On transparency Index of the Russian Budget

On January 23 Budget Partnership, Washington, has published its regular, the fourth one since 2006 report with a review of the budget 2012 transparency. The review presents already traditional transparency index of the state budgets with the relevant rating (for 100 countries this time), three new indices that reflect public participation in the budget process, budget authority of legislative bodies and Accounts Chambers.



Over two years since the publication of the previous review, the transparency index of the Russian budget has increased fr om 60 to 74 points (out of 100), which allowed our country to take the 10th position in the rating, becoming one of the leaders in the group of countries with a transparent budget system, very closely succeeding the USA.


Such a remarkable achievement was noticed and caused a positive feedback in a number of mass media in general, and in "Russian Business Newspaper" in particular. The Russian Ministry of Finance has given a positive feedback on this issue. Last week the Head of the Federal Treasury R. Artyukhin at the "Business Breakfast" in "Rossiyskaya Gazeta" was even able to confidently dispel doubt of journalists: "Our tenth place is well-deserved".


The question of journalists, if there is no mistake here, looks quite legitimate to us, especially in view of the fact that two years ago the score of 60 points, gained by that time, seemed excessive. Unfortunately, doubts in the scored points only increased upon the review of the Russia-wide questionnaire, filled in by the International Budget Partnership independent expert, representing a non-government organization.


Differences in the choice of the proposed answers have emerged as early as in the second survey question (there are 125 of them in the questionnaire), wh ere the choice of an expert can be supported only through ignoring certain differences between the used classification of budget expenditures in Russia and the UN-recommended standard Classification of the functions of government (COFOG) in both, the number of classification Items (14 vs. 10) and the structure of sub-items within their structure (for comparison, the item "Civil Defense" in both structures). In other words, if you are pursuing a dubious goal to adjust the classification of budget expenditures to the departmental structure of the government, and thus also to get rid of the concept of "economic classification" in the Budget Code, as it happened in 2007, intentionally or not you violate international standards and cannot qualify for 100 points under the second question.


In the answer to the third question, the expert ignored the exclusion of economic classification of the budget from the Budget Code of the same in 2007, having replaced it with classification of public administration functions. A link given by the independent expert to the explanatory note to the draft federal budget, which supposedly contains budget data relevant to the economic classification is amazing, since there is no budget line "wages", which is incompliant with the effective classification of public administration functions and substantially discredits the economic sense of the information provided in the explanatory note.


The major discrepancies with the independent expert view was due to the absence of the data on the current and executed budget at the level of targeted expenditures in the draft of the Russian federal budget, as well as any explanations in the annual report and the federal budget law. Herewith, although all our answers to 125 questions of the questionnaire were matching the answers of the independent expert for 75%, we estimated an alternative transparency index of the budget at 54 points, which brings Russia by 25 points down in the above rating, placing it at the same level with Ukraine. As a result, we share with Ukraine 34-35th position, behind another our neighbor - Georgia (55 points, 32-33th position).

In general, the result is not surprising.


More details on our estimates of the above indices can be found here.


V.B. Zatsepin, Ph.D. in Military Science, Head of Economics of the Military-Industrial Sector Department