Public financial management and accountability
Accountability in budget planning and monitoring
The need for effective and independent scrutiny of government expenditure creates the need for a range of actors to be involved in the budget process. However, in many countries, the budget is insulated from political debate, or used as a tool for short-term political ends.
Creating the right incentives for individuals within the system to work together and to adhere to collective policy decisions is an important step towards increasing transparency and policy-making capacity in developing country governments.
Page contents
Where is a good place to start?
Bosworth, J, 2005, ‘Citizens, Accountability and Public Expenditure: A Rapid Review of DFID Support’, Working Paper 17, DFID, London
What is DFID doing to strengthen domestic accountability on public expenditure in the countries it supports? Joanne Bosworth reviews DFID work supporting the targeting of accountability on public expenditure, drawing on 87 interventions, operational since 2000, in 28 countries. Building accountability is a gradual process and it is difficult to ascertain clear impact, although intermediate changes are often noticeable.
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The role of parliament and government ministries
The budget process is a key area of decision-making in which the interests of different groups confront each other. In democracies, parliaments should act as a mechanism for expressing different interests, and should therefore play a vital role in overseeing and approving the budget. However, although parliaments possess a wide range of budgetary powers, they often fail to exercise them effectively, frequently due to technical and institutional constraints.
Santiso, C., 2005, ‘Budget Institutions and Fiscal Responsibility: Parliaments and the Political Economy of the Budget Process in Latin America’, World Bank, Washington
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Oxford Policy Management, 1999, 'Prioritisation and Fiscal Responsibility: How To Involve Politicians in Expenditure Management', Issue Paper 2, Oxford Policy Management, Oxford.
This Issue Paper summarises the different approaches for fiscal discipline that have been used in OECD countries such as Australia, New Zealand and the United States and explores the extent to which similar institutional controls and incentives could be established in developing countries. It focuses on 'governance' or 'constitutional' frameworks rather than ongoing 'political' decision-making which takes place within these frameworks.
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Gender responsive budgeting
There is increasing recognition that budgets offer the potential to transform inequalities. Gender responsive budgets are an example of budget targeting designed to advance gender equality. The success of gender responsive budgeting demonstrates the potential of participatory budgeting to make governments accountable to their commitments on gender equality, and to bring a fairer distribution of public resources.
Bhat, A., Kolhar, S., Chellappa, A. & Anand, H., 2004, ‘Building Budgets from Below’, Economic and Political Weekly, October 30, 2004
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Budlender, D., 2005, ‘Expectations versus Realities in Gender Responsive Budget Initiatives’ UNRISD, Geneva
Gender Responsive Budgets (GRBs) are political interventions to change the nature of budgets, policies and programmes. How does what gender-responsive budget (GRB) initiatives have done in practice compare with the claims and expectations about what they can achieve? This paper, compiled for the United Nations Research Institute for Social Development, attempts to bring some realism into the discussion, planning and assessment of these initiatives. The paper also stresses that different initiatives have different objectives and different outcomes which depend on context, who is involved, and a host of other things.
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Bakker, I., 2002, 'Fiscal Policy, Accountability and Voice: The Example of Gender Responsive Budget Initiatives', UNDP, New York.
Participatory budgeting and analysis offer a new method of holding governments accountable to their commitments. They can also lead to a more balanced distribution of public resources. This background paper for the United Nations Human Development Report considers the relationship between fiscal policy and accountability, and analyses the development of gender-responsive budget initiatives.
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Hofbauer, H., 2003, 'Case Study: Gender Analysis in Policy Planning and Budgeting' from training session on 'Gender Analysis in Policy Planning and Budgetary Processes', World Bank, Washington DC.
A case study used in World Bank training sessions describes the experience of non-governmental organisations (NGOs) working on engendering budgetary policy in Mexico. It gives a brief roundup of recent Mexican political history and introduces the two NGOs studied.
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Civil society & participatory budgeting
Although parliaments should represent the views of different interests, some groups in society are not well-represented in parliaments, and can participate more effectively in budgetary decision-making processes through civil society organisations. Civil society participation in the budget process strengthens domestic accountability on public expenditure. This is particularly the case in the context of fiscal decentralisation, where resource allocations should reflect local priorities.
The following documents demonstrate that both the supply side of accountability (improving the availability and accessibility of information and opening up the budget process) and the demand side (building the capacity of civil society organisations to analyse, critique and engage) need to be developed.
Brautigam, D., 2004, ‘The People’s Budget? Politics, Power, Popular Participation and Pro-Poor Economic Policy’, United Nations, New York
Technical considerations used to be paramount in the budgetary process. Now that citizen participation is valued in the economic arena, ‘people’s budgets’ have emerged. This has raised hopes that spending and revenue generation can be made ‘pro-poor’. This draft paper for a United Nations’ Expert Group Meeting on Participation of Civil Society in Fiscal Policy looks at the factors that encourage pro-poor spending, and draws on case studies from Porto Alegre, Ireland, Chile, Mauritius and Costa Rica.
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Krafchik, W., 2003, 'Can Civil Society Add Value to Budget Decision-making? A Description of Civil Society Budget Work', International Budget Project, Washington D.C.
How can civil society affect the budget process? This paper, commissioned by the International Budget Project, investigates the trend in many developing countries for an emerging subset of civil society organisations, or ‘applied budget groups’, to become more involved in the budget process. It is still early days but evidence suggests that applied budget groups broaden understanding and oversight of budget process - the most important economic policy instrument.
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De Renzio, P., n.d., ‘The role of CSOs in Pro Poor Budget Policies’, ODI, London
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Rodgers, D., 2005, 'Unintentional Democratisation? The Argentinazo and the Politics of Participatory Budgeting in Buenos Aires, 2001-2004,' Crisis States Research Centre, London
If the implementation of Participatory Budgeting (PB) requires strong political parties, how then did it come to emerge in Buenos Aires in a time of economic crisis, with fragmenting government and conflicting interests? This working paper examines the background to the Argentinazo crisis, and the implementation of PB in spite of a lack of those conditions considered theoretically necessary.
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Singh J. and Shah P. 2003, Making Services Work for Poor People -The Role of Participatory Public Expenditure Management (PPEM), Social Development Notes No. 81, World Bank, Washington D.C.
How can services be made to work for poor people? What reforms are needed? This note from the World Bank puts forward the case for participatory public expenditure management (PPEM) to improve service delivery in developing countries.
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Heimans, J. 2002, Strengthening Participation in Public Expenditure Management, OECD Policy Briefing no. 22.
This policy briefing is based on a review of the existing literature as well as interviews with a range of experts, including members of civil society, government officials, and specialists in multilateral agencies, who have had experiences with different aspects of participatory budgeting. The brief argues that participatory budgeting matters because it promises to improve social and economic outcomes while increasing confidence in public institutions.
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Budget literacy and access to information
Access to information about budgets and the ability to understand such information are vital ingredients in promoting public scrutiny of and civil society participation in the budget process – whether at the stage of budget formation, or in budget and expenditure monitoring.
Gomez, P., Friedman, J. and Shapiro, I., 2004, ‘Opening Budgets to Public Understanding and Debate: Results from 36 Countries’, International Budget Project, Washington
How does public access to budget documents contribute to a more open society? This research from a pilot project organised by the International Budget Project shows how budget documents allow the public to evaluate a government's policy intentions, its policy priorities, and their implementation. Public access to such documents is essential to ensure both that government is financially accountable and that civil society can participate effectively in budget debates.
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International Budget Project (undated), ‘A Guide to Budget Work for NGOs, Chapter 6: Advancing Budget Literacy’, International Budget Project, Washington DC
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Public expenditure tracking surveys and civil society budget monitoring
Once budget allocations have been made, how much actually reaches the services to which they have been allocated? Even rigorous accounting systems may hide the fact that expenditure has gone astray or been pocketed by corrupt officials and contractors. Ablo & Reinnika’s innovative Public Expenditure Tracking Survey in Uganda found, for example, that only an average of 30% of the amount allocated was actually reaching schools. Carrying out the survey enabled the government to take direct remedial action – much of it of an innovative nature, including publishing budget amounts on school notice boards and in the local media, and thus enabling citizens to monitor their own access to services. Civil society expenditure tracking has become particularly useful in ensuring that poverty reduction budgets which emerge from the PRSP process are adhered to.
Ablo, E. and Reinikka, R., 1998, 'Do Budgets Really Matter? Evidence From Public Spending on Education and Health in Uganda', World Bank Policy Research Working Paper 1926, World Bank, Washington D.C.
Budget allocations alone can be misleading in explaining outcomes and making policy decisions, when institutional relationships of accountability are weak. Also, data on actual public spending are seldom available by sub-sector or program. This diagnostic study by the World Bank uses a new survey tool, the public expenditure tracking survey (PETS), in primary education and health care in Uganda to examine how well public funds reach their intended beneficiaries.
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Reinikka, R. and Svensson, J., 2002, 'Assessing Frontline Service Delivery', World Bank, Washington D.C.
This review by the World Bank of studies in Sub-Saharan Africa and Honduras shows that the public expenditure tracking survey (PETS) and the quantitative service delivery survey (QSDS) are newpromising microeconomic tools both for diagnosis of problems and for research.
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Lawson, M. 2002, 'Monitoring Policy Outputs: Budget Monitoring in Malawi', Oxfam, United Kingdom.
A large and growing number of civil society budget groups have taken up work to improve the transparency of their budget processes, as well as to open up avenues for participation. What are the outcomes and lessons learned from Malawi’s budget monitoring experience? A paper from The International Budget Project addresses that question and describes the monitoring process that civil society organisations in Malawi undertook in the year 2001-2002 budget.
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Sundet, G., 2004, ‘Public Expenditure and Service Delivery Monitoring in Tanzania: Some International Best Practices and a Discussion of Present and Planned Tanzanian Initiatives’, USAID, Washington DC
How effectively have initiatives to enable public service users to monitor government expenditure and service delivery worked in practice? How can service users’ oversight of government programmes be improved? This paper, originally written for USAID and later published by HakiElimu, surveys the various instruments for enabling communities to monitor and provide feedback on the public services they use. Comparing users’ experiences in Tanzania with those elsewhere, it argues that a co-operative relationship needs to be established between government and civil society to strengthen monitoring and governance.
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CSPR Zambia, 2004, ‘Tracking Poverty Reduction Expenditures Under the PRSP. An Analysis of 2002 and 2003 Budgets’, CSPR Zambia
How much money has been channelled into poverty reduction through Zambia’s Poverty Reduction Strategy Paper (PRSP)? This report by the Civil Society for Poverty Reduction (CSPR) uses expenditure data to track anti-poverty spending under the PRSP. It suggests that greater political will is required to ensure that Poverty Reduction Programmes (PRPs) actually receive 100 percent of budgeted resources.
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Corruption and transparency
Public financial management systems in themselves cannot ensure against corruption, which takes sustained political and popular will to address. But properly administered PFM will include a number of checks and balances– from accounting and auditing procedures, to public monitoring of budgets, which can be used to build transparent and accountable systems.
The Utstein Anti-Corruption Resource Centre provides anti-corruption resources and makes information available about the Utstein partners and their anti-corruption work. The Centre runs a public access website at http://www.u4.no, including a page dedicated to corruption and PFM: http://www.u4.no/themes/pfm/main.cfm.
Partner agencies of the Utstein Centre, which are listed on the site, can also access a restricted site at http://partner.u4.no.
Transparency in government procurement
As governments spend large amounts on goods and services in both the national and international markets, it is important that appropriate safeguards are put into place to ensure that government contracts are awarded to the best and most efficient suppliers and to reduce the risk of bribery and corruption. The following documents outline international norms and procedures which can be put in place to ensure transparency and efficiency in government procurement practices.
Søreide, T., 2002, ‘Corruption in Public Procurement, Causes, Consequences and Cures’, Chr. Michelsen Institute, Bergen
What is the impact of corruption in public procurement? How is it carried out and how can it be reduced? This paper by the Chr. Michelsen Institute explores corruption in public procurement and suggests some anti-corruption measures. It emphasises that political commitment is a necessary condition for successful reform.
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Evenett, S. J., 2003, ‘Is there a case for new multilateral rules on transparency in government procurement?, Chapter III of The Singapore Issues and The World Trading System: The Road to Cancun and Beyond’ World Trade Institute, Bern
Can international initiatives strengthen national procurement system reforms? Are new multilateral agreements proposed by the World Trade Organisation (WTO) to improve the transparency of national procurement procedures necessary? This paper by the World Trade Institute assesses the effectiveness of new multilateral rules on transparency in government procurement practices. It recommends that rules on transparency need to be accompanied by rules on discrimination against foreign suppliers.
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OECD DAC, 2005, ‘Harmonising Donor Practices for Effective Aid Delivery Volume 3: Strengthening Procurement Capacities in Developing Countries Preliminary Edition’, OECD DAC, Paris
How can procurement systems in developing countries be improved? Can they contribute to development outcomes? This paper, by the Organisation for Economic Co-operation and Development (OECD) and the World Bank, argues that strengthening procurement capacity in developing countries is critical to improving social and economic well-being and a necessary feature of poverty reduction programmes. It provides practical guidance on mainstreaming procurement, capacity development, benchmarking, and monitoring and evaluation.
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What other resources are available on the GSDRC?
Use the site search at the top of this page if you wish to look for wider resources on accountability in budget planning and monitoring.
Additional information resources
International Budget Project
The International Budget Project exists to assist civil society organisations around the world to improve budget policies and decision-making processes in their countries. It aims to make budget systems more responsive to the needs of society, making them more transparent and accountable to the public.
UNIFEM’s website on Gender Responsive Budgets
Participation and Civic Engagement, World Bank website
IDASA – including the Africa Budget Project
Utstein Resource centre pages on PFM and corruption
World Bank Country Procurement Assessment Reports (CPARs)
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