Budgets

Every year, governments collect and spend billions of dollars in taxpayer funds and citizens have a right to know how their governments are collecting and spending their money.

Governments implement policies through ministries, departments and agencies at central and local levels. These public bodies, and their executives, are accountable to the political leadership. Politicians, in turn, are accountable to their citizens for the implementation of national policies, in health care and education for example. Budgets are the link between policies and their implementation, between political visions or programmes and their delivery: they allocate resources to plans in terms of money and time.

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As part of the management of the budget, governments produce a series of reports at various points in the annual budget cycle. These include Pre-Budget Statement, Executive’s Budget Proposal, Enacted Budget, Citizens’ Budget, In-Year Reports, Mid-Year Review, Year-End Report and Audit Report.

In order for citizens to be able to know how their governments are collecting and spending their monies, they need access to these budget reports. Fiscal transparency allows for better-informed debate by both policymakers and the public about the design and results of fiscal policy, and establishes accountability for its implementation.

Many budget reports are already being produced by governments for their internal use and these reports can be made available on government websites at almost no cost. Further, legislative discussions on the budget happen in almost every country and it is not an expensive exercise to make these discussions public by allowing the media to cover these discussions.  Fiscal transparency is often pushed forward as part of political transitions, or in response to financial crisis or corruption. External influences that promote global norms and empower domestic reformers and civil society actors can also play a key role (Khagram et al, 2013).

Recent research studies show that transparency can enable governments to raise credit from the international markets at cheaper rates (Hameed, 2011). It can also help shine a light on the efficiency of public expenditures. Further, transparency can help foster equity by matching national resources with national priorities. Transparency and public participation can enable governments to build trust and give citizens voice and dignity (IBP, 20313)  Opacity on fiscal issues on the other hand can undermine fiscal discipline and as illustrated in a recent IMF publication it can lead to large unexpected debt (Cottarelli, 2012).

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