FUNDAR assesses the transparency of development loans in Mexico

What do the projects or governmental projects financed through loans from regional or international Banks consist in? Is the money being spent in a way that we can see the results, or at least the progress of implementation?

A study conducted by FUNDAR solicited information of this type, with the goal of evaluating the transparency in relation to the loans made to the Federal Government of Mexico by the International Financial Organizations, specifically the World Bank and the Inter-American Development Bank (IDB). The results show opacity: of the requests made to the federal Government, the requested information was only received in 3.4% of the cases. It was further revealed that there were flaws with the implementation of IDB and World Bank transparency policies.

Mariana González Armijo, the researcher responsible for this project, talked to us and shared, among other details, its motivations and repercussions.


What were the main preoccupations that motivated this study?

At FUNDAR, we work with many different themes surrounding budgetary transparency in general and we realized that opacities existed regarding public debt. Among this theme, there is an important branch referring to development loans made by International Financial Organizations (IFOs) –mainly World Bank and IDB – representing 30% of foreign public debt and 6.5% of Mexican GDP (and growing).

Given the importance of this theme, we made a first request for information to the governments few years ago, and we received as a reply that this information belonged to the development banks, while we knew these were public resources. That was when we decided to make an assessment and dig deeper into the characterization of these loans, and its legal framework, and to establish a methodology which would permit us to evaluate the transparency of this branch.


How did you define the scope and the methodology and the evaluation?

We decided to analyze the loans issued by the World Bank and the IDB, first because of the importance of the amount loaned by these entities to the Mexican Government, second because they have access to information policies, which would allow us to have a basis upon which we could compare the information provided by the government. Thus, we took as a sample the loans directed to the public sector (excluding those made as a donation) which were approved since the date of the approval of the respective access to information policies of the IDB and the World Bank, up to 30 of April 2013. In total, we analyzed 29 loans: 14 from the World Bank, and 15 from the IDB.

We identified, among the relevant documents for each loan (according to the legal framework), some which were not available in the corresponding banks’ databases, and it was with respect to these that we made the requests for information. Said requests were sent to the respective bank, to the Ministry of Finance and Public Debt (SHCP) and to the agency in charge of executing the loan. We made a total of 220 requests for information: 147 to the Federal Government and 45 to the Inter-American Development Bank.            

Because this is a first assessment, we did not make any appeals, though we could have in 80% of the cases.


What were your expectations when the study began and what were the main results obtained?

The first interesting and unexpected result was the existence of such a robust legal framework. Development loans are regulated in the Constitution, in the General Law of Public Debt, and in the General Law of Access to Information, among other regulations. In several articles, the process of negotiation and authorization, as well as the governmental organs responsible are very clearly established.

From the normative analysis we understood that the government prepares and delivers to the banks a series of reports, from the profile of the project up to its closing report. However, despite such information being emitted periodically, only in 3.4% of the cases was this information delivered to us by the responsible agency. In more than 50% of the cases, they sent us to the respective bank’s webpage, without even verifying if the information was available on it.

On the other hand, we were negatively surprised with the fact that the international banks did not fully comply with their own policies of access to information. In both cases, we found that not all the relevant information was available on the website. Furthermore, when soliciting the missing information, the World Bank took up to 80 working days to respond, while their maximum time limit is 20.


What was the impact of this study?

The most immediate impact was the repercussion of the assessment in the media, this has permitted the theme to be slowly but continually inserted in the public debate. In this sense, the challenge remains to be how to transmit a theme that is so technical in such a way that it is understood and captures citizens’ interests, that it be seen as something related to them.

Another impact regards the decision makers. One of our proposals, to introduce an article in the Revenue Law for 2016 to disaggregate the information referring to development loans, was picked up for the first time by a Deputy. While it did not pass, we believe this is a first step towards our wider strategy and we hope that it can be approved, further on. On the other hand, we initiated conversations with the SHCP in order to generate a microsite in its online transparency portal with the quantitative and qualitative information available.


In our audit section, you can find a summary of the diagnosis. You can also click here to see the complete document.