After a gruelling 35-hour flight, it took me a few days to recover and digest all that had happened in Busan last week, where more than 2,000 delegates gathered for the 4^th High-Level Forum on Aid Effectiveness. Overall, I thought that the outcome was fairly disappointing. The outcome document, called the Busan Partnership for Effective Development Cooperation, is long on principles and short of commitments. It was endorsed by the emerging donors like Brazil, Russia, India, China on condition that it is not binding. Specific and time-bound targets for improving donor performance, such as those agreed in Paris in 2005, are absent. And all details about the new and more inclusive body expected to oversee the implementation of the document’s commitments are lacking, though a deadline of June 2012 for its establishment was set.

But not all is bleak. The document contains strong language on the need to promote democratic ownership of development policies and processes, and recognizes the vital role played by Civil Society Organizations (CSOs) in “enabling people to claim their rights, in promoting rights-based approaches, in shaping development policies and partnerships, and in overseeing their implementation”. It also retained the commitments related to improving aid transparency, including a deadline of December 2015 for implementing a common open standard for the publication of comprehensive information on aid flows. In fact, the International Aid Transparency Initiative, which was undermined by reluctant donors in the run-up to Busan, got a strong boost with the US Government joining it, alongside other large donors such as the Asian and Inter-American Development Banks. This means that more than  75% of information of total aid flows will soon be compliant with strong transparency standards. This will allow CSOs in both donor and recipient countries to track more closely how aid money is spent.

Donors also committed to using country systems as a default approach for development cooperation, something that could strongly enhance the link between aid and budget transparency, and to further untie their aid. Finally, the document talks about the importance of fiscal transparency in combating corruption, and about the need to “establish transparent public financial management and aid information management systems, and strengthen the capacities of all relevant stakeholders to make better use of this information in decision-making and to promote accountability”.

The results of the Busan HLF4 therefore create a reasonable framework to push forward issues that are of core interest to CSOs working on transparency and accountability. Yet, much remains to be done. In order to fully exploit the opportunities opened at Busan, the International Budget Partnership will work with others to:

1. Monitor and influence negotiations on the establishment of the Global Partnership for Effective Development Cooperation, ensuring that it adequately includes and addresses transparency and accountability issues (focusing particularly on aid and budget transparency, and use of country systems), with monitorable indicators and time-bound commitments.
2. Work with the IATI Secretariat to ensure that aid information is increasingly compatible with recipient country budget systems and processes.
3. Continue discussions on enhancing the linkages between aid and fiscal transparency with the smaller set of actors who were part of the Transparency Building Block at Busan, and who are committed to further and faster progress in this area.

If you are interested in joining, let us know!

Open Budget Surveys have repeatedly found that countries that are heavily dependent on foreign aid to finance their budgets tend to have less transparent budget processes, . This might be due to various country characteristics, such as low incomes or weak democratic institutions. But donor behaviour also plays a part, as argued in a recent IBP Briefing Note. The brief highlights the importance of the relationship between donors’ provision of information on aid flows and recipient country governments’ disclosure of budget information to their citizens. In fact, aid transparency and budget transparency are inextricably linked. Budgets in partner countries cannot be made fully transparent without improved aid transparency. Only if donors provide partner countries with sufficient information, compatible with partner country budget systems and schedules, can timely, accurate and comprehensive budget information be made available to citizens of countries receiving aid. This point is also highlighted in the the Dar es Salaam Declaration on Budget Transparency, Accountability and Participation, signed last week by nearly 100 civil society groups.

At the Fourth High-Level Forum on Aid Effectiveness, which will take place in a few days in Busan, South Korea, the transparency theme will have a prominent place. The latest draft of the Busan Outcome Document (the declaration that participating governments will sign at the end of the Forum) covers transparency issues in a number of ways. First, transparency and accountability are recognized as ‘shared principles’ that form the foundation of development cooperation, alongside ownership, results and inclusive partnerships. Second, a whole paragraph (para 22) is devoted to aid transparency commitments, in which donor agencies undertake to make publicly available more information on aid flows, and to implement a common standard for its publication, building among other things on the efforts of the International Aid Transparency Initiative. Third, donors and recipient countries commit to building more transparent public financial management systems and to improving fiscal transparency.

All of these commitments were the outcome of some difficult negotiations, facing resistance from a number of donor governments, including China, Japan and France. Provided they make it through the final discussions, they are very welcome, and represent a significant step forward in recognizing the importance of transparency and accountability as key ingredients of both aid and development effectiveness. The explicit link between aid transparency and budget transparency, however, is not recognized. Luckily, this link will be the focus of a plenary session, which IBP has helped organize and which is supported by a smaller number of like-minded actors, including the governments of Sweden, the US, Rwanda and South Africa, the Collaborative Africa Budget Reform Initiative (CABRI), the World Bank and CSOs like Transparency International and Publish What You Fund. In this session, more ambitious targets and commitments around aid and budget transparency will be discussed, and hopefully agreed.

One of the most important aspects of the discussions at Busan will be to agree on the future international architecture for development cooperation, with a view to overcome the limitations of the OECD/DAC Working Party on Aid Effectiveness, which for too long has been seen as too exclusive a body that does not reflect the role of emerging donors and the need for a more equal partnership between donor and recipient governments. The current draft of the Busan Outcome Document talks about the establishment of a Global Partnership for Effective Development Cooperation. Ideally, this body should include a specific mechanism for ensuring the transparency-related commitments are monitored and enforced. Such mechanism would also gain from a multi-stakeholder nature, following the example of the Global Initiative for Fiscal Transparency (GIFT), which brings together governments, international organizations and civil society groups in a joint effort to promote fiscal transparency across the world.

The International Budget Partnership will be represented at the Busan Forum, and will report back on what happened.

Watch this space!

Read more here: www.r2k.org.za

The global Civil Society Movement for Budget Transparency, Accountability, and Participation wants government finance systems that make all budget information easily accessible, provide meaningful opportunities for citizens to participate in budget decisions and oversight.

The demands of the Civil Society Movement for Budget Transparency, Accountability, and Participation (BTAP) are contained in a Declaration of Principles that will be signed at the meeting.

The core demands of the Declaration is that all governments at the national and subnational levels should:

1.  Recognize, legislate, enact and operationalize the right to information generally and to public budget information specifically;
2. Actively engage citizens and all other stakeholders in setting public budget priorities– including para-statal and para-fiscal funds– as early and inclusively as possible,
3. Produce, and publicly discuss, in a timely fashion, at least eight key budget documents: pre-budget statement, executive’s budget proposal, enacted budget, citizens budget, in-year report, mid-year review, end-year report, audit report;
4. Comprehensively report on all public financial flows and institutions, including those that are managed outside of the formal budget process;
5. Include all resources used for the implementation of public, fiscal and economic policies, regardless of their origin, in their public budget documents and processes;
6. Ensure that legislatures and auditors are independent of government and have sufficient resources to increase their capacity and thus fulfill their oversight mandates effectively.
7. Publish and disseminate budget information in easy and accessible formats through all possible means, including digital open data formats through the internet, public libraries, information centers, etc.

Civil society organizations can sometimes struggle for years without apparent impact on government policies and budgets.  Such sustained campaigns do, however, prepare CSOs to act decisively when new opportunities come knocking.

The success of the National Campaign for Dalit Human Rights’ (NCDHR) Campaign 789 was built on the CSO’s diligent budget monitoring and persistent efforts to get government to honor its promises to the Dalit community. When  international attention was focused on India and the Commonwealth Games (CWG) 2010 – and, more specifically, corruption linked to the games – the NCDHR and its partners were ready to push ahead for greater accountability from the government and/or fairer allocation of resources.

Scheduled Caste Sub Plan  and Code 789: redressing injustices

The Dalits, who were traditionally regarded as “untouchable” in India’s caste system, make up the most disadvantaged community in India. Comprising 16.2 percent of the Indian population, the Dalits are physically and socially excluded. The majority of the community (62 percent) is also illiterate. The Indian Constitution, recognizing this injustice, includes clear directives about redressing these injustices.

However, the Indian government has been lax in making sure that these directives are followed and that the measures put in place are adhered to. Take, for example, the Special Component Plan, which was introduced in 1980 and was renamed the Scheduled Caste Sub Plan (SCSP) in 2006-07.

The SCSP requires government to spend a pro rata proportion (that is, 16.2 percent) of funds set aside for development specifically on the Dalits. However, in 2007-08 only 6.1 percent of development funds were channeled through the SCSP, and in the budget for 2011-12 this number had risen marginally to 8.84 percent. Furthermore, the allocations are not binding and the way in which the funds are allocated means that it is possible for funds to be spent in such a way that they do not specifically benefit the Dalits.

In 1995, the government introduced code 789 to categorize all SCSP funds; however, because no timeframe was stipulated, most departments neglected to do so. This meant that there was no way to track what SCSP funds were actually being spent on. This made it difficult to monitor what the funds were being spent on and to hold government accountable when it diverted funds meant for the economic, educational, and social development of the Dalits to other projects and programmes such as the CWG 2010.

Taking advantage of the Commonwealth Games

The NCDHR, which was established in 1998, worked for many years with various government departments – such as the Comptroller and Auditor General of India (CAG) and the Planning Commission of India, which is responsible for resource allocation – in an attempt to get the government to implement code 789 and meet its obligations under the SCSP.

While the NCDHR achieved small successes in this way, it was the international attention generated by the CWG 2010 that provided the campaign with the much-needed momentum to secure some promising interim impacts. At the time of the CWG 2010, national and international media focused on issues of corruption around the games. Because the NCDHR had, for many years, been doing in-depth budget work, it was able to take advantage of this  opportunity to draw attention to the way in which funds intended for the development of the Dalits were being diverted elsewhere.

Together with the Housing and Land Rights Network (HLRN), another CSO, the NCDHR established, by studying the Delhi administration’s budget allocations, that funds for the CWG 2010 were being diverted from various sources including SCSP allocations. The NCDHR held a press conference on the misuse of SCSP funds and, because there was already national and international media attention on stories of corruption related to the CWG 2010, the story made headlines.

“The campaign shows how the impact of CSO campaigns can be multiplied when they tap into the agendas of other powerful actors on the national and international stage,” Vimala Ramachandran and Sapna Goel wrote in a case study about the campaign.

The HLRN then filed a right-to-information petition, asking for information on the cost of the CWG 2010 and, more specifically, the amount of SCSP funds that was diverted to the CWG 2010 between 2006 and 2010. The government admitted that INR 7.44 billion in resources had been diverted from the SCSP, and the NCDHR and NLRN held a joint press conference to share this information with the media and parliamentarians.

Promising interim impacts

Opposition members of parliament subsequently raised the issue in parliament and the home minister of India was forced to admit that the diversion of funds was wrong and that the government would make sure that the funds were returned. The government of India also made it mandatory for all departments to use code 789 in the budget of 2011-12. In addition to this, the Planning Commission set up a taskforce in June 2010 to “re-examine and revise the extant guidelines issued by Planning Commission for implementation of SCSP.”

While the fight is far from over – the government has yet to actually return the funds as it promised – the NCDHR has demonstrated how large national events and the international pressure that they generate can be used to push a particular agenda onto the national stage.

Ramachandran and Goel conclude that “this campaign illustrates the importance of sustained monitoring and advocacy pressure throughout the policy and budget cycle.”

Were it not for the NCDHR’s diligent budget work and ability to analyze budget allocations, the CSO would not have been able to seize the opportunity presented by the CWG 2010 and the 162 million members of the Dalit community would have been poorer for it.

This post was written by Rebekah Kendal based on the case study by Vimala Ramachandran and Sapna Goel commissioned by the International Budget Partnership. Click here to read more case studies of how citizen budget monitoring has improved government service delivery.