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What is Budget Transparency and its Elements

What is Budget Transparency and its Elements

BUDGET TRANSPARENCY

  • Increased transparency in budgeting made significant advances in the late 1980s and early 1990s. This was a period associated with unfavourable budget conditions in most Member- countries; high annual deficits and increasing levels of outstanding debt Governments needed to institute large fiscal consolidation programmes.
  • These were often painful and getting the public’s understanding of the problems was necessary.
  • The most effective manner for achieving that was simply to throw open the books and say to the public: “Look, things are really as bad as we told you, we’re not hiding anything.”
  • This may sound a bit sinister at first, but in actuality it is government at its best: Being honest with citizens, explaining the problem to them in order for an understanding to emerge as to the best course of action to take.
  • This time period also coincided with increased attention being paid to good governance in general. The budget is the principal policy document of government, where me government’s policy objectives are reconciled and implemented in concrete terms.
  • Budget transparency — openness about policy intentions, formulation and implementation — is therefore at the core of good governance agenda.

ELEMENTS OF BUDGET TRANSPARENCY

If we take a look at fiscal transparency in concrete terms, we can say that it has three essential elements:

  • The first is the release of budget data. The systematic and timely release of all relevant fiscal information is what we typically associate with budget transparency. It is an absolute pre-requisite, but it is not enough.
  • The second element is an effective role for the legislature. It must be able to scrutinise the budget reports and independently review them.
  • It must be able to debate and influence budget policy and be in a position to effectively hold the government to account. This is both in terms of the constitutional role of the legislature and the level of resources that the legislature has at its disposal.
  • The third element is an effective role for civil society, through the media and nongovernmental organisations. Citizens, directly or through these vehicles, must be in a position to influence budget policy and must be in a position to hold the government to account. In many ways, it is a similar role to that of the legislature albeit only indirectly.                                        What is Budget Transparency and its Elements

These three elements work together. The scrutiny of fiscal information by the legislature and by civil society can only take place if the information is released in the first place.

Similarly, released budget information is only of value if it is effectively scrutinised by the legislature and by civil society.                              What is Budget Transparency and its Elements

The legislature and civil society have a very similar function, one is responsible for shaping budget policy and for holding government directly to account while the other performs this role indirectly.

 

ALSO READ : https://www.brainyias.com/good-governance/

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