The latest open budget index will likely give South Africa a high ranking and this will improve its credit rating and service delivery. Or will it?
In 2010, the International Budget Partnership’s open budget index rated South Africa as the country with the most transparent national budget documentation out of 94 countries.
The 2012 open budget index will likely rank South Africa among the first again. Recent research commissioned by the International Budget Partnership and others shows that budget transparency can improve governments’ credit ratings, increase electoral support for incumbent office bearers and improve service delivery. Investors, voters and service users trust, cooperate with and even assist governments that play open cards with their budgets. This sounds like really good news for South Africa, right? Wrong. While investor sentiment has been surprisingly buoyant throughout our recent political storms, budget transparency has not given the government increased electoral support or improvements in service delivery.
South Africa does outperform transparency trend setters such as New Zealand and Sweden in the regular production and dissemination of budget documents such as the estimates of expenditure, monthly expenditure and revenue reports, and annual reports. But the publication of documents is only the first in a series of steps that governments need to take in order to reap the rewards on offer from budget transparency.
Governments must also find proactive ways to bridge the gap between the information contained in budget documents and the true information needs of the population. Unfortunately, the recent reality in South Africa is of a government that is regressing in transparency by closing itself up to external scrutiny, notwithstanding the high quality of macro-level budget reporting. The Protection of State Information Bill is the most prominent, but by no means the only example of a disturbing trend towards increased opacity. Earlier, one used to be able to chat to senior officials and ministers during breaks in parliamentary committee meetings.
These days when one asks for even the most innocuous information from old friends in government, they refuse to give this information because the director general or even the minister needs to authorise the release of such information.
Why does this closing up matter if our budget documents are amongst the most comprehensive, timely and detailed in the world? Why does one need to ask an official for information if the data can ostensibly be found in published budget documents? Because government budget documents are unlikely to include all the detailed information that might be of interest to a specific individual or interest group. While provincial budgets can tell us how much money is spent on primary schools, it doesn’t tell us how much money was spent on school books for a specific primary school, when they were purchased and when they will be delivered. Similarly provincial budgets can tell us what is being spent on community health clinics, but don’t tell us how much money was spent on Aids drugs for a specific facility, what was purchased and when it was delivered. In short, while budget documents are helpful to policy makers and international investors, they don’t provide the fine grained information that would tell the layperson what he or she can expect government to deliver at their local facilities. Increasing amounts of money have also been transferred out of the main budget to parastatals such as Eskom, the Development Bank of South Africa and the Land Bank where it is much harder to follow the money. The public money transferred to these behemoths is lost in the sea of their other transactions and their financial reports do not reach the same transparency standards as government’s.
How to close this gap between ordinary people and the kind of budget information that is relevant to their everyday lives? Brazil, Kenya and India have created massive online databases that allow people to track government spending in the finest detail. Many other countries (including South Africa) have passed freedom of information legislation that allows citizens to request specific government information. But no law or technology solution will be effective without a government willing to implement it. Indeed, surveys show that the South Africa government ignores over 60% of right to information requests. We hope that this elusive political will is fanned by the research that shows that governments have to gain from budget transparency. Far from needing to be protected itself, budget transparency research shows that making budget information freely available can indeed protect government.
Albert van Zyl is a research manager at the International Budget Partnership.