Budget Transparency and Political Oversight in Uganda

Local governments are crucial for public service provision. They collect taxes, draw up budgets, select con-tractors, report information to the central government, and manage resource flows. The recent wave of decentralization in developing countries has rendered local governments' role all the more important. Yet many local government officials operate in settings with weak institutions and limited oversight. This study seeks to address two questions: Can increased budget transparency result in improved accountability and quality of public services? To whom should the budget information be targeted?

The majority of the empirical literature on accountability focuses on either the principal-agent relationship between voters and politicians or on 'direct accountability', i.e. the principal-agent relationship between public service users and providers, who typically are (or are overseen by) bureaucrats. This project departs from this literature by focusing explicitly on strengthening the oversight function of local elected representatives over their bureaucratic counterparts.

Together with the Uganda Ministry of Finance, Planning and Economics Development, the Budget Strengthening Initiative of the Overseas Development Institute and the Advocates Coalition for Development and the Environment, Innovations for Poverty Action is assessing the impact of a budget transparency intervention targeted at local government councilors and local opinion leaders.

Due to a 2010 reform, the Ministry of Finance receives detailed project-by-project reports on budget allocations and alleged quarterly expenditures via an Operating Budget Tool (OBT). Local stakeholders, including elected representatives whose mandate it is to monitor service provision, are largely unaware of this information.

The intervention puts disaggregated and location specific OBT budget information into the hands of local councilors and opinion leaders. Stakeholders in treatment subcounties are receiving budget information in the form of print-outs and through a toll-free hotline. In addition, they are trained on interpreting the information and using it to monitor local government projects in a day-long workshop. The information is also available on an interactive website.
To assess the impact of different variations of the intervention, 255 study subcounties in 29 districts are randomly assigned to either (a) have councilors trained and targeted with budget information, (b) have both councilors and local opinion leaders trained and targeted, or (c) receive no intervention (the status quo). The intuition behind designing the second treatment arm is to introduce second-order monitoring of councilors by elite constituents, and to make this salient in the perception of councilors.