Introduction

This short guide is dedicated to encouraging organizations that are interested in monitoring the Millenium Development Goals (MDGs) to think about how they might focus on government budgets as an important part of their efforts.

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The guide describes:

• Why it is important for civil society to focus on budgets,
• The recent growth of civil society budget-focused work in developing and transition countries,
• How civil society can use budgets to monitor the MDGs
• The opportunities for civil society involvement in the budget process
• Sources of further information and key contacts for those who want to further explore budget monitoring.

Why focus on budgets?

The budget is the government’s most important economic policy instrument. It reflects a government’s social and economic policy priorities more than any other document, translating policies, political commitments, and goals into decisions on where funds should be spent, and on who and how these funds should be raised. A well-functioning budget system is vital to the formulation of sustainable fiscal policy and facilitates economic growth and development. In many countries, weak budget systems and poor budget choices exacerbate social problems.
A government’s budget directly or indirectly affects the life of all its citizens. But frequently people from the most vulnerable sectors of society are the ones who most severely suffer the consequences. They are the ones who tend to be harmed the most by weak economic growth or high inflation. The current well-being of the poor, and their future prospects, can hinge on expenditure decisions in areas such as health and education. Yet budget cuts frequently tend to affect programs that benefit the poor, as other items such as interest on the debt or the public-sector wage bill are more likely to have first claim on scarce resources. Moreover, even when funds have been allocated to achieving the MDGs, weak expenditure and program management — and the lack of political power among the poor — can mean that the money never reaches the intended beneficiaries.