1 Day 2 Technical Sessions - 1 Social Accountability Tools Dr. Gopakumar Thampi. SDC/ACC Workshop. Thimphu, August 20-23, 2013

1

Day 2

Technical Sessions - 1Social Accountability Tools

Dr. Gopakumar Thampi. SDC/ACC Workshop. Thimphu, August 20-23, 2013

UNDERSTANDING BUDGETS & ENGAGING IN BUDGET WORK

2Dr. Gopakumar Thampi. SDC/ACC Workshop. Thimphu, August 20-23, 2013

What is a Budget?

“A budget is a plan that outlines where to get money from and what to spend it on.”

3

Political Economic Social

National & Local policy making

Blueprint for economic growth

Reflects priority for social safety nets

Instrument to allocate resources

Authorizes revenue collection & spending

Reflects priorities for disadvantaged

Reflects national & local priorities

Reflects sensitivity to the environment

Reflects commitment to Rights & Entitlements

Reflects commitment to protect economic, social and cultural Rights


What can budgets tell us…

• Is the current budget adequate to meet policy objectives?

• How much priority is given to different sectors?

• Are budget allocations equitable? E.g., different population groups, different districts

• Are resources being spent efficiently?

• Are resources being used effectively?


Main Components of a Budget

• Revenue: Income – or Funds coming to the government from various sources.

• Expenditure: amount of money spent on goods and services aimed at meeting identified needs and goals of the budget.


TYPES OF REVENUE & EXPENDITURE

• What are the different sources of income or revenue of the National Govt.?

• What are the different kinds of expenditure of the Govt.?


Some sources of revenue and expenditure

• Revenue:– Exploration and sales of natural minerals:- such as crude oil– Direct taxes:- these are income taxes such as; personal income

(salaries), Business Income, Corporate Income, – Indirect taxes:- these include , Sales tax, Import and Export duties– Non tax revenue:- Administration charges, Capital Revenue,

Interest receipts

• Expenditure:– Recurrent: This is an ongoing expenditure, example- personal and

overhead cost (Salaries)– Capital Expenditure: This is an expenditure of fixed assets that are

not easily consumed (infrastructure)


Budget Outputs• Surplus budget:

– Here budget expenditure is less than the revenue/income. In this case, there is an extra amount which can be used as savings or used for some other ventures.

• Deficit budget:– Here the expenditure exceeds the income. In this case,

the account of the government is in red. This might have been due to reckless spending or unforeseen situations.

• Balanced budget:– Here, the income equals the expenditure. This shows

budget discipline and planning. It is however rare and depends on a lot of variables.


BUDGET ANALYSIS BUDGET WORK

• Research & Analysis of revenues, expenditures, allocations etc.• Emphasis on information & knowledge

• Budget Analysis + advocacy + education + Monitoring• Emphasis on informed actions and informed advocacy

Budget Analysis & Budget Work


The Politics & Economics of Aid


• Globally, developing countries shell out $1.5 billion everyday on debt repayments. $34 million out of this is paid by the poorest countries.

• For every $1 received as aid, $5 is returned as repayment.

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State of Debt, May 2012. Jubilee Debt Campaign

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Debt Payments as a % of Government Revenue

2000 2010 2014

Bangladesh 13.8 8.8 6.7

Bhutan 6.5 26.6 28.2

Cambodia 5.1 4.5 5.7

India 17.9 3.9 NA

Indonesia 27.1 11.9 NA

Laos 13.3 11.5 10.5

Maldives 10 14.4 10

Nepal 16.2 7.4 4.7

Pakistan 17.4 10.5 NA

Philippines 35.8 27.1 NA

Sri Lanka 22.5 24.1 21.4

Vietnam 19.8 6.9 10

Since 2008, globally governments have spent almost $ 11 trillion bailing out banks and repairing financial systems.

Information is Key to Budget Analysis


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18

The Budget Cycle

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What are the entry points for budget work in Bhutan?

Discussion


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1. AccessInformatio

n

2. Simplify &

Demystify

3. MobilizeConstituen

cies

4. Influence Allocations

5. Track Expenditure &

Monitor Outcomes

RESEARCH

ANALYSIS

MOBILIZEADVOCATE

MONITOR

• By population group – e.g. by geographic area or gender

• By government programme – e.g. Social security, non-formal education

• By issue – e.g. HIV and AIDS• By policy – e.g. identifying areas of weakness in

the education sector• By using policy documents as a benchmark –

e.g. Poverty Reduction Strategy Papers.

Types of Budget Work


Sector Analysis

• Key questions:1. Allocation with respect to critical importance of

the sector2. Have allocations increased in real terms over the

years3. Do allocations reflect priority areas within the

sector4. Do allocations favor or discriminate certain

groups or regions


• Which stage in the budget cycle will you get involved with?

• What activities can you do to influence this stage of budget work?

• What evidences/research/information will be needed?

• Who will you work with?• What results can be expected?

Discussion


Budget Calculations


• Consumer Price Index (CPI): This reflects the price of a representative basket of consumer goods and services. This index measures the impact of inflation on the average consumer.

• Deflator: A statistical tool used to convert current currency into inflation-adjusted currency, in order to compare prices over time after factoring out the overall effects of inflation.

• Gross Domestic Product (GDP): Total value of final goods and services produced in the country during a calendar year. GDP per person is the simplest overall measure of income in a country. Economic growth is measured by the change in GDP year by year.

• Gross National Product (GNP): The GDP plus the total net income from abroad.• Inflation: The rate of increase in prices.• Nominal terms: Actual monetary value in terms of its purchasing power at

current prices. Nominal terms do not take into account the affect of inflation on the real value of money. Government budgets are set in nominal terms and do not adjust totals for inflation.

• Real terms: Value measured in terms of the purchasing power of money at a particular time. For instance, GDP may be measured in constant 2006 prices by taking the affect of inflation into account.

SOME USEFUL TERMS


Consumer Price Index (Inflation Index)

How is CPI Calculated?

Monthly expenditure incurred by individuals on 363 items: (e.g.)

1. Food & Non Alcoholic Beverages2. Alcohol & Narcotics3. Clothing & Footwear4. Housing, Water, Electricity, Gas, Fuel5. Household Furnishing & Maintenance6. Health7. Transport8. Communication9. Recreation & Culture10.Education11.Restaurants & Hotels12.Miscellaneous Goods & Services

YEAR CPI

2001 83.38

2002 85.45

2003 86.79

2004 94.96

2005 100

2006 105.00

2007 110.4

2008 119.61

2009 124.83

2010 133.61

2011 145.43


Nominal Vs Real (Current Vs Constant)

Product 2011 2012 Nominal GDP contribution

Real GDP contributionBase year=2011

Price Quantity Price Qty 2011 2012 2011 2012

Bread 3Ng 100 4Ng 125 300Ng 500Ng 300Ng 375Ng

Butter 2Ng 50 2.5Ng 60 100Ng 150Ng 100Ng 120Ng

Total 400Ng 650Ng 400Ng 495Ng


Budget Calculations (1)

• Budget Share = (Budget Area / Total Budget) * 100

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Item Amount (Mill.) Share (%)

Defence 100 50

Education 25 12.5

Health care 25 12.5

Social Protection 40 20

Environment 10 5

Total 200 100


Budget Calculations (2)• Converting nominal allocations to real

allocations, or current prices to constant prices, or adjusting for inflation

Method 1: Using CPI or Inflation IndexReal Value = (Nominal Value * Current

Inflation Index)/Previous Year Inflation Index

Method 2: Using a deflatorReal Value = Nominal Value / Deflator


2004/05 2005/06 2006/07 2007/08

Nominal Expenditure 150 230 320 450

Real Expenditure 165 240 328 458

Example 2

Year CPI

2003 113.2

2004 124.5

2005 130.1

2006 133.2

2008 135.6


2004/05 2005/06 2006/07 2007/08

Nominal Income 180 275 360 510

Real Income 197 275 348 451

Example 3

Year Deflator

2004 0.912

2005 1

2006 1.032

2008 1.131


Budget Calculations (3)• Measuring changes over timeChange in % = (Most recent budget figure -

previous year’s figure) / previous year’s figure * 100

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Spending 2005 2006 2007 2008

275 330 125 280

Growth rate 20 -62 124


Budget Calculations (4)

• Calculating per capita expenditure = Spending / population

• Comparing budget to GDP = (Total spending /GDP) * 100


Practice Exercises


Tool# 2

SERVICE DELIVERY SURVEYS /CITIZEN REPORT CARD


A School Report CardName: Gopa; Class: IX

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SUBJ ECT MAX. Marks

HighestMarks

Actual marks

English 100 82 82

Social Studies 100 85 53

Science 150 123 76

Mathematics 150 125 50

Total 500 415 261

Rank in class: 21/30


LEARNINGS FROM A SCHOOL REPORT CARD…

Power of MEASUREMENTPower of COMPARISON

An Opportunity for REFLECTIONA trigger for CHANGE & IMPROVEMENTS


Defining Features Credible user feedback on public services

Provide opportunities to communities to demand more access, responsiveness & accountability from service providers (from Shouting to Counting)

Create an effective diagnostic tool for service providers to prioritize areas for reform

Report always in PUBLIC DOMAIN

Not a one-off effort – continued benchmarking


What evidences are collected

FEEDBACK FROM ACTUAL USERS OF SERVICES REGARDING

– AVAILABILITY, ACCESS & USAGE OF SERVICES– QUALITY & RELIABILITY– INCIDENCE OF PROBLEMS & RESPONSIVENESS OF

SERVICE PROVIDERS – HIDDEN COSTS - CORRUPTION & FORCED INVESTMENTS – SATISFACTION WITH SERVICE – REASONS FOR DISSATISFACTION– SUGGESTIONS FOR IMPROVEMENTS


The Methodology

Identifying services – What to study?Determining the sample – Whom to ask?Designing the questionnaire – What to ask?Conducting the survey – How to collect

information?Analyzing the information – What to report?Using the information – How to move from

findings to reforms?


An Example…

CRC in a Municipality in Sri Lanka

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The Context

Nuwera Eliya Municipality in central part of Sri Lanka – Pop: 750,000

16 General Services & 2 Special Services assessed

Surveys conducted by University studentsInitial briefings with city Mayor and his

staffSample of 450 HHs for General Services &

100 respondents for each of the 2 special services

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Civic Amenit-ies

Solid Waste Management

Roadways Sewerage Streetlighting0

10

20

30

40

50

60

70

8070

64

5349 49

Scores (Max: 100)

Combined Score is 57/100

Overall Satisfaction with General Services

Unbundling Civic Amenities (1)

Community Centre

Public Toilets

Vehicle Parking

Sports

Public Library

Playground

Children's Park

Community Water Scheme

Town Hall

Maternity Clinic

Cemetry

0 10 20 30 40 50 60 70 80

45

46

47

52

54

59

61

67

68

74

75

Scores (Max: 100)

Overall Satisfaction with Special Services

Trade License Building Permit0

10

20

30

40

50

60

70

80

90

100 95

68

Scores (Max: 100)

We now raise the bar and take a look at complete satisfaction

When citizens say they are “satisfied’ they can be completely satisfied

or partially satisfied

Complete Satisfaction with General Services

Solid W

aste M

anagement

Civic

Amentie

s

Sewerage

Streetli

ghting

Roadways0

5

10

15

20

25

30

35 32

19 1815 15

Scores (Max: 100)

Combined Score is 20/100

Civic Amenities


Roadways Sewerage Streetlighting0

10

20

30

40

50

60

70

80

19

36

15 18 15

51

28

38 31 34

Complete Satisfaction Partial Satisfaction

70

64

5349 49

Total Satisfaction

Complete Satisfaction with Special Services

Trade License Building Permit0

10

20

30

40

50

60

70

80 76

47

Scores (Max: 100)

What are the top 3 aspects that explain citizen satisfaction

Service Rank #1 Rank #2 Rank #3

Sewerage Redress of grievances with Sewerage services

Maintenance of Sewerage

Redress of grievances on drainage issues


Provision of Garbage disposal facilities

Redress of grievances

Roadways Maintenance of roads & sidewalks

Cleanliness of roads & sidewalks

Quality of road repairs

Street Lighting

Intensity of street lights (brightness)

Maintenance of street lights

Reliability of street lights

General Services

How do citizens rate services in terms of problem incidence &

resolution

Problem Incidence, Reporting & Resolution – General Services

Service Number of people who faced a problem

Among those who faced a problem, number which reported the problem

Among those who reported the problem, number which reported resolution

Sewerage 120 (out of 450) 60 (out of 120) 6 (out of 60)


98 (out of 450) 54(out of 98) 16 (out of 54)

Roadways 220 (out of 450) 62 (out of 220) 8 (out of 62)

Street Lighting 87 (out of 450) 49 (out of 87) 7 (out of 49)

Economic Status & Satisfaction


Streetlighting Roadways Sewerage0

10

20

30

40

50

60

70

80

90

100

60

49 5047

68

47

59

51

75

92

58

67

Low Mid High

Overall Satisfaction & Ethnicity


Streetlights Roadways Sewerage0

10

20

30

40

50

60

7064

5256 56

62

47

52

42

61

45 4548

Sinhalese Tamil Moor

Location & Satisfaction


Streetlighting Roadways Sewerage0

10

20

30

40

50

60

70

80

9083

67 67

17

59

47 47 4752

44

24

48

<1km 1-3 Kms >3 Kms

CRC & Political Representation

>60% Needs to Maintain Performance

40-60% Needs Improvement

<40% Needs Urgent Attention

GN Divisions SWM Sewerage Street Lights Roadways

Nuwara Eliya 61% 39% 30% 30%

Nuwara Eliya C 62% 37% 60% 55%

Nuwera Eliya W 79% 75% 68% 82%

Magasthota 68% 72% 36% 40%

Kalukele 88% 69% 88% 75%

Kelegala85% 56% 85% 70%

Sandathenna 30% 34% 7% 11%

Hava Eliya N 84% 71% 71% 74%

Hava Eliya E75% 47% 69% 75%

Hava Eliya W 86% 39% 82% 46%

Bulu Ela 56% 60% 12% 40%

Bambara Kele76% 51% 63% 73%

Recommendations

• Setting up an internal committee to review and develop an action plan

• Sharing the findings with business community to explore possibilities for PPPs

• Institutionalizing CRC – Repeat the exercise after 2 years

Corruption & The Urban Poor

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SERVICE / AGENCY

PERCENT PAYING BRIBES

AVERAGE AMOUNT (RUPEES)

PERCENT CLAIMING BRIBE WAS DEMANDED

WATER SUPPLY

04 200 50

MUNICIPAL SERVICES

34 270 73

ELECTRICITY 10 250 100

RATION SHOPS

11 84 83

POLICE 46 4193 88

PUBLIC HOSPITALS

53 640 63


Urban Services in Bangalore

9

34

49

0

20

40

60

1994 1999 2003

Year

% S

ati

sfi

ed

Percentage of satisfied citizens


SERVICE WISE SATISFACTION%

Sati

sfi

ed

agency


CORRUPTION

CORRUPTION ACROSS THREE REPORT CARDS

149

32

1922

25

0

10

20

30

40

1994 1999 2003

YEAR

% W

HO

PA

ID

General Households Slum


Who can do a CRC?

Individual Civil Society Organizations – PAC (India) & TIB (Bangladesh)

Civil Society Partnerships – People’s Voice Project (Ukraine), PANE (Ethiopia)

Independent Multi-Stakeholder Consortiums – Kenya, Tanzania, Kyrgystan

Political Leadership (National/Sub-national) – Philippines, Vietnam, Delhi, Bosnia-Herzogovina

Governments (Local) – Brazil (7), India (50+), Sri Lanka (3)

Utilities – Karachi KWSSB, 3 cities in Kenya (Water), Police (Bangalore)Dr. Gopakumar Thampi. SDC/ACC Workshop. Thimphu, August 20-23, 2013

VARIETY IN IMPACT OF CRC’S

AGENCIES DISCUSS PERFORMANCE WITH CITIZENS IN OPEN FORA IN BANGALORE

SYSTEMATIC CITIZEN WATCH DOG ROLE IN LOCAL GOVT. IN TERNOPIL, UKRAINE

FINDINGS USED TO BETTER DIRECT BUDGET ALLOCATIONS IN THE PHILIPPINES

INDEPENDENT APPROACH TO MONITOR PRO-POOR SERVICES IN ZANZIBAR & ETHIOPIA

LOWER LEVEL OFFICIALS CITE FINDINGS TO SEEK FUNDS & SUPPORT IN MUMBAI, INDIA

POLITICAL LEADERSHIP ASKS FOR MORE DIRECT FEEDBACK IN DELHI, SRI LANKA.


Some Enablers

• Building ownership among stakeholders

• Presenting information in a neutral way – Pat & Slap

• Focus only on institutions – never on individuals

• Power of information dissemination• Sequencing activities


Challenges in Implementing CRC

• Locating different skill sets – survey, analysis, advocacy

• Lot of preparatory work (design)• Ensuring repetitions &

institutionalization • Willing to dedicate time and resources• Credibility of the champion

DiscussionCan SDS/CRC be implemented in our context? If

yes, which sector, program or service is most enabling? Give reasons

What aspects (indicators) of the sector, program or service would you be interested?

Which population will you target for collecting information?

What are the key challenges or risks that you anticipate? How will you address them?

What additional skills and resources do we need to implement SDS/CRC?


Documents

1 Day 2 Technical Sessions - 1 Social Accountability Tools Dr. Gopakumar Thampi. SDC/ACC Workshop. Thimphu, August 20-23, 2013