Is Governance a Luxury that Only Rich Countries Can Afford?

The Government of Rwanda has taken serious steps in fiscal transparency, which Sri Lanka lags behind

Gender and Climate Budgeting operates effectively in Rwanda at both national and district levels, while Sri Lanka has been ‘working on’ similar initiatives since 1997 with minimal progress

Rwanda also ensures transparency in their meetings, which Sri Lanka does behind closed doors

March 2025—Rwanda. There I was, fresh off the plane, ready to immerse myself in a country that had only existed in my imagination as a name on a map. While I was certain about two things—giant gorillas and good coffee—little did I know that a third experience would be waiting for me. 

And that woke me up more than a strong cup of Rwandan brew.

It wasn’t the landscape, which was stunning. It wasn’t the people, who were among the warmest people I’ve met. It was something far more unexpected: it was what I saw of Rwanda’s systems of fiscal governance. 

It’s worth mentioning that I wasn’t there on vacation. I was in Rwanda to learn about budgets. This was in the form of a national budget training workshop organised by the International Budget Partnership.  

As an economist who spends a lot of time thinking about governance, public finance, and debt sustainability, it didn’t take me too long to start drawing comparisons between Sri Lanka and Rwanda. I was in Rwanda for technical training on the nuts and bolts of national budgets, but what I saw in Rwanda gave me a deeper pause for thought: Rwanda, a country with a GDP per capita one-third that of Sri Lanka, is outperforming us in so many ways, in its fiscal transparency, accountability, and governance.

When we think about economic success, we often assume that governance improves only when a country becomes wealthy. But what if the opposite is true—that good governance is what enables countries to prosper in the first place?

Transparency Starts with Data-Rwanda Gets It Right

One of the simplest yet most transformative policies I observed in Rwanda was its approach to budget data. Rwanda publishes almost all its budget data in Excel files. This might seem quite unremarkable to an ordinary person, but anyone who’s worked on budget analysis in Sri Lanka will know that most of our data is stuck in PDFs, sometimes even in images. This means hours of transcribing data just to get started. But Rwanda? They’ve made it simple—all their budget data is stored in Excel files. No more wrestling with unreadable files. It’s ready to go.

Gender and Climate Budgeting-From Promises to Execution

Then there’s Rwanda’s gender-responsive budgeting, something Sri Lanka has been “working on” since 1997. Despite creating KPIs for gender budgeting in 2017, Verité Research found that 75% of these KPIs showed no progress. Meanwhile, Rwanda publishes an annual gender budget statement with detailed targets and progress reports, not just at the national level but also at the district level, keeping officials accountable in real time. 

It doesn’t stop there. Rwanda also has a climate budget, something Sri Lanka has yet to attempt. This budget outlines financial allocations and actions for climate change mitigation and adaptation, integrating environmental sustainability into every ministry’s planning. It’s a clear commitment to sustainability, with concrete targets and accountability—something Sri Lanka lacks in its fiscal policies.

Public Engagement and Accountability-A Missing Piece in Sri Lanka

Another striking difference in Rwanda’s approach to public participation in fiscal governance, is the strides it has made in transparency. They publish meeting minutes from discussions with civil society organisations and international multilateral agencies, making policy debates inclusive. 

This is the kind of transparency that makes policy participation and democracy meaningful. Meanwhile, Sri Lanka does all its policymaking behind closed doors, even minutes of meetings of finance ministry officials with significant vested interests, such as the Ceylon Tobacco Company, are not published despite guidelines from the Framework Convention on Tobacco Control to keep any such meetings open to public scrutiny. This, in turn, leads Sri Lanka to adopt poorly designed policies, such as those on taxes in March, favouring vested interests.

Comprehensive Information and Analysis of the Economic Path

Even on the reports that Sri Lanka does publish, I found the quality and comprehensiveness of those published in Rwanda to be higher. For example, Rwanda’s medium-term macroeconomic framework includes forecasts for growth, exchange rates, and fiscal policy over the next five years. In contrast, Sri Lanka’s medium-term fiscal framework has no growth or depreciation forecasts. Potential investors in Sri Lanka are left scrambling to determine currency depreciation expectations, as the government provides no useful medium-term forecasts. Meanwhile, those looking at Rwanda receive a five-year projection—in Excel.

When it comes to fiscal risk statements, Rwanda doesn’t just do a quick paragraph. They publish detailed reports with a baseline, worst-case, and best-case scenario analysis. Sri Lanka, in contrast, settles for a single, vague paragraph tucked away in its end-of-year report.

Rwanda also publishes up-to-date district budgets along with the national budget. In Sri Lanka, district-level data is about as easy to find as a unicorn at a pet store. So, there you have it—Rwanda, a country whose GDP is a fraction of Sri Lanka’s, has made great strides in fiscal transparency and governance, while Sri Lanka is still trying to figure out how to make our data accessible (and free it from the shackles of imaged-PDFs). 

Since the end of Rwanda’s genocide in 1994, the country has averaged an 8.6% annual growth rate (until 2019), while Sri Lanka’s growth has been 5.3% over the same period. This demonstrates that good governance can drive growth, and sustained growth can, in turn, strengthen governance. The two are closely linked: good governance is essential for long-term growth.

As I enjoyed my last cup of delicious Rwandan coffee before heading back home, I returned to my original question with which I started this reflection: when we think about economic success, we often assume that governance improves only when a country becomes wealthy. But what if the opposite is true? That good governance is what enables countries to prosper in the first place.

The writer is a Lead Economist at Verité Research. He holds a BSc degree in Economics and Management from the University of London with first-class honours.