Critical remarks on investing in children: How to ensure effective and efficient investment in children and monitoring government’s investment in children

by Russell Wildeman

Input delivered at the Save the Children Regional Conference, Johannesburg, 02 November 2012asa

The customary question that is asked today is how well public spending holds up after the economic crises of 2008 and 2009 and the enduring problems faced by parts of Europe? These questions are also vital in the context of international goals such as the Millennium Development Goals (MDGs).

The International Monetary Fund (IMF) makes the interesting point that social spending in Sub-Saharan Africa (SSA) was preserved in the wake of the economic crisis that affected the developed North. This was related, in part, to the strong economic growth of the last decade and the relatively low levels of public debt of most SSA countries. However, the slowing down of the global economy and our reliance on commodity exports may introduce a series of fresh public funding challenges. Such a scenario may necessitate a strategy where SSA countries re-invest income gains into critical social services spending.

While the United Nations Economic Commission on Africa (UNECA, 2012) acknowledges the growth spurt in the last decade, it makes the point that this economic growth has not yielded commensurate dividends in poverty reduction. In fact, SSA countries are spending 8.7% on social services as a percentage of GDP and this is considered to be the lowest spending ratio in the world. There is general concern that in spite of the strong economic performance in the last decade, low investment in social development infrastructure remains. Given this scenario, many economists are now arguing that pro-poor spending, efforts at improving the quality of government spending and sound fiscal policies have become imperative in the fight against poverty.

I have invoked this context to place my input and our discussion in this broader context of economic growth that has not delivered solid social benefits. This suggests that our concerns with the rights and well-being of children should also be framed in a context that demands greater inclusiveness.

The rest of my input focuses on issues that have a direct and indirect effect on our ability to advocate for children’s rights and on governments’ ability to provide us with an unbiased account of how well they are promoting children’s rights. I interrogate the notion of budget outcomes, how national budget processes actually work, and the challenge of not having access to vital budget information. I conclude with the way forward for CSOs in promoting a children’s rights agenda by drawing attention to the effectiveness and the efficiency of spending on children.

Budget outcomes

The famous public finance theorist Allen Shick (1998) notes that any government budget (or any budget really) produces three outcomes and where the policy intention is to maximise the gains of each of the three outcomes. Firstly, budgets should achieve the simple maxim of “living within one’s means.” The fancy code word for this is fiscal discipline and within a broader budget context, simply aggregate fiscal discipline. This is not always achievable and inevitably governments are required to borrow resources so that key national policy and funding priorities are met.

Secondly, budgets should ideally direct resources to where they are needed and in line with the established and emerging policy needs of the country. The public finance code word for this is “allocative efficiency” and one could also translate this to mean “effectiveness” of spending. So, apart from the need to ensure that funding is in line with policies (this is of course the provenance of budget policy), such analyses should establish whether policies and funding have reached the intended beneficiaries of government’s policies. Naturally, because policy is dynamic and because policy contexts change, we are referring to moving targets.

Thirdly, any budget should strive to minimise the cost of implementation, even when there are plans afloat to extend government services. This is the language of unit costs and improving the overall efficiency of spending. It goes without saying that the efficiency principle is embedded in just about all the public finance management legislation in the region, but this does not mean that operational efficiency is commonplace in the region. In fact, achieving efficiency gains are arguably one of the hardest budget outcomes to achieve.

If we view the work we do from a budget outcomes perspective, where should we place our policy and advocacy energies?

  • First of all, while regional governments are hard at work trying to pioneer the establishment of more diversified economies, promoting intra-regional trade and reducing dependence on foreign donors, the reality is that we are unlikely to see an immediate change to the status quo. Given the need to keep African economies solvent, the issue of domestic resources mobilisation (DRM) should now stand at the centre of efforts by CSOs and governments. The benefits of an effective DRM strategy allow countries in the region to own their policy agendas and develop child-friendly policies that are effective in alleviating the plight of children and families in distress. In other words, this is no longer an issue for economists and tax specialists, but those of us working in the children’s sector should make such work a pillar of our interventions.
  • Secondly, we should not take for granted that regional governments have won the battle in directing resources to where they are needed. In Zimbabwe, there is an urgent need to engineer health spending away from secondary and tertiary hospitals that are not suited to deal with such basic demands. The neglect of the primary health care sector has devastating effects on children and their families and in spite of the Government of National Unity promising that such inverse spending patterns will be reversed, this is unlikely in the short and medium-term. Another example is Swaziland where households have been privately supporting the education of their children but because of economic pressures, such spending can no longer be taken for granted. There is clearly a need for a national conversation on the importance of basic education in Swaziland and child right advocates should continue to identify examples of mis-directed spending, poor quality spending and spotlighting the importance of children in basic budget equations.
  • Thirdly, while operational efficiency gains are hardest to realise, regional governments should assume that spending will come under further pressure and this would necessitate a focus on service delivery mechanisms that deliver maximum benefits at the cheapest possible price. Should we follow the example of Zimbabwe and South Africa that reward private hospitals and schools with government-driven subsidies? It is important to understand that such subsidies are rewarded on the basis that these private institutions relieve the State of larger service delivery burdens and because such services are valued, the State slaps a price on this through the subsidy system. We should urgently clarify whether such Public Private Partnerships should be extended or whether we are undiluted public sector die-hards who believe in the supremacy and the necessity of the public sector.

At any stage in the development of a country, that country may achieve some of the key budget objectives, but it is rare to have a situation where all objectives have been achieved. In South Africa, as one example, the government has done great work on aggregate fiscal discipline and directing resources where they are needed, but have been less successful in extracting maximum value from this spending. The reason for the latter can be attributed, in part, to weak management, but it is also clear that poverty and inequality conditions often vitiate noble policy and spending intentions.

In our advocacy work, we have to prepare ourselves for tough times ahead and it is not far-fetched to suggest that children spending agendas could easily slip under the radar in the present circumstances. In the context of potential and real spending cuts, regional governments are required to improve the quality of their spending and do more with less. While such a public finance equation would be hard to balance, there is enough evidence to suggest that positive and favourable outcomes are more than a function of government spending. We have to become involved in policy and spending decisions in a way that extend, multiply and stretch any extra Dollar, Rand or Kwatcha.

The reality of national budget processes

Let me first of all remind you about the purpose of any careful, deliberate and well thought through budget process. This process is done to maximise the probability that centrally set fiscal and policy goals are met. Hence, although the budget process is not averse to details, one can conclude that this is really a big picture scenario. In other words, the budget process does not take as a leading cue how can we promote the rights and well-being of children? Or women? Or people with disabilities? It answers to a different set of demands (balancing the books, ensuring an equitable distribution of revenue among the various levels of government, sorting out the best balance between unconditional block grants and earmarked spending etc.). I would go as far as to suggest that in spite of constitutional provisions regarding the delivery of certain services, the budget process remains relatively inaccessible to special interest lobbying and advocacy.

This view may sound contrary to the standard advice we give to advocacy organisations-go and intervene in the national budget process and make the case for children’s rights. This then raises the question whether national budget processes are relevant intervention points to advocate for the realisation of socio-economic rights or whether advocacy should be done in a piecemeal manner (departmentally and by sectors etc.). An alternative way of phrasing the question is asking what could be regarded as “effective” interventions in the budget process.

In my view, the time has passed where sector groups could work on their own and “lobby” governments and politicians. The fragmentation typical of modern civil society (you deal with education, I deal with women, you deal with people with disabilities) is no longer an acceptable paradigm. Civil society groups need to take responsibility for what kind of society they want to live in, put together a coherent set of policy and funding proposals, and intervene in the budget process based on a much broader understanding of what policy and funding should achieve. Part of the reason for the weak impact of CSOs in the government’s budget process is because most CSOs are content with presenting part or partial perspectives and this leaves government to fill in the broader picture. Even when we are doing the best we can, we unnecessarily cede ground to the governments of the day and allow them to make important trade-off’s and budget decisions that impact on children and all of us.

What am I saying? Accountability and governance is better served by a mature civil society whose interest resides in the crafting of a broader vision. This requires trade-off’s and a sophisticated process of negotiating among social partners. Hopefully, such perspectives include a fuller picture of what children need in order to grow into mature and responsible adults. The key here is that the work we do must lead to maturing and mature political communities-in other words, communities capable of making deals, understanding trade-off’s, being able to postpone immediate satisfaction of local needs and so on. This position reduces the need for governments to make such trade-off’s on our behalf and should make for more socially cohesive societies. Again, this work is not other organisations’ work, but it is ours too!

Existing efforts at promoting children’s rights in the absence of an overall vision for society (or for your country) as a whole should not be encouraged. I am aware that there are contrary views that would suggest that sectoral advocacy delivered good benefits, but rarely is there an explicit acknowledgement that such victories almost always mean serious losses in other equally important social sectors.

In my view our intervention should be relatively straightforward, even though it will be far more difficult to put into place. To repeat-advocating for children’s rights without championing a comprehensive and coherent vision of the kind of society we desire is no longer appropriate. As members of civil society advocating for the rights of children, we should actively seek broader alliances and the Children’s Network is a good and positive start but hopefully, it will not end there.

By engaging with the broader picture AND the details of children’s rights, our intervention in the budget process should be boosted. This would bring to an end the dis-juncture between a government perspective that thinks beyond special interest groups (big picture thinking) and our own that is fatally centred on our often single advocacy and lobbying issue (thinking consumed in details).

Access to information in budgets

Access to information in general and access to information in budgets more specifically is critical to advancing the work of children’s rights advocates.

Let me provide a personal testimony. I am an education budget analyst and have had the good fortune of doing this work for the last 12 years. What aided me was a context where the government in South Africa not only improved the information provided, but also standardised sector budgets across sub-national governments and published accompanying documents (such as Annual Reports). Truth be told, what we call independent budget analysis would not exist in the form it does today in South Africa if we did not have a government committed to open information. Two weeks ago, I went to Zimbabwe and I was pleasantly surprised about the degree and level of detail provided in the budget documents. This enabled me to provide targeted support to members of NANGO.

However, such positive stories are still in short supply and this makes proper and forceful advocacy for children’s rights quite hard. In the 2010 Open Budget Index (OBI) Survey of the IBP, African countries are disproportionately represented in the middle and the bottom of the open access information distribution. An often repeated ironic finding is that many countries in Southern and Eastern Africa frequently provide budget information to donors but conveniently do not publish such information in their public budgets. In other words, their funding dependence on donors makes them more responsive and accountable to donors than to their real bosses, the citizens of these countries. As heroic as we try to be, not having access to budgets and access to quality information makes the task of determining whether children are getting a better deal nigh impossible. Apart from the availability of financial information, non-financial information is completely absent, or when presented, is incoherent and does not allow one to assess the effectiveness or efficiency of spending on children.

Just to indicate how hard it is to obtain information, we commissioned the information request survey in 6 of the partner countries where we do work on the right to education and the right of access to information. The countries included were Malawi, Swaziland, Ghana, Kenya, Zambia and Uganda. On average, requesters lodged about 140 information requests. Some of the key results indicate that

  • In Zambia, our partners and colleagues had a 63% refusal rate, while in Ghana, a significant proportion of institutional responses was qualified as mute refusal.
  • In Uganda on the other hand, close to 66% of requests were positively answered, which indicates the importance of official access to information legislation.
  • Swaziland has had a high oral refusal rate while in Kenya, only 31% of requests were positively answered.

Why are these results so important? In order to conduct independent budget analysis, one needs access to documents and knowledgeable officials. The latter are needed especially where budgets fail to provide data on the effectiveness or the efficiency of spending. It is vital that such access to officials is secured and part of the social and fiscal contract between government and its citizens. Our data paint a rather bleak picture of the challenges that need to be overcome.

Interestingly, this broader lack of access to relevant budget information has inspired donors and CSOs to pioneer new tools such as public expenditure tracking surveys (PETS) In Malawi and Uganda, third party monitoring of infrastructure projects in the DRC, and more recently, data surveys that measure not only spending, but the relevant social and economic outcomes of spending such as the Twaweza (“we can make it happen”) initiative in East Africa.

While these developments are immensely positive, the demand to have budgets that provide relevant information and that report on progress in realising children’s rights should not be under-estimated. The spending-outcomes link is vital in our efforts at promoting accountability and deepening the fiscal contract between the government and citizens.

The way forward

Permit me to summarise the key intervention points for us as children’s rights advocates and how we can promote the effectiveness and efficiency of spending on children

  • We have to develop viable Domestic Resource Mobilisation campaigns and it would not hurt to focus on the implicit fiscal contract (willingly take our taxes and in return, show us that our money makes a difference).
  • Mount a campaign that requires governments to publish information on the per unit costs of the services they deliver to children. This should include a baseline expenditure survey and the annual publishing of per unit expenditure data.
  • Build broad alliances with organisations, donors and individuals concerned with overall government service delivery and not only narrow sectoral interests.
  • Maintain a focus on the composition of spending in government budgets and especially programmes that benefit children directly.
  • Related to the latter, intensify capacity development efforts in civil society so as to make a more meaningful engagement with government budgets possible.
  •  Focus strategically and selectively on improving overall access to budget information in published budgets and changing the culture of secrecy associated with government officials. This could be done by developing indices that rank departments for the quantity and quality of information provided in their official budget documentation.
  • Advocate for the establishment of government-wide M&E systems.
  • Work with regional institutions (such as PAP and SADC-specific structures) to promote acceptance of the significance of children’s rights and emphasising the importance of access to information.
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