Increasing transparency and social expenditure in public budgets

1
Increasing transparency and social expenditure in
public budgets

• Iván Fernández Espinoza
• Technical Secretary of the Social Front
• Quito-Ecuador

2
Overview

• Context and Background
• Some economic and social indicators
• Evolution of social spending 1995-2004
• The program Technical Secretariat of the Social
  Front-Ministry of Economics and Finance-UNICEF
• Results of the program
• Challenges Social Spending, Transparency and
  Human Rights

3
Context and Background economic indicators

• Ecuador is located in Western South America,
  bordering the Pacific Ocean of the Equator,
  between Colombia and Peru. It has around 13
  million inhabitants and the economically active
  population is about 5 million
• The GDP per capita of 2002 was 1,706 USD, which
  locates Ecuador among the least developed in the
  region
• The country has experienced various crisis. The
  last one in 1999, characterized by high and
  increasing inflation, a drop in production,
  worsening of external accounts, fiscal and
  financial crisis

4
Context and Background social indicators

• Negative impact on the social sector
• High levels of unemployment and undermeployment
  16 and 60 in 2000, respectively, around 10 and
  50 in 2003, respectively.
• Inequality, poverty and exclusion

5
Evolution of overall social spending 1995-2004

• Downward trajectory of social expenditure between
  the 1980s and the 1990s. Low investment in
  priority social programs. Poor administration of
  social sectors resources. Cyclical expenditure.
  
• Social expenditure among the lowest in Latin
  America
• Low levels of civil society participation and
  lack of transparency in social expenditure
  figures
• The trend has been reversed during the previous
  years, with an increase of public social
  expenditure (education, health, welfare,
  employment and housing) and an increase in social
  programs investment.

6
Evolution of overall social spending 1995-2004
7
The program Social Front, Ministry of Economics,
UNICEF

• Basic Social Agenda five components
• Social support network
• Conditional cash transfer (Bono de Desarrollo
  Humano)
• Subsidies food and nutrition provided by social
  programs
• Programs targeted towards vulnerable population
• Children development fund
• Plans for provision of universal services
  (education and health)
• Plans for job creation and micro-financing
• Common component protection of social
  expenditure, expenditure targeting and impact
  evaluation

8
The program Social Front, Ministry of Economics,
UNICEF

• Ecuador has started a process of public social
  expenditure transparency
• Budget formulation
• Expenditure follow-up
• Expenditure evaluation
• Strategic alliances had been formed Ministry of
  Economics and Finance, UNICEF, The Social Front
• Active participation of civil society, for
  example Fiscal policy observatory and Childrens
  rights observatory

9
The program Social Front, Ministry of Economics,
UNICEF
Information and civil society monitoring
Technical Assistance
Elaboration
Negotiation
Programming
UNICEF
TSSF
Approval
Resources
Execution
Civil Society monitoring
Evaluation and control
Closing
Information and technical assistance
10
Results increasing social spending
11
Results increasing social spending
12
Results increasing transparency

• Social Front Ministers Council Budgetary
  discussions and definition of a negotiation
  strategy with the Ministry of Economics and
  Finance
• Budgetary dialogs (2000-2004) Congress, The
  Social Front, Ministry of Economics and Finance,
  Fiscal Policy Observatory, UNICEF, Civil Society,
  Mass media
• Follow up and monitoring of Social Expenditure
  quarterly monitoring of overall social
  expenditure and priority social programs. The
  Social Front, UNICEF, Fiscal Policy Observatory.

13
Results increasing transparency

• Information flow Social expenditure module.
  Coordination with the Ministry of Economics and
  Finance, Ecuadors Central Bank, UNICEF and the
  Social Front.
• Information with institutional, geographic and
  administrative-unit disaggregating
• Information that has been verified at three
  levels and spread out through periodic
  publications
• Civil society informed and interested about
  social expenditure
• Technical assistance processes (Technical
  Secretariat of the Social Front and UNICEF) have
  strengthened institutional capacities Ministries
  and Congress.

14
Challenges

• Integration of economic and social policy
• Improve the amount and quality of social
  expenditure
• Quantity International standards. Reduce
  cyclical variations in social expenditure
• Quality coverage goals and services provided,
  priority social programs focalization
• Budgets should be understood as a shared
  responsibility between the government and civil
  society
• Strengthening of information culture
• Public expenditure as a way to reduce poverty,
  inequality and to guarantee human rights.