Designing National Budgets: Translating Global Commitments into Realities

On Monday, April 19th, the SDSN, in partnership with Parliamentarians for the Global Goals (PfGG) and UHC2030, presented the third and final installment of their webinar series Parliamentary Leadership for the 2030 Agenda. The series aimed to support parliamentarians with scientific evidence for decision making, and this event focused on the role Parliamentarians play in developing and approving national budgets, and how their authority and voice in budgeting matters can be used to support SDG achievement. The organizers were grateful to two volunteer interpreters from the University of Massachusetts Amherst Translation and Interpreting Studies Certificate Program, without whom we would not have been able to offer simultaneous interpretation in Spanish.  

Overview Session

Gabriela Cuevas Barron, Co-Chair of the UHC2030 Steering Committee, opened the meeting. She emphasized the importance of the topic before yielding the floor to Jeffrey Sachs, President of the SDSN, for opening remarks. In his comments, Sachs said "our budgets should be based on our goals, rather than our goals being based on our budgets." He highlighted a few key challenges in the budgeting processes, such as the fact that annual budgets with incremental changes make it difficult to achieve broad, transformative goals like the SDGs and the Paris Agreement, noting that the objectives described in these agreements require us to look forward twenty and event thirty years, and this is not how budgets are currently discussed in most parts of the world. Sachs urged Parliamentarians to hold their governments and ministers accountable for submitting budgets which will achieve the SDGs. Sachs closed by noting that in low-income countries  domestic budgets are insufficient to achieve the SDGs, such as universal healthcare and education. He urged Parliamentarians to help identify financing gaps between what is needed and what is available, and for wealthy countries and multilateral organizations to step in and help close these gaps through debt cancelation or restructuring, increases in development financing, and other forms of assistance. 

The next presentation was by Dr. Ahmed Al-Mandhari, Regional Director of the World Health Organization (WHO)'s Eastern Mediterranean Regional Office (slides). He opened by highlighting that WHO signed an agreement with the Inter-Parliamentary Union in 2018 to support Parliaments in achieving their goals for health financing, through increasing access to science-based evidence and fostering dialogue. In his region they are operationalizing this through a regional forum on Health and Well-being for All. They have organized a number of meetings to share best practices between countries, and support Parliamentarians in their roles as lawmakers, in budgeting, and in oversight. Al-Mandhari emphasized that there is strong evidence that as public spending on health rises, out-of-pocket expenses fall and fewer families are left exposed to financial hardship because of health costs. However, current levels of health spending is insufficient in most countries, leaving people exposed to high healthcare costs. Parliamentarians have a key role to play in ensuring budgets are aligned to health goals, ensuring funds are flexible, that there is more funding for health overall, and that there is accountability in spending. More resources on this topic are available on the WHO website. 

Dr. Fernando Aportela, a Professor of Finance at the Autonomous Technological Institute of Mexico, spoke next. He described budgets as living documents, which reflect both current priorities as well as political compromises. He also noted that the majority of a budget has in effect already been spent when it is adopted, with many of the costs already pre-determined. Further, decisions are not made in a vacuum, but rather with many stakeholders, including the executive and legislative branches, NGOs and external advisors, and independent budget offices. Aportela presented 3 innovative ideas on how to allocate more spending to the SDGs: 1) directly allocate more spending in annual budgets, 2) create special committees on the SDG agenda to work SDG spending into different areas of a budget, or 3) take advantage of underspent budget lines or unexpected changes, and re-allocate funds to the SDGs at the end of the fiscal year. Aportela elaborated on this third idea, proposing that legislators pass a rule whereby a percentage of unspent funds at the end of each year would be re-allocated to a fund for the SDGs, and noted that over time this could add up to a sizable fund. He closed by sharing a link to an OECD paper available online. 

Elisabeth Hege, a Research Fellow in the Sustainable Development Governance Programme at IDDRI, presented key findings from the 2018 study Integrating SDGs into national budgetary processes, which examined how different countries were aligning the SDGs to their budgets (slides). They found some countries used the SDGs to improve the narrative of budget proposals and justify spending (ex. Finland & Norway), others mapped their budgets against the SDGs (ex. Colombia, Mexico, & Nepal), and others evaluated the impact of their budget and fiscal policies on the SDGs (ex. Finland). Hege also noted that the SDG lens is only one framework to consider if the objective is a budget that better supports desired social and environmental outcomes; for example, New Zealand uses a well-being framework with five objectives on mental health, decarbonization, and addressing child poverty. Another example is the Paris Collaborative on Green Budgeting launched by the OECD, which helps align national expenditure and revenue processes with climate and environmental goals. Hege concluded by emphasizing that the key to success in all the above is ensuring that SDG integration and alignment processes are not just technical exercises, but mechanisms to begin effective public debate on spending priorities and hold governments accountable for delivering on the SDGs. 

Breakout Sessions

Following the overview session, participants divided into three groups to explore content in more detail and share their own experiences.

A breakout session on budgeting for health was led by Dr. Aminu Magashi Garba, Founder of the Africa Health Budget Network (slides). He opened by reminding parliamentarians of key targets for public spending on health; either 15% of a government's budget, 3-5% of a country's GDP, or at least US $86 per capita. Garba also highlighted some common mistakes when budgeting for health, including under- or over-budgeting for capital expenses; not consulting with the public to set priorities and spending amounts, particularly with key constituencies such as women, youth, and healthcare workers; and not capturing donor funds in budgets.

A breakout session on budgeting for a sustainable economic recovery was led by Dr. Phoebe Koundouri, a Professor at the Athens University of Economics and Business (slides). She offered several key recommendations, saying that budgets should use the SDGs to frame their narratives, that allocations and spending should be mapped against the SDGs, and that the SDGs should be considered in evaluating budget performance. Koundouri spent time describing the resources available to Parliamentarians through the Paris Collaborative on Green Budgeting and how the European Green Deal will support SDG financing in that region. In the discussion, many participants expressed difficulty in balancing short-term COVID-19 recovery needs with longer-term economic and green growth needs. Koundouri warned that the cost of not acting on climate change is much higher in the long run, and emphasized that these objectives are not as contradictory as it may seem when long-term costs are considered. 

A breakout session on budgeting for education was led by Dr. Manos Antoninis, Director of the Global Education Monitoring Report at UNESCO (slides). He presented some key challenges in translating global goals, like SDG 4 on Education for All, into national policies. Global goals need to be translated into appropriate targets at the national level, and then adequate funds allocated. However, there are several challenges with funding, such as the large proportion of budgets which are allocated to salaries, incremental budgeting processes, attention to short-term gains rather than long-term solutions, and a lack of results-driven, program-based budget formulation. On the solutions side, he encouraged Parliamentarians to think of education as a key contributor to other key outcomes, including health and economic growth, and for the inclusion of inter-sectoral perspectives in making the case for education funding. He also shared a wealth of UNESCO resources which can help base budgets and programs on scientific evidence, such as the 2020 Global Education Monitoring Report.

Closing Remarks

The group reconvened for closing remarks from Kirsten Brosbøl, Founder of Parliamentarians for the Global Goals. She emphasized again the role Parliamentarians have in aligning a country's global committments to their national programs and policies, particularly where budgets are concerned. She highlighted the tools presented by the WHO to support Parliamentarians in implementing universal health coverage (UHC), and the point made by Elisabeth Hege that the SDGs must be part of the public debate. Brosbøl reminded participants of Aportela's idea to establish SDG funds with budget surpluses, calling it a refreshing and specific idea to implement. She also encouraged Parliamentarians to be active in all parts of the budget cycle, year-round. She concluded with a call for greater equity, and the need to leverage more funding from wealthy countries to support the SDGs in lower income countries.