Public Finance Paper
Public Administration- Institutions and Processes MGT/522
May 24, 2014
Professor Mark Holtzclaw
Public budgets and expenditures are the means through which public policies are translated into tangible and targeted developmental actions. Government decisions about how to allocate and spend financial resources have a direct impact on the well-being of citizens. However, the misallocation, wrong prioritization, abuse and mismanagement of public funds pose a tremendous challenge for the efficiency and effectiveness of development interventions and poverty reduction. Citizen participation and civil society involvement in processes of public budgeting and financial management are essential for: promoting transparency and accountability with regard to public finances, building safeguards against corruption; and ensuring that public monies are allocated equitably so that the interests and needs of poor and marginalized groups are adequately addressed. The seven tools under this category cover a wide range of methods and mechanisms through which ordinary citizens and civil society organizations can participate in, monitor and exert influence on processes of public budgeting and spending. There are seven tools in Public Budgets and Expenditures:
Public Revenue Reporting and Monitoring: Public revenue reporting serves to inform citizens about sources and amounts of government revenues as well as how these are managed and used by the government. The public disclosure of such information is necessary for citizens to understand the amount of financial resources the government has at its disposal and to engage with the government on issues of public finance. Public revenue reporting also forms the basis for public revenue monitoring which aims to ensure public revenues are properly managed. Budget Transparency (BT) is defined as the full disclosure of all relevant public fiscal information in a timely and systematic manner. BT is a precondition for effective public participation in budget processes. The combination of BT and public participation in budget processes has the potential to combat corruption, foster public accountability of government agencies and contribute to the judicious use of public funds Independent Budget Analysis (IBA) refers to efforts by civil society organizations (CSOs) to analyze proposed government budgets and to share their findings and concerns with the government and the public at large in order to advocate for budgetary changes. IBA enhances public awareness of key budget issues and can lead to the reallocation of budget resources to better reflect public priorities and concerns. Alternative Budget initiatives are advocacy strategies that seek to highlight the limitations of public budgets with regard to key sectors or issues in society. Alternative budgets accomplish this typically by first emphasizing the failure of the budget to serve the interests of specific groups (such as women, children, people with disabilities and the poor) or to address cross-sectoral issues (such as environmental conservation or social equity) and then by proposing an alternative budget that addresses the needs of specific groups or issues. Public Expenditure Tracking involves tracing the flow of public resources for the provision of public goods or services from origin to destination. It can help to detect bottlenecks, inefficiencies and/or corruption in the transfer of public goods and resources and is a key tool for the government and CSO to guard against corruption and work towards ensuring transparent, accountable and effective public financial management. Community-led Procurement (CLP) enables local communities to implement and control the procurement process through their own organizations. This often results in more openness and accountability, reduced corruption and wastage, better value for money, increased use of local workers/contractors and better quality works/services....
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