Public Finance in the Arab World: Accountability starts with Transparency

September 27, 2013

  • Governments in the Arab world under public pressure for more economic opportunities and increased transparency in the decision making process
  • International experience has shown that budgetary transparency can both promote inclusion while increasing the efficiency of government programs
  • Connecting Voices’ brings together all the social actors, from government to civil society, that have a stake in better public financial management

Connecting Voices” is a new World Bank regional initiative aimed at promoting governance, transparency, accountability, and sound financial management practices in both the public and private sectors.

As part of this initiative, “Connecting Voices” in the Middle East and North Africa region (CV MENA) recently held its first annual forum, entitled “The Exchange”, in Abu Dhabi. The purpose of the event was to initiate a conversation among financial management professionals on how best to promote good financial practices in MENA countries.

More than 150 representatives of governments, supreme audit institutions, courts, civil society organizations, and media outlets from across the region attended the meetings and tackled many cross-cutting issues with the aim of building more efficient and transparent public finance management systems.

The event was not merely about talking but about connecting voices! A clear and resounding message emerged from the discussions: achieving greater transparency in budget management is not only a public demand, but also a necessity for governments to perform better.

Why Transparency in Public Finance Matters

The recent political and economic transformations experienced by various MENA countries, coupled with the growing need to generate more and better jobs in a sluggish global economy, have put significant pressure on Arab governments.  Delivering economic dividends to their citizens is a priority.

Yet, along with the demand for improved economic opportunities, Arab citizens are also calling for greater transparency and an active role in the decision-making process itself. In the protests that swept through the region, corruption and misuse of public funds was a major grievance, with demands that future governments ensure that the fruits of prosperity are equally shared.

A number of international examples have shown that budgetary transparency can both promote inclusion and enhance the efficiency of government programs. Furthermore, it can also help governments make the best use of limited, public funds in order to maximize development outcomes and produce tangible benefits for their citizens.

In this context, the role of Supreme Audit Institutions, which provide external audits of government spending, alongside financial monitoring agencies, are essential in bringing any financial irregularities to the fore. These institutions are integral to managing and prioritizing the use of public funds according to sound governance practices.

Budgetary management is vital. However, equally important is the need for public disclosure of government financial data, which is often published through e-government portals. Throughout the MENA region, the disclosure of public fund allocation has been long considered a taboo. With increased public demand for governmental transparency and accountability this needs to change. Citizens must now be regarded as integral actors in public policy oversight, monitoring, and evaluation.

In this regard, an interesting anecdote comes to mind that Ms. Sowmya Kidambi, from the International Budget Partnership, shared with the forum. While Ms. Kidambi was participating in a public hearing organized in a remote village in India, public authority representatives asked an old lady in the room why attending the meeting mattered to her. The old woman responded that when she gives her son a set amount of money for groceries, she asks for a detailed account of how it was spent when he returns from the market.

On a larger scale, all citizens want the same accountability and active participation in the way public funds are spent.

Thus, the first step in building greater transparency and accountability is helping governments publish simplified budgets, legible by the layperson, on a quarterly basis to inform the public about budgetary allocations.  In the MENA, Morocco has been noted for the efforts it has taken to give citizens access to budgetary data. Thanks to the easy-to-read and comprehend ‘Citizen’s Budget’ it has published every year since 2011, Morocco managed to double its score in the last Open Budget Survey.

" Government institutions, civil society institutions and the media have to play a complimentary role in the checks and balances that ensure government responsiveness and accountability. "

Rend Al-Rahim

Executive Director of the Iraq Foundation

The Role of Civil Society and Media

Citizens, civil society organizations, and the media can, and often do, play a role in ensuring transparency and accountability in public financial management decisions and programs. Be it at the national, provincial, or local levels, these entities can monitor public policies and point to governmental shortcomings through their work in advocacy, monitoring, and evaluation. 

However, in order for civil society organizations and media outlets to fully play their role, it takes adequate knowledge and familiarity with the technical concepts of public financial management. Complicated and even convoluted, financial reports with unclear and unexplained data can be a deterrent to budgetary transparency and accountability.

Therefore, organizing public hearings and supporting the training of civil society stakeholders working in the field of public financial management and monitoring can provide a good start; one that can be conducive to improving the relationship and building trust between government and civil society.

Rend Al-Rahim, Executive Director of the Iraq Foundation summarized it succinctly: “I think that all people in the region are looking for more responsive and more accountable governments and ultimately, this is what democracy means.” She added: “Government institutions, civil society institutions and the media have to play a complimentary role in the checks and balances that ensure government responsiveness and accountability.

The Golden Rules

Building and ensuring greater budgetary transparency and accountability involves two important elements. These include a strong political will on the part of governments to engage the public, and a great deal of education and awareness from civil society organizations and the media.

This should be seen as a win-win partnership, whereby governments would include the public in the decision-making process by sharing in a transparent way budgetary data and public expenditure reports, while at the same time benefiting from recommendations and comments non-governmental entities can provide.

Two golden rules emerged from the forum as guides towards better management of public budgets. An effective and transparent system of communication is needed, along with stronger oversight institutions.  Indeed, transparency is the first step on the road to accountability.