Trends in Fiscal Transparency

Posted by Rachel Wang, Tim Irwin, and Lewis Murara[1]

What do El Salvador, Hong Kong, Russia, and the Slovak Republic have in common? They are the only economies that submit fully comprehensive government finance statistics to the IMF. That is one of the results of a recently published Working Paper, Trends in Fiscal Transparency: Evidence from a New Database of the Coverage of Fiscal Reporting.

The paper looks at one aspect of fiscal transparency: namely, the comprehensiveness of the fiscal statistics that are reported each year to the IMF’s Statistics Department for inclusion in Government Finance Statistics Yearbooks. It assesses, for example, whether countries report fiscal data for all of general government (i.e., central and subnational government combined) and whether they report a full set of financial statements, including a balance sheet and an accrual-based operating statement. From this, it derives an index of the comprehensiveness of government finance statistics illustrated below. The new database finds evidence of gradual improvement, over the last ten years, most notably in the coverage of institutions, but most countries’ reporting remains far from comprehensive.

Comprehensiveness is, of course, only one of the desirable features of fiscal data. Reliability and timeliness, for example, also matter. Unfortunately, these features are not amenable to measurement using our sources. In addition, the measures are derived solely from information submitted to the IMF and therefore ignore other publicly available information. Finally, they consider only aggregate data and not, for example, whether there are detailed breakdowns of government spending and revenue into component categories.

For more information—including data on how transparency has changed over the past decade—please see the paper.

 Index of the Comprehensiveness of Government Finance Statistics