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Resource dependence and budget transparency | Governance Assessment Portal

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Resource dependence and budget transparency

Producer: 
Antoine Heuty & Ruth Carlitz
Publication year: 
2009
Source of the information: 
Revenue Watch Institute

 

 

This paper analyses the results of the Open Budget Survey 2008 - an evaluation of budget transparency in 85 countries. The authors highlight a number of issues including: 
  • Budgets are less transparent in oil-dependent countries: poor performance of resource dependent countries is largely driven by the lack of budget transparency and accountability.
  • The cost of budget opacity in resource dependent countries: implications of lack of transparency.
  • Why transparency matters in resource dependent countries: lack of budget transparency is likely a direct result of the states' dependence on oil for public revenues. 

 

 

Findings:
  • Resource dependent countries tend to be less transparent than countries that are not resource dependent.
  • Resource dependent countries register an average Open Budget Index (OBI) 2008 score of 31 out of a possible 100, compared with 45 out of 100 for non-resource dependent countries.
  • Furthermore, with the exception of South Africa, none of the resource-dependent countries appear among the five top OBI performers.
  • Oil-dependent countries also appear to have very poor expenditure control systems, which can allow for the mismanagement of resources.
Recommendations/Conclusions:
  • An abundance of natural resources need not imply slower economic growth and poor development outcomes, a phenomenon often referred to as the 'resource curse'.
  • Opening budgets can help to channel natural resource revenue towards economic and human development.
  • The lack of transparency in oil producing countries underscores the need to implement the Extractive Industries Transparency Initiative.