Fiscal Transparency and Accountability

              This post is about a theme that we Brazilians have been heard a lot lately, The importance of fiscal transparency and fiscal accountability. According to many economists, we are now in Brazil witnessing the social, economic and political consequencies of a badly management of a fiscal policy, so it is important that we understand more about this theme.This post is a summary of three posts. The first was published at https://en.wikipedia.org/wiki/Fiscal_transparency                                      The second was published at  http://www.theguardian.com/global-development-professionals-network/2013/jun/12/fiscal-transparency-better-accountability-development. The third with the title above was published at http://unpan1.un.org/intradoc/groups/public/documents/un/unpan001892.pdf

            Fiscal transparency refers to the publication of information on how governments raise, spend, and manage public resources. More specifically, it means publication of high quality information on how governments raise taxes, borrow, spend, invest, and manage public assets and liabilities. Fiscal transparency includes public reporting on the past, present, and future state of public finances. Fiscal policies have critical impacts on economic, social and environmental outcomes in all countries at all levels of development. Fiscal transparency is sometimes used synonymously with budget tramsparency. However, fiscal transparency is in principle wider than budget transparency. The global financial crisis that started in 2008 prompted more widespread reflection on the effectiveness of the existing international arrangements to promote fiscal transparency and accountability. One outcome of this was the creation of the Global Initiative for Fiscal Transparency ( GIFT ) in 2011. GIFT is a multi-stakeholder action network that aims to advance and institutionalize global norms and significant, continuous improvements on fiscal transparency, engagement, and accountability in countries around the world. fiscaltransparency.net Although fiscal openness is improving in many countries, the rate is uneven and slow, and backlashes are constantly registered. At the same time, the challenge is complex and need multiple stakeholders to address it in a coordinated manner. From the OBS - 2015 Executive Report : Results from the Open Budget Survey 2015 reveal large gaps in the amount of budget information that governments are making available to the public. The survey found that around one-third of budget documents that should be available to the public are not. They were either not produced at all, produced for internal use only, or published too late to be useful. Many of the budget documents that are missing from the public domain are prepared, but remain off limits to the public. Budget transparency could be significantly advanced if governments were to take the simple step of releasing these already-prepared documents. Failing to publish information that is already being produced is a question of political will, which civil society can influence. The survey also found that even when documents are published they frequently lack sufficient detail. To disclose what governments organizations do with financial resources is not always easy, in fact, there is much resistance to fiscal transparency. There is evidence that fiscal transparency strengthens the eddiciency, equity, effectiveness, stability and sustainability of fiscal policies. This in turn enhances the likelihood that fiscal policies will have positive economic and social impact.                                                               For people interested in transparency and its impact on development, these are very interesting times. The last few years have seen a flurry of international initiatives aimed at promoting transparency in a variety of areas of government action. The  Open Government Partnership launched in 2011, already has more than 50 member governments who have undertaken to promote transparency  and openness and to allow for independent reviews of their efforts. Transparency initiatives have existed for longer in the extractive industries and foreign aid sectors. The  Global Initiative for Fiscal Transparency, has brought together key actors: governments, NGOs and inter-governments agencies, to design and promote improved global norms for transparency and citizen participation in the management of public resources. All of these efforts stem from two inter-related convictions. First, that having access to government information, including budget information, is a right of every citizen, as enshrined in the U. D. H. R. Second, that transparency and access to information will allow citizens to engage with policy processes and monitor government action, leading to improved accountability and better development outcomes. While the first comes from a belief that governments have a duty to fulfil individual human rights, the second one needs to be demonstrated in practice and backed by credible evidence. The Open Budget Index has contributed to expose the difficulties that citizens face in accessing budget information and to put pressure on governments to open up their books. As global development professionals who promote transparency, we must ask ourselves, first, how improvements in fiscal transparency and participation come about and, second, under what circumstances they lead more government responsiveness, improved accountability and better development outcomes. Research surrounding these questions shows that four main factors stand out as contributing to improvements in fiscal transparency and participation. These are: 1) Processes of political transition towards more democratic forms of political contestation and alternation. 2) Fiscal and economic crises that forces governments to put in place enhanced machanisms for fiscal discipline and independent scrutiny. 3) Widely publicised cases of corruption that gives reformers political space to introduce reforms that improve public access to fiscal information. 4) External influences that promote global norms and empower domestic reformers and civil society actors.

       Fiscal transparency, reflecting a system of windows on public policy making and policy implementation, is not an end in itself, but is a means contributing to effective and comprehensive accountability that aims at securing full answerability from governments and their officials. Governments depend on authority needed to provide services, to regulate the economy and to finance both types of activities. Markets are dependent on security utility, but both governments and markets depend for their smooth functioning, on a large variety of information. The importance of information on the activities of the government to facilitate the twin roles of individual decision-makers, or economic agents, to ascertain what the government is doing and to evaluate how the resources are being utilized. Similarly, there has been recognition, from the Pre-Christian times, that "unaccountability means lawlessness." The growing recognition of the importance of strengthening the civic society to perform its designated role has been an important factor in shaping the debate on fiscal transparency. The strengthening of the civil society requires greater transparency in governmental actions, and greater trust on government agencies, accompanied by an effective framework of accountability. The demand for a strengthened civil society comes in the context if a profound paradox in the working of the governments. On the one hand, there is a view that governments have grown enormously in size and in the range of tasks undertaken, and their performance has yet to match expectations. Notwithstanding this prevailing sense of disappointment, there is also a greater demand for  more services. A related issue is how this paradox may be addressed through greater fiscal transparency and improved accountability. The concept of fiscal accountability reflects the concerns of those interested in the sustainability and quality of public finances, in that services delivery and observance of economy and efficiency are integral parts of this form. However, where the machinery for full transparency and accountability exists, the institutions charged with these responsibilities,  have not been very effective. Their underachievement is, in part due to the laws enacted a long time ago and to poor adjust to the changing tasks. A combined result is growing apathy towards government at a time when its role is also expanding. One of the underlying objectives of improved transparency and accountability is to reduce the extent of corruption. The effective functioning of an independent audit system reinforces the trust that the public has on governments. While this is a majoe achievement, in several cases, the audit can not follows the full trail of government expenditures. Transfers to local governments, NGOs and the books of contractors that perform tasks for and on behalf of governments , are beyond the scope of a normal audit.