Politics, rights and accountability in the budget process Andy Norton, Diane Elson

Source: Whats Behind the Budget? Guide to the budget literature for non- specialists Approaches to analysing politics and rights in the budget process Review of pro-poor & gender budget initiatives in developing countries

1. Key Issues in Understanding the Budget Process Have to understand accompanying processes of policy and planning Essentially a political process – purely technocratic approach inadequate Holistic understanding of PEM includes macro and revenue issues, and issues of efficiency/effectiveness Should not assume that allocations translate accurately into spending…

2. Political Dimensions of Budget Processes Means examining the ways in which the distribution of power within the budget process affects the distribution of public resources

unequal power relations may be expressed by: Inclusion/exclusion/proximity of different social groups to the formal decision-making process Norms and values embedded in priorities and assumptions contained in the process, structure and content of the budget Dominant norms and assumptions about expertise and knowledge (mystification)

Key areas for understanding: Formal structure of roles and responsibilities Formal rules governing decision-making, political choice & accountability Networks of stakeholder power and influence which influence budget outcomes Incentives for action (covert/overt) affecting decision making during formulation and execution Latitude for bureaucratic discretion at all levels of the budget execution process Dominant norms and values in key institutions

Challenges… Budget offices tend to be closed, defensive, even secretive – reluctant to reveal their strategies for fighting off claims Honest account of incentives might touch on illegal/publicly unacceptable practices Hard to analyse and describe the operation of power through informal processes

Some sources of obfuscation in budget processes Information exists but not released Nobody knows what is actually disbursed or spent (or deliberately mis-recorded…) Structure of the budget makes it impossible to tell who benefits Budget is changed so often during the year that original intentions no longer matter Key expenditure is off-budget

An operational method – politics of budget execution 1. Compare allocations with expenditures over an extended period (e.G. 10 years) 2. Are there any areas of the budget critical for poverty reduction which consistently lose out in budget execution? 3. If so, analyse why and what can be done about it – formulate strategy 4. Monitor the trend… has it changed?

When we tried this in Jamaica (through MoF…) Found one part of the budget which was consistently under-spent (social and community capital expenditures) Concluded that this was a result of budget practices and procedures rather than overt political manouevering This was a significant problem for both social impact and governance

Why….? …a strongly held belief in the budget division that the costs of postponing Economic Services expenditures were greater than those of postponing Social expenditures.. Social ministries dont prepare their case well enough, and dont contest resources effectively throughout the cycle Projects tend to be small, localised and benefit those without political clout….

Recommendations… Officials in S&CS ministries need to improve quality of project preparation Engage with the budget division throughout the budget cycle Make officials in the BD more aware of the real costs of postponing or cancelling social and community expenditures through comprehensive and convincing argument

Other approaches to pro-poor change … Strengthening demand/capacity of service users, and local level officials, to draw down resources from the centre through: Transparency, information dissemination Public expenditure tracking Enhancing the clarity of rights and entitlements Capacity building for civil society/local action

Rights, Entitlements and Policy Arguments for: Empowering for the poor and marginalised Human Rights framework – international normative and legal framework stressing inclusion, participation, obligation Political development – moving from patronage to citizenship and rights (basis for collective action)

Formal Entitlements Entitlement = claim or right defined by reference to a custom or established procedure. Provide concrete, specific content to rights. Benefits: More transparent, equitable, secure - less likely to be stigmatising, promote collective action on the basis of citizenship Potential difficulties: mechanisms of redress may not be accessible for all; if unaffordable, rationing may occur; restrict flexibility of policy response

Helpful Conditions for Pro- Poor Impact Entitlements provided on a citizenship basis, non-discriminatory in intent Legal or administrative systems of redress are sufficiently effective/accessible for equitable impact Can be realistically provided on sustainable basis Established through relatively accountable, democratic process

3. Pro-Poor/Gender-Sensitive Budget Initiatives Research-based advocacy initiatives aimed at influencing policy to better fulfill rights Government-led gender analysis initiatives Government-led consultation exercises (e.g. PPAs) Transparency and information initiatives Participatory budgeting initiatives Developing a rights-based approach to public provision (including direct assistance to the disadvantaged to effectively make claims)

Broad Lessons from the Experience… Importance of networks and partnerships (parliamentarians, civil society, political parties, technocrats, social movements) Many successful initiatives have benefited from donor support – capacity building or provision of resources (e.g. HIPC) Successful initiatives are often facets of a broader political movement or project Strong pro-poor policy or constitutional frameworks increase space for engagement

4. Conclusions PEM literature focuses largely on technical/procedural adjustments to policy and budget systems. As well as technical approaches we need: Better understanding of the political dimensions of the BP More emphasis on spaces for pro-poor engagement and the capacity of poor people to make claims

7 Key Factors…. Constitutional framework and political culture oriented to citizenship & rights System of issues-based political competition Sufficient fiscal resources for wide-scale delivery of some basic services Clear, inclusive, framework of policy goals Transparent system of allocation/execution Active, engaged civil society Active, informed citizens able to draw down services/hold officials to account.