1. Sanjeev Khagram Founder and Senior Advisor, GIFT skhagram@fiscaltransparency.net GIFT-OGP Fiscal Openness Working Group Meeting San Jose, 18 November, 2014 “Citizens and non-state actors should have the right and effective opportunities to participate directly in public debate and discussion over the design and implementation of fiscal policies.” GIFT High Level Principle 10, Endorsed by the United Nations General Assembly, December 2012

2. Fiscal Openness 2 Fiscal openness includes transparency, participation and accountability in government decision-making over the mobilization, allocation and use of public resources. GIFT promotes fiscal openness by:  Developing a more coherent/comprehensive global architecture of norms  Strengthening incentives for better policies and practices  Supporting research and technical assistance  Facilitating peer-to-peer sharing and learning GIFT Stocktake identified gap in standards for fiscal policy:  Focus was on/confined to disclosure of fiscal information, very little on direct public participation

3. What is public participation? 3 The variety of ways in which the general public, including citizens, civil society organisations and other non-state actors interact directly with public authorities by means of face to face communication, deliberation or decision- making, or by written forms of communication including electronic or paper media. Different depths of participation: IAPP five levels of participation of increasing depth: inform, consult, involve, collaborate, empower. Public discussion, deliberation and open advocacy in contrast to private lobbying or corrupt/illicit activity.

4. Goals of Public Participation 4 Governments, citizens, civil society organizations and non-state actors use public participation to: Broaden public dialogue and the range of policy options Better target public policies to meet citizens’ needs Improve the use of scarce public resources Empower citizens Reduce corruption Improve service delivery Reform bureaucracy Increase government legitimacy

5. General International Norms on Public Participation 5 Article 25 of the International Covenant on Civil and Political Rights of the United Nations enshrines the right of citizens to participate in public affairs. International Labor Organization (ILO) 169 provides indigenous communities with the “right of prior informed consent” regarding development in their territories.

6. General International Norms 6 The United Nations Conference on Environment and Development issued the “Rio Declaration on Environment and Development.” in 1992. Principle 10 of the declaration states that, “Environmental issues are best handled with participation of all concerned citizens, at the relevant level.” The World Commission on Dams enshrined public participation in its international guidelines on decision-making processes for large dam and infrastructure projects in its widely acclaimed final report of 2000.

7. General International Norms 7 The Aarhus Convention was adopted by the United Nations Economic Commission for Europe. Its core principles include the” “the right to participate in environmental decision-making, and “the right to review procedures to challenge public decisions.” The OGP encourages increased access to information, participation and accountability in government more generally. To date, 65 participating countries have made openness commitments, and most have made specific fiscal openness including public participation commitments in their OGP action plans.

8. Specific International Norms 8 Revised IMF Fiscal Transparency Code - Principle 2.3.3:  The government provides citizens with an accessible summary of the implications of budget policies and an opportunity to participate in budget deliberations. Revised OECD Principles of Budgetary Governance:  …citizens should be able to engage with and influence the discussion about budgetary policy options… Updated Open Budget Survey 2012 (Section 5) measures participation across the budget cycle, and by legislature and SAI.

9. Open Budget Survey 2012 Results on Public Participation (100 Countries) 9 Average public engagement score was only 19 out of 100 (for OGP member countries it was 29). Korea scored 91. In 51 countries, the executive is required to engage (directly) with the public during the budget process. In 32 countries, public testimony is heard by a legislative committee on the individual budgets of central government administrative units (i.e., ministries). In 42 countries, supreme audit institutions have mechanisms for engaging the public in formulating audit programs (by identifying programs that should be audited) or in conducting audit investigations (as respondents, witnesses, etc).

10. Public Participation Good Practices: Windows of Opportunity 10 Institutions  Executive  Legislature  Supreme Audit Institutions  Subnational governments Policy Cycle  Macro-Fiscal Policy  Sector-level Fiscal Policy  Micro-level Fiscal Policy GIFT is documenting good practices and innovations that occur at these institutional and policy cycle opportunities (examples are at end of this powerpoint presentation)

11. GIFT HIGH LEVEL PRINCIPLE 10. 11 ‘Citizens should have the right and they, and all non-state actors, should have effective opportunities to participate directly in public debate and discussion over the design and implementation of fiscal policies.’

12. Short Normative Instrument on Participation Principles and Good Practices Intended to:  Complement other standards and norms.  Guide governments (and all stakeholders).  Indicate to the public what they can expect.  Help assurance practitioners assess practices.  Be accompanied by a ‘primer’ on the case for participation, as well as more detailed explanatory materials Draws on UN Conventions, OBS 2012, Aarhus Convention, ISEAL Alliance, HAP Standard, Philippines Principles of DBM-CSO Engagement, World Commission on Dams, the Open Government Guide, World Bank Social Accountability E-Guide, etc. etc. 12

13. Structure of Short Norm 1. Introduction 2. Scope 3. Principles of public participation 4. Good practices 13

14. Introduction 14 Participation can strengthen equity, efficiency, legitimacy of fiscal policy and budget making, thereby improving fiscal performance, and enhancing economic, social and environmental outcomes. ICT developments have dramatically lowered cost of direct participation and created new spaces for citizen input. Instrument intended to apply to all public authorities at all levels of government as well as generally to legislatures and Supreme Audit Institutions. Intended to be applicable to all country contexts (though implemented differently depending on context).

15. Scope of public participation in fiscal policy and budget making 15 Covers all fiscal policy and budget making activities: I. The annual budget cycle II. Fiscal policy reviews outside the annual budget cycle III. The design, production and delivery of public goods and services. IV. The design and delivery of public investment projects.

16. Principles of Public Participation Ensuring openness about the purpose, process, and timelines of public participation. Ensuring well-informed participation Ensuring meaningful participation: engaging early, allowing for more than one round of engagement, providing feedback on inputs received and how used, and considering public inputs on an objective basis irrespective of source. Allowing sufficient time in the policy cycle for the public to provide inputs in each phase Ensuring inclusiveness and non-discrimination: pro-active use of multiple mechanisms Encouraging the public to speak for itself: Avoiding parallel systems that could undermine existing accountability structures. 16

17. Good participation practices (1) 17 Full disclosure of fiscal data (international standards). All fiscal reports/data easily accessible to general public (non-technical summaries, citizen’s guides, open data). Public authorities promote general public awareness of fiscal and budget policy challenges and issues. An authorizing environment, and guidelines, for officials to engage the public in appropriate ways. Public authorities should promote public awareness of key opportunities for public participation

18. Good participation practices (2) 18 Central fiscal authorities should implement a comprehensive strategy for citizen engagement in the formulation and implementation of fiscal and budget policy. The Legislature and the Supreme Audit Institution should each designate a unit or officer responsible for management of public engagement in fiscal policy and budget making. When seeking public input, public authorities should indicate the potential scope for and limits on changes in fiscal policy or administration that are under consideration. Public authorities should publicly explain the basis on which they have invited individuals and groups to participate in a specific, and decisions to exclude anyone, with such decisions subject to independent review. Those directly affected by fiscal policy implementation e.g. the public in the locality of a public infrastructure project should have access to low-cost administrative review and the ability to seek judicial review of process.

19. Good participation practices (3) 19 A published summary of public inputs received, indicating in general how issues raised were addressed, and why. The process of each participation exercise should be documented and adequate records maintained. Each public authority should set out its overall approach to public participation, ensure staff have the skills required, and document processes to learn effectively from public participation exercises. Governments should publish a strategy to reduce barriers and costs faced by non-state actors in engaging with the government and other official actors on fiscal policy, including a policy to support building of civil society capacity for public participation in fiscal policy and budget making.

20. Some issues for discussion 20 What are country experiences, lessons, goals and needs in terms of public participation? What are views on the “short normative instrument” and specific participation principles and practices For example on scope:  Directed only at public authorities; should it also set out how civil society should engage constructively?  Level of decentralization/de-concentration taken as given?  Role of media as enabler of public participation?  ‘Citizens’?

21. Appendices: More Elaboration of Good Practices Institutions  Executive  Legislature  Supreme Audit Institutions  Subnational governments Policy Cycle  Macro-Fiscal Policy  Sector-level Fiscal Policy  Micro-level Fiscal Policy

22. Public Participation: Executive 22 Budget CyleExamples of Currently Used Approaches/Tools FormulationPre-budget discussions; Town Hall meetings Focus Groups Surveys Provides access to budget and fiscal data EnactmentCitizens’ Budget Public hearings Accessible information ExecutionNational government monitors: bureaucracy subnational governments Ombudsman AuditingYear-End Reports Citizen Audits Report cards Social media inputs

23. Public Participation: Legislature 23 Budget CyleExamples of Currently Used Approaches/Tools FormulationPre-budget discussions Public hearings held by line ministries and in budget-specific committees Pre-Budget approval by Legislature EnactmentPublic Hearings Standing committees ExecutionSupplementary Budgets: Public Hearings Oversight of Contracting Bidding Outsourcing Quality of policy implementation AuditingOngoing oversight Review of Year end reports

24. Public Participation: Supreme Audit Institutions 24 Budget CyleExamples of Currently Used Approaches/Tools Formulation Legal Hearings  Constitutional Court assesses legality  Public hearings on previous budget cycles Enactment Audit agenda  Establish calendar for audits  Establish priority areas for auditing during execution stage Execution Auditing  Citizen-based  Expert-based  Fraud hotlines Auditing Public release of year-end reports. Public hearings Monitor legality

25. Macro-Fiscal Policy 25 National Executive LegislatureSAIs Public consultation on medium term fiscal strategy and aggregate annual budget policy - Publication of a ‘Citizens’ Budget’ with interactive portal, and a Citizens’ Financial Statement - Budget literacy campaigns - Public consultation on natural resource exploitation strategy as relevant - Public consultation on long- term fiscal strategy. - Institutionalized mechanisms for independent advice and debate on macro- fiscal policy Well-defined committee procedures for consideration of the annual budget, and for reviewing in-year and end-of- year reporting. Public attendance and testimony at Committee hearings. Independent sources of technical support and advice on all aspects of macro-fiscal policy. Compliance audit of government’s consolidated financial statements. Social audit/multi- stakeholder reconciliation of total natural resource revenues reported paid by companies with receipts reported by government

26. Sector-Level Policy 26 National Executive LegislatureSAIs Public consultation on medium-term tax strategy and on significant tax and other revenue policy changes - Participatory public expenditure reviews - Sector and sub-sector policy consultation, both on current programs and on investment projects - Line ministry consultation on multi-year strategic business plans - Provision for non-binding citizens’ initiated referenda on sector-level fiscal policies - Public attendance at committee consideration of bills, and of audit reports - Public testimony at committee hearings - Independent sources of technical support and advice on sector-level policy Consultation with the public during completion of audits of sector ministries, revenue administration, public debt management, asset management, fiscal risk management

27. Micro-Level Policy 27 National Executive LegislatureSAIs - Public consultation on new revenue policies, changes to revenue policies -Consultation with the affected public on public investment projects Participatory Budgeting - Published service delivery standards. - Publication of resources received by front-line service delivery units - Mechanisms for client feedback and complaints on public services -Community score cards of public service delivery - Client surveys on service delivery quality - Participatory monitoring and evaluations. - Co-delivery of public services -Standing consultative bodies (e.g., district boards) - Public attendance and testimony at committee consideration of bills, and of audit reports. - Independent sources of technical support and advice on micro-fiscal fiscal policy. - Published forward agendas of Committee hearings, fiscal policy Bills - Proactive publication of information on how to make a parliamentary submission. - Plain language explanation of Bills - Free access to media, and support for media coverage. - Consultation with public during compliance and performance audits of departments and agencies. - Consultation with the public on audit program priorities. - Hot lines and other mechanisms for public input. -Participatory, social and collaborative audits. - Social audit/multi- stakeholder reconciliation of natural resource revenues reported paid by individual companies with receipts reported by government from those