World Bank Blogs | By Warren Krafchik and Leslie Tsai

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In addition to sparking a global health, economic, and education crisis, the coronavirus pandemic may be fueling a fourth crisis that has, thus far, not gotten the attention it deserves.

Just as the global pandemic has illuminated the vulnerabilities in our health, economic, and education systems, it is shining a spotlight on the gaps, gaffes, and weaknesses in the management of public finances.

Headlines around the world are increasingly making clear that governments are struggling to balance dueling needs: for speed and integrity.  Reports cite secret contracts for COVID-19 vaccines, inflated prices for supplies, and corruption in the spending of relief funds.

Certainly, weak governance, poor public financial management, and misuse of public funding and public goods is not a new problem. But the pandemic has given it new urgency. That’s because, governance failures, including the misuse and mismanagement of COVID-19 funding, has the potential to undermine pandemic response efforts in three key ways – none of which we can afford right now: (1) inflated prices and misuse of funding, or funds that simply disappear, reduce scarce resources available for pressing and legitimate expenses like relief packages; (2) sub-standard equipment or failures in service delivery are a threat to public safety; and (3) most importantly, mismanagement of public funds undermines public trust at a moment when governments can ill-afford the erosion of trust. Distrust in government, for example, makes it more likely that large numbers of people could refuse the vaccine, threatening its effectiveness. We already see signs that this is the case.

We can and must take steps to improve governance and counteract growing distrust in government not only because it is critical to our successful response to the pandemic  but also because public trust is the firewall between social cohesion and fragmentation.

Fortunately, there are evidence-based tools that international institutions, governments, civil society, and philanthropy can use to help governments increase trust, strengthen their management of public funds and with that, improve their response to the current crisis.

1. Improve Transparency

Many governments have not yet implemented common sense transparency reforms, such as posting all budgets and contracts publicly online. This is easy and long overdue. Governments already produce significant data that they use for internal purposes or donor reporting, but do not make it public.  This is a political problem, not a technical one.  

The Open Contracting Partnership has worked with dozens of countries, including Paraguay and Ukraine, on reforms that require governments to publish contracts and procurements. Others should follow their lead.

2. Accountability Through Civil Society

As recent research from Transparency International has shown, transparency is only an effective tool if accompanied by strong accountability measures. We must support civil society and the media’s efforts to monitor government spending and the delivery of government services. Civil society organizations have the models and tools to reach citizens and hold governments accountable. For example, in 200 informal settlements across South Africa today, the International Budget Partnership and its partners are helping residents report on the delivery of critical public services during the pandemic through a regular questionnaire delivered via cellphone.

3. Harness Technology

Technology can help reduce opportunities for corruption. In addition to e-procurement and digitized budgets, the use of technology to administer conditional cash transfers can safely and efficiently get vital funds into the hands of their most vulnerable during the current crisis. In India, a biometrically authenticated payment system reduced corruption and substantially improved the delivery of government social assistance programs.

4. Engage the Right Levers in Government

Supreme audit institutions are agencies that lead on accountability for public finances and have a constitutional role to do so. However, supreme audit institutions often struggle with independence, mandates, and resources. We should look for opportunities to strengthen these key institutions.

5. International Institutions

The International Monetary Fund, the World Bank, and other international institutions can help.

The World Bank’s Global Director for Governance Ed Olowo-Okere emphasized that “The response to the pandemic is likely to increase corruption risks…” To help countries guard against these risks, the Bank developed a policy brief, Ensuring Integrity in Government’s Response to COVID-19.

IMF Managing Director Kristalina Georgieva advised governments, “In this time of crisis, please spend whatever is needed. But spend wisely and keep your receipts.”

But we know that keeping the receipts isn’t enough. It matters that the public and oversight actors have access to those receipts. That’s what creates the necessary accountability.

We can all help governments live up to their potential and spend public funds effectively and equitably by helping them earn and keep the public’s trust.  

Warren Krafchik is Executive Director of the International Budget Partnership. Follow them @OpenBudgets

Leslie Lang Tsai is Director of Social Impact at the Chandler Foundation. Follow them @ChandlerFdn.

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This article was originally published by World Bank Blogs.