Ending extreme poverty is not possible without investments by governments. Too often, people lack the power to find out how public resources are spent or to verify that the funds are serving the public interest. Oxfam helps citizens to take action to ensure that their country’s resources—including revenues from oil, gas, and mining, foreign aid dollars, and tax revenues—are spent in ways that alleviate poverty. To meet this challenge, citizens must be equipped to “follow the money”, raise their voices, and demand responses and reforms from their government officials.
Consider Africa’s oil sector. Over the next decade many resource-rich countries in Africa stand to reap a public revenue windfall. The Africa Progress Report 2013 found that the continent’s oil reserves (measured between 2010 and 2011) could increase government revenues by $180 billion, or 15 percent of regional gross domestic product (GDP). Yet, the UN High Level Panel on Illicit Financial Flows from Africa estimates that $50 billion in illicit financial flows leave the continent annually.
- World Bank: "Africa's ample resources provide an opportunity for inclusive growth"
- World Bank: GDP Ranking Table
These illicit financial flows represent 4 percent of the continent’s GDP, less than one percentage point below the estimated growth rate (4.9 percent) of Africa’s GDP in 2013. Multinational companies account for two-thirds of these losses, mostly through tax evasion. Thirty percent of the illicit flows are linked to criminal activities, and 5 percent to corrupt officials; official corruption may also facilitate tax evasion. The greatest share of revenues lost has been in the extractive industries sector.
With respect to foreign aid, studies show that improving global aid quality and outcomes could unlock up to $67 billion in more-efficient and more-effective aid, equivalent to more than half of total aid investment in 2010.
Developing countries themselves can mobilize domestic resources for poverty-focused public investments through effective tax revenue collection, by tackling illicit financial flows,1 or, as in Ghana recently, by issuing bonds to be traded in domestic and international markets.
“Following the money” has become a growing concern for governments and citizens. They need to be able to track financial transactions at regional and subnational levels as well as nationally, because the movements of funds are increasingly decentralized. In doing so, they address issues of power imbalances, weakness of the state compared with corporate powers, corruption or political patronage, or poor-quality service delivery that can result in “leakages” throughout the public finance chain that prevent public revenue from flowing to poor people.
Oxfam supports active citizens who are working to bring about accountable and effective governance in their nations and their neighborhoods.
In Ghana, Oxfam is working with partners who are extending a pilot program to monitor district assembly budgets, and are building a network of activists working at the local and national levels. Oxfam partners in Ghana are pushing for greater transparency in Ghana’s emerging oil industry. They are also working to make information on foreign aid more usable and accessible so that citizens can track where money is going.
In Cambodia, Oxfam is focused on protecting and expanding the legal space for citizens and civil society organizations to advocate for change. In Cambodia, access to information on local and national development policies and budgets is severely curtailed. Oxfam partners in Cambodia are enhancing the capacity of local civil society organizations to monitor development policies and expenditures, and we are helping to create the political space these organizations need to carry out this monitoring. Our partners are pushing for increased access to national budget information and for disclosure of payments to the government from extractive industries.
Globally, Oxfam is joining forces with like-minded citizen networks, such as the Global Movement for Budget Transparency, Accountability and Participation (BTAP), as well as linking with the Open Government Partnership (OGP) and Global Initiative for Fiscal Transparency (GIFT). Oxfam is urging the International Monetary Fund (IMF), the World Bank, the US government, and other international donors to support transparency and accountability agendas at the national level.
- A recent study by the Organization for Economic Cooperation and Development (OECD) found that the world’s poorest countries lost nearly $946.7 billion in illegal capital flight in 2011, a 13.7 percent rise from the year before. Overall, illicit financial flows—that is, money laundering, tax evasion, and corruption—drained nearly $1 trillion from the developing world in 2011.
Goals & priorities
The long-term goal of Oxfam’s active citizenship work is to help empower local citizens to hold their governments to account for spending public funds effectively in ways that benefit poor people. Through this work, Oxfam and our partners will capitalize on the global momentum for transparency and move into the more difficult challenge of securing accountable governments.
Transparency is only the first step toward accountability. And even it may not guarantee pro-poor public investments. There are also questions related to mapping specific leakages in a country’s public resource chain that prevent investments from flowing to poor populations. Is the problem that countries are getting a bad deal in their oil-gas-mining contracts and therefore losing potential revenue? Is it an issue of power, where in the political economy of budget allocations, pro-poor sectors like education, health, or small-scale agriculture lose out to elite interests? Are there leakages at the level of expenditure and execution, where resources bleed out to corruption or political patronage? Or is it an issue of leakages by means of poor-quality service delivery?
As our active citizenship work progresses, we at Oxfam are asking ourselves how transparency of data and information can provoke citizens to ask questions and mobilize around any of these issues. In essence, how does transparency lead to accountability?
To answer this question, Oxfam will bring together and support the thinkers and practitioners who are actively engaged in these areas—the activists and community leaders furthering the accountability of public investments on the ground and the champions of public financial management reforms within government who are trying to meet these demands. Oxfam is on the lookout for promising local, national, and global initiatives that are moving active citizenship forward. We are eager to add our own voice to these initiatives and to help strengthen the global civil society movement for greater accountability of public finances.
Oxfam will work with civil society partners as these groups strengthen their ability to take action on behalf of people and their rights, enabling them to:
- Access information about where public resources are coming from and how they are currently being spent.
- Engage with public institutions (such as parliaments and executive branches) in their process for allocating resources.
- Monitor expenditures to provide feedback on the quantity and quality of the delivery of goods and services.
- Improve the governance of pro-poor public finances by strengthening the rule of law and public institutions.
Ultimately, Oxfam aims to ensure more and better public sector investments that contribute to the end of poverty.
Achievements so far
This is a newly designated area of work for Oxfam America, beginning in 2014. It is building on the successes of our campaign to make aid work and on our research and advocacy on natural resources and rights.
Learn more:"Making Aid Work" Field Reports