Presenting an evolutionary TPA framework to understand opportunities and risks
Global trends
In our interviews with thought leaders on transparency, participation and accountability (TPA), we started to see a pattern. The TPA subfields evolve and progress through three stages. And in each evolutionary stage, there are specific opportunities and risks for donors.
Stage 1: Changing norms
The first evolutionary stage is all about spreading an idea and changing global norms. This stage is, perhaps, the least complicated for a funder to support.
The diffusion of global norms starts with the emergence of a norm — such as corporates should invest and behave more responsibly. When enough countries adopt the norm, a tipping point is reached and many more countries will follow in response to international pressure.
This norm’s diffusion is primarily undertaken by international organisations, professional associations and international advocacy coalitions, who lead the efforts to author, codify and validate these global norms (Finnemore and Sikkink, 1998; Martinsson, 2011).
What does this mean for organisations in the TPA field, and for opportunities and risks? First, the ideal organisation for efforts at this first stage of TPA evolution is an international advocacy-oriented NGO with a global presence and headquartered in important political hubs.
For donors the main risk involved at this norm-changing stage is likely to be programmatic: political leaders may pay lip service to the new norm without actually having to change anything in practice; without tangible outcomes from an intervention, it may be hard to hold these leaders to their word or to demonstrate progress.
Stage 2: Changing rules
A new global norm cannot exist in an abstract form for too long. It needs to be anchored in laws, rules and behaviours. It is at this point that the newly shared and adopted norm is confronted by a country’s institutional and political context — including possible vested interests seeking to maintain the status quo.
In challenging established ways of doing things, the organisation driving forward a TPA agenda in a subfield may therefore seek out partners, for example by tapping into grassroots movements or forming coalitions with other organisations.
In other words, anchoring or institutionalising a new norm is inherently a political undertaking in a country. As such, this rule changing stage presents many more risks for an external donor or funder, and any support that they provide to a subfield at this stage must be done with open eyes.
Stage 3: Making it work in practice
Some TPA subfields are sufficiently well-established to have successfully anchored their norms in national policies or laws. What then?
The third stage in a subfield’s evolution is all about implementation: making sure that the policies and laws are upheld as intended, and can be considered the litmus test for whether T + P = A.
This stage is less about big national politics and more about accountability relationships, which can be much more localised and micro. Although this eases some of the risk for donors and funders, it also comes with fewer opportunities to demonstrate success, which an announcement of a policy reform can bring.
Legitimacy of voice here is important; it is not only what’s being said that counts but who says it. And, whereas strategic coalitions were key in the previous stage, in this stage it is all about mass participation.
The question is: where does this leave donors? What types of organisations are best situated to support TPA subfields at this stage in their evolution, and what entry points and opportunities are there for donors and funders?
Hints can be found by looking at TPA subfields that have (at least in some countries) made it to this third stage.
Changing norms: responsible investment and corporate behaviour case
At this stage of its evolution, the responsible investment and corporate behaviour subfield mostly concerns spreading the idea that taxation should be more transparent. Tax transparency is expected to reduce corporate tax avoidance, especially by multinational corporations. And with corporate tax making up a significantly larger share of government revenues in developing countries (about 16%) compared to OECD countries (about 8%), this particular norm shift has the potential to be highly pro-development.
A major actor in this TPA subfield is The B-Team, a collective of businesses and civil society leaders that came together after the 2008 global financial crisis to combat what they saw as being wrong with the corporate culture, including short-termism and shareholder primacy.
The TPA field’s focus on more responsible corporate taxation came about in response to realisations that business-as-usual approaches were not fostering trust between corporates and society. A main contributing factor to this distrust was a growing perception of widespread corporate tax avoidance and a recognition that the way in which the international tax system has been built has allowed businesses (particularly multinationals) to play the system, exploit loopholes and, as a result, minimise their tax liabilities.
This has spurred the development of a set of Responsible Tax Principles, developed by The B-Team, together with civil society organisations, investors, international institutions and nine multinational corporations. And, three years on from the publication of these Principles, we are seeing norms start to change. Especially encouraging is the fact that many large investors are beginning to see multinational corporations’ tax affairs as a source of risk and in turn are demanding more responsible corporate behaviour. As one thought leader explained:
We see more and more investors, both large and mainstream, starting to realise that tax is a key risk that needs to be built into their investment strategies. It is a reputational risk if companies are exposed as tax avoiders. It is also a financial risk because if companies have tax positions that might be subject to challenge from revenue authorities then these companies can end up with a big tax bill. We are also starting to see investors argue that tax is linked to contextual risk because it is tax, ultimately, that pays for the type of modern and functioning societies that we all aspire to and that, indeed, businesses rely upon. They need infrastructure to function and well-educated workforces, and a healthcare system that supports their staff. As a consequence, investors have started raising their expectations of companies.
The Principles are now followed by 20 multinationals and efforts are underway to grow this number and to improve the Principles’ implementation. Moreover, The B-Team — which initially had to actively convince companies to sign onto them — are now being approached by companies themselves, who see it in their own interest to sign onto the Principles.
Beyond norm setting and changing, the ambition in this subfield is to create some sort of informal advocacy coalition, formed of these multinational corporations, that would speak up for rule change — that is, to lobby governments to legally mandate that all companies to adopt some of the responsible behaviours that these corporates have voluntarily.
In time, we’ll be able to do advocacy with this group of companies and I think that will be powerful. A big reason why rule change/legislation with regard to taxation, particularly regarding tax transparency, is tricky is because businesses lobby against it. We now have a group of companies doing it voluntarily and the best part about that is that all the arguments that have been used by businesses against transparency — the like of arguments that say that transparency undermines competitive positions and are incredibly costly from an administrative perspective — are sort of disintegrating because we have shown that it can be done.
Changing rules: Natural resource governance
Transparency and citizen participation are seen as key to ensuring that wealth generated from the extractive sectors contributes to growth and poverty reduction.
For initiatives working in this TPA subfield, the theory of change is that civil society and citizens will make use of information about contracts, and government revenues and payments related to the extractive sector to hold the government accountable for their public spending decisions and for upholding integrity.
Equally, citizens will, if armed with information, use this to hold extractive companies accountable for their actions — including their contribution or lack thereof to communities affected by their presence (World Bank, 2016).
Since the early 2000s, TPA initiatives and actors, including Publish What You Pay, the Extractive Industries Transparency Initiative (EITI) and the Natural Resource Governance Institute (formerly the Revenue Watch Institute), have managed to change the norms with respect to transparency in the extractive sector.
More than 50 countries now produce publicly accessible detailed reports on the revenues flowing to the government from oil, gas and mining industries (Gaventa, 2019). This is no mean feat, especially since conversations around extractive industry governance in many countries have been taboo and highly sensitive.
TPA efforts in the area of natural resource governance began with a singular focus on transparency of revenues — what governments receive and what companies pay — with CSOs using the narrative of the ‘resource curse’: why are people in resource-rich countries so poor?
Today, this subfield covers the entire extractives decision chain, starting from the decisions to exploit, contracts, legislation, revenue collection management systems and sustainable development. More recently, the EITI has also started looking at things beyond the direct focus of extractive governance, including issues of gender equality and energy transition.
Having achieved good results in changing norms relating to TPA in the extractive sector, in many countries this subfield has advanced to initiating policy, institutional and legal reforms.
This second rule-changing stage has, however, been tricky. Not only does the extractives sector have a powerful business lobby that would make it difficult to push through any changes that might be deemed disadvantageous to extractives corporations, but the government itself may also have strong reasons to resist reform.
In fact, control over the resource sector is considered one of the most politically valuable assets available, especially in poorer nations (Smith and Rosenblum, 2011). As one thought leader explained:
One constraint in this field that needs to be considered is that governance of the extractive sector cannot be divorced from the general state of democracy. In some African countries, leaders have been in office for decades as a direct result of being able to use the extractive sector for political purposes. Thus, any change to this sector is likely to be difficult politically, particularly in Africa since the very survival of many African regimes boils down to their direct involvement in the extractive industries.
This political sensitivity has resulted in a certain level of ‘window-dressing’, with transparency laws being drafted and enacted but not ratified, applied or enforced (resulting in so-called implementation gaps, as discussed in section 2 of this report). Some governments have signed onto the EITI just to gain popularity among citizens and donors (Sovacool and Andrews, 2015). In such contexts, real progress towards TPA is naturally slow.
In this sort of political economy environment, power might be tilted towards good governance if civil society organisations are able to form large coalitions and mobilise a critical mass of people and institutions in support of the cause.
As for donors, the political nature of efforts at this second stage should make risk-averse donors tread carefully. Those looking to provide support to subfields at this stage in their evolution should put significant effort into understanding the political economy of these subfields in the countries they support.
Recent research published by the International Budget Partnership on the politics of tax reform (Lakin, 2020) is a good step in the right direction that could be undertaken for other TPA subfields as well, including natural resource governance.
Making it work in practice: procurement reform
Procurement accounts for around 50% of total government expenditure in low- and middle-income countries, making it one of the greatest corruption risks. Indeed, more than half (57%) of the 427 bribery cases concluded under the OECD Anti-Bribery Convention involved bribes paid to secure public contracts (Amin, 2017).
To remedy this problem, ensure fairness and value for money, countries have undertaken various reforms to increase transparency and openness in public procurement.
Open contracting builds on the assumption that when governments make public procurement information accessible, businesses can compete fairly to win contracts and civil society can monitor the process to identify and challenge irregularities such as corruption and state capture (Amin, 2017).
The Open Contracting Partnership has played a norm-setting role in this TPA subfield, aided by the Open Contracting Data Standard, which many countries have endorsed through the Open Government Partnership (as commitments in their national action plans). Several countries also endorsed the Standard publicly during the international Anti-Corruption Summit that was held in London in 2016.
Some procurement transparency initiatives have gained international attention, driving progress in this subfield. For example, Ukrainian initiative ProZorro, which was developed in close cooperation between government, private sector and civil society, gained international recognition when it won the World Procurement Award in 2016 (Bugay, 2016).
More recently, in 2020, a procurement transparency initiative was the winning anti-corruption project in a competition organised by the International Monetary Fund. The project — ‘Public Procurement Corruption Risks: Harnessing Big Data for Better Fiscal Growth’ — created an intelligence tool that uses big data to spot corruption risks in public procurement processes.
In some countries, there are now good legal frameworks for procurement transparency in place and governments are sharing procurement data. However, as in the budget transparency subfield, work to ensure accountability in procurement has only just begun. Using the example of Nigeria, one thought leader explained:
Due to efforts by civil society, there is now a good legal framework in Nigeria for procurement transparency. This law is well established and used across the levels of government. However, the problem is that we don’t know whether this has had any impact on actually making public procurement any more effective and less prone to corruption. What is needed now is procurement monitoring, specifically to focus on how public contracts are being implemented. These contracts may look good on paper and they can have followed the right procedure but if they are implemented in a way that is not in line with what the contract states, they will likely not have the intended results and be value for money.
Like with budget transparency and monitoring, professionalised CSOs in this space lack capacity and legitimacy to take on this task of monitoring. Instead, it needs to happen at a much more localised level.
Specialised civil society organisations working in this subfield will therefore play more of a facilitator role, which can include training community monitors, providing technology-based services (e.g., digitalising monitoring information) and translating contract-related information into local languages.
An uncertain evolution: social accountability
You think that social accountability is the government responding to pressure from civil society but what has changed in the past few years is the emergence of a cohort of governments that no longer wait for civil society’s pressure to appreciate social accountability but that proactively use it as part of their accountability system. This is an important trend to watch. (Thought leader)
Social accountability (with particular attention to health) is a form of participatory citizen engagement. It recognises that citizens are the people who are ultimately affected by healthcare decisions and are therefore the people who should affect change in health policies, health services and health provider behaviour through collective influence and action (Danhoundo et al., 2018).
Activities to advance social accountability in health can be undertaken across the budget cycle — starting with participatory budgeting, followed by health service monitoring (to ensure policy and budget are implemented as intended) and lastly engaging citizens in the auditing process through social audits and by sharing information with the supreme audit institution.
Social accountability gained traction during the third wave of democracy in the early 1990s, at a time when there was an abundance of new civic energy that pushed for democracy and democratic rights. This was also a time when many countries were drafting programmes of decentralisation for which engagement of citizens was a natural fit. In the early 2000s, the World Bank incorporated citizen participation into its accountability agenda, with the aim of facilitating citizen-led accountability of public institutions in addition to basic citizen engagement.
The question is, where did this TPA subfield go after this first stage of changing norms?
Despite its relatively long history as a theme, it might be fair to say that it has never been institutionalised like other TPA subfields (stage 2: rule change).
On the other hand, single components of this subfield — including participatory budgeting and social audit — have clearly been institutionalised in various places around the world (Mills, 2016). An interesting trend is emerging where the government itself is a driver of social accountability.
The thought leader quoted at the top of this article went on to describe how Ghana’s government is one of the countries in the forefront of this trend. Specifically, it has established a Directorate for Social Accountability within the Ministry of Local Government with the mandate to connect central government to local government and civil society. The fact that the government is investing in this role shows the value it assigns to ensuring that social accountability practice is a feature of its accountability ecosystem.
The Government of Ghana (and its line ministries), value social accountability for its ability to bridge the gaps that exist in government capacity to effectively monitor local-level service delivery and policy implementation. During an interview in September 2019, a representative of the health sector in Ghana described this as follows:
There are so many small health service providers that we do not have the capacity to monitor and supervise what is going on. That is why [social accountability projects] are so important. They provide us with a lot of information from the community level that, in turn, can inform us in our policy deliberation. It also serves to hold the government to account, looking at how the money that the government is spending on providing health services is being put to use in practice… In addition, civil society organisations (CSOs) have the ability to get honest answers from people, which is something that we in government may not always be able to get. (Mills, 2019)
Interestingly, governments that are not known for giving CSOs much room for manoeuvre in regard to other facets of TPA are among those governments that have begun to institutionalise social accountability activities.
The Government of Rwanda, for example, puts a rigid structure around civil society relationships; yet it has also developed a framework for CSO monitoring of public contracts in the agricultural sector to make government resources in agriculture more transparent and accountable. Similarly, in Uganda, amidst its general lack of liberalism, there are pockets of government that have a great commitment to social accountability and this is particularly manifested in citizen monitoring of government contracts.
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