How to make budget reflect the wishes of Wanjiku

In commemoration of the fifth anniversary since inauguration of the new Constitution, I am writing a series on ways in which we could potentially tweak the basic law to better serve Wanjiku.

Last week, I discussed how to do this by reforming the electoral system. This week I focus on how to reform the budget process to deliver for Wanjiku. The current hue and cry over whether the government can afford to pay teachers raises interesting questions about where our budgeting priorities lie as a nation.

The emerging narrative is that the NYS budget is almost Sh8 billion more than the amount demanded by teachers. The same narrative reinforces what a sizeable proportion of Kenyans already believe: that the NYS is a corruption boondoggle.

The veracity of this claim aside, it is informing public opinion on whether the government really has money to pay teachers. And as I keep saying, in politics perception is everything. Seldom do the actual facts matter.

For the national government to improve its service delivery to Wanjiku, it must start acting like an entity that has a hard budget constraint. What do I mean? You see, most individuals and other private entities have what economists call a hard budget constraint. They often do not have credit lines to allow them live beyond their means. Therefore when budgeting (or not) they simply match their expenses to their income. Governments are different. In theory, governments can live forever (unless a country is conquered and absorbed by another). They can therefore obtain loans that span decades. This allows governments to live beyond their means, and have very soft budget constraints. The end result is often excessive borrowing, and glaring examples of poor budgeting.

The Katiba provides a framework for a more efficient public finance system. But several parts of the new system are failing. The Parliamentary Budget Committee has been a major disappointment. Treasury seems to be in perennial reaction mode, mostly spending money on political projects (like the NYS) rather than having a hard-nosed approach to the question of; how do we develop the country fast? And lastly, the Auditor General keeps churning out data suggesting that the government is rotten to the core. But the same data is never packaged in a manner to make it politically actionable. So right now all Wanjiku knows is that the government collects a lot of taxes, Treasury is not keen on an efficient allocation of state resources, and Parliament does not really care.

So what can be done to make the budget process more responsive to Wanjiku? First, we need to reform the Parliamentary Budget Committee. As currently constituted it is bloated and therefore unable to effectively perform its duties. The membership of the Committee should be reduced to no more than 20, 12 from the majority and eight from the minority sides. The members should in turn be the heads of departmental committees (this places the upper bound of cabinet size at 20). Each departmental committee will therefore be incentivized to elect heads that will champion their specific department’s economic interests. This move will also deprive the House leadership (and extra-parliamentary parties) of discretion in the selection of members of the all-important Budget Committee. Like the existence of the Budget Committee itself, this provision should be enshrined in the Constitution.

Second, we need to increase the number and quality of staff at the Parliamentary Budget Office (PBO). As things stand, PBO is vastly outgunned by the Treasury. The goal ought to be to minimise this gap in order to enable Bunge effectively perform its duty as custodian of the public purse. The Constitution gives Parliament the powers to move moneys around once the Treasury proposes the headline figure. This power can be used to set our spending priorities right, and tie the hands of the executive branch. To succeed in this task, Bunge needs exceptional talent.

Lastly, we need to increase vertical accountability between Wanjiku and Bunge. Now this might be the hardest thing to do. The threat of having to seek reelection appears to have no effect whatsoever on our MPs. Part of the problem is a lack of information on what is possible. Individual MPs have the ability to hide behind other members, and misbehave outside Wanjiku’s view.

It might therefore help to have a system of relaying regular information on MPs’ performance directly to constituents. This could be done through radio, or WhatsApp groups run by an entity like Mzalendo (www.mzalendo.com). The knowledge that they are always on record might incentivize our MPs to recalibrate their behavior in Bunge.

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Budget citizens