Democracy, Freedom, and Budget Transparency: A Multinational Analysis

Abstract

The article examines the importance of democracy and freedom to budget transparency that contributes to government responsiveness and accountability to citizens. It investigates the question: What are the effects of democracy and freedom on budget transparency? Using the 2019 data from the International Budget Partnership that scored countries’ budget transparency practices and ordinary least squares multivariate regression, findings show that countries that score high on democracy and freedom tend to report higher budget transparency scores. The study attests to and validates the importance of democracy and freedom and the recognition that these principles should be incorporated as core values in government administration.

PLAIN LANGUAGE SUMMARY

Study purpose: The purpose of this research is to demonstrate the importance of democracy and freedom to budget transparency. The study examines the question: What are the effects of democracy and freedom on budget transparency?

Study approach: The study used data from the International Budget Partnership that scores budget transparency practices across different countries. The higher a country’s score, the more transparent it is regarding the disclosure of all relevant revenue and expenditure information. The study also used data from the Heritage Foundation on countries’ democratic, business freedom, government spending freedom, finance freedom, and labor freedom scores. Data were analyzed to see whether there is a relationship between budget transparency on the one hand and democracy and freedom on the other.

Study findings: Findings show that countries that score high on democracy, government spending freedom, and finance freedom report higher budget transparency scores. However, labor freedom and business freedom are not related to budget transparency.

Study implications: The result suggests that democracy, which is related to disclosure, free speech, and citizen participation, influence budget transparency. Also, some freedoms are more relevant to budget transparency. Given that budget transparency contributes to the efficient allocation of resources, evaluation of government performance, strengthening of investor trust, promotion of macroeconomic stability, and ensuring inclusivity in society, governments should prioritize those factors that contribute to it.

Keywords:

• Democracy
• freedom
• accountability
• budget transparency
• open budget

Disclosure statement

No potential conflict of interest was reported by the authors.