Using data to fight corruption: full budget transparency in local government
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The document discusses Dr. Vuk Vuković's research on corruption and re-election in Croatian local government, highlighting how personal connections between politicians and rent-seeking firms allow corruption to thrive while maintaining electoral success. It emphasizes the importance of full budget transparency to combat corruption, detailing a web-based search engine developed for the city of Bjelovar that provides public access to government financial transactions. The goal is to enhance public accountability and citizen engagement in local governance, thereby reducing fraudulent activities and nepotism associated with political patronage.
Using data to fight corruption: full budget transparency in local government
- 1. USING DATA TO FIGHT CORRUPTION Full budget transparency in local government Dr.sc. VUK VUKOVIĆ Oraclum Intelligence Systems
- 2. My Oxford PhD research: Corruption and re-election Personal connections and mutual dependence between rent-seeking firms and the political establishment enables politicians to engage in corruption and still win elections There is a limit to corruption: when a mayor surpasses the cutoff level of 20% of corruptly allocated funds from public procurement probability of re- election declines (at 50% he or she loses the election) Vukovic (2019): Corruption and re-election: How much can politicians steal without getting punished? Journal of Comparative Economics
- 4. How do I measure corruption? I design a proxy for corruption based on fraudulent procurement contracts in Croatian local government – Cases in which firms with zero employees receive vast sums of money as the only bidder in the procurement, firms that win tenders in which the value of the procurement contract is significantly larger than their average revenues, and firms with large losses which are indirectly subsidized by the local government – Based on interviews with key stakeholders in the procurement process: special police investigators, civil sector anti-corruption watchdogs, local government officials, public sector bureaucrats, and entrepreneurs
- 5. My research: vote-buying and fiscal profligacy in Croatian local government Building small powerful coalitions of interests to keep a politician in office for long periods of time (the longer they are in power, the higher the levels of corruption) Keeping local taxes high and avoid any punishment for doing so Voters reward corruption and fiscal profligacy: higher debts and deficits, and higher spending on construction significantly increase re-election chances
- 6. My research: vote-buying and fiscal profligacy in Croatian local government
- 7. My research on local politics in Croatia “Corruption and re-election: How much can politicians steal without getting punished?”, Journal of Comparative Economics, first online, 17 September 2019 "Post-war voters as fiscal liberals: local elections, spending, and war trauma in contemporary Croatia" (with Josip Glaurdić), April 2018, East European Politics, 34(2): 173-193. "Political economy of local government in Croatia: winning coalitions, corruption and taxes", December 2017, Public Sector Economics 41(4): 387-420. – Awarded the prof.dr. Marijan Hanžeković annual prize for 2017 for best paper "Granting votes: Exposing the political bias of intergovernmental grants using the within-between specification for panel data" (with Josip Glaurdic), April 2017, Public Choice 171(1): 223–241. "Political Economy of Corruption, Clientelism, and Vote-Buying in Croatian Local Government" in Petak and Kotarski (eds.) Policy-Making at the European Periphery: The Case of Croatia, Palgrave Macmillan, 2018.
- 8. A quote from the chapter… “Local politics in Croatia is no different than any other political environment throughout the transitional world. The system is riven with endemic corruption, serving simultaneously the interests of the politicians (the patrons) and either the rent-seeking private sector, politically- connected voters, or any other vested interest (the clients). In such a system the best response function of each agent is to be connected and be part of the appropriate clique, the goal of which is to act upon common interests of all those included. The clients get their exclusive deals with the government, while the patrons get re-elected and keep holding power virtually unconstrained. “
- 9. Can we escape this trap?
- 10. WHAT MAKES A TRANSPARENT BUDGET? Full budget transparency of the local government implies that the public has a direct insight into every single transaction within the government budget (city, municipal, national). This implies access to public information such as: travel expenses and daily allowances, lunches and dinners, gross employee salaries, loans, big construction jobs, and every single procurement contract. In short, to whom, when, how much, and why has a certain amount been paid.
- 11. WHAT MAKES A TRANSPARENT BUDGET? The goal is to respect the right of the citizens to know where their money is being spent and create a positive perception that taxpayers have control over budget execution.
- 12. Most cities in Croatia have ‘open’ budgets. There is a big misunderstanding of what it means to have an open budget and what it means to have a transparent budget.TRANSPARENT VS OPEN BUDGETS EXAMPLES
- 13. What does an open budget look like? An interactive map of revenues and expenditures in the city of Bjelovar TRANSPARENT VS OPEN BUDGETS EXAMPLES https://proracun.bjelovar.hr/
- 14. What does a transparent budget look like? Example: US Federal budget ($4tn annual) Interactive search engine of all entry and exit transactions EXAMPLES TRANSPARENT VS OPEN BUDGETS https://www.usaspending.gov/#/search
- 15. TRANSPARENT VS OPEN BUDGETS What does a transparent budget look like? Example: EU Commission grants Interactive search engine of all entry and exit transactions EXAMPLES https://ec.europa.eu/budget/fts/index_en.htm
- 16. Full budgetary transparency in Croatia
- 17. SOLUTIONS CITY OF BJELOVAR – THE FIRST INTERACTIVE SEARCH ENGINE OF ALL TRANSACTIONS FROM THE LOCAL BUDGET Simple and easy solution that tracks all details of revenues and expenditures, available on a web-based app: https://transparentnost.bjelovar.hr/ BUDGET TRANSPARENCY
- 18. SOLUTIONS CITY OF BJELOVAR – THE FIRST INTERACTIVE SEARCH ENGINE OF ALL TRANSACTIONS FROM THE LOCAL BUDGET The simple search engine shows every query and allows the download option in XML, CSV, or JSON formats. BUDGET TRANSPARENCY
- 19. SOLUTIONS CITY OF BJELOVAR – THE FIRST INTERACTIVE SEARCH ENGINE OF ALL TRANSACTIONS FROM THE LOCAL BUDGET Use the advance search to filter across several categories: OIB, name (of person or company), postcode, date, amount, description, and economic or functional budget classification BUDGET TRANSPARENCY
- 20. SOLUTIONS CITY OF BJELOVAR – THE FIRST INTERACTIVE SEARCH ENGINE OF ALL TRANSACTIONS FROM THE LOCAL BUDGET Possibility of downloading the full dataset via an API key BUDGET TRANSPARENCY
- 21. Our approach 1. Design of the web-based search engine app Includes: technical solution and app design, visual representation of transactions, hosting on our server, further control of data quality 2. Consulting and analytics Analytical approach in data processing, legal study for GDPR compliance, advisory services on data transfers, workshops for local accounting officials on how to import the data dr.sc. Vuk Vuković, vuk@oraclum.co.uk dr.sc. Dejan Vinković, dejan@oraclum.co.uk BUDGET TRANSPARENCY
- 22. How does this help solve the corruption problem? 1. Prevents fraudulent allocation of public procurements, donations, subsidies, and other expenses from the budget, as well as changes of urban planning laws based on criteria of cronyism and political connections 2. Prevents any possibility of nepotism and employment through local political parties in an effort to “buy votes” 3. Prevent inefficient spending of public resources 4. Encourage the citizens towards a more active cooperation with the local government in solving problems of the local community 5. Reach an unprecedented level of budgetary transparency emulating the level of public accountability in advanced democracies