Chapter 6: Civil society and subsidies
Private efforts to control the abuse of subsidies
Criticism of subsidy abuse is closely tied with freedom of speech. Rulers have been doling out taxpayer money to favoured benefici-aries, or wasting it on lavish lifestyles or grandiose projects, for millennia. People feel safe in questioning government expenditures only if they know they will not be put in jail, or worse, for doing so.
Domestic criticism of subsidies has traditionally come from four quarters: opposition political parties, liberal economists, non-beneficiary producers, and taxpayer organizations. Political parties and producers can be fickle in their opposition to subsidy abuse, however. By contrast, the resources and the organization of the beneficiaries of subsidies tends to grow over time. Short-term bursts of public outrage against particular subsidies are usually ineffectual; the offending programmes simply get renamed or cloaked in the latest policy fashion.
Fortunately, a new voice has been added to the chorus of subsidy sceptics: that of environmentalists. As awareness of the harm that subsidies can cause for the environment, and for sustainable development more generally, has increased, so have the number of non-governmental organizations who are taking an interest in subsidies.
Among the first to raise alarm bells was the World Resources Institute, over subsidized energy. Groups such as the Environ-mental Working Group, which has become a powerful force for the reform of agricultural subsidies in the United States, and the World Wildlife Fund, which has been highly effective in its efforts to prod governments into forging an agreement at the WTO that would sharply reduce global subsidies to fishing, have joined the fray. The following pages list some examples of current campaigns.
Since 1994, the Green Scissors Campaign, led by three non-governmental organizations, Friends of the Earth, Taxpayers for Common Sense and U.S. Public Interest Research Group, has been working with the U.S. Congress and various administrations to end environmentally harmful and wasteful spending. Working to breach party lines, the Green Scissors Campaign has helped cut more the $26 billion in environmental wasteful programs from the federal budget.
The Green Scissors Campaign highlights programs for reform in six sectors: agriculture, energy, international and military programs, public lands, transportation and water. Each year between 1999 and 2004 it has published an annual Green Scissors Report, targeting environmentally harmful and wasteful spending in the federal budget. For example, Green Scissors takes credit for helping to reform the royalties that oil companies pay the US federal government for the drilling they do on public lands, so that they better reflect market prices.
In recent years it has shifted its campaign to individual states, starting with California, Maryland and Virginia.
Farmsubsidy.org is a project coordinated by the Danish International Center for Analytical Reporting (DICAR) and EU Transparency, a non-profit organisation in the UK. Formed in 2005, it is working to obtain detailed data relating to payments and recipients of farm subsidies in every EU member state and make this data available in a way that is useful to European citizens.
Subsidies paid to farmers and others under the European Union's Common Agricultural Policy amount to over 40 billion a year, - more than 40% of European Union's entire annual budget, or around €100 a year for each EU citizen.
By publicizing data on subsidies on its website, Farmsubsidy.org aims to help European citizens become better informed and contribute to a constructive public discourse about farm subsidies in the EU. To undertake its work, the project has brought together a diverse group of journalists, analysts and campaigners who share a belief in increasing the transparency of the Common Agricultural Policy. While those involved in the project may hold their own opinions about the Common Agricultural Policy, farmsubsidy.org has no common position other than the need for greater transparency.
The network has successfully pushed governments to reveal the recipients of farm subsidies in Denmark, Latvia, The Netherlands, Slovakia, Slovenia and Sweden. But the struggle continues; some European governments have so far refused to release information on subsidy recipients, or have provided incomplete data.
International Budget Project (International)
The International Budget Project was formed within the U.S.-based Center on Budget and Policy Priorities in 1997 to nurture the growth of civil society capacity to analyze and influence government budget processes, institutions and outcomes. The IBP works closely with organizations that focus on the impact of the budget on poor and low-income people in developing countries or new democracies. The overarching aim of the project is to make budget systems more responsive to the needs of society and, accordingly, to make these systems more transparent and accountable to the public.
To achieve its aims, the IBP works with individual civil society organizations that are developing or strengthening dedicated capacity to engage in public budgeting, through training, research, and re-granting activities; encourages these civil society budget groups to work together and to learn from each other; and helps to raise the profile of budget work in the international community and to promote private, public and multilateral donor investment in civil society budget work.
One of IBP's major projects, The Open Government Initiative, has rated some 59 governments according to the transparency and accountability of their budgets. IBP also produces a range of manuals and resources to help citizens gain access to and understand their public budgets.