Transparency and accountability in public financial management: analysis and trends for Latin American and Caribbean countries
Latin America and the Caribbean face a development crisis, reflected in three structural traps that hinder progress toward productive, inclusive, and sustainable development: one of low capacity for growth and transformation; another of high inequality, low social mobility, and weak social cohesion; and a third of limited institutional capacities and ineffective governance (ECLAC, 2024a). The latter restricts the implementation of transformative and sustainable public policies, reduces their effectiveness, and erodes citizens’ trust in democratic institutions.
Improving public trust in democratic institutions and implementing effective public policies requires transparent institutions that promote public participation and ensure accountability. In this context, budget credibility is a critical element of overall government credibility and its capacity to deliver on political commitments. (De Renzio, P. and C. Cho, 2020; ECLAC, 2024b). This is precisely why one of the indicators for Target 16.6 of the Sustainable Development Goals - which aims to “develop effective, accountable and transparent institutions at all levels” – focuses specifically on the credibility of the public budget1.
In fact, increased transparency and citizen participation in the budget discussion are consistently associated with improvements in budget quality. For example, they play a crucial role in highlighting climate change spending and guiding countries’ efforts toward achieving environmental sustainability goals (ECLAC, 2024c; IBP, 2016).