Corruption in government systems lowers the quality of governance and services and erodes public trust. The impact of corruption is especially insidious at the local level, where citizens are closest to the government. By eroding public confidence, corruption inhibits citizens’ willingness to collaborate with government. It also lowers investor confidence and limits economic growth opportunities.

Transparency in local government, on the other hand, is fundamental for effective and efficient services, increased trust and confidence on the part of citizens, healthy economic development, and improved governance. Generally speaking, the relationship between transparency and corruption is direct and inverse: more transparency leads to less corruption.

While transparency and accountability are important characteristics of a community, the ultimate goal is to improve the lives of citizens by providing quality services and promoting local economic development in an open, competitive, and fair manner.

A vision of a transparent community
While local governments play a critical role in facilitating transparency and accountability, the term community is used to acknowledge that all stakeholders—civil society and the private sector, as well as the government itself—must be held to standards of transparency and accountability. All three must be actively engaged in identifying solutions and promoting transparency in their own organizations. All three have a responsibility to communicate openly and work together to facilitate change.

This article identifies five “critical success elements” for creating transparency and accountability. While it is widely recognized that corruption in government has an adverse affect on the quality of service delivery and on economic growth, it is also true that complacency by civil society and the private sector has the same effect. Thus, rather than targeting individuals, these critical elements focus primarily on actively engaging stakeholders in reforming institutions and systems.

There are many ways to address these “success elements,” and while the model outlined here is broadly applicable, the specific approaches and tools used must take into account a myriad of factors unique to each community, including the nature of corruption within it; its local, state, and national legislative frameworks; and its resource base.

Initiating reforms at the local level
An environment lacking in transparency, professionalism, and accountability allows corruption to thrive. Before initiating reforms, however, it is important to understand the challenges facing local governments and their communities. With decentralization, local governments often have the mandate, but not the resources, to deliver quality services to citizens. Operating within national and subregional legal and policy frameworks, local governments may also lack the autonomy and ability to undertake reforms. Clearly, any transparency initiatives at the local level have the greatest chance of succeeding when they are undertaken as part of broader, nationwide anticorruption efforts.

There are many benefits to working at the local level to promote national reforms. Local-level efforts often result in rapid, tangible improvements that may take decades to emerge at the national level. And local institutions are much more accessible and visible to most citizens, facilitating a clearer understanding of the direct link between increased transparency and improved service delivery. As part of a broader, integrated national-level reform program, local-level initiatives can be used as best practice models to inform both local and national decision making. Finally, local-level reforms tend to be more institutionally focused than those at the national level, which may involve broader legal, parliamentary, or constitutional issues.

Critical success elements
To foster the active engagement of participants and ensure long-term sustainability, it is essential to establish a vision of the transparent community that is common to all stakeholders. This vision may include improved service delivery and/or local economic development. Solid local government systems should

• Reflect agreed-upon community priorities and service provision needs
• Productively and positively involve all stakeholders with a focus on sustainable institutional and systemic reform
• Promote public awareness and open dissemination of information.

The five critical success elements are:

• Political will
• Integrity in local government systems
• Information sharing and continuous learning
• Monitoring and evaluation
• An ethic of public service.

All must be combined with active communication among and engagement of local government, civil society, and the private sector.

Political will
Political will is characterized by community leaders prepared to be held accountable to citizens for their public decision making and willing to impose consequences on those who undertake inappropriate behavior. These leaders should operate on the basis of clearly articulated, applied, and enforced rules and standards of ethical conduct, not just legal status.

Windows of opportunity exist in which to foster political will. A change in administration in a local government or a community organization may facilitate reform, particularly in the wake of a corruption scandal. Elections provide another incentive for leaders to embrace improved public service, especially if elected officials are eligible to serve more than one term.

Integrity in local government systems
For a local government to deliver quality services and promote economic development, administrative processes and procedures must be simplified and standardized across all systems and departments so as to minimize opportunities for individual discretion and corruption. Three key systems that must function in a transparent and accountable manner are human resource (HR) management, procurement, and financial management.

Human resource management: Transparency in HR management systems provides internal controls and reduces incentives and opportunities for corruption. These systems include a well-structured pay schedule that guarantees a living wage for public employees and removes the need for seeking wages outside, clear definition of roles and responsibilities, and corresponding performance measures providing a basis for evaluation. Standards of integrity and commitment must be reinforced through merit-based hiring and promotion practices.

Procurement: Procurement processes should be open and accessible to all eligible suppliers, including businesses that are small, disadvantaged, or owned by women or minorities. Procurement procedures should involve the preparation of standardized bid documents that include nondiscriminatory specifications and clear and transparent evaluation criteria. Local governments must promote competitive bidding, publish all tenders, and document the award and the decision-making process.

Because procurement systems are also open to exploitation by the private sector, local governments may consider establishing prequalification mechanisms for public bidding, with those organizations known to have offered bribes or engaged in collusive activities being barred from participation in the open process. This also opens a channel for collaboration with organizations representing the private sector. Chambers of commerce or industry may participate in efforts to educate their members about public procurement processes and establish codes of ethics for companies competing for public tenders.

Financial management: A transparent and integrated financial management system is inextricably linked to the community participatory planning process, as it formalizes citizen input into resource allocation and decision making and provides citizens with the tools to hold local governments accountable.

Financial management should include an accounting system based on internationally accepted standards, an open budgeting process, and the reporting of financial and performance-based results or progress to the community. Performance budgeting is a powerful performance management tool; it links allocated resources to measurable outcomes in order to assess progress toward meeting agreed-upon community priorities.

In addition to performance budgeting, other means of ensuring that the budgeting process is open and transparent include:

• Multiyear capital needs budgeting
• Budget education workshops for citizens
• Open workshops with councils to discuss the inextricable ties between the budget and such issues as growth management, land use, transportation, and economic development planning
• An annual “report card” issued at the end of the budget year highlighting key sections of the budget, including what was spent and not spent and why, and includes a discussion of the process for starting new fiscal-year budget planning.

Local governments also must develop internal controls and undergo regular independent audits. The information from an integrated financial management system will enable them to produce transparent, credible financial statements that can be objectively audited. This, in turn, will allow them to be assessed for creditworthiness, an important step for stimulating economic growth by attracting investment.

Information sharing
In order for all stakeholders to engage in building a transparent community, they must have free access to accurate and complete information in an accessible format. This may include local government budget reports, detailed posting of local government services and any associated fees, and publication of public tenders. In order to use this information effectively, stakeholders also must know how the public sector functions and understand the constraints that apply to budgets, procurement, and human resources, as well as the legal framework within which local government operates.

In addition to providing information, local governments must create opportunities for constructive dialogue and stakeholder input into local government decision making and resource allocation. This reinforces to residents that they have a role to play in local government and the management of their community. And all stakeholders should undertake a coordinated public awareness campaign to educate and mobilize their constituents around the issue of building transparent communities.

Monitoring and evaluation
At the onset of any transparent community initiative, an initial evaluation should be conducted to provide baseline data and identify critical issues. This evaluation may include a corruption vulnerability assessment of the local government, citizen surveys reflecting perceptions of corruption, and/or transparency assessments undertaken by civil society organizations.

As initiatives evolve, effective monitoring and evaluation on the part of all stakeholders can be used to benchmark progress, foster healthy competition among communities to encourage higher performance, and advance accountability and sustainable transparency efforts.

Monitoring and evaluation processes can be institutionalized (e.g., an independent body or an ombudsman), or they can be undertaken informally by different stakeholders using customized tools and methodologies. Any such institution must be able to handle complaints from both inside and outside the local government and must be free to act and report as an independent entity. Any actions it takes will provide the community with rapid and visible proof that corruption is not acceptable. Individuals identifying incidents of corruption must be free from direct or indirect retaliation or retribution.

An ethic of public service
While the importance of effective controls, such as legislation, cannot be overlooked, promoting transparency and accountability should become ingrained in the institutional culture of all stakeholders.

Promoting and demonstrating compliance with existing laws, such as freedom of information acts, campaign finance disclosure acts, and laws mandating asset disclosure by public officials, may help reinforce the local government’s commitment to the vision of a transparent community. So, too, may passage of additional legislation, such as local ordinances that formalize budget hearings and performance reporting.

To create sustainable institutions dedicated to the ideals of transparency and accountability, all stakeholders must play an active role in promoting integrity in public service. In local government, codes of ethics and of conduct are valuable tools for establishing shared ethical parameters and providing guidance for employees. Local governments should also provide employees with resources, including continuous education and informal discussions where they can address questions and concerns about what constitutes ethical behavior. Civil society and the private sector should have access to training resources as well to help them educate their constituents and mobilize citizens in support of transparent and accountable local governments.

Conclusion
This model of a transparency requires the engagement of all stakeholders—local government, civil society, and the private sector—in efforts to ensure sustainable institutional reforms. Using the five elements described here, stakeholders can work toward the common objectives of improved service delivery and economic growth.

Initiatives at the local level often yield rapid successes, particularly when compared with similar initiatives at the national level. This inspires stakeholder confidence, builds momentum, and increases commitment to institutional reform efforts. And these successes, in turn, can be used to inform policy dialogue at the national level and be replicated in other communities to achieve the ultimate objective: an improved quality of life for everyone.