Revitalizing the Fiscal Transparency Agenda

Posted by Min Zhu, Deputy Managing Director, IMF

The first public event of this year’s IMF-World Bank Spring Meetings was a seminar organized by the IMF’s Fiscal Affairs Department on the morning of Monday April 15th which brought together experts from governments, academia, civil society, and international organizations to discuss how to work together to revitalize the fiscal transparency agenda in the wake of the recent crisis.

The timing of last Monday’s Fiscal Transparency Seminar at the start of a week of seminars, panels, roundtables, and other events underscores the importance that the IMF attaches to the issue of fiscal transparency. The number of people who turned up to listen to and participate in the discussion highlighted the breadth and depth of public interest in this topic. The need to improve government financial disclosure was a recurring theme in many of the discussions which I attended during the past very busy week. 

For those of you who could not join us at last week’s seminar, I would like to use this article to share with you the IMF’s latest thinking on fiscal transparency and present our work program in this critical area. In particular, I want to focus on three issues:

Progress to Date

Fiscal transparency is of course not a new topic. At the IMF, our concerns go back at least to the late 1990s, when we developed the Fiscal Transparency Code and started preparing Fiscal Reports on Observance of Standards and Codes (ROSCs) that assessed country compliance with those good practices. A number of other fiscal transparency standards and evaluation tools have also been developed over the last two decades, including:

And there is no doubt that the last decade has witnessed real improvements in country compliance with these standards. Two brief examples:

Lessons of the Economic Crisis

But the economic crisis that erupted in 2008 has reminded us that the work of demystifying the finances of the state remains unfinished, even in advanced economies.

Last year, we published a policy paper entitled Fiscal Transparency, Accountability, and Risk, which triggered a lively debate at the IMF’s Executive Board and in which we reviewed the state of fiscal transparency in the wake of the economic crisis.

The paper found that, despite the significant gains made since the late 1990s, the transparency of information about the state of public finances remains inadequate, including as a basis for taking policy decisions. Three examples:

Addressing these issues requires both revisions to existing fiscal transparency standards and a more concerted effort to promote adoption of those standards:

The economic crisis has also highlighted shortcomings in the IMF’s own surveillance, and in this context, our own fiscal transparency standards and evaluation tools. In the 2012 policy paper, staff looked back at the fiscal ROSCs we had prepared for some of the countries hit hardest by the crisis. Many of them identified some of the gaps or weaknesses in reporting that contributed to problems during the crisis. However, the reports weren’t as helpful as we might have hoped in highlighting the size of reporting problems and in spurring countries to address them. For example, the 2003 ROSC on Portugal mentioned that the government’s accounts did not capture the obligations created by public-private partnerships, but it didn’t estimate how much greater the government’s debt would have been if it had included those obligations.

A Revitalized Fiscal Transparency Agenda

So what can the international community do to revitalize the effort to improve fiscal transparency in the wake of the economic crisis and prevent a resurgence of fiscal opacity? At the IMF, we are in the process of revising the fiscal transparency code and rethinking the reports that assess country practices against that Code. We will be releasing a revised draft of the code in May, and we will be seeking comments from the public on the code before we finalize it October. But the IMF is but one actor on a broad stage, and progress in fiscal transparency will depend on efforts made by many others.

Governments, and ministries of finance in particular, need to do more to reap the benefits of greater transparency both in terms of the quality of information available for policymakers and in terms of the credibility it lends those policies in the eyes of their electorate and their creditors.

But in addition to policymakers, many others have a crucial role to play, including:


A revitalized fiscal transparency effort is essential to address the problems revealed by the economic crisis, inform government’s policy response to the crisis, and guard against a resurgence of fiscal opacity in its wake. I hope that we can work together to build a more effective global architecture of transparency standards and evaluation tools, and I can promise that the IMF will play its full part in that effort and reflect it in its surveillance activities.

If you want to know more, you can find links to the video of Monday’s seminar and more information on the IMF’s work on fiscal transparency via the links below.

Links to video of Fiscal Transparency Seminar: Part 1 and Part 2

Powerpoint on new draft Fiscal Transparency Code and Assessment

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