TABLE 5: INDEX OF EFFECTIVENESS OF AAAs IN LATIN AMERICA
Index of institutional
Note: Indicators are in a scale from 0 to 1, with lower scores meaning lower performance.
Sub index of independence of audit agencies: Author compilation based the constitutions, organic budget laws, financial administration laws and organic laws of fiscal control and government auditing along 12 key variables. Sources include the AAAs’ websites; America’s Accountability and Anticorruption Project (AAA) (2005) Banco de Datos Administración Financiera y Auditoría Gubernamental América Latina y el Caribe (www.respondanet.com; 8 March 2005); Political Database of the Americas (1998) Comparative Analysis of Audit Institutions (www.georgetown.edu/pdba; 20 March 2005); as well as Santiso (2006a, 2004c), UNDP (2004), Moreno et al. (2003:126 – 127), Payne et al. (2002:228-231), and Petrei (1998). The normalized value for the sub-index ranges from 0, reflecting limited independence, to 1, signifying strong independence.
Sub-index of credibility of audit findings: Author compilation based on the IBP’s indicator of the credibility of external auditing, which is itself a sub-index of the Index of Budget Transparency (Lavielle et al. 2003). Four statements were taken into consideration to quantify this variable: (i) the external comptroller is trustworthy; (ii) the recommendations of the external comptroller have contributed to combat corruption; (iii) the external comptroller verifies that the executive complies with the physical goals of the budget programs; (iv) the external comptroller has the capacity to effectively oversee federal spending. The normalized value for the sub-index ranges from 0, reflecting low credibility, to 1, signifying high credibility.
Sub-index of timeliness of audit reports: Author compilation based on the IBP’s indicator of the quality and timeliness of fiscal information, which is itself a sub-index of the Index of Budget Transparency (Lavielle et al. 2003). The sub-index of timeliness of audit reports measures the perception of timeliness of fiscal and audit information during the control stage of the budget process. This variable measures ‘with what degree of timeliness is budget information made public during the control and oversight phase of the budget’ (Lavielle et al. 2003:21). Its normalized value ranges from 0, reflecting low perception of timeliness, to 1, signifying high timeliness.
Sub-index of enforcement powers of audit agencies: Author compilation derived from a proxy indicator measuring their formal enforcement powers of the AAAs, provided by the UNDP (2004, Table 16). It reflects the binding nature of audit decisions and AAAs’ capacity to enforce sanctions. It nevertheless measures whether external audit agencies are legally capable to enforce their decisions, not necessarily whether they do so consistently. As a result, the construction of this dummy variable is not particularly robust. The normalized value for the sub-index of enforcement ranges, from 0, indicating low enforcement capabilities, to 1, reflecting high enforcement capabilities.