International Practices to Promote Budget Literacy

GIFT_postSponsored by the Ministry of Finance of the Russian Federation

The World Bank Global Governance Practiced just published the study International Practices to Promote Budget Literacy, Key Findings and Lessons learned , by Harika Masud, Helene Pfeil, Sanjay Agarwal and Alfredo Gonzalez Briseño. I was invited to share some comments on the study at a seminar in the Bank. One first remark about the study is that the reader, even if a specialist on public finance management, will by surprised by the amount of very exciting information on budget literacy at the school level around the world! Indeed, I learned very much about the international practices of a very relevant topic.

The way the subject is treated is very illustrative, informative and useful for practitioners. This is music for the ears of the GIFT community as it is directly related to the crucial issues of access to budget information, citizen engagement and public participation. A global trend of increasing fiscal transparency is resulting in expanding opportunities for citizens to participate in the budget cycle, and governments are increasingly recognizing the role and long-term benefits of budget literacy. This is a relevant topic about which there was very little knowledge until this work was undertaken and published.


Why is this study so important?

Many reasons explain the importance of this review of practices.  It addresses the demand side of fiscal information. For many years, policy makers, legislators, decision makers, have been working on the supply side of budget information. Years of proactively disclosing significant amounts of fiscal information. And yet, there has been little use of it. This refers to what the authors call the budget transparency feedback loop, when citizens are not budget-literate and when they lack the capacity to analyze and discuss budgets, which is necessary for them to engage in meaningful dialogues with their governments .

As such, it makes the case about the role that governments must have in sharing not only information, but also sharing knowledge, which entails training public servants and the public, for public participation. The Russian experience, for example, documents well how crucial it is to develop the competences of the teachers for success.

The study also shows that budget literacy education has different objectives, pedagogic approaches, and from there, different outcomes: from tax compliance to civic awareness, including accountability pressure, and practical skills for daily life issues. There are different results of budget education, depending on approaches and methods, the same way there are different motivations, approaches, and results, of citizen engagement. This is something specialists and policy makers tend to forget.  Different ways of citizen engagement take us to community control, better understanding the demand of public services, better allocation and implementation or resources, so on and so forth.

Very importantly, the study also shows that governments, even when they are actively addressing the strategic issue of budget literacy education, rarely address the objective that, from my perspective, should be at the core of fiscal transparency and citizen engagement: to provide better public services, to include and ensure access to the goods and services citizens are entitled to, to improve people’s lives.


Main features of the study

The study provides a review of illustrative examples of initiatives promoting budget literacy among young students in selected countries. It aims to raise the profile of budget literacy in discussions about curricula and fill the existing literature gap by documenting a variety of practices that promote budget literacy in a collection of 35 case studies from 34 countries.

The document provides a comparative perspective, as it analyses systematically the national context, curricular content, learning outcomes, pedagogical approaches, and materials used for school-based initiatives to promote budget literacy. Aimed at practitioners, experts and policy makers, it emphasizes the pedagogical approaches, results and implications of literacy initiatives intended to strengthen citizen’s awareness and engagement on budget. To the question on the incentives for the governments to embark in such complicated project, the authors respond: the need to educate citizens on tax compliance and the idea of citizen co-responsibility on good management of public resources.

The study shows that budget-literacy education can have various important outcomes. Better knowledge of public budgets, practical skills for daily living, economic competence, civic awareness, including a preference for tax compliance; and improved competency in analytical and numerical skills, among others. Also, development of values and attitudes, such as thinking proactively about participating in the discussion of economic issues and decision-making.

The document illustrates the various approaches for budget literacy education, various pedagogic strategies, with numerous and different objectives and a wide range of materials and methods: Lectures, enquiry learning, simulations and role playing, scenarios analysis, fact-finding and analysis, etc. including field visits, games, cartoons, and media programs. Quite remarkable are the exercises of participatory budgeting at the school level in France, Canada. Germany and Poland, as well as the example of the Russian Federation with various strategies at play. From this perspective, coalitions are crucial for shaping projects that end up delivering good results: the role of non-governmental actors in these efforts (parents, CSO, etc.) and in pushing the agenda for budget literacy education, including the curricula, are very important.

On the chapter of lessons learned, the document makes a series of very practical and evidenced based recommendations.  A central one is to clearly establish the objectives of budget literacy education. I found the most compelling to be the one links budget literacy and public service delivery. In addition to the value of their educative implications, the document makes the case that emphasis should be put in better management of public resources and improved service delivery as a result of informed citizens engagement, closing of the budget transparency feedback loop over progressive budget cycles.


A final thought for the discussion

Let me go back to the feedback loop here. It is true that there is generally insignificant interest on budget information; I also agree that there is little capacity for independent analysis and for a subsequent productive engagement. But the dialogue is only possible when the conditions on all sides are propitious. In fact, there are little points of contact between supply and demand: few points of entry, lack of a common language and sometimes, too much information that makes little sense. There is not really a dialogue between producers and users of fiscal information, and this cannot only be explained by the lack of an informed and analytical stands on the demand side. Other studies have shown that the demand exists, it is strong, structured, and consistent. (see to study of Mastruzzi and De Renzio, here)

As you know, GIFT has developed principles for public participation, which is defined as a fundamental right. This document is very relevant to public participation, as it underlines the importance of an informed public that is capable to engage in a meaningful way in the dialogue with authorities on budget issues. But the open avenues, the required civic space, the inclusiveness, the timeliness, the accessibility and sustainability of citizen engagement are also required. We know that participatory budgets work because they are processes that empower communities to decide on how to spend public resources. We know communities, when compelled to have access to public resources, try to find the ways to express their preferences. And we know that the most informed and educated people will not engage, unless they really need to, and it is possible. In all cases, what is crucial for the fiscal transparency loop to become a virtual circle, where the right to public participation is observed, is to include the institutional arrangements to ensure than anyone, when needed, can effectively exercise such a right.


Juan Pablo Guerrero Amparán, GIFT’s Network Director.