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Don’t Let Cash Slip Away: Strengthening Government Oversight of Stimulus Spending Through Disclosure and Public Participation

Que no se escape el dinero: Cómo fortalecer los mecanismos de supervisión de los estímulos a través la transparencia y participación pública

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Mia Katan|

This blog post is the second in a series that looks at the four core ingredients for strong government oversight of stimulus spending. Read the introductory piece here.

Around the world, governments are implementing massive stimulus packages to protect individuals’ economic and physical wellbeing in the midst of the pandemic. Robust oversight mechanisms are essential to ensure these huge social programs reach intended recipients. However, many governments are struggling to effectively monitor their complex and evolving stimulus programs. In this post, I outline how oversight bodies with explicit transparency and public participation components contribute to effective stimulus oversight.

 

Disclosure and Public Participation

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Robust government oversight mechanisms must have strong elements of public participation and disclosure, including transparency of the mechanism itself as well as the content under review.

Mia Katan

Robust government oversight mechanisms must have strong elements of public participation and disclosure, including transparency of the mechanism itself as well as the content under review. Explicit transparency and participation components ensure civil society organizations, and the wider public, are empowered to engage in oversight efforts.

Currently, oversight bodies’ disclosure policies vary across institutions and countries. However, many mechanisms fail to practice both procedural transparency, the disclosure of information on internal processes, and content transparency, the disclosure of the underlying information and data being monitored.

When it comes to procedural transparency, parliamentary committees are the most open, as most are subject to open meeting rules and parliamentarians are electorally incentivized to advertise their oversight efforts. Meanwhile, audit and prosecutorial institutions’ processes are opaque. Keeping some information confidential is justified to protect the identity of individuals under investigation. However, any limits to disclosure should be narrow, specific, and serve a purpose, such as upholding investigatory privilege. Overall, instances of non-disclosure of information related to large-scale emergency public spending should be explicitly acknowledged and an exception to the rule.

When it comes to content transparency, there are a handful of admirable examples of oversight bodies disclosing stimulus data in an open format. One great example is Brazil’s TCU, which maintains a portal of data on large social safety net programs enacted in response to the pandemic. The Brazilian Federal Comptroller has also launched a beneficiary registry for emergency COVID aid. The government of Argentina has recently published open data on formal and informal workers receiving Emergency Family Income, disaggregated by province.

Civil society has stepped in to advocate for transparent oversight efforts when governments have failed to disclose underlying data. In the United States, civil society and the media flooded the Small Business Association with Freedom of Information requests, which resulted in the disclosure of loan information. In Nigeria, BudgIT maintains a tracker that aggregates COVID-19 donations to hold the state accountable to good financial management of emergency donations.

However, instances of formal channels for public participation in government oversight mechanisms are sparse. Opportunities to participate rarely extend beyond whistleblower or public complaint hotlines, which are important but insufficient. A few countries have formalized cooperation by establishing multi-stakeholder committees to oversee stimulus spending.

  • The government of France formed a committee with representatives from the Supreme Audit Institution, Parliament, business associations, and local government. This committee, modeled after those established during the global financial crisis, will produce a report on the loan guarantee scheme one year after implementation. 
  • El Salvador’s Legislative Assembly legally established a committee of government, private sector, and civil society representatives to oversee use of the Emergency, Recovery, and Economic Reconstruction Fund. However, the committee is currently not operating due to the resignation of civil society representatives over tensions with the government.

 

Implications for Oversight Design

With these obstacles in mind, the following recommendations can help governments nurture open stimulus oversight systems through disclosure and public participation:

  • Procedural transparency: Oversight bodies should practice procedural transparency by publishing information on participants, deliberation, meeting minutes and agendas, mandate, documentation, etc. 
  • Content transparency: Oversight bodies must also publish underlying data and findings in an open format, excluding only confidential business, national security, or personally identifying content when necessary.
  • Civil society collaboration: Create formal channels for CSO-government collaboration. Provide CSOs with stimulus spending data, uphold freedom of speech and association, and respond to information requests readily.
  • Participation: Create a multi-stakeholder forum to bring together representatives from across society, such as representatives of vulnerable groups, business associations, local government, civil society, academia, etc. to provide stimulus oversight.

 

Featured Image Credit: August de Richelieu from Pexels

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