One of the key objectives of the aid transparency agenda is to provide aid information in a way that can be used by recipient governments in the budget planning cycle. Put simply, if donor spending is not transparent, recipient countries cannot accurately include aid spending in their own budgets.

Demand and need for the budget identifier

Information on aid which is aligned with country budgets is a key demand of partner countries. CABRI’s[1] 2011 Position on Aid Transparency emphasizes this in its first point under “Useful information”:

countries require… aid information (especially with regard to off-budget aid) to be classified consistently to align with the country categories and classifications used for budget allocation and accountability processes, irrespective of whether the classification is administrative, programmatic and/or economic

The budget identifier is the last big piece of the IATI Standard still to be finalized. It was originally agreed in 2011 as a placeholder and provisionally agreed in 2012 subject to piloting. A 2012 report successfully tested it against 40 country budgets, and piloting with donors has now tested it against three donor systems.

What is the budget identifier

The IATI budget identifier is being developed to bridge the remaining gap between IATI data and the budget classifications that recipient governments use.

The budget identifier will provide two new elements to IATI:

• the economic classification – which distinguishes between capital and recurrent expenditure (vital information for effective planning);
• the common code – which matches donors’ sector codes with the sector codes used by most partner countries in their budgets. This will allow automatic integration of the majority of IATI data with the administrative classifications of a recipient country budget, greatly reducing the amount of manual matching required, thus freeing up time for closer scrutiny of more complicated sectors and projects.

This builds on the existing base of IATI data, which needs to be:

• timely – so it is relevant to the annual budget cycles of different governments;
• detailed – it needs to be comprehensive and sufficiently disaggregated to allow meaningful budget planning and expenditure forecasting;
• accessible – the data needs to be in a common, open format.

There are some practical hurdles in addressing this issue, such as donor and government planning horizons and financial years being different, and donor classification of aid expenditures being different from the budget classification used by the recipient governments.

Who is involved

Through a series of country pilots, DFID, Sida, Canada’s DFATD and the International Budget Partnership have been piloting the budget identifier. This work is the last remaining big piece of the standard left to be formally agreed.

See our progress update on the IATI Budget Identifier here