The Global Need for Social Budget Work
The Convention on the Rights of the Child obligates countries to undertake measures to the maximum extent of their available resources to ensure the fulfillment of children’s rights. Social budget work for children helps to ensure that this obligation is carried out; and many of these initiatives share several common goals, each contributing to stronger public finance policies for children:
- Improving equity by helping to ensure that children, women and poor families are not marginalized in both the actual public sector allocations as well as the decision-making process of arriving at these;
- Improving efficiency by helping to achieve the best possible results for children for the amount of resources committed;
- Contributing to stability by helping to secure adequate resources to sustain investments in the social sectors and promote social protection, notably during crises.
Social Budgeting to Address Efficiency
Recent studies have shown that public spending and investments in weak institutional and governance environments often do not translate into effective public services. Stronger evidence of better human development outcomes due to public sector spending is found in better governed countries. Studies of corruption also reveal that it could distort the composition of government expenditures, biasing it towards public sector investment projects that are easier to extract rents and kickbacks from, and ultimately undermining social sector investments in education and in health.
Social budgeting work could help make public finance management much more effective and efficient in various ways. A common foundation among many initiatives is that they seek to increase the transparency of information throughout the budget cycle. For instance, many social budgeting initiatives try to track how resources are eventually channeled towards public services, helping expose major leakages and governance problems that tend to weaken the connection between resource allocations and actual service delivery and impact. These projects look at how much of the budgeted funds actually make it to their intended destination (schools, public works, etc). By making this information known to the public or to legislative bodies, these initiatives are expected to help enhance the “demand” for a more effective channeling of resources, including to the social sectors.
Social Budgeting to Address Equity
Social Budgeting efforts aimed at improving equity are aimed at improving equality between different groups of society (between socioeconomic classes, ethnic groups, genders, etc). One aspect of social budget work that could address both efficiency and equity involves initiatives that boost citizen engagement and participation in various parts of the budget process. This contributes to efficiency by helping to shape budget priorities during the budget design and approval stage; and also by holding government agents accountable when citizens (or their proxies, such as parliamentarians or civil society) engage at the budget implementation stage. In addition, this also contributes to equity, to the extent that marginalized groups (or their proxies) are brought in and capacitated through such social budgeting initiatives.
Most examples of Social Budgeting efforts impacting equity help to strengthen the “demand” for pro-poor, child-friendly or gender-responsive budgets. Evidence-based policy advocacy could be very useful in shaping policy discussions and public debate, by developing rights- and investment-based arguments for addressing the specific needs of certain segments of the population, including children and women or groups that have been marginalized and excluded from the social and economic sphere (e.g. indigenous groups).
Social Budgeting to Address Stabilization
A critically important additional aspect of social budget work focuses on the stabilization branch of public finance, by tackling issues related to pro-poor countercyclical policies which include helping to ensure sufficient social protection during periods of economic volatility.
One of the main challenges is that during aggregate shocks and periods of economic contraction or stagnation, the capacity of government to carry out its commitments (or undertake new ones) to invest in programs and projects that benefit children, women and the poor is often curtailed. So too is its capability to undertake countercyclical fiscal policy and provide adequate social protection to the most vulnerable is curtailed at precisely the time when they are most needed. As a result, most studies find that fiscal policy is procyclical in developing countries (as opposed to countercyclical or acyclical in industrialized countries). Social spending is typically stagnant or retrenched during periods of economic contraction. Projects aimed at instilling countercyclical or acyclical budget cycles could have a significant impact on the wellbeing of marginalized sections of society.