Luis Flores Ballesteros
We are used to cases of lack of accountability in public finance around the world. For example,
- Oil-rich Equatorial Guinea purchased a $35 million vacation home for its president in Malibu, California, according to a US Senate investigative committee. This was $10 million more than the government’s budget showed the country planned to spend on health care for its impoverished population in 1995.
- Saudi Arabia, which holds an estimated $400 billion in assets from oil profits, makes so little information available that it is not clear what spending is accounted for in public documents and what spending is not reported in public documents. Saudi Arabia publishes almost no budget documents at all, providing only a very scant summary of the budget and some highly aggregated information on the overseas holdings managed by its central bank.
- As part of the current global commodity boom, China has entered into joint agreements with the governments of Angola, Sudan, and the Democratic Republic of Congo to develop lucrative oil and copper deposits. Little is known about these agreements, leaving the public in the dark about whether the revenues the governments receive from the projects go into public coffers to be used to benefit the people, or are pocketed by officials.
- The 2005 peace accord in Sudan mandated disclosure of the amount of oil revenues, but neither the government in Khartoum nor that in Southern Sudan have provided information, leading to suspicion that the money has been used to purchase weapons, not to alleviate poverty. This threatens the stability of the accord.
- Nicaragua’s government refuses to account for funds from oil-rich Venezuela that apparently have been used for undocumented loans to government-linked companies and to reward them with no-bid contracts for projects being built on public land.
- In Nigeria, two top officials resigned when it was discovered that they had pocketed unspent funds from the 2007 budget as their end-of-the-year Christmas bonus.
The Open Budget Initiative (OBI) is a global research and advocacy program to promote public access to budget information and the adoption of accountable budget systems. According to its Open Budget Index 2008, 80 percent of the world’s governments fail to provide adequate information for the public to hold them accountable for managing their money. Nearly 50 percent of 85 countries whose access to budget information was carefully evaluated by the International Budget Partnership provide such minimal information that they are able to hide unpopular, wasteful, and corrupt spending. Indeed, only France, New Zealand, South Africa, the United Kingdom, and the United States make extensive information publicly available as required by generally accepted national (sometimes) and international public finance practices.
Why is accountability in public finance administration important? OBI provides these two examples from India (60) and Mexico (54):