other countries, but these improvements all come from a very low base and are generally the result of governments publishing documents that they were already producing. Further improvements may require bigger investments of political capital and greater development of data capability. As a result of these political and technical thresholds, many fragile countries such as Uganda, Kenya, Georgia and Nepal have stagnated at relatively low levels of transparency. The big question is how to continue to get good progress from fragile countries that have started to improve.

What drives budget transparency in fragile environments?

Exploratory research commissioned by the IBP indicates that elections and party political competition play a key role in driving transparency reforms. Fragile countries have however earned their status from the very absence of these democratic processes and in some cases the absence of processes of state altogether. Indeed, IBP case studies on budget transparency in the Democratic Republic of the Congo and Afghanistan confirm that foreign donors and externally funded consultants in finance ministries are central to budget transparency reforms in fragile countries.

In a recent post on the Open Budgets Blog, we reviewed the relevant literature and confirmed that budget reforms such as improvements in transparency are unlikely to take root on their own. Does this mean these efforts at external grafting of budget transparency are ultimately doomed to failure?

The IBP case studies also show that there are segments of the bureaucracy and civil society that see the advantages of budget transparency and have taken ownership of it. In the Afghanistan case study, Nematullah Bizhan writes that the post-2001 government acted on a strong incentive to use the budget to gain public trust and build confidence in the country. He also describes how an emerging class of young Afghan professionals, particularly in the budget department, contributed significantly to ensuring that the ministry was moving in the right direction. The efforts of these insiders were consistently supported by Integrity Watch Afghanistan, the local OBI partner, and the fledgling but enthusiastic local media and legislature. In the DRC case study Jean-Pierre Samolia and Claire Schouten write that REGED, a local network of 310 CSOs representing all provinces, pooled their efforts to persistently engage with government and keep budget transparency and financial management reforms moving.

To be sure, these internal drivers of budget transparency are relatively weak and often in a small minority. They do however provide a starting point for building the accountability infrastructure needed to sustain technical reforms. With the necessary support, they may provide the points of departure needed to embed budget transparency in the democratic processes that ultimately make them sustainable.

 

2008

2010

2012

Afghanistan

8

21

59

Angola

4

26

28

Bangladesh

42

48

58

Bosnia and Herzegovina

44

44

50

Cameroon

5

2

10

DRC

1

6

18

Georgia

53

55

55

Kenya

58

49

49

Kyrgyz Republic

8

25

20

Liberia

3

40

43

Malawi

28

47

52

Nepal

43

45

44

Niger

26

3

4

Nigeria

19

18

16

Pakistan

38

38

58

Rwanda

1

11

8

Uganda

51

55

65

Yemen

10

25

11

Average OBI for 18 Fragile states 

25

31

36

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References (4)

References allow you to track sources for this article, as well as articles that were written in response to this article.
  • Response
    Response: mba papers
    Its a surprised improvement in OBI score of fragile states, even nonfragile countries have not showed this type of faster improvement. Anyways its good to see the open budget survey. Thanks for the impressive article. I am searching for this type of information for my work.
  • Response
  • Response
  • Response

Reader Comments (5)

There are a couple of other points to consider:

- there are incentives that donors and civil society can activate to encourage budget transparency including country stability, promotional leverage to the international community
- many fragile states have single core financial systems and are more able to deploy budget transparency so the problem of "cost" isn't that material to the cost-benefit analysis
- competition among countries is a key driver

My sense is that "backsliding" is not a long-term phenomena - there could be very specific reasons for the drops that may relate to the political situation such as financial crisis, the timing of elections or changes in government.

January 30, 2013 | Unregistered CommenterDoug Hadden

Interesting comments, thanks Doug. A few thoughts about your backsliding hypotheses:

1. The provisional IBP research cited above shows that more transparent countries have higher credit ratings, but I am not sure that this will apply in fragile countries where market mechanisms are often broken or severely compromised.
2. As also indicated above, our research also shows that there is a link between the existence of an electoral cycle and levels of transparency. It would be interesting to see if there is also a link between the timing of elections and levels of transparency. Given the institutional arrangements required for the production and publication of a key budget document, I would be surprised if this were the case though.
3. We have not yet done any research about the link between levels of transparency and changes of government. In non-fragile countries party political competition does however tend to push budget transparency higher.

As I said, interesting questions. But not many answers.

@Albertonbudgets

January 31, 2013 | Unregistered CommenterAlbert van Zyl

Thanks Albert - a very interesting read. It's encouraging to see this substantive improvement over four years, but as you say the picture is much more complicated than that. The OBI results also prompt larger questions about the relationship between transparency, accountability and fragility.

You're right in saying that fragile states are that way for a reason, and transparency and accountability have something to do with it, although not in a linear way. You can have successful non-fragile developmentalist states without transparency. China, say.

In a more elemental way, the OBI at lower levels probably correlates with basic budget functionality - you can't publish what you don't have. So as a country emerges from conflict and shattered institutions, the OBI score is very likely to improve. Beyond that, there will be a complicated relationship between state-internal and external factors that drive transparency. Like you said, we know from research what some of these relationships are (i.e. between electoral competition and transparency), and there's a lot we don't know yet.

One last point: I agree with Doug that it seems unlikely that there is systematic backsliding. The fact that transparency is deeply embedded in domestic institutions means that every country will have its own trajectory. The corrolary is, however, that systematic improvements across the board are just as unlikely. An international dimension has to be involved, but what is it? I have some thoughts, and not all are entirely positive. For instance, as the OBI itself becomes more important as a policy tool for donors, and higher scores in themselves start to matter to governments (without a corresponding interest in actual accountability), gaming behaviour will start to evolve. I'm saying that without judgement, it would be irrational for governments to do so. But it has its own implications...

January 31, 2013 | Registered CommenterPhilipp Krause

Kadar je šel tradicija na praznik dal praznih steklenic pod mizo? Nikjer, razen v Rusiji, ni tak običaj no. Mnogi ljudje zmotno mislijo, da praznoverje, povezano s praznimi steklenicami, je prišel k nam iz sovjetskih časov. Nato pa so mislili, da lahko prazna paket na mizo povzroči nekaj slabega: denar v hiši ne bo hostesa ni mogla zanositi.

November 22, 2014 | Unregistered Commentergoogle spelling check

You have fanatic blogging skills, thanks for sharing it. The topic was also quiet good, all in all great job done

January 30, 2015 | Unregistered CommenterAiden Pearce Coat

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