The fiscal pressures OECD and partner governments face today are categorically different from those that shaped the last wave of public finance reforms. Short-term demands - defense, healthcare, climate - compound deep structural strains from ageing populations, rising debt, and widening inequality. These challenges are simply too large and too complex to be resolved by any single institution acting alone. Yet the dominant model of fiscal reform over the past three decades has concentrated investment in one actor: the executive, and above all the ministry of finance.
That logic was sound for its time. Building capable, technocratic centers of fiscal management remains essential – and in many countries, unfinished business. But strong executives alone cannot deliver fiscal sustainability, accountability, and equity. The challenges ahead require the combined efforts of all fiscal actors - executives, oversight institutions, civil society and citizens working in concert. Governments and their international partners must now embrace two underutilized strategies: strengthening the entire accountability ecosystem, not just its executive core; and creating meaningful spaces for civil society and citizens to contribute to fiscal decisions. Both are preconditions for making difficult choices - and making them stick.
Underlying both strategies is a trust crisis that cannot be separated from fiscal management. New IMF analysis shows that higher social unrest is associated with lower growth and wider deficits. Distrust is not merely a political inconvenience; it is a fiscal liability. Governments that make hard fiscal choices without broad legitimacy will find those choices difficult to sustain.
The standard response to this trust deficit has been greater transparency – and transparency can significantly improve fiscal management, but it does not automatically translate into accountability or equitable outcomes. Getting from disclosure to these deeper results requires strong executive and oversight institutions, an active media, and engaged citizens – and these actors must find ways to work together rather than in silos.
Recent comparative research on fiscal reform in Brazil, Indonesia, and South Africa illuminates why these matter. All three countries developed strong formal fiscal institutions, and yet all three still experienced major fiscal crises, including episodes of state capture. The core problem in each case was a persistent gap between de jure and de facto fiscal governance: between what the law requires of oversight bodies and what those bodies can deliver. Legislatures lacked capacity and time for critical scrutiny; supreme audit institutions struggled with independence and limited public reach; civil society and citizens had few formal channels for engagement. The result was a system heavily too weighted toward executive power and chronically vulnerable when that power was abused.
But the research also reveals something more hopeful. In South Africa, for example, when state capture threatened public finances, it was a convergence of institutions - not a single institution - that turned the tide. Treasury resistance was strengthened by an outraged private sector; courts intervened where legislatures fell short; the Auditor-General worked closely with civil society; investigative journalists and think tanks assembled the evidence required for prosecutions and amplified public pressure. Institutional independence was essential, but it was the combination of that independence with strategic interdependence that made the system resilient. Strong institutions working in isolation are not enough.
This points to a striking gap in the current fiscal reform agenda. In the 2023 Open Budget Survey, citizen engagement in 35 OECD and partner countries scored an average of just 23 out of 100, only slightly higher than the global average of 15 out of 100. This is not simply a missed opportunity for democratic engagement; it is a structural weakness at precisely the moment when the contribution of citizens is most needed.
The evidence shows that citizen engagement in budgeting strengthens trust and legitimacy, and in some contexts directly improves fiscal outcomes through stronger tax compliance, lower debt risk, and better-quality expenditure. For finance ministries, it provides timely information and legitimacy for difficult decisions. For legislatures, it expands the analytical base and sharpens scrutiny. For supreme audit institutions, it generates citizen-level data that amplifies the reach and resonance of findings. Citizen voice does not substitute for institutional authority; in fact, it makes that authority more credible and effective.
Two entry points exist for expanding civil society and citizen engagement. Upstream engagement - drawing citizens into long-term fiscal choices on pensions, climate, debt, and intergenerational equity - is the more ambitious route. France, Brazil, and New Zealand are developing frontier practices here, using deliberative processes to surface public values and build support for reform. Downstream engagement - in budget execution, service delivery monitoring, and audit - is easier to design, closer to citizens' lived experience, and capable of producing visible wins that build trust; yet it remains the more neglected route. For countries with limited experience, it is a strong place to start; early wins downstream can build the foundation for more ambitious upstream engagement over time.
Three policy implications follow from the arguments above. Going forward, capable oversight institutions must be built alongside capable executive institutions, not as an afterthought. Reform strategies must invest in the connective tissue between institutions - the relationships and feedback loops that sharpen decisions and maximize outcomes. And citizen engagement must be recognized as a strategic instrument of fiscal governance; not participation for its own sake, but the marshalling of citizen knowledge, oversight, and legitimacy in service of better fiscal choices.
The preconditions for this shift are more favorable than they have ever been. Fiscal data is now quite widely available; tested models of citizen engagement exist at all income levels; and global norms are supportive. What is missing is the commitment to move these approaches from the margins to the mainstream of fiscal reform. In a moment defined by constraint and distrust, listening is itself a vital act of leadership; and leaders who embrace it will find the hard choices ahead more legitimate, and more durable.