Foreign aid is under a microscope because of its potential impact and, in some cases, the harm it has brought. Donor countries, which do not want simply to give money away; recipient countries, which need to make the most of what they have and get; and analysts, policymakers, and writers are all scrutinizing how much is spent and where it goes. But aid is only a small part of what developing country governments spend. Their own resources finance 80 percent or more of health and education spending except in the most aid-dependent countries. Lives in the Balance investigates a vital aspect of this landscape - how best to ensure that public spending, including aid money, gets to the right destination.

Charles C. Griffin is senior adviser to the vice president for Europe and Central Asia at the World Bank and former senior fellow in Global Economy and Development at Brookings Institution. David de Ferranti is president of the Results for Development Institute and a former World Bank vice president. Courtney Tolmie is a senior program officer for the Transparency and Accountability Program, a project of the Results for Development Institute. Justin Jacinto, Graeme Ramshaw, and Chinyere Bun all have conducted research for Brookings.

Preface-a story about this book	p. ix
Acknowledgments	p. xvii
The process of government accountability-an anecdote and an agenda	p. 1
A critical focus-public expenditure management	p. 3
Evolution of thinking on development and accountability	p. 4
A simple model	p. 7
A word of caution on a promising agenda	p. 15
Notes	p. 17
Major issues and tools in public expenditure management	p. 18
Countries need a strategic approach to expenditure planning	p. 18
The government's role is often too broad to be successful	p. 19
Spending tends to be inefficient and inequitable	p. 20
Decentralization of public spending creates practical problems	p. 28
Budget execution and the expenditure framework are weak	p. 33
Prospects for improving public financial management and procurement systems are mixed	p. 42
What remains to be done	p. 44
Notes	p. 47
The political dimension of public accountability	p. 51
Defining the problem	p. 51
Applying the principal-agent framework to citizens seeking results from government	p. 52
Charting the sources of accountability	p. 55
Taking advantage of the changing world political context	p. 58
Improving prospects for demand-driven accountability	p. 62
Notes	p. 65
Transparency and accountability in budgets and expenditure management	p. 66
Making budgets clear and transparent	p. 67
Analyzing performance and transparency in the budget process	p. 68
Some success stories in budget execution-but more are needed	p. 82
Notes	p. 85
Independent monitoring organizations at work	p. 87
What is an independent monitoring organization?	p. 87
Putting independent monitoring organizations on the map	p. 88
Engaging in a multiagent environment to improve transparency and accountability	p. 89
Measuring the impact of independent monitoring organizations-some questions	p. 103
Next steps for independent monitoring organizations	p. 108
Notes	p. 109
Strengthening independent monitoring organizations	p. 111
Characteristics of a small group of independent monitoring organizations	p. 112
Actions taken to strengthen independent monitoring organizations	p. 123
Lessons for donors	p. 129
Summary of lessons for improving the effectiveness of independent monitoring organizations	p. 134
Notes	p. 135
Conclusion-bringing everyone to the same page	p. 136
The story of the book	p. 136
What can donors do?	p. 138
What can independent monitoring organizations do?	p. 140
What can governments do?	p. 140
And finally, a ministry of finance perspective	p. 141
Notes	p. 145
References	p. 147
Index	p. 157
Boxes
What do we know about the links between transparency, public expenditure, and human development?	p. 5
Introducing results-based budgeting in Peru	p. 9
Improving the effectiveness of education spending in Kenya	p. 11
Better outcomes with better governance in Indonesia	p. 12
Increasing budgetary transparency in Paraguay	p. 13
Shaping the dialogue on education spending in Ghana	p. 15
Implementing food subsidy reform in Tunisia	p. 29
The Ho Chi Minh City experiment	p. 32
Aid dependence in Africa	p. 36
Objectives of a medium-term expenditure framework	p. 38
Comparing infrastructure services across 10 municipalities in Karnataka, India	p. 46
Bottom-up accountability and interest group theory	p. 58
Mobile success emerges amid the mayhem	p. 60
Access to information laws	p. 62
International standards and accountability	p. 63
Trust in nongovernmental organizations among opinion leaders	p. 64
Budget legislation reform in Turkey and Vietnam	p. 84
Evolution from advocacy to independent monitoring organization-Developing Initiatives for Social and Human Action	p. 94
Independent monitoring organizations and other expenditure analysis tools	p. 96
Independent monitoring organizations and other routes of accountability	p. 104
A legal model encourages civil society participation in Colombia	p. 106
Demonstrating the impact of independent monitoring organizations in Mexico	p. 109
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