In many developing countries, government officials monopolize budget formulation and the budget drafting process does not involve public participation or consultation. Often, very little budget information is made available during the budget-drafting phase, even to members of parliament.
In many countries, the general absence of information on budget issues — particularly in accessible, non-technical forms — can hinder the efforts of Employers' Organizations to participate in budgetary planning. Probably the most widespread problem facing democracies of the developing world is the lack of accurate budget data and socio-economic statistics.
The primary sources of data are:(1)
- National Budget Speech delivered by the Minister of Finance to Parliament;
- National Budget Review which generally provides more details and a comprehensive set of public finance statistics;
- National Estimate of Revenue and Expenditure and accompanying explanatory memoranda;
- Auditor-General's report, which can contain useful information on past budgets;
- Parliamentary Committee on Finance or Public Accounts Committee (including records from hearings if in place);
- Department of Finance Intergovernmental Fiscal Review; and
- Adjustments Estimates of national governments, which are presented toward the end of the financial year.
At Provincial level a provincial Budget Review can be produced, which would provide a review of the previous budget as well as salient features of the current provincial budget and some detail on the provincial budget process.
Ideally, an Employers' Organization should try and obtain actual spending in various departments and then compare this to what was budgeted, as in this way systematic overspending or under-spending may be detected; then it is a matter of figuring out which pressures influenced this outcome. For example, are unspent funds symptomatic of a capacity bottleneck or mainly due to poor financial management? Unfortunately, actual figures are hard to come by.(2)
Trawling through the above documentation is extensive and complex work and beyond many Employers' Organizations' possibilities. However, an Employers' Organization can seek to use other partners and sources to obtain budget information. Among these are:
- Sympathetic public officials: No government is a monolith, while some public officials may be hostile to an Employers' Organization's requests for information and assistance, others can be forthcoming. Identify officials who can help the Employers' Organization with its analysis.
- Auditors and legislators: Public audit institutions can be an excellent source of information. Legislators often have too much information.
- Donors: in countries that are highly donor-dependent, donor organizations may have access to information on public projects.
- National economic research institutions: Such institutions often distil the above information into more digestible products.
|Box 2: Checklist for Employers’ Organizations on effective budgetary processes|
|A legal framework for transparency: The legal framework typically dictates the nature of the budget system; to the degree that governments advance transparency only in an informal fashion, such advances are more than likely to prove transitory.||YES/NO|
|Clarity of the roles and responsibilities of the national and provincial governments: The clarity of roles and responsibilities in the management of public finances is essential to the electorate’s capacity to hold specific parts of the government accountable for budget policy and decisions.||YES/NO|
|Public availability of budget information: A fundamental requirement of fiscal transparency is that comprehensive, reliable, and useful budget information is made available.||YES/NO|
|Independent checks and balances of budget execution and government data: A critical requirement of fiscal transparency is the opportunity for legislatures and other stakeholders to influence the budget and assess whether government undertook what it planned. Another fundamental issue is to establish checks and balances on the data used in the budget process.||YES/NO|
|Budget decision-making process: A key issue is whether the legislature and Employers’ Organizations are able to participate effectively in the budget process. By effective participation the study refers to the opportunities for the legislature and businesses to make their viewpoints known and to have these views taken seriously.||YES/NO|
|SOURCE: Adapted from International Budget Project Guidebook, 2001.|
(1) Institute for Democracy: An idiot's guide to compiling a provincial expenditure review in South Africa, 2006.
(2) Bhajan S. Grewal: Budget Formulation (presentation for Public Finance and Expenditure Management Course, ADB Institute, Tokyo, Japan). Centre for Strategic Economic Studies, Victoria University. Melbourne, Australia, 2005.