17. South Africa 1
Transparency of government activities at all levels is particularly important because it
differentiates countries with established democracies from others that relatively recently
started their democratic transformation. In Russia the budget is the main tool to
accomplish socio-economic policies. Therefore, the study of transparency of the budget
process is of vital importance.
Budget transparency has its origin in the history of parliamentary systems. However,
modern budget practices in many countries do not meet transparency requirements when
the executive dominates the budget process, the legislature has limited power during
budget debates or during amendment recommendations; when there is limited availability
of budget related information for the effective assessment of budget execution; or when
the public has little participation in the budget process. Hence, budget transparency
receives considerable attention in the advancement of budget
Globalization and the growing interdependence of national economies draw attention to
the role of international financial institutions to improve financial transparency. The Asian
financial crisis showed that with broad access to information on the Asian financial market
and fiscal policies, it might have been possible to “turn on the appropriate regulatory
mechanisms” and alleviate the crisis. As a result, first steps were taken in order to
formalize transparency requirements.
On April 16th, 1998, the International Monetary Fund (IMF) published the Code of Good
Practices in Tax and Budget System and called on its member-countries to implement it.
The principles and practices of the Code are based on the experience of tax and budget
administration in member-countries. The IMF Code offers recommendations, is limited to
finance and credit policies, and is addressed to the IMF member-country governments.
Increasing transparency of the budget process can be initiated not only by financial
institutions or governments to improve the budget
3. Why do we need budget process transparency?
Representatives of the legislative and executive branches, as well as civil society groups,
share an interest in budget transparency.
Although the motives for promoting transparency can be different (elections, investments,
control on budget expenditure, receiving
budget allocations, etc.), budget transparency is always a necessary condition to good
governance due to the following reasons:
• Transparency enables every member in society to understand the budget language and
its figures. Since taxes
constitute the major source of revenue, it also allows seeing where tax money is spent.
• Transparency creates opportunities for public debates and enables realization of citizen
rights to budget information,
and participation in budget decision making.
• Transparency increases oversight from legislators and citizens over quality budget
decisions at the formulation and
• Transparency is a prerequisite for control on budget allocations and is an instrument
• Transparency promotes greater trust between the government and civil society groups.
• Transparency and public participation can increase the effectiveness of budget
• Transparency is a precondition for macroeconomic stability in a country. In a crisis
situation necessary changes can
be made more quickly and efficiently.
• Transparency opens regional and national government policies to other countries, which
4. Transparency and public participation
Budget process transparency is not only about availability of information to the public.
Transparency is a necessary, but not sufficient
condition for public participation. Budget transparency being an instrument for the
development of democracy depends on the level of
development of democracy, i.e. the readiness and ability of civil society to ensure public
control over budget transparency and
participation in budget policy decision-making process, protecting the interests of
The Transparent Budget Program is seen as social technology, or as a set of methodically
valid actions, rules, and procedures,
which enable independent experts and NGOs to ensure public participation in the budget
process, aiming at increasing its efficiency.
In addition to applied budget analysis, public participation and the technology of legislative
initiatives, budget transparency
evaluations are a key component of social technology.
5. “Me” and transparency: I can, I want, I know how
During the Program to evaluate the budget process, data was collected regarding the
willingness, readiness, and capability of
participation in the budget process. Motivation was rated very high, whereas only 1% of the
participants said they Know How to
apply transparency tools, 95% of the participants said their Know How abilities would
improve with adequate access to
6. Transparency assessment: methodological toolkit
The methodological toolkit that was developed in the framework of the project consists of
the questionnaire and methodological recommendations regarding the organization of
surveys to assess public participation. The IMF Code became the first international
experience to design standards (minimum requirements) applicable to every budget
It is based on clarity of roles and function of government bodies; public availability of
information on activities of government; openness of budget preparation process and its
execution, and accountability; and independent guarantee of tax and budget-related
information reliability. However, being limited within the financial policy, the code pays
insufficient attention to the role of civil society institutions, and it is not oriented towards
improvement of budget process through enhancement of public and legislators
The transparency assessment and participation scorecard (questionnaire) - which is
mainly based on the IMF Code of Good
Practices but was developed and broadened to consider factors of public participation -
was used in South Africa by the experts of the Budget Information Service of Idasa and the
The scorecard originally served as a basis for the Russian version of transparency
assessment within the framework of a budget program. International experience and
standards are undoubtedly of interest for Russia as a first attempt to apply the
questionnaire to the project’s seminar attendees. However, collaboration with regional
experts, as well as consultation with the representatives of the Committee of Finance
demonstrated that for practical use we need to adapt the questionnaire.
The following circumstances require adapting the scorecard to the Russian context:
• In the framework of Strategy’s budget project the questionnaire was intended for the
budget at the sub-national and
municipal levels, while the IMF Code and the scorecard used in South Africa are designed
for the national budget.
• Specific characteristics of tax and budget system in Russia, including constitutional and
legislative terminology, make
it impossible to directly copy the scorecard, which was also confirmed by the results of
surveys conducted by the
experts and participants of the seminars.
• The budget process at the municipal units and sub-national divisions of the Russian
Federation also differ due to legal
frameworks, which need to be adapted.
A questionnaire was developed in the participating regions of St. Petersburg, Pskov,
Samara, Petrozavodsk, Novosibirsk, and Velikie Luki for the sub-national and municipal
divisions of the Russian Federation. The questionnaire to assess budget process
transparency for municipalities includes 58 questions. The one for the Russian
Federation has 55 questions. The questions are grouped under the following sections:
• Budget expenditure responsibility.
• Budget information and budget documentation.
• Analysis of budget execution.
• Public participation in the budget process.
The instructions for regional coordinators, who organized the pilot survey for the
transparency and participation assessment, included the following sections: purpose,
goals, tasks, and responsibilities of regional coordinators; organizing and technology of
pilot survey, including selecting expert-respondents, processing the results, and the
format of results presentation. The main goal was to ensure a uniform methodological
approach for conducting the assessment, which is the underlying condition for inter-
regional and intermunicipal comparison of the obtained assessment results and
development of recommendations for increasing budget transparency and participation in
the budget process.
The main goal of the methodological recommendations was to ensure uniform principles
• Selecting expert-respondents.
• Organizing and technology of conducting expert survey.
• Processing the results and presenting them to Strategy.
7. Transparency and participation assessment
Transparency and participation assessment was conducted in 8 regions on the basis of
surveys at the municipal level in Murmansk city, Petrozovodsk, and Velikie Luki, and at the
sub-national level in St. Petersburg, Novosibirsk, Samara, Pskov, and Ujno- Sakhalinsk
oblasts (“Oblasts” is the Russian term for “region”). Eighty experts took part in the pilot
survey, 32% of the experts were legislators, 26% were part of the executive branch, 23%
NGOs, 11% were media representatives and 8% were scholars and academics (see.
Annex 1). The experts self-evaluated their experience in budget work in the following way:
• 13% have no experience.
• 11% 3 years of experience.
• 23% 3 to 5 years of experience.
• 53% more than 5 years of budget-related experience.
Distribution of the expert self-appraisal was in the range of 4 to 9 points on the 10 points
Experts were selected according to a basic knowledge of budget processes and public
participation at the municipal level for the regions of Murmansk, Velikie Luki, Ujno
Sakhalinsk (basic scheme of selection). For St. Petersburg, Pskov, Novosibirsk, Samara
region, and Petrozavodsk experts required an in-depth knowledge of budget processes
and public participation (full scheme of selection).
Based on the generalized results of pilot experts survey, the following conclusions can be
• It was proved that the developed methodological toolkit for transparency and participation
• Assessment can be expressed both qualitatively (high, moderate, weak) and
quantitatively (from 0 to 1 or on a 10
points scale) and presented in tabular and graphical form (see, for example, Annex 2, 3).•
Qualitatively transparency was assessed as “moderate”. However, quantitative
assessment in each section substantially differs from region to region. This shows that
the experts gave different conceptual weight to “moderate”.
• Agreement among the experts on particular questions is not significant, because the
respondents’ opinions vary
widely and require additional analysis.
• Interpretation of obtained results should consider individual characteristics, such as
professional expertise in the field,
since the questionnaire includes a broad range of questions and in some of these a
respondent may not be prepared
• If the assessment results for two regions are close there may still be substantial
differences, since each region’s
results reflect a different range of factors (See Annex 5.4).
• The results enable us to highlight some specific aspects of transparency and
participation, also based on comparative
analysis of Russian cities’ characteristics.
• All of the regions obtained a low grade in the section of “participation in the budget
process” (See Annex 6), which
shows weak civil society participation in the budget process.
• Including government officials in the surveys increased their interest in public
participation, which will influence
executive, legislative, and civil society cooperation.
• The experience suggests that the technology of transparency and participation
assessment can be used in other
regions, which are not yet participating in the budget program. This can be achieved
through minor methodological adjustments and appropriate consultation.
8. Public participation and budget transparency: experience and problems
The problems faced during the development of the toolkit, can be divided into general and
specific, like shortage of qualified specialists. In addition, the origin of the problems can
be classified as follows:
• Organizational, as a result of the organization of the survey.
• The problem of expert selection and assessment of opinion agreement.
• Methodological problems to analyze obtained results.