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As government budgets significantly influence people’s lives and well-being while also providing opportunities to address societies’ most pressing needs, transparent, inclusive and credible budgets become key policy objectives. Moreover, the achievement of the SDGs depends on the ability of governments to execute budgets as intended and in line with national development objectives and needs. That said, opaque budget-making practices and unbalanced budget compositions, with underspending in sectors that may be critical to sustainable development, and overspending in others, continue to plague public financial management systems. Such problems are exacerbated by limited opportunities for citizens to participate in budgeting as well as other challenges, such as limited capacity of oversight institutions to scrutinize budgets.
Better budgeting within the context of the 2030 Agenda means explicit and measurable presentation of SDG targets in budget allocations and reports as well as in other elements of the budget cycle. It entails informing legislatures, audit institutions and the public about SDG-related budget policies and execution. It requires engaging them throughout the budget cycle in accountable manners. There is thus a need for inclusive dialogues on how to improve budget transparency and enhance budget credibility, bringing together governments, civil society and all other relevant actors.
An SDG-oriented budget is one that is organized according to the SDGs, SDG targets and indicators. The benefits of SDG budgeting are many. These include improved budget coherence, enhanced accountability and comparability of national budgets. When done appropriately, the mapping and tracking of budgetary contributions to each SDG can also improve budget performance evaluation. Governments typically link their national objectives to the SDGs and adapt the latter to national contexts prior to adopting key performance indicators for monitoring national development. SDG budgeting can also be used to justify budget proposals and negotiate for greater allocations to priority programmes, particularly during the drafting phase of the budget.
SDG budgeting as a practice is still in its infancy. Several countries have announced, through the voluntary national reviews, an intention to reflect the SDGs in budgetary processes but few have specified why it would be relevant to do so or how the practice could be operationalized.
Experience has shown that the SDGs can be more easily linked to programme budgets if there is already a plan or strategy in place that sets out national priorities. The active involvement of finance ministries is also important. A sense of ownership of budgetary processes by all stakeholders, such as civil society, parliaments and supreme audit institutions, is key as these actors hold government to account regarding commitments to the 2030 Agenda. Among the most important enablers of successful SDG budgeting are discussions on how governments can track public resources allocated to achievement of the SDGs. An SDG budget classification system and use of performance budgeting methods are also useful.
For more information on budgeting for SDGs, please follow expert discussion at the upcoming meeting of the Committee of Experts on Public Administration (CEPA), at:: publicadministration.un.org/en/CEPA
The blog is based on the paper prepared by Committee members Katarina Ott and Juraj Nemec in collaboration with Linda Bilmes, Cristina Duarte, Lamia Moubayed Bissat and Geert Bouckaert, for the upcoming 19th session of CEPA.