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Fiscal Transparency in OGP Countries, and the Implementation of OGP Commitments: An Analysis Juan Pablo Guerrero Network Director GIFT

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Presentation on theme: "Fiscal Transparency in OGP Countries, and the Implementation of OGP Commitments: An Analysis Juan Pablo Guerrero Network Director GIFT"— Presentation transcript:

1 Fiscal Transparency in OGP Countries, and the Implementation of OGP Commitments: An Analysis Juan Pablo Guerrero Network Director GIFT GIFT-OGP Fiscal Openness Working Group Meeting San Jose, 18 November, 2014

2 Overview 2 1. How transparent are Budgets in OGP countries? 2. What fiscal transparency commitments did countries make in their National Action Plans? 3. How well have the commitments been implemented? 4. How ambitious were the FT commitments? 5. Some notable commitments and practices. 6. What steps to increase fiscal transparency should countries include in their NAPs?

3 Figure 1: Distribution of Absolute Changes in OBI Scores of OGP members and selected non-members: first survey – 2012 3

4 Outstanding examples of increase in OBI score: OGP members* and selected non-members 4 In the Americas: Honduras* +42 Dominican Republic*+17 El Salvador* +15 Asia: Afghanistan+51 Mongolia+33 Indonesia* +20 Pakistan +20 Bangladesh +19 Vietnam +16 Europe: Albania*+22 Georgia*+21 Croatia*+19 Bulgaria*18 Africa: Liberia* +40 Malawi +24 Many of the gains came from governments publishing documents previously only available within government

5 Notable reductions and gaps in fiscal transparency 5 Asia: Sri Lanka -21 Europe: Macedonia* -19 Romania* -19 Serbia*-19 OGP members that do not meet the minimum eligibility criteria for OGP membership (publication of the budget and audit report):  Americas: none  Asia: none  Europe: Tunisia  Africa: Liberia

6 What types of FT commitments did OGP countries make? 6 Most commitments under GIFT High Level Principle 3: ‘The public should be presented with high quality financial and non-financial information on past, present, and forecast fiscal activities, performance, fiscal risks, and public assets and liabilities….’ Focus is on flows rather than stocks Many commitments on public participation (HLP 10) Few commitments on legislative oversight (HLP 8); on macro-fiscal policy (HLP 2); or on a citizen right to fiscal information (HLP 1) For further details of FT commitments see ogp-country-commitments-on-fiscal-transparency/ ogp-country-commitments-on-fiscal-transparency/

7 How well have OGP countries implemented their commitments? 7 This analysis uses data in the first 43 Independent Reporting Mechanism (IRM) Progress Reports: 8 cohort 1 countries, 35 countries from cohort 2 Two sources:  A paper by Foti (IRM program manager) on the implementation of all the commitments in 43 National Action Plans (NAPs)  A GIFT background paper for the FOWG, analysing implementation of all the commitments in the first 41 NAPs by country and region, and implementation of just the FT commitments in NAPs, based on data extracted by GIFT from the Executive Summaries of the first 43 IRM reports

8 Foti’s* analysis of NAP implementation (1) 8 Analysis of all 978 commitments in the first 43 IRM Reports by Foti* concludes that:  There is a high level of variation in the degree of implementation across countries Cohort 2 countries had considerably weaker rates of implementation of commitments than cohort 1 countries  There were 200 ‘starred commitments’—impactful, clearly relevant, substantially completed commitments. This was around 25% of all commitments  More ambitious action plans were not necessarily implemented less often – a number of countries with higher potential impact action plans also had higher rates of completion of commitments; a next step for the OGP community will be to learn from countries with high levels of both potential impact and implementation IRM progress reports show wide variation in institutional ownership & the degree of consultation with civil society  It is too early to tell if OGP has had a measurable impact on opening government in participating countries * ‘OGP By The Numbers: What the IRM Data Tell Us About OGP Results.’ IRM Technical Paper1, Joseph Foti.

9 Weak performance in public consultation 9 Three quarters of the second cohort of 35 countries held in-person consultations with civil society, and four-fifths completed a detailed self-assessment on time But fewer than half of OGP members met the letter of the OGP requirements for consultation in development and implementation of their NAPs, and thus risk being found in breach of their OGP commitments

10 GIFT identified FT commitments within NAPs 10 Commitments were coded by GIFT as FT commitments where they related to any aspect of taxation, borrowing, spending, investment and management of public resources, including delivery of public services Covers policy design, implementation, review Includes: any public participation in fiscal policy Excludes: general references to public participation, or RTI, or open data that do not specifically refer to FT

11 Overview of FT commitments in NAPs 11 A total of 318 FT commitments identified, in 41 out of the first 43 NAPs for which IRM reports published = 32% of all commitments in these NAPs The definition of a commitment varies widely within and across NAPs, however, reducing the comparability of data on commitments There is a very wide range in the proportion of fiscal transparency commitments to total commitments in NAPs, from 0% (Chile, Romania) to 100% (Guatemala); the average share is 35%

12 Implementation of FT commitments 12

13 Notable country FT reforms 13 Of those countries with more than 5 FT commitments, notable progress in implementation of FT commitments was made by:  Croatia – 12 out of 16 commitments completed or substantially completed  Mexico – 12 out of 17  Brazil – 10 out of 10  Indonesia – 10 out of 11  Moldova – 8 out of 14  The Philippines – 8 out of 16

14 OGP Star Commitments 14 A star commitment is defined by the OGP as a commitment that combines three elements:  Clear relevance to OGP values  Concrete: specific enough for ambition to be assessed  ‘Ambitious’; assessed as likely to be moderate to high impact  Has been assessed by IRM researcher as substantially completed or completed Introduced after the IRM reports for cohort 1 countries had been completed

15 FT Star Commitments 15 There are 66 star commitments relating to FT = 21% of all FT commitments At the country level the stand-out performer on FT star commitments is Croatia - 11 star commitments Honduras, Moldova, Colombia and the Dominican Republic also have an impressive number of star commitments (5-6 each)

16 Country Implementation of FT by Level of Ambition: A Stylized Qualitative Approach 16 High Implementation Denmark Italy Spain UK USA Brazil Croatia Indonesia Mexico Moldova Philippines Albania Azerbaijan Bulgaria Colombia Dominican Republic El Salvador Honduras Jordan Low Implementation Canada Israel South Korea Sweden Georgia Greece Ukraine Macedonia Paraguay Slovakia South Africa Czech Rep. Estonia Norway Armenia Guatemala Montenegro Tanzania Latvia Peru Uruguay Kenya Low Ambition High Ambition

17 Some notable commitments 17 GFMIS reforms in Honduras, Dominican Rep. (latter also introduced a treasury single account) Commitments to strengthen procurement in many countries, those for which the IRMs reported reasonable implementation progress include Brazil, Mexico, Paraguay, and Uruguay EITI commitments in a number of countries e.g. Colombia, Guatemala, Mexico, Peru, and USA In El Salvador, the government attributed an increase in the country’s OBI score to the additional information published on the tax transparency portal (an NAP commitment) Honduras: update and disseminate the PEFA assessment Transparency of external assistance from the donor side, including conforming with the IATI standard: Canada & USA

18 Some innovative commitments 18 DR: publish data on public complaints at the level of individual govt agencies; introduce a balanced scorecard on implementation of the national development strategy Honduras: update and disseminate the PEFA assessment; create a portal devoted to fiscal education Peru: improve mechanisms for public consultation on budget preparation, approval, implementation and reporting The Philippines: create a People’s Budget interactive web site; and institutionalize social audits Kenya: increase the country’s score on the OBI The UK: spend up to 5% of ODA budget support on strengthening local accountability to support progress for related OGP goals

19 Innovative commitments in second NAPs 19 SV: ensuring that private companies managing public funds openly share their data in line with the law on Access to Public Information. GT: implementing Open Budgeting in all web portals for the general population to learn about/access information published by MOF. HO: improving the quality of planning and budgetary control on the implementation of the Annual Plans on Procurement & Contracting & opening up citizen participation in the monitoring of public procurement. MX: building a public, open & interactive geo-referencing platform that allows citizens to track public resource allocation as well as the results of federal spending and public works. PY: building capacity among citizens to monitor public sector budget management by explaining the general budget proposal in plain & accessible language & creating citizen access to budget information on indigenous beneficiaries & investment made.

20 Innovations in consultation and accountability 20 MX: OGP the responsibility of a Tri-Partite Commission of govt., Federal Institute for Access to Information, and a coalition of CSOs PE: a multi-sector Commission to monitor NAP implementation (govt., judiciary, private sector, CSOs) CL: A Citizens’ Defence and Transparency Commission is in charge of coordinating OGP with government institutions. HO: for its second NAP formed an Interagency Committee that raised awareness, consulted and disseminated materials Slovakia: IRM report says NAP is a legally binding document, ensuring that responsible institutions take actions or explain the lack of action Tanzania: awareness of OGP raised through television, radio, newspapers. Kenya: web and mobile phone-based channels for citizens. The implementation status of OGP commitments shared through an OGP-CSO Listserve SA second NAP lists the responsible institution for each commitment, and in some cases the name of the responsible official UK second NAP lists the supporting CSO for each commitment, and detailed time scales

21 What steps to increase FT should countries include in their (next) NAPs? 21 First, OGP member governments should publish documents already produced within government: 9 countries produce a Pre-Budget Statement but do not publish it including AR, CL, DR, SV, PE 3 countries produce but do not publish in-year budget reports including Costa Rica 7 countries produce but do not publish a mid-year report 3 countries and 1 country respectively produce but do not publish a year-end report and an audit report

22 Next steps (2) 22 Other reports not currently produced, but which would take relatively effort, are a Citizens’ Budget (not published in 27 OGP members), and a mid-year report (not produced in 18 OGP members) OGP members that have gone backwards on fiscal transparency in recent years should give priority to decisively reversing this trend

23 Next steps (3) 23 Countries should also give early priority to:  Strengthening legislative oversight  Strengthening SAI independence and resourcing  Introducing social auditing  Consulting the public more during budget preparation  Opening up legislative committee budget hearings to the public

24 Designing good quality commitments 24 Countries should pay much more attention to the specification of commitments in their Action Plans, using SMART criteria:  specific, measureable, achievable, relevant, and time bound The Philippines first NAP and the second UK NAP provide some good examples. Each commitment should demonstrate specifically how it advances open government Group similar activities together in logically sequenced steps with timelines

25 A poorly-specified commitment 25 Commitment: ‘…plans to launch a web site where citizens can find information on the national budget and report information they may have on the actual expenditure of government funds.’ Commitment is not specific on the types of budget information, nor the types of information that citizens might report. Not possible to see how commitment builds on current information availability, nor how success will be measured. No reference to a time frame.

26 A well-specified commitment 26 ‘…commits to publish data on government subsidies to elementary and junior high schools and to publish health expenditures and budgets at every community hospital in 497 regions…’ Commitment is specific and measureable – although not time bound.

27 A results-focused commitment 27 ‘Improve the management of public resources by increasing the country’s ranking in the Open Budget Index from providing ‘limited information’ to providing ‘significant information’ Very specific and measureable: the expressions ‘limited information’ and ‘significant information’ correspond to bands on the OBI (scores of 41-60 and 61-80 respectively) - although it lacks a time dimension

28 Recommended consultation practices 28 Designation of a lead agency responsible for each commitment Publication of the names of specific CSOs who are working with government on each commitment Countries need to follow much more closely the OGP process requirements for public consultation in the design & implementation of their NAPs Go beyond traditional civil society consultation models towards institutionalising systematic, on- going & meaningful dialogue with non-government actors and the public

29 In conclusion 29 GIFT stands ready to assist countries with the design & implementation of fiscal transparency initiatives, whether they are current members of OGP or are non-members.

30 Selected references 30 Fiscal Transparency in OGP Countries, and the Implementation of OGP Commitments: An Analysis. GIFT Background Paper for the FOWG Meeting in San Jose, 18 November 2014. Fiscal Openness Working Group London Workshop Background Paper: Fiscal Openness Working Group 2014 Work Plan: GIFT Expanded High Level Principles: high-level-principles-on-fiscal-transparency/ high-level-principles-on-fiscal-transparency/ OGP By The Numbers: What the IRM Data Tell Us About OGP Results. IRM Technical Paper1, Joseph Foti. 201_final.pdf 201_final.pdf

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