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Can transparency really reduce corruption in development aid? A very well known study by Reinikka and Svensson about the public funding of primary schools in Uganda suggests that the publication of budget details contributed to reducing leakage (money lost in the system) from about 80% to 20%. The system, that was actually used in Uganda was Public Expenditure Tracking Survey (PETS). A study published by the Anti-Corruption Resource Centre U4 highlights the conditions for budget tracking to reduce corruption.
PETS monitors how funds from a national treasury flow through the public service system and how much money gets lost at each administrative level until it reaches its service delivery unit, e.g. a school or a health centre. PETS have been around for some time and currently many donors are eager to promote such mechanisms for more government transparency. However, as Geir Sundet, Director at "Accountability in Tanzania" (AcT) points out, all success stories in public expenditure tracking are relatively old. Newer initiatives, often driven by the availability of funding, are far less convincing in their results than the famous example from Uganda. According to Sundet, civil society organisations (CSOs) monitoring government finances face four key challenges: difficulty to access financial data, threats and intimidation, lack of capacity to analyse financial data and failure to develop overall advocacy strategies as opposed to "just" publishing information. These challenges are also relevant when CSOs want to monitor aid projects. IATI is working on making donor data available. Open data is necessary but not sufficient. To make transparency "work" attention to security, capacity and strategy development is needed.