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June 06, 2019

From Fiscal Transparency to Social Impact

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Posted by the GIFT Coordination Team[1]

We are frequently confronted with the question: how relevant is fiscal transparency for improving public spending? There is no easy answer to this question, as there is no easy or unique path to transforming fiscal transparency into good social outcomes. But there is evidence that transparency can be a stepping stone to improving the quality of spending and accountability for the use of public resources (see de Renzio and Wehner 2015). The following diagram displays GIFT’s theory of change which links fiscal transparency to improved social economic and environmental results.

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Click on the figure for a better image quality

 

One of GIFT’s contributions has been to encourage a dialogue between ministries of finance (MoF) and civil society organizations (CSOs), resulting in the disclosure of more meaningful information in more friendly and accessible formats. Examples include the publication of information on how money has been spent to reduce gender-based violence in Argentina, budget allocations for HIV in Indonesia, and resources for sustainable urban mobility in Mexico.

The stories set out below are illustrative. They are not intended to provide an exhaustive compendium on how fiscal transparency can be used to achieve better policy results, nor are they evaluations of the projects described.

Gender based violence spending in Argentina

How many governments promote their policy decisions with promises that wonderful results will be achieved, but do not back-up these promises with the funds needed or with hard evidence of the results that have been achieved? This is a common political practice of course in many policy areas from environmental protection, to poverty alleviation, to gender issues. Disclosure of more information in the budget and informed public debates can put limits on the false claims of politicians.

In this first video, Renzo Lavin, Co-Director of Asociación Civil para la Igualdad y la Justicia (ACIJ), explains how improved access to budget and spending open data in Argentina has enabled this CSO to take part of an informed discussion. Among other benefits, this initiative has led to corrections in the proposed allocations for gender-based violence policies by identifying and exposing the mismatch between political promises and the actual distribution of budgetary resources.

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In March 2019, the ACIJ started a budget and data literacy effort directed to organizations focused on gender issues, expanding access to the open spending data published by the government.

Budget Allocations for HIV in Indonesia

The finance ministry of Indonesia was among the first to introduce an budget open data portal as part of its fiscal transparency efforts. With more accessible budget information, Indonesian CSOs such as Seknas-Fitra have been able to engage in constructive conversations with the finance ministry and local governments on a range of budget issues. 

Using these new sources of information, Seknas-Fitra has also been able to act as an intermediary with grass-roots organizations to facilitate their understanding of the published data. A specific result of these actions has been changes in the allocation of the budget directed to HIV in different regions. In this video Yenti Nurhidayat explains the chain of events that has led to better protection of vulnerable groups.

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Budgeting for sustainable urban mobility in Mexico

Mexico has been one of the early adopters of mainstreaming fiscal transparency reforms through digital tools, including open data and digital platforms. The ministry of finance has been a key actor in showcasing how user-centered fiscal transparency efforts can benefit organizations with a variety of backgrounds and interests, in areas such as regional development, maternal health, social inclusion and human rights.

This blog post describes how fiscal transparency led to an improved analysis of the distributional impact of the budget on sustainable urban mobility, and the changes in policy that resulted, including the approval process for new investment projects.

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To conclude, CSOs working with GIFT are helping to translate the potential benefits of fiscal transparency to organizations at the grass roots level.  A proactive and open attitude by ministries of finance is an important part of the equation. A better allocation and evidence-based use of public resources will be crucial when addressing the Sustainable Development Goals. Having data available for different expert organizations to analyze is a first step to allow a deeper and better informed discussion between the government and civil society on key policy issues.

 

[1] Global Initiative for Fiscal Transparency: Lorena Rivero, Albertina Meana, Tarick Gracida, Murray Petrie and Juan Pablo Guerrero.

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.

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