Juan Pablo Guerrero Network Directorguerrero@fiscaltransparency.net

Fundar, Center for Analysis & ResearchMexico City 29 January, 2015

“Citizens and non-state actors should have the right and effective opportunities to participate directly in public debate and discussion over the design and implementation of fiscal policies.”

GIFT High Level Principle on Fiscal Transparency n.10Endorsed by the United Nations General Assembly, December 2012

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Fiscal Openness

Fiscal openness includes transparency, participation & accountability in government decision-making over the mobilization, allocation & use of public resources.

GIFT promotes fiscal openness by: Developing a more coherent/comprehensive global architecture of

norms Strengthening incentives for better practices (evidence research) Supporting peer-to-peer learning & technical assistance Harnessing information technologies & budget open data

GIFT, a multi-stakeholder action network to advance FT: Lead Stewards: Governments of Brazil & Philippines, International

Budget Partnership, World Bank, IMF, Intl. Federation of Accountants

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What is public participation?

The variety of ways in which the general public, including citizens, civil society organisations and other non-state actors interact directly with public authorities by means of face to face communication, deliberation or decision-making, or by written forms of communication including electronic or paper media.

Different depths of participation: IAPP five levels of participation of increasing depth: inform, consult, involve, collaborate, empower.

Public discussion, deliberation and open advocacy in contrast to private lobbying or corrupt/illicit activity.

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General International Norms on Public Participation

Article 25 of the International Covenant on Civil & Political Rights of the United Nations enshrines the right of citizens to participate in public affairs.

International Labor Organization (ILO) 169 provides indigenous communities with the “right of prior informed consent” regarding development in their territories.

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General International Norms

The UN Conference on Environment and Development issued the “Rio Declaration on Environment and Development” in 1992. Principle 10: Environmental issues are best handled with participation of all concerned citizens, at the relevant level.

The World Commission on Dams enshrined public participation in its international guidelines on decision-making processes for large dam & infrastructure projects in its widely acclaimed final report of 2000.

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General International Norms

The Aarhus Convention was adopted by the UN Economic Commission for Europe. Its core principles include the right to participate in environmental decision-making, and the right to review procedures to challenge public decisions.

The OGP encourages increased access to information, participation and accountability in government more generally. To date, 65 participating countries have made openness commitments; most have made specific fiscal openness commitments (including public participation) in their action plans.

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Why a new set of principles on fiscal transparency & public participation?

Aim to convene authors & improve coherence, comprehensiveness and alignment of growing multiplicity of norms & standards

Identified gaps and overlaps (post-GFC; new emphasis on governance/participation/accountability)

Need systematic and practical approach on public participation

FT-HLP: draft adopted by GIFT stewards & endorsed by UN General Assembly November 2012

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High Level Principles on Fiscal Transparency

Preamble, plus 2 parts: Access to Fiscal Information (principles 1-4) The Governance of Fiscal Policy (principles 5-10)

Bookended by two fundamental rights principles: A public right to fiscal information (from UDHR Art.

19) A right to participate directly in fiscal policy design

and implementation (from ICCPR Art. 25)

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Access to Fiscal Information

1: Everyone has the right to seek, receive and impart information on fiscal policies. National legal systems should establish a clear presumption in favour of the public availability of fiscal information without discrimination. Exceptions should be limited in nature, clearly set out in the legal framework, and subject to challenge through low-cost, independent and timely review mechanisms.

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Access to Fiscal Information

2: Governments should publish clear and measureable objectives for aggregate fiscal policy, regularly report progress against them, and explain deviations from plans.

3: Presentation of high quality financial and non-financial information on past, present, and forecast fiscal activities, performance, fiscal risks, assets and liabilities.

4: Governments should communicate the objectives they are pursuing and the outputs they are producing with the resources entrusted to them, and endeavour to assess and disclose the anticipated and actual social, economic and environmental outcomes.

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Governance of Fiscal Policy

5: All transactions should have their basis in law.6: Government sector clearly defined, and

financial relationships with private sector disclosed, conducted openly, and follow clear rules and procedures.

7: Roles and responsibilities for fiscal activities clearly assigned between the legislature, the executive and the judiciary, between national and each SNG, between government and rest of public sector, and within the government sector.

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Governance of Fiscal Policy

8: No government revenue should be raised or expenditure incurred or committed without the approval of the legislature; the legislature should be provided with the authority, resources, and information required to effectively hold the executive to account for the use of public resources.

9: The Supreme Audit Institution should have statutory independence from the executive, and the mandate, access to information, and appropriate resources to audit and report publicly on the raising and commitment of public funds. It should operate in an independent, accountable and transparent manner.

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GIFT High Level Principle 10

10: Citizens should have the right and they, and all non-state actors, should have effective opportunities to participate directly in public debate and discussion over the design and implementation of fiscal policies.

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Specific International Norms including PP

Revised IMF Fiscal Transparency Code - Principle 2.3.3: The government provides citizens with an accessible summary of the

implications of budget policies and an opportunity to participate in budget deliberations (good practice:citizens have formal voice in budget deliberations)

Revised OECD Principles of Budgetary Governance: …citizens should be able to engage with and influence the discussion about

budgetary policy options…

Updated Open Budget Survey 2012 (Section 5) measures participation across the budget cycle, and by legislature and SAI.

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Open Budget Survey 2012 Results on Public Participation (100 Countries)

Average public engagement score was only 19 out of 100 (for OGP member countries it was 29); Korea scored 91.

In 51 countries, the executive is required to engage (directly) with the public during the budget process.

In 32 countries, public testimony is heard by a legislative committee on the individual budgets of central government administrative units (i.e., ministries).

In 42 countries, supreme audit institutions have mechanisms for engaging the public in formulating audit programs (by identifying programs that should be audited) or in conducting audit investigations (as respondents, witnesses, etc).

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Goals of Public Participation

Governments, individuals, CSOs & non-state actors use public participation to:Broaden public dialogue & the range of policy optionsBetter target public policies to meet citizens’ needsImprove efficiency & the use of scarce public

resources Empower citizensReduce corruptionImprove service delivery - effectivenessReform bureaucracyIncrease government legitimacy

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Short Normative Instrumenton Participation Principles & Good Practices

Intended to: Complement other standards & norms Advance public participation by established good practices Guide and help governments & practitioners (and all

stakeholders) Indicate to the public what they can expect And what they are entitled to

Draws also on UN Conventions, Humanitarian Accountability Partnership Standard, Philippines Principles of DBM-CSO Engagement, the Open Government Guide, World Bank Social Accountability E-Guide, etc.

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Structure of the Public Participation Principles

1. Introduction

2. Scope

3. Principles of public participation

4. Good practices

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Introduction

Participation can strengthen equity, efficiency, legitimacy of fiscal policy and budget making, thereby improving fiscal performance, & enhancing economic, social & environmental outcomes.

ICT developments have dramatically lowered cost of direct participation & created new spaces for citizen input.

Instrument intended to apply to all public authorities at all levels of government as well as generally to legislatures and Supreme Audit Institutions.

Intended to be applicable to all country contexts (though implemented differently depending on context).

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Scope of public participation in fiscal policy and budget making

Covers all fiscal policy and budget making activities:

I. The annual budget cycle (8 documents)

II. Fiscal policy reviews outside the annual budget cycle (revenue, tax, finances, asset, liability management)

III. The design, production and delivery of public goods & services (including feedback, independent mechanisms)

IV. The design & delivery of public investment projects (planning, apraisal, selection, implementation, audit)

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Principles of Public Participation

• Ensuring openness about the purpose, process, and timelines • Ensuring well-informed participation (background) • Ensuring meaningful participation: engaging early, allowing more than one round of engagement, providing feedback on inputs, considering all public inputs on an objective basis • Allowing sufficient time in the policy cycle for the public to provide inputs in each phase• Ensuring inclusiveness & non-discrimination: pro-active use of multiple mechanisms• Encouraging the public to speak for itself (direct participation)• Avoiding parallel systems that could undermine existing accountability structures

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Good participation practices (1)

Full disclosure of fiscal data (international standards)

All fiscal reports/data easily accessible to general public (non-technical summaries, citizen’s guides, open data)

Public authorities promote general public awareness of fiscal & budget policy challenges and issues

An authorizing environment, and guidelines, for officials to engage the public in appropriate ways

Public authorities promoting public awareness of key opportunities for public participation

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Good participation practices (2)

Strategy for citizen engagement in the formulation & implementation of fiscal & budget policy

Legislature & Supreme Audit Institution designate a unit responsible for management of public engagement in fiscal policy

Ex-ante indication of the potential scope or limits on changes in fiscal policy that are subject to public input

Explanation of the basis on which individuals & groups participate in a specific participation exercice; eventual exclusions subject to independent review

Public directly affected by fiscal policy implementation with access to low-cost administrative review & the ability to seek judicial review of process

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Good participation practices (3)

Published summary of public inputs received, indicating how issues raised were addressed, & why

Record keeping of processes of each participation exercise

Setting out overall approach to public participation, ensuring skilled staff & effective learning from public participation exercises

Governments publish a strategy to reduce barriers & costs faced by non-state actors in engaging with officials on fiscal policy, including policy to support building of civil society capacity

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Some issues for discussion

What are country experiences, lessons, goals and needs in terms of public participation?

What are views on the “short normative instrument” and specific participation principles and practices

What incentives should be developed for goverments and social actors?