The laggard is leader, too

IN A FIELD of restored and restricted democracies, and repressive regimes, the Philippines’ so-so score in the 2010 Open Budget Survey is cause enough to celebrate. One of Southeast Asia’s economic laggards, the Philippines did one better: it tops 10 other countries in the region in terms of budget transparency.

This is even as the Philippines scored a measly 55 out of a possible 100.

The average score for the countries surveyed in Southeast Asia, though, is just 33, indicating that governments in the region provide the public with “minimal” budget information. After the Philippines, the next best Southeast Asian score belonged to Indonesia (51), followed by Thailand (42), Malaysia (39), Timor-Leste (34), Cambodia (15), and Vietnam (14).

Brunei, Burma, Laos, and Singapore were not included in the Survey.

Apparently, too, the Philippines is among the countries that have relatively lower incomes but have more open budget books than some richer countries.

Indeed, the Philippines, which has a per capita gross domestic product (GDP) of $3,515, fared better than Equatorial Guinea (per capita GDP adjusted for purchasing power parity of $18,600 in 2009), Saudi Arabia ($23,221), and Trinidad and Tobago ($19,818).

GDP per capita is the estimate of the total value of goods and services produced per person in a country during a year.

Still, the Survey revealed a strong correlation between transparency/accountability and a country’s level of income, as well as its level of democratic freedom.

For instance, countries on the top tier of transparency (OBI scores of 81 to 100) had an average per capita GDP of $34,308, among them France, New Zealand, Norway, South Africa, Sweden, the United Kingdom, and the United States.

This is a far cry from the average GDP per capita of countries that scored low on the OBI (OBI scores of 0-60). Ranging just between $8,770 and $4,698, these countries, including the Philippines, make up almost 80 percent or 74 of the total 94 countries assessed.

The Survey noted that this relationship is not an unexpected finding since high-income countries are typically countries with well-established public finance management systems, while countries that are very poor typically do not have mature public finance management systems.

Meanwhile, the 14 countries classified as “full” democracies by the Economist Intelligence Unit’s Democracy Index received an average score of 72. The 33 countries – among them the Philippines – classified as “flawed” democracies had an average score of 51.

Twenty-five countries in the Survey that are classified as “hybrid” democracies got an average score of 36. But the 21 that were classified as having “authoritarian” regimes had the lowest average score: 17.

According to the Democracy Index, full democracies have free and fair elections, well-functioning government institutions, and citizens who are able to participate freely in the political sphere. Flawed democracies are characterized by lower levels of political participation and “weak” democratic cultures.

Hybrid regimes lack the necessary political participation and functioning government institutions to be classified as democracies, says the Index.  As for authoritarian regimes, these are those that do not conduct credible elections and have low levels of political participation and inefficient government institutions.

Countries that receive a significant amount of donor aid tend to be less transparent as well, according to the Survey data.

Eighteen of the 94 countries included in the Survey receive donor aid that constitutes more than 10 percent of their gross national income; these countries receive an average score of 30. Fourteen countries in which donor aid constitutes between five and 10 percent of their gross national income had an average score of 31.

By comparison, the 51 countries in which aid constitutes less than five percent of their gross national income posted an average score of 44.

Interestingly, the Survey noted that China is becoming a major donor of foreign aid, but itself is among the least transparent countries in the world, scoring just 13 out of 100.

The Survey stressed, however, that any country can achieve transparency and accountability if its government makes these priorities.

The International Budget Partnership, which conducted the Survey, recommended that governments should make public all the documents they produce, which would require virtually no additional effort or cost yet would dramatically improve the openness of budgets in large parts of the world.

The IBP cited as examples the Kyrgyz Republic, Liberia, and Yemen, which increased their scores substantially by making available on their websites the budget reports they had produced earlier but had made available only to internal government audiences or to donors.

Legislatures should begin to conduct public hearings on the budget, said the IBP, while and auditors must establish mechanisms for getting public input on problems with specific programs and what should be monitored.

In the longer term, the IBP recommends a movement toward a global norm on budget transparency and participation that codifies broadly accepted principles and guidelines. Such a norm, it said, would provide civil society organizations, the media, and legislatures a powerful tool to leverage improvements within countries. – PCIJ, October 2010