BUDGET ANALYSIS AND POLICY ADVOCACY

1. BUDGET ANALYSIS AND POLICY ADVOCACY Mark Robinson (Institute of Development Studies) Warren Krafchik (International Budget Project) 30 January 2007

2. Research aims • Document growth of applied budget work • Provide systematic analysis of the nature and impact of applied budget work • Disseminate lessons learned to budget groups and policy makers in governments and aid agencies • Research collaboration between IDS and International Budget Project, funded by ESRC, the Ford Foundation, Hewlett Foundation, and Open Society Institute.

3. Six case studies • DISHA, India • Fundar, Mexico • IBASE, Brazil • Institute for Democracy in South Africa (IDASA), South Africa • Institute for Public Finance (IPF), Croatia • Uganda Debt Network (UDN), Uganda

4. Team composition and fieldwork • Two member teams combining a mix of disciplines, experience and country knowledge • Maximize cross-evaluation and potential learning outcomes; at least one team member is directly engaged in applied budget work • Field visits of 10 -12 working days • Data gathered from several sources, including interviews and focus group discussions with wide range of stakeholders, public budget and policy data, IBP and group materials, and media reports

5. Key research questions • Budget policies: Changes in budget policies and systems; budget allocations; implementation (efficiency and effectiveness) and outputs • Budget process: Budget awareness and understanding; budget transparency; participation in the budget process

6. Impact – budget systems and allocations • Budget systems: some influence in Croatia and South Africa - structural constraints on the budget process • Budget allocations: evidence of increased allocations for specific sectors or programmes in Mexico (reproductive health), India (tribal welfare expenditure) and South Africa (children, HIV/AIDS, women)

7. Impact – implementation • Significant engagement and impact in Gujarat and Uganda at local government level through expenditure tracking • Monitoring reveals strong evidence of inefficiency, corruption and expenditure misallocations

8. Impact – budget awareness and budget literacy • Legislative influence: strong in Gujarat, Mexico and South Africa, resulting from deliberate strategy of engagement, and with elite policy makers in Croatia • CSO influence: significant take-up of findings from budget analysis by other groups for advocacy and analysis, especially in Uganda, India and South Africa • Media coverage: significant reporting by media for most organisations, often the sole source of information outside government

9. Impact – budget transparency and participation • Transparency: demonstrated capacity to open up budget process to public and legislative scrutiny, especially at the federal level in Mexico and South Africa • Participation: ability to promote wider citizen participation in budget deliberation more limited; partial exception of Ibase in Rio de Janeiro through leadership training and distance learning

10. Interim conclusions • Strength of independent budget analysis lies in information provision and awareness building (for legislators, CSOs and media), enhanced budget transparency • Some positive impacts on budget priorities, allocations, implementation and outcomes – financial impact can be very significant with social justice and equity implications

11. Critical success factors • Civil society can add value to public budgeting • Transparency and inclusiveness positively associated with equity, efficiency and effectiveness. • Limitations? Incremental vs. structural change. • Budget work is a flexible tool • Can be applied in diverse countries and stages of development. • Environment should influence program choices but does not predetermine impact. • Budget work is adaptable to most civil society organizations • Think tanks vs. grassroots organizations. • Specialized budget organizations vs. budget work as a tool. • Advocacy vs. information organizations. • But, dedicated capacity and year-round engagement necessary.

12. Critical success factors • Quality of analysis and dissemination determine potential for impact • Accuracy = credibility • Timeliness = usefulness • Accessibility = legitimacy • Actual impact depends on relationships • Work within civil society • Legislature and executive • Potential with external auditors • Long-term impact / structural change depends on oversight system and coalitions with other actors

13. Implications for donors • Growing recognition that civil society participation in the budget process is central to effective public financial management • Direct influence of government budget policies through policy dialogue and direct budget support • Financing for civil society organisations directly engaged in budget work

14. Improving the environment for applied budget work • Donors can encourage governments to improve budget transparency and make budget information widely available • Donors should provide more comprehensive information on aid flows and reduce ‘off-budget’ spending • Donors can engage local budget groups in diagnostic and analytical work on budget issues • Donors should aim to strengthen accountability in the budget process and support the roles of legislatures, civil society and the media

15. Direct support for civil society budget work • Avoid over-burdening civil society organisations with fragmented, small-scale project support • Long-term core support can support development of medium term perspective and strategy by improving internal capacity • Preconditions for support include sound technical capacity and legitimacy, clear linkages between analysis and advocacy, a credible monitoring and evaluation system to track impact, and legitimacy with parliaments, media and civil society

16. Wider significance • Contribution to government accountability through independent scrutiny of budgets and improved participation in the budget process • Contribution to improved public expenditure management as donors channel an increasing proportion of aid through national and sectoral budgets • Reduced scope for corruption through tracking and monitoring of government expenditures and improved utilization of scarce public resources • Furthering poverty reduction as benefits primarily accrue to poor and vulnerable groups through improved budget policies, increased budget allocations and better service delivery • Strengthening democracy through a more informed citizenry and greater voice and participation in decision making