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Grading Budget Transparency Around the World

Michael Lipsky

One road to democracy is through periodic, competitive elections with secret ballots, protected by the rule of law. Another is the slow and steady cultivation of government accountability, through which public officials communicate regularly to citizens and citizen groups, and expect to be answer for their actions. 

In aid of this second approach the Open Budget Index (OBI), produced every two years by the International Budget Partnership, reports on the state of budget transparency across the world.  Its fourth biennial survey was released yesterday.

The aim of the OBI is to present an authoritative account of how well countries communicate to their citizens about how their funds are spent. The index focuses on eight core documents that an accountable government would provide its citizens, such as a summary of the executive’s proposed budget, or a report on how funds were spent.

Today’s edition provides a relatively dismal picture of the status of budget transparency in 100 countries.   Seventy-seven failed to meet the Index’s minimal accountability standards. 

On the positive side, of the forty countries that have been surveyed over the eight years of the OBI, average scores improved from 47 to 57. 

Countries that are under observation by others sometimes show significant improvement over time.  This is a fair explanation why some aid-dependent countries such as Afghanistan, and oil-dependent countries such as Mexico, have relatively transparent budget systems.  Progress can also happen rapidly.  Many countries currently produce documents for internal use that they don’t publish.  Such countries could make rapid progress on their OBI scores without having to develop new accounting systems. 

By the way, the United States scored seventh in budget transparency, behind Norway, France, South Africa and three other countries. 

Demanding transparency is an increasing trend as a soft instrument of international diplomacy.  International aid providers are making demands on aid recipients to demonstrate that their funds are not being wasted. The OBI also supports the United Nation’s Millennium Development Goals to reduce world poverty.  With the Open Budget Index demands for greater budget accountability are focusing not just on accountability to donor countries and private aid agencies, but also to the citizens of the countries themselves.