SAIs operate in a world characterised by democratic backsliding. According to the Economist Democracy Index (EIU) 2020, only about half (49.4%) of the world's population live in a democracy of some sort, and even fewer (8.4%) reside in a “full democracy”. In the 2020 Democracy Index, 75 of the 167 countries and territories covered by the index, or 44.9%, are considered to be democracies.

During 2020, the year of the COVID-19 pandemic, the average global score in the 2020 Democracy Index fell from 5.44 in 2019 to 5.37, an all-time low. The score fell due to receding scores in regions already dominated by countries characterised as “authoritarian regimes”. Furthermore, scoring on EIU's indicator on the “functioning of government” regressed further since 2019. This indicator measures systems with checks and balances and government systems characterised by transparency and accountability.

This demise continues a trend observed over the last 12 years. The downturn is particularly visible for civil liberties. The Freedom House Index⁴ concluded that 2020 constituted the 15th consecutive year of decline in global freedom. While these downturns are seen in all thematic areas covered by the index, the most common areas of decline are functioning of government, freedom of expression and belief, and rule of law. According to Freedom House, nearly 75% of the world's population lived in a country that faced deterioration last year.

In 2020, the number of Free countries in the world reached its lowest level since the beginning of a 15-year period of global democratic decline, while the number of Not Free countries reached its highest level.

The Transparency International's Corruption Perceptions Index (CPI) 2020, also report that corruption is contributing to undermining democracy.⁵ The index, which ranks 180 countries and territories by their perceived levels of public sector corruption, finds that most countries have made little or no progress in tackling corruption in the last decade, with more than two-thirds of these scoring below 50, on a scale from 0 to 100. Research from 2019 suggests that falls in scores on the CPI index correlates with drops in levels of democracy.⁶

The last decade's deterioration of democracy is a part of trend that was intensified by last year's COVID-19 pandemic. The pandemic affected the overall democracy scores, in particular in scores for civil liberties. EIU also report that “confidence in government” was influenced by the public's perception of governments' handling of the pandemic. According to EIU Index, throughout the pandemics the population has become more critical of their governments, even when endorsing measuring to combat COVID-19.

Trends that weaken democracy, accountability and transparency also transcend to budget and oversight processes. The Public Expenditure and Financial Accountability (PEFA) Global Report 20207 concludes that governments perform strongest on budget preparation, and weakest on internal audit, external audit and scrutiny. The 2019 Open Budget Survey (OBS) notes that budget transparency remains limited, with average global scores of 45 out of 100, and that meaningful public participation in the budget process remains low with averages scores of 14 out of 100.

Countries that score well also score highly on overall transparency. Global average PEFA scores also suggest that, for fiscal transparency, countries score lowest on performance information for service delivery (PI–8) and public access to fiscal information (PI–9). Research has suggested that fiscal transparency is a determinant for budget credibility.⁸

According to the Inter-Parliamentary Union (IPU), the fundamental objectives of parliamentary oversight are to promote people's freedoms and wellbeing and to improve governance. For SAIs in many countries, the Legislature is an ally in holding government accountable for public expenditure and service delivery to citizens. IPU reports that almost all parliaments (90%) receive reports from SAIs, but a much smaller percentage (66%) report having clearly established procedures for reviewing reports.

OBS 2019 corroborates that only 34 countries have adequate legislative oversight. Legislature budgetary oversight covers budget formulation, approval, implementation, and review. Performance is overall better at budget approval than formulation, implementation, and review.