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Transparency and Accountability in Government


November 22, 2009

This is section 3.2.4of a series of blog entries creating a Government IFMIS Technology Evaluation Guide. This includes information to assist in evaluating IFMIS options and the technology requirements for FreeBalance IFMIS implementations. These series will be combined with feedback to produce a comprehensive Technology Evaluation Guide to be published on our web site.

Transparency and accountability have become the dominant memes in governance – private and public sector. A favourite topic of politicians – particularly those in opposition parties.. We should not dismiss this as a fad. It’s a compelling objective for governments. It’s played a significant role in recent high-profile elections, such as the recent American presidential election

We’ve written about this before through our “knowledge sharing series” that summarizes lessons learned from conferences.

Globalization, competition and governance

Globalization generates competition among countries. Many realize that economic factors like education have become issues of national security. It’s much more than protecting an economic base – it’s about building and sustaining economic growth in a digital world. “Trust in the state can be undermined by evidence of corruption, secrecy, incompetence or lack of accountability.”

Country Gross Domestic Production (GDP) is positively associated with good governance measurements. Governance matters. There are many explanations for this phenomenon. One compelling argument links country risk with governance. Companies have choices. The private sector can expand business in many countries – build factories, set-up call centers, outsource services and provide ICT products and services. Governments that are opaque represent risk. Operating licenses could be revoked. Costs could increase through corrupt practices. Frivolous lawsuits could hamper business. According to the World Bank, “governance consists of the traditions and institutions by which authority in a country is exercised. This includes the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies; and the respect of citizens and the state for the institutions that govern economic and social interactions among them”

Governance Value Chain

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  • Constituents (voters, taxpayers, businesses, organizations) demand government accountability to ensure that money is spent effectively.  Constituents demand this directly to government agencies, to politicians and to specialized government agencies, particularly supreme audit organizations.
  • Politicians demand accountability from agencies.  Politicians produce “compliance legislation”.
  • The specialized agencies are provided some enforcement capabilities via the legislation. This provides formalized accountability.
  • Civil society organization like the press and Non-Governmental Organizations leverage data to help improve governance
  • Government 2.0 enables data to be used by constituents providing another layer for performance improvement

Government Challenges

  • Many governments are improving transparency and accountability. Factors that slow these efforts include:
  • Financial systems in use are not able to produce needed data in a reasonable time to be transparent
  • Conflict between country secrets and need for openness makes it difficult to effectively support “freedom of information”
  • Culture of expertise in government differs from the Web 2.0 peer culture model
  • Digital divide makes it difficult to reach all citizens, especially those in the greatest need.

Setting government data free

Many experts believe that releasing government data assists in economic development. Taxpayers have paid for it already. The notion that information generates economic growth is not obscure. After all, the Rothschild fortune was said to be based on learning the results of the Battle of Waterloo faster than competitors. Data needs to be accessible and usable. It must be easy to understand and easy to leverage electronically.

Good governance measurements

Companies looking to expand in emerging economies can easily compare country governance risk thanks to so many international comparisons including:

  • World Bank Doing Business “provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level”
  • Public Expenditure & Financial Accountability (PEFA) supports “integrated and harmonized approaches to assessment and reform in the field of public expenditure, procurement and financial accountability”
  • World Bank Governance Matters “reports aggregate and individual governance indicators for 212 countries and territories over the period 1996–2008, for six dimensions of governance: Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, Control of Corruption”
  • Open Budget Initiative (OBI), “a comprehensive analysis and survey that evaluates whether governments give the public access to budget information and opportunities to participate in the budget process at the national level.”
  • Transparency International Corruption Perceptions Index “measures the perceived level of public-sector corruption in 180 countries and territories around the world.”
  • Millennium Challenge Corporation (MCC) Country Scorecards “consolidate an individual country’s scores for each of the 17 policy indicators MCC uses to determine eligibility for its assistance programs. By using information collected from independent, third-party sources, MCC allows for an objective, comparison of all candidate countries.”
  • Organisation for Economic Co-operation and Development (OECD) Development Cooperation Directorate (DAC) statistics for aid effectiveness, governance and development, and poverty reduction.  

Implication for government technology

The second generation of public financial management requires

  • Fully auditable and timely financial data, including budget plans
  • Comprehensive government Chart of Accounts that links funds, projects, organization, economic purpose to enable effective analysis
  • Integration of transactions and electronic content
  • Movement away from the document as the primary transparency metaphor to XML that can be mashed up to enable Government 2.0
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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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