A Mint.com for Government: The Future of Budget Monitoring
Once a week I receive a mildly depressing email from Mint.com. Last week was fairly typical: I spent $60 on beer and alcohol when I only budgeted for $10, I paid $8 in banking fees that I never understand, and I paid more money for internet access at hotels than for the connection at my actual house. Even though I like to think of myself as more charitable than consumerist, so far this year I have spent $500 on clothing and only $100 on micro-investments at Kiva.org. But despite all this bad news delivered to my inbox every week, Mint.com has also helped me save. A lot. First it demands that I create a budget to organize how I’d like to spend my money. Then it sends me alerts when I start spending beyond what I had budgeted for. Those alerts often convince me to not spend money when I don’t need to. There is even an entire section with tips about how to save money more effectively. For example, if I had stuck to my budgeted $10 per week for beer and had invested the other $50 in my brokerage account, then this week I would be able to make two more loans to small scale entrepreneurs on Kiva.org and treat myself and my girlfriend to a nice dinner.
Mint.com forces me to come to terms with my personal political economy by putting the relevant information right in front of my eyes. I can no longer play dumb to the fact that my purchases reflect my priorities (and at times my laziness).
Governments are badly in need of platforms like Mint.com to better understand their budgets and spending. Citizens also deserve to know how their tax payer money is used. Fortunately, in the past few years civic hackers and transparency activists have developed a number of websites and open source platforms to help us visualize and understand public spending.
Open Knowledge Foundation developed Where Does My Money Go? in 2007 to promote transparency and citizen engagement through the visualization of public spending in the United Kingdom. More recently the Open Knowledge Foundation launched OpenSpending, a global dashboard that aims to collect budget and public spending data from around the world by partnering with local transparency groups. Any organization or individual can upload budget data in a particular format and then use the platform to visualize and analyze the data. For example, we see that the London borough of Barnet spent £11 million on “commercial services,” £7 million on libraries, and £2.8 million on “Chief Executive’s Service.” So far, however, data is only available from the UK, Israel, and Italy.
Mexico & Brazil – Visualizing Budgets
Here in Mexico, the transparency organization Fundar — with the technical help of Visualización y Conocimiento — implemented some of the same OpenSpending visualizations for the Mexican 2010 and 2011 budgets on a site called “¿A Dónde Van Mis Impuestos?“, or “Where Do My Taxes Go?”.
My weekly beer consumption is a testament to the importance of distinguishing between budgets (projected spending) and accounting (actual spending), but even budget analysis gives us a better idea of how the government prioritizes its functions. For example, the Fundar website reveals that the 2011 Mexican budget has allocated roughly the same amount of spending on the economic development of the tourism industry as the energy industry. (Around US$ 400 million.)
We can also see which government entities are responsible for spending various percentages of the federal budget:
As you can see in the upper-lefthand box in the above graphic, a large chunk of the federal budget is destined to municipalities with earmarks for particular types of spending, such as education, health, and infrastructure. Fundar has created a visualization to show how much each state will receive in 2011 to fund different types of municipal spending. All the data are also available for download as a spreadsheet.
Finally, we’re able to compare the total amount of federal public spending from 2000 – 2010, with a slight breakdown of different types of spending. While it gives us a general idea of how Mexican public spending has evolved over the years, it doesn’t offer the level of granularity to compare, for example, how spending has changed in public security, farm subsidies, and subsidized college loans.
These visualizations are supplemented by a series of analytical blog posts that attempt to explain the numbers. A post published earlier this month describes how nearly US$ 50 million that was budgeted for basic medical attention was not spent. This is good news if it means that the medical needs of Mexicans are met beyond expectation, but the many citizens stuck waiting through the country’s notorious long lines at medical clinics will tell you otherwise.
As Fundar continues to add budget and spending data in coming years we can expect to see a timeline view that helps us understand how public spending evolves in particular sectors over time. For example, how much does the federal government spend on bottled water compared to water treatment plants? How do various states spend on text books compared to school computers? (Before Fundar is able to visualize state budgetary information, state governments first need to make the information accessible, as the law requires. A report this month by the UNDP found that only 21 of 32 Mexican states meet their obligations to publish budget data, including disbursements to municipalities.)
A similar website in Brazil, Para Onde Foi O Meu Dinheiro (“Where Did My Money Go?), also uses the OpenSpending visualizations developed by the Open Knowledge Foundation to give users a visual breakdown of the raw data available at the official Federal Government Transparency Portal.
Argentina – Follow the Money
Nearly all municipal governments in Argentina use the same accounting software, which includes a handy feature to automatically export the latest government purchases to the municipal website. In theory, citizens could see in real time how their local government spends taxpayer money and which government service providers receive the largest contracts. In practice, any concerned citizen would need to perform a separate search on the website for each government payment, then copy and paste the information into a spreadsheet, and finally analyze it with filters and graphs. The obstacle to greater transparency wasn’t a lack of information, but rather the burden of time. Fortunately a young programmer from Bahía Blanca in southern Argentina used free, open source tools to automate this process and share real-time visualizations of the city’s spending patterns at an independent website called Gasto Público Bahiense, or “Bahia Blanca’s Public Spending.” Citizens were able to see the relationships between the various city agencies and the companies that benefited from service contracts. For the first time residents were able to compare — in real time — the percentage of public spending that went to education, infrastructure, public transportation, etc.
Earlier this month, unfortunately, the website stopped working. The city government re-designed their own website and implemented a “captcha” restriction to enter the transparency section. Humans can still access the same information as before, but computer scripts are now prevented from collecting and analyzing the data, a major step backward for budget transparency in Argentina.
[Update: As of July 28, Gasto Público Bahiense is now back online with a new design.]
Argentine “civic hackers” were already aware that the platform depended on the whims of government agencies. They had contemplated rolling out versions of Gasto Público Bahiense for each of Argentina’s municipal governments, but with foresight they decided that the platform was too dependent on factors they could not control. Instead their plan is to work with the city governments to convince them of the virtues and advantages of open government and budget transparency.
Noam Hoffstater and Alon Padon, two transparency activists in Tel Aviv, would likely support their strategy. In 2009 they recruited volunteers to spend months converting the Tel Aviv city budget from its public PDF format to Excel so that they could analyze and visualize it online. The sad irony is that the city government creates the budget using Excel, but then exports it to PDF so that citizens have more difficulty analyzing spending patterns. The following year Hoffstater and Padon decided that it was a waste of time to develop custom software. Instead they sued the city, demanding that it publish the budget in a more accessible format. A day before the Tel Aviv District Court was scheduled to hear the case, the city announced that it would publish the 2011 budget in an open format. A few months later and the Israeli federal government also decided to publish its annual budget in an open format online, which as you’ll recall, is now available on the OpenSpending portal.
Both cases reveal the importance of pressuring governments to release budget information in accessible formats. At times this can be done through incentives (for example, offering a prize to the municipality with the best budget data on its website), but other times we must resort to lawsuits and critical media attention.
USA – From Analysis to Interaction
Compared to other parts of the world, until recently there were few platforms in the United States to visualize how the federal government spent taxpayer money despite the fact that the necessary data have been available since 1997 on the website of the Government Printing Office.
In December 2007 the US government launched the first version of USAspending.gov, which offers a number of visualizations to better understand federal spending and the procurement process. For example, in the above graph we see the total dollar amount of Department of Defense contracts from 2000 – 2010. (The data shows that the Defense Department spent more than four times as much money on contracts in 2010 as it did in 2000.)
However, according to Ellen Miller of the Sunlight Foundation, not all the data on USAspending.gov are accurate. This finding inspired the transparency group to launch Clearspending.org in September 2010. They produced this brief video to explain discrepancies on federal spending reporting:
The very same month two computer engineers from Minneapolis, Louis Garcia and Andrew Johnson, launched What We Pay For. Their motivation, they explain, is to remove the psychological barrier between citizens and their government in order to increase civic participation and ensure a more efficient democracy. The website allows users to enter their annual salary and tax filing status in order to better understand what percentage of their tax payments go to which government agencies. For example, if a single, self-employed American citizen makes US$ 45,000 per year, then in 2010 she paid $171.53 to fund federal highways, $123.61 to fund the National Institutes of Health, and $202.77 to finance the Military Retirement Fund. Overall she spent $365.48 on education and social services, and $3,368.25 on national defense and veteran benefits.
Louis Garcia and Andrew Johnson were happy with what they built, but they felt that much more could be done with the data they collected. In February — with the support of Google and Eyebeam — they launched the DataVizChallenge. The $5,000 grand prize isn’t much of an incentive for computer programmers that often make over $80,000 per year, yet more than 40 entries were submitted.
Where Did My Tax Dollars Go? took the grand prize, though personally I am fond of Every Day is Tax Day, a clock-based interface which estimates how many hours of each work day are spent on the federal government.
Increasingly sophisticated visualizations of the US budget continue to blossom. A group of young programmers and designers from Austin, Texas raised $20,000 from individual donors on the crowd-funding platform Kickstarter to develop and launch VisualBudget.org. The New York Times has developed a number of interactive visualizations including “Budget Puzzle: You Fix the Budget,” which challenges readers to make cuts in federal spending. A follow-up article summarized how over 7,000 users chose to fix the deficit.
In the United States the debate over federal spending has reached a level of urgency that threatens global markets. Meanwhile, a recent headline from the New York Times declares that “Economies in Latin America Race Ahead.” But much of Latin America’s economic growth depends on extractive industries and the export of natural resources, which can cause social conflicts and environmental harm. Economists and social scientists warn that if Latin American governments don’t re-invest profits from natural resource exports in education, innovation, and development, the region’s impressive economic growth will be short-lived.
Whether in the United States or Latin America, it is clear that governments need to start spending and investing more wisely.
The Future of Budget Monitoring
Computer programmers and graphic designers have only become interested in budget transparency over the past few years, but the International Budget Partnership has been collaborating with local NGOs to promote open budgets since 1997. How can the traditional NGO-based budget transparency movement most effectively collaborate with the new crop of online tools and platforms? This is a question I put to the nascent Latin American Network for Budget Transparency, a collective of public officials and NGOs from around the region that support greater budget transparency. After showing them the latest platforms and tools for analyzing budget data at their second annual regional meeting, some enthusiastic participants exclaimed that this is exactly what they had been looking for. Many of these organizations collect mountains of budget-related data, but the only way they communicate such information with the public is by publishing 100-page PDF reports each year that very few have the time to read. As a result, budget monitoring has mostly been an elite activity of NGOs and academics. Even journalists rarely dig deeply into public spending data, though doing so would add important context to their reporting.
The tech-savvy programmers and designers who develop online budget platforms also have a lot to learn from civil society. It’s one thing, for example, to show that the Mexican federal government spent more on government advertising than it had budgeted for, but it’s quite another to carefully explain the implications and work with legislators to craft policy that clarifies how government agencies can use taxpayer money to advertise. If civic hackers want their platforms to engender more efficient democracies, then it is key to work with civil society to craft policy that is informed by good data.
By sharing code and tactics NGOs and programmers can quickly replicate the best approaches and learn from experimentation and failure. For example, the Mexican Institute for Competitivity has developed a very handy online calculator which shows how fluctuations in oil prices affect revenue allocated for social spending. The approach of the tool is brilliant, and it would clearly benefit transparency activists in other oil producing countries such as Venezuela, Brazil, and Ecuador. But the presentation of the data is confusing and overwhelming. It could benefit from some of the basic design principles that enable Where Did My Tax Dollars Go? to clearly communicate seemingly complex information.
Automated visualizations help us better understand government budgets and public spending. However, as humans, we rely on stories that we can relate to. The UK-based Open Knowledge Foundation, which first launched Where Does My Money Go? in 2007, has discovered the importance of the narrative. Last month they were awarded a $250,000 grant by the Knight Foundation to develop Spending Stories, a collection of data-backed, journalistic narratives to explain the context and implications of public spending to the British public.
It’s the middle of the week already and I have yet to spend any money on beer. Just this morning I made a $25 loan to Marco Miguel, a carpenter in Bolivia who wants to invest in a machine that molds wood. I find it a little easier to make better choices with better information. The same should be true for governments.
From 1997 to 2003 the United States Defense Department purchased and then left unused approximately 270,000 commercial airline tickets at a total cost of $100 million. The US Government Accountability Office didn’t catch the wasted taxpayer money until 2004. Just last month the Sunlight Foundation discovered that the majority of US senators don’t e-file their taxes, at a cost of $250,000 in taxpayer money each year. They put up a simple website that clearly explains to readers how to call their senators to demand that they file their taxes electronically. Politicians, too, can make better decisions with better information and a pinch of civic participation.
You can learn more about budget transparency by following the Open Budgets Blog.