When a government runs a deficit, there’s usually a gnashing of teeth, a grumbling over coffee, and it usually ends with a heavy sigh. Everyone then goes about their business and generally hopes the next bit of news isn’t as glum. “Oh, you spent more than you made? Six consecutive quarters in a row? Carry on then.” And that’s it: not with a bang, but a whimper.
Now, to be fair, I understand that governments can’t be held accountable by corporate profit motives. Government revenues are generally tied to taxes, service fees, transfer payments and grants. They have an obligation to provide social services and help the poor, the sick and the infirm. They can’t arbitrarily shut down emergency services because it’s not turning a profit. And they can’t fire their citizens because they’re having a hard go of things. (Although, if one Presidential hopeful has his druthers, this might not be such a far off notion. I can almost hear the echoes of “America, You’re Fired!” being broadcast from Coast-to-Coast.)
Even with all these variables, a budget should take into account these particular details; if done correctly, one would expect matters to be at least within an acceptable margin of error. Unfortunately, that’s not happening. Greece, Japan, Ireland, The Fiscal Cliff, The Government Shutdown, California, Detroit – these are all events with some poor budgeting tied to it.
Now, take a look at the image below. It depicts 51 municipal bankruptcy filings since January 1, 2010. Perhaps our governments might benefit from a little bit of guidance in the manner of balancing the books?
This is only scratching the surface. Why? Because a lot of governments are not allowed to declare bankruptcy. And, a lot of governments are just not transparent when it comes to balancing the books.
This is underscored in the results of the recent Open Budget Survey conducted by the International Budget Partnership. The 2015 report reveals that 98 of 102 countries surveyed lack adequate systems for ensuring that public funds are used efficiently and effectively. Each of these 98 countries fall short on at least one of the key pillars of budget accountability: budget transparency, public participation, and formal oversight. Thirty-two countries fall short across all three pillars. (Download the report here)
The challenge, it appears, is the vast majority of governments have inadequate systems for ensuring accountable budgets. Most countries surveyed provide insufficient information for civil society and the public to understand or monitor budgets, and only a small fraction of countries have appropriate mechanisms for the public participation in budget processes. Formal oversight institutions also frequently face limitations in performing their function of holding governments to account.
The irony here is that public companies are held accountable to just about everything, but not so for many in public office. At a minimum, one would be inclined to believe that public participation in the budgeting process would be encouraged. Still, the survey results indicate that most countries currently provide few opportunities for the public to participate in budget processes. Among the countries surveyed in 2015, the average score for participation is just 25 out of 100. This suggests that meaningful channels for the public to engage in the formal budget process are rare in the vast majority of countries.
Participation opportunities are typically insufficient at all stages of the budget process. Further, even when governments have established mechanisms for the public to participate, they often fall short of good practice. The most common way for governments to open up the budget process to public participation is through legislative hearings. However, while more than half of the countries surveyed hold public hearings on budget issues, only 19 out of 102 countries allow the public to testify at both of the two key hearings (hearings on the macroeconomic framework, and hearings on the individual budgets of administrative units, such as health and education).
A simple way to introduce budget process reforms would be to start with something like Budget Allocator. Used in conjunction with a solution like EngagementHQ, the two platforms deliver on the three pillars of accountability: transparency, public participation, and formal oversight. Through these Bang the Table software solutions, government agencies might actually get meaningful information from their citizens, and realize where changes can be made without materially impacting service areas.
Are you a municipal leader that wants to set themselves apart from the crowd as being innovative, groundbreaking, and a trailblazer among your peers? Do you want to do all these pioneering things – knowing that you’re also doing the right thing? Start a participatory budgeting project today with Budget Allocator and you’ll be able to boldly distinguish yourself as a budgeting professional in the Top 96th Percentile of your profession – globally!