The last few decades have seen two mutually reinforcing trends with regard to government budgets. First, though fiscal policy has long been seen as a key tool for governments to support stable economies and provide public services, the instrumental role of budgets in promoting development, redistributing wealth, and reducing poverty has been increasingly recognized. Second, this growing recognition of the importance of budgeting in addressing some of the world’s most persistent challenges has been a major factor in transparency and accountability becoming fashionable.
While budgets today have a global profile like never before, the lingo connecting public budgets to people’s lives has a clear precedent in the International Covenant on Economic, Social and Cultural Rights (ICESCR), adopted by the UN General Assembly in 1966 and ratified by more than 160 countries. Article 2 of the ICESCR states “each State Party to the present Covenant undertakes to take steps…especially economic and technical, to the maximum of its available resources [emphasis added], with a view to achieving progressively the full realization of the rights recognized in the present Covenant …”
The wording of this principle—the maximum of available resources—inevitably lends itself to analysis of government budgets when assessing whether governments are meeting their commitments. But, despite the clear connection between the covenant and public revenues and spending, its implications for fiscal policy and budgeting have so far remained under explored.
To close this gap, the International Budget Partnership and a handful of groups that use budgets to push for the realization of rights have published a new handbook on using budget analysis to hold governments to account for their ICESCR commitments. So, what does using “the maximum of its available resources” mean for how governments should manage public resources?
- Governments must mobilize as many resources as possible to realize people’s rights. All revenues and taxes must be levied and collected in a way that maximizes the resources available to spend on rights and recognizes the differences in people’s ability to pay. For example, tax reforms that reduce how much revenue is mobilized to spend on services that contribute to the realization of rights may contravene this provision, unless there is credible evidence that all the rights articulated in the covenant have been fulfilled.
- Governments must give “due priority” to the realization of rights. Signatory governments must prioritize allocations and expenditures toward rights-related areas. For example, if a government is failing to use available resources to provide basic education to children, it may be failing to comply with the provision.
- Governments should not divert resources that are essential to the realization of rights to other areas. For example, taking money away from social programs to finance infrastructure to host international sporting eventsviolates this obligation.
- Expenditures must be efficient. Governments should not pay more than necessary for goods and services. Buying medicines at retail prices due to lack of adequate planning and consolidated purchases, for example, may contravene this. Governments should also not spend on unnecessary items (like workshops in fancy hotels, with five course dinners). Furthermore, finance ministries should transfer funds to implementing agencies in a well-planned way throughout the fiscal year. Impeding the steady provision of essential services by “dumping” of funds near the end of the fiscal year, a recurrent practice in many countries, may violate this obligation.
- Expenditures must be effective in the realization of rights. A government must purchase those goods and services that make a real contribution to the right at stake. For example, they should provide services, say heating that materially improve the living conditions in public housing, not simply those that may improve the appearance of that housing.
- Funds allocated to rights must be fully spent. This means making an effort to overcome the institutional barriers or bottlenecks that impede the adequate functioning and spending of certain programs. It also means addressing lack of institutional capacity where required.
The connection between international human rights law and budget analysis has the potential to be a powerful tool for holding governments to account for their obligations. The handbook has begun to illustrate this connection. In doing so, it underscores the need for new, innovative approaches for evaluating governments’ compliance with human rights.
But many more cases and campaigns are needed to reach a deeper understanding of the public finance implications of the covenant. We invite you all to produce evidence and share analysis and stories that can help maximize the impact of government budgets on the realization of the rights of the people they should be serving.
Helena Hofbauer is Director of Partnership Development and Innovation at the International Budget Partnership. This piece originally appeared on the International Budget Partnership’s website, and it is cross-posted with permission.