The Open Budget Index (OBI) as a Comparative Statistical Tool

ArticleinJournal of Comparative Policy Analysis 15(1):87-101 · January 2013with 807 Reads 
How we measure 'reads'
A 'read' is counted each time someone views a publication summary (such as the title, abstract, and list of authors), clicks on a figure, or views or downloads the full-text. Learn more
Cite this publication
Abstract
Abstract Since 2006 the International Budget Partnership (IBP) has conducted a biannual Open Budget Survey (OBS) to assess national budgets of around 90 countries in terms of their fiscal transparency. Responses from 92 of the 123 questions that constitute the Survey are used to construct the Open Budget Index (OBI) which ranks countries according to their budget openness. This article describes the OBS methodology in detail and explains how the Open Budget Index is constructed.

Do you want to read the rest of this article?

Request Full-text Paper PDF
  • ... The positive trend towards fiscal transparency has pervasively spread across entire countries (Seifert, Carlitz, & Mondo, 2013). Based on the guidelines for fiscal transparency provided by prominent international organizationssuch as the International Monetary Fund (IMF), the Organization for Economic Co-operation and Development (OECD), the International Organization of Supreme Audit Institutions (INTOSAI), and the World Bankthe International Budget Partnership (IBP) documented that more than 22% of around 100 central governments surveyed had sufficient fiscal transparency (IBP, 2015). ...
    ... The IBP developed the Open Budget Index (OBI) based on PFM best practices of IMF, OECD, and World Bank prescriptions. It indicates the availability, timeliness, and comprehensiveness of (a) formulation of the budget by the executive, (b) budget enactment by the legislative, (c) budget execution by the executive, and (d) year-end reports (Seifert et al., 2013 Specifically, the OBI elaborates the existing budgeting process, such as budget preparation (executive budget proposal, pre-budget statement, citizens' budget), and enacts the budget, in-year reports, mid-year review, and year-end report until the audit report. The elements of the budget document contain fiscal information. ...
    ... Budget documents should disclose revenue compositions, expenditure dimensions, financing activities, fiscal risk analysis, extra-budget, off-budget, and intergovernmental funds, investment in associations, and financial and non-financial asset. All documents in each stage must be coherently presented between budgets and their actual variances analysed, and the reporting quality should be assured (Seifert et al., 2013). ...
    Article
    This study aims to explore government accrual-based IPSAS implementation level measurements and to test the measures associated with central government fiscal transparency. Performing content analysis and Confirmatory Factor Analysis (CFA) on a sample covering 77 countries from 2008 to 2015, measurement indicates the relative importance and significance of financial performance statements and accrual accounting policies, such as non-exchanged and exchanged transactions as accrual level constructors. Conducting panel data regression, we find that accrual level scores meet the requirements of the external validity test, as indicated by their positive association with the International Budget Initiative’s (IBP) fiscal transparency index. The evidence suggests that central governments should strategically implement accrual-based IPSAS. Accrual practices (implicitly or explicitly) based on IPSAS strengthen fiscal transparency when it prioritises developing accrual accounting policies substantially rather than accrual commitment and the completeness of reports.
  • ... In relation to the OBI, de Renzio and Masud (2011) point out that the index is effective and governments around the world are increasingly interested in their scores, and civil society groups had been using their recommendations to pressure governments to improve the transparency related to budgetary decisions. According to Seifert et al. (2013), the OBI contributes in an exclusive and independent manner, providing objective data regarding the transparency related to budgetary procedures of a number of countries over time. For Seifert et al. (2013), this independent process guarantees the reliability of the data. ...
    ... According to Seifert et al. (2013), the OBI contributes in an exclusive and independent manner, providing objective data regarding the transparency related to budgetary procedures of a number of countries over time. For Seifert et al. (2013), this independent process guarantees the reliability of the data. Therefore, as a proxy for fiscal transparency (named TRANSP), we use the OBI. ...
    Article
    Full-text available
    This study analyzes the effects of fiscal transparency and legal aspects on the perception of the control on corruption. Our argument is that fiscal transparency can reduce information asymmetry and, thus, the existing discretionary power of public officials, politicians and legislators. In addition, we also argue that fiscal transparency and a strong legal system might be able to increase the expected cost of corruption and, consequently, the deterrent effect against corruption, once it increases the probability of corrupt officials, politicians and legislators being caught, representing important aspects able to increase the perception of the control on corruption. Based on a sample of 82 countries for the period 2006–2014 and using panel data methodology, our study provides important practical implications in terms of anti-corruption policy guidelines since the results indicate that more transparent fiscal practices bring beneficial effects in terms of corruption perception. Moreover, the findings indicate that the effect of rule of law on the perception of the control on corruption becomes greater as fiscal transparency increases (the marginal effect of rule of law on this perception increases with fiscal transparency improvements). The findings also reveal that a strong legal system (represented by a strong rule of law, integrity of the legal system and impartial and effective courts that guarantee law enforcement) increases the perception of the control on corruption.
  • ... The Open Budget Index (OBI) is a composite transparency score created by averaging each country's responses to 92 of the 123 questions included in the Survey (Seifert, Carlitz, & Mondo, 2013). A substantial amount of research has used the OBI in assessing correlates of national level transparency scores (see e.g., Ross, 2011;Wehner & De Renzio, 2013). ...
    ... A substantial amount of research has used the OBI in assessing correlates of national level transparency scores (see e.g., Ross, 2011;Wehner & De Renzio, 2013). However, as Seifert et al. (2013) point out, the Survey can also be broken down into indexes that reflect the interests of particular research studies. Such has been the case with research that has used items assessing whether particular budget documents are disclosed as a measure of transparency practices (see, e.g., Rios et al., 2013;Sayogo & Harrison, 2013). ...
  • ... 5 In relation to the OBI, de Renzio and Masud (2011) point out that the index is effective and governments around the world are increasingly interested in their scores, and that civil society groups had been using their recommendations to pressure governments to improve the transparency related to budgetary decisions. According to Seifert et al. (2013), the OBI contributes in an exclusive and independent manner, providing objective data regarding the transparency related to budgetary procedures of a number of countries over time. This independent process guarantees the reliability of the presented data ( Seifert et al. 2013). ...
    ... According to Seifert et al. (2013), the OBI contributes in an exclusive and independent manner, providing objective data regarding the transparency related to budgetary procedures of a number of countries over time. This independent process guarantees the reliability of the presented data ( Seifert et al. 2013). The OBI ranges from 0 to 100, where 100 is the maximum of fiscal transparency, and zero represents total opacity. ...
    Article
    The global financial crisis and the debt crisis of the EU countries revealed serious weaknesses in fiscal reporting. As a consequence, uncertainties regarding the real situation of the public accounts of the countries raised doubts in relation to the effectiveness of government policies. Since then, countries are undertaking reforms in order to improve fiscal transparency. This paper analyzes whether countries are making efforts to enhance fiscal transparency, and whether fiscal transparency affects government effectiveness and government spending efficiency. We consider two channels through which this effect occurs. The first channel is indirect and it works through public debt. The second channel is the direct effect that transparency has on government effectiveness and government spending efficiency once transparency enhances accountability and thus the task of resource allocation. We use a sample of 82 countries (68 developing and 14 developed) for the period 2006–2014, and panel data analysis. Comparing the scores of fiscal transparency between 2006 and 2014, we observe that approximately 80 per cent of the countries made efforts to improve fiscal transparency. The results suggest fiscal transparency is important to reduce public debt and to improve government effectiveness and government spending efficiency.
  • ... 6 In relation to the OBI, de Renzio and Masud (2011) point out that the index is effective and governments around the world are increasingly interested in their scores, and that civil society groups had been using their recommendations to pressure governments to improve the transparency related to budgetary decisions. According to Seifert et al. (2013), the OBI contributes in an exclusive and independent manner, providing objective data regarding the transparency related to budgetary procedures of a number of countries over time. This independent process guarantees the reliability of the presented data (Seifert et al. 2013). ...
    ... According to Seifert et al. (2013), the OBI contributes in an exclusive and independent manner, providing objective data regarding the transparency related to budgetary procedures of a number of countries over time. This independent process guarantees the reliability of the presented data (Seifert et al. 2013). The OBI ranges from 0 to 100, where 100 is the maximum of fiscal transparency, and zero represents total opacity. ...
    Conference Paper
    Full-text available
    The global financial crisis and the debt crisis of the EU countries revealed serious weaknesses in fiscal reporting. As a consequence, uncertainties regarding the real situation of the public accounts of the countries raised doubts in relation to the effectiveness of government policies. Since then, countries are undertaking reforms in order to improve fiscal transparency. The present paper analyzes whether countries are making efforts to enhance fiscal transparency, and whether fiscal transparency affects government effectiveness as well as government spending efficiency. We consider two channels through which this effect happens. The first channel is indirect and it works through public debt. The second channel is the direct effect that transparency has on government effectiveness once transparency enhances accountability and thus the task of resource allocation. We use a sample of 82 countries (68 developing and 14 developed) for the period 2006-2014, and panel data analysis. Comparing the scores of fiscal transparency between 2006 and 2014, we observe that approximately 80 per cent of the countries made efforts to improve fiscal transparency. The results suggest fiscal transparency is important to improve government effectiveness and government spending efficiency.
  • ... Transparent public institutions are characterised by economic growth, democratic consolidation, poverty reduction, manageable debt practices, and improved governance (Alt et al., 2006;Benito & Bastida, 2009). Therefore, budget transparency can facilitate government accountability, improving the quality of governance and more generally of democracy (Seifert, Carlitz, & Mondo, 2013;Harrison & Sayogo, 2014). Governments promoting budget transparency tend to be more democratic, have free and fair elections, and encourage partisan competitions (Harrison & Sayogo, 2014;Wehner & de Renzio, 2013). ...
    Chapter
    The chapter seeks to contribute to the literature on determinants of local government election by adopting a different perspective focused on the effects of financial indicators on the elections of mayors. Using the agency and the public choice theory, this study implements a model where specific financial indicators—whose selection takes into account the increased autonomy and responsibility of local politicians—have been included to document their effect on mayoral re-election. Focusing on the Italian context, the chapter examines a sample of 129 municipalities during the period 2008-2014, where several elections were held. By using different estimators, findings indicate that the re-election of mayors is affected by the level of indebtedness and the current equilibrium. In addition, current spending is better valued by citizens/voters than capital expenditure, which increases the probability of being re-elected.
  • ... ITPIs exert important influence as criteria in aid (for relevant work on aid see, Bermeo, 2011;Ghosh & Kharas, 2011;Knack et al., 2011;Larsen & Mamosso, 2014), investment, and as independent and dependent variables in scholarly production (for examples of the latter, see Berliner, 2014;Bermeo, 2011;Michener, 2015b;Seifert, Carlitz, & Mondo, 2013). As a cross-cutting indicator of organizational fitness, transparency is used ubiquitously in evaluations of all types -formal and informal -meaning that ITPIs probably exert more influence than can be measured. ...
    Article
    International transparency policy indexes (ITPIs) help determine billions in investment and aid, influence “authoritative” scholarship, and shape policy choices. Are ITPIs valid yardsticks of transparency, or do they encourage dissimulation? Most scholarship on index-based evaluations focuses on “concept indexes” (e.g., governance) from quantitative approaches. This paper presents qualitative insights about ITPIs in specific and “policy indexes” in general, analyzing three measurement-related pitfalls and proposing countermeasures. Most significantly, it shows how indexes presuppose substitutability while policies contain nonsubstitutable ‘necessary’ policy provisions. This dilemma of “ontological compatibility” means that policies can rank favorably on indexes notwithstanding the absence of lynchpin policy provisions.
  • ... Several measures of government transparency have indeed sought to narrow the scope of indicators and focus on the actual release and flow of data and information from government officials ( [16,40,41]). Data availability indicators refer to surveys of government information published (primarily) electronically, or data reported to international organizations (see also [3]). Most notable among these is perhaps the index developed by Hollyer et al. [16] which maps the extent to which states comply with requests from the World Bank to release indicators that together make up the World Development Indicator (WDIs). ...
    Article
    Full-text available
    Policymakers and researchers often cite the importance of government transparency for strengthening accountability, reducing corruption, and enhancing good governance. Yet despite the prevalence of such claims, definitional precision is lacking. As a consequence, approaches to measurement have often cast a wide net, in many cases tapping into the capacity of government institutions more generally, resulting in empirical findings that are ambiguous in terms of interpretation. This paper argues that the operationalization and measure of government transparency should be tailored to two main parameters of the phenomenon under investigation: the principals and purpose of the information. We advance a new measure of government transparency argued to be more suitable for the study of the role of government transparency with respect to probity. The data derive from a survey of public administration experts in 102 countries carried out by the Quality of Government Institute and allow for a more reliable analysis of the effects of transparency on reducing corruption, and the analyses suggest that an association indeed exists.
  • ... The OBI is built starting from an independent and comparative survey of countries' national budgetary processes, compiled by a wide network of IBP and national researchers through desk research and interviews with national government officials and supervised by peer reviewers. The survey focuses on countries' compliance with widely recognized international guidelines or declarations of multilateral institutions including the IMF, OECD, and International Organization of Supreme Audit Institutions (Seifert, Carlitz, and Mondo 2013). The OBI has been calculated five times thus far -biannually from 2006 to 2012 and then again in 2015 -and the number of countries covered has increased over time, from 59 in the first edition to 102 in the latter. ...
    Article
    Fiscal transparency is considered an essential feature of public financial management and is supposed to provide beneficial governance effects such as reducing corruption. This paper adds to recent empirical literature that specifically investigates the impact of fiscal information disclosure on corruption. Country-level evidence provided by previous studies is exclusively based on cross-sectional econometric analyses, while the present contribution relies on a wide-ranging, country-level dataset of 116 countries that cover a ten-year time span (2003–2012), and on dynamic panel data estimates. These innovations in terms of data and methods provide new, robust empirical support to the claim that fiscal transparency is negatively correlated with corruption.
  • ... research started with the original sample of 101 countries that are included in the International Budget Partnership(IBP 2015), which carried out the Open Budget Survey to determine the Open Budget Index. The survey uses 95 questions referring to the timeliness and comprehensiveness of publicly available budget information in the eight key budget documents(Seifert et al. 2013). The survey questionnaire draws on the standards issued by the International Monetary Fund (IMF), on OECD guidelines and on additional sources such as Auditing Precepts published by the International Organization of Supreme Audit Institutions. ...
    Article
    Full-text available
    The paper analyzes whether transparency, the quality of budgetary management and the strength of audit institutions have a positive effect on corruption and can increase trust in governments from a comparative analysis. The study is based on panel data from 75 countries worldwide about transparency and corruption published by international organizations, testing a relation between the transparency and accountability of a country and corruption and trust in governments has been tested. The results show that transparency, the quality of budgetary management and audit systems positively affect the perception of corruption. Consequently, politicians must consider enhancing the elaboration and disclosing of accounting information as a tool to improve public management and reduce the perception of corruption. However, it is not found that transparency or strengthening the Supreme Audit Institutions increases the level of confidence.
  • ... Likewise, Sudan was classified with 0 points and occupied the bottom position along with Sao Tome, Democratic Republic of Congo and Equatorial Guinea in the Seifert, Carlitz, & Mondo (2013) conducted with Sudan and 84 other countries, The factors which contributed to this state of corruption and abuse of public funds in Sudan included the lack of efficient governance and control in managing public financial system, absence of transparency in government's performance, lack of law enforcement and regulatory bodies, lack of checks and balances on procurement of funds, untrained and unskilled staff to keep accounts and maintain audits and above all poor wages of public sector workers (El-Nafabi, 2010;Logune, 2006). As pointed out by Lawal (2007) however, once corruption becomes entrenched in each society, its negative effects continue to increase. ...
    Article
    Full-text available
    Logically censorship or self-censorship is always detrimental to any media whose ambition it is to be free and independent. self-censorship though exists in law, but when it is practiced it undermines the freedom of the press as the “fourth estate”. The first role of a watch-dog or “fourth estate” is severely restrained by self-censorship, lack of resources and political parties intervening in journalists’ work. It is further undermined by the economic dependence on business and political parties. Though Sudan has many local and national newspapers, still not enough attention has been paid to issues of censorship impact on corruption. In view of this, this study examines how censorship affects Sudanese newspapers’ practice fourth estate role especially in the fight against corruption. To achieve this, the study adequately probes into how ownership pattern affects Sudanese newspaper to perform their watchdog role in Sudan. Based on the analysis therefore, it was discovered that censor hip which is the outcome of ownership influence affects Sudanese press negatively in the “fourth estate” role more importantly restrained its fight against corruption. Therefore, for Sudanese newspaper to contribute usefully to fight corruption and promote good governance efforts should be intensified to free Sudan media from the control of politicians and government. Keywords: Censorship, Ownership, Fourth Estate, Newspaper, Corruption, Sudanese
  • ... In choosing South Africa, therefore, the test of the aforementioned objectives will lie in measuring the degree of budget transparency that has been achieved in South Africa through tools such as its citizens budget. This will be conducted using cross-country peer-reviewed data from the International Budget Partnership (IBP, 2015b), which has been used by various academics to assess the evolution of national and international budget transparency programs (see for example Seifert, Carlitz, and Mondo, 2013;Chohan and Jacobs, 2016). ...
  • ... Overall, however, we believe this questionnaire is a good source of data on budget disclosure that captures the main characteristics of budget disclosure in our model. This dataset has been recognized by the literature as a reliable research source (de Renzio and Masud 2011;Seifert et al. 2013;Wehner and de Renzio 2013). ...
    Article
    This paper attempts to identify the socio-economic, political and institutional determinants of central government budget disclosure, both through the Internet and other media. It builds budget disclosure indicators based on the International Budget Partnership questionnaire for 93 countries. The findings show that Internet penetration, education level, relative central government size, budget surplus, administrative culture, political competition and incumbents’ ideology determine central governments’ budget disclosure. A cluster analysis finds three groups of countries: high, medium and low level of budget disclosure.
  • Article
    The existing literature postulates that budget openness often improves at critical moments of democratization. Hong Kong, Macao and Taiwan, which are transitional regimes currently experiencing different regime trajectories, should be ideal places to test the validity of this theory. By examining whether and how open budget reforms in Hong Kong, Macao and Taiwan are related to their regime trajectories through historical-comparative case studies, this article aims to make an original contribution to the comparative budgeting literature by providing a new and unique set of Open Budget Survey-based case studies in the context of East Asian transitional regimes.
  • Article
    The investigation of the determinants of fiscal transparency has been mostly performed on cross-sectional data, and it has produced mixed results. This paper improves the existing literature by performing a static and dynamic panel analysis of the effect of a set of political variables on the level of fiscal transparency in 36 democratic countries. By using a recent measure of fiscal transparency based on IMF Governance Finance Statistics and available from 2003 to 2013, we find strong links between political environments and the dynamics of fiscal disclosure. Our results show that government control over the legislature exerts some negative effect on fiscal transparency, while the effect of government ideology is shown to be at least fragile. Furthermore we find that legislature fragmentation exerts a negative effect on fiscal transparency, which suggests that competition within the parliaments does not increase fiscal transparency, but instead it induces governments to react by reducing accessibility to information.
  • Conference Paper
    Full-text available
    Methods and technologies of open data have emerged an important component of the Information Society and e-governance development worldwide. However, the measurement and evaluation of socio-economic and political effects of open data, including the impact on government transparency, still remain debatable. The paper presents the preliminary results of a review of such through the lens of Open budget initiatives implemented in Russia.
  • Article
    How does governments’ ability to gain financing from oil income affect their behavior? Numerous studies have explored the effects of oil wealth on countries’ political characteristics, especially the level of democracy. Oil has also been associated with a significant electoral incumbency advantage across different political regimes. However, the relationship between oil wealth and incumbent governments’ behavior, including election‐year fiscal manipulation, has been studied to a lesser extent. This article argues that higher oil rents increase election‐year public spending, as they provide national governments both with direct revenue as well as increased financing opportunities. However, fiscal transparency mitigates this effect. Consequently, oil‐induced electoral budget cycles decrease as fiscal transparency increases. Using a high‐quality measure of fiscal transparency in a panel of countries, robust evidence in favor of this argument is found. The findings suggest that many of the previous results on the political effects of oil, including incumbency advantage, might run through an election‐year spending channel, and that fiscal institutions might matter substantially for the political effects of oil. This article is protected by copyright. All rights reserved
  • Article
    Purpose Making citizens able to monitor and evaluate public spending activities is a fundamental issue in public financial management literature. The purpose of this paper is to analyze whether fiscal transparency, measured by the Open Budget Index, has an effect on public spending performance, measured by the World Economic Forum’s Global Competitiveness Report data. Design/methodology/approach Research methods rely on random-effects panel regression models on a country-level panel data set of 82 world countries observed in the 2008–2015 time interval. Findings Results show that the potential positive effects of fiscal transparency are mediated by the level of democracy of the country. In detail, in democratic countries, a higher degree of disclosure of fiscal information is correlated with a higher efficiency of government spending while, in non-democratic countries, fiscal transparency does not seem to provide any effect. Social implications The results suggest that fiscal transparency can be a powerful device where politicians can be held accountable for their actions, while it could fail to provide positive results where a strong and effective vertical accountability is missing. Originality/value The novelty of the paper is twofold. First, it provides new additional evidence about the positive effect that fiscal transparency has on public spending efficiency by advancing previous research on this topic (Porumbescu, 2017; Montes et al. , 2019). Second, the paper investigates conceptually and empirically how the positive effect on public spending efficiency determined by fiscal transparency depends on the degree of democracy present in the institutional environment in which fiscal information disclosure is implemented.
  • Article
    Global country rankings have faced criticism for their normative character and methodology. Because of this, there have been attempts at creating so-called actionable governance indicators that provide more detailed and reform-oriented measurements of governance. This article analyzes the policy process behind the rise of actionable governance indicators and related changes in the production and use of indicators. It argues that the evolution of measurements can be understood as a process of field structuration, where various actors are entering the field of global governance assessments with rival indicator sets. But as the new actors tend to reproduce ideas and practices that already exist in the field, there are rather limited methodological improvements in the indices. However, the new actionable indicators are likely to become more influential policy instruments than rankings. This can be seen as an unintended outcome of the critique of ranking that has sparked the development of actionability. Measurements of transparency are used for analyzing the changes in the field of global governance indicators.
  • Article
    Interest in the political and economic consequences of transparency has grown significantly over the past decade. The literature, however, has been hampered by methodological issues over what actually constitutes ‘transparency’, as well as the lack of a quantitative indicator that has substantial coverage across countries, and time. This paper uses a relatively new methodology, similar to Transparency International’s Corruption Perceptions Index, to construct composite indicators of what we call Informational Transparency, and Accountability. These new indicators use data from 29 sources, with scores being derived annually between 1980 and 2010 across more than 190 countries.
  • Resource dependence and budget transparency. Revenue Watch Institute Brief
    • A Heuty
    • R Carlitz
    Heuty, A. and Carlitz, R., 2009, Resource dependence and budget transparency. Revenue Watch Institute Brief (February 2009), pp. 1–5.
  • Code of Good Practices on Fiscal Transparency
    • International Monetary
    International Monetary Fund (IMF), 2007b, Code of Good Practices on Fiscal Transparency. Available at http://www.imf.org/external/np/fad/trans/code.htm. (Accessed November 28, 2012.) International Budget Partnership, undated, Open Budget Index 2008 – Methodology (
  • Transparenting transparency'. Initial empirics and policy applications. Preliminary draft discussion paper presented at the IMF conference on transparency and integrity, World Bank
    • A Bellver
    • D Kaufmann
    • D C E Allen
    • R Zanna
    • L.-F Prakash
    • T Kvintradze
    • E Lledo
    • V Yackovlev
    • I Gollwitzer
    Bellver, A. and Kaufmann, D., 2005, 'Transparenting transparency'. Initial empirics and policy applications. Preliminary draft discussion paper presented at the IMF conference on transparency and integrity, World Bank, Washington, D.C., July 6–7, 2005. Dabla-Norris, E., Allen, R., Zanna, L.-F., Prakash, T., Kvintradze, E., Lledo, V., Yackovlev, I. and Gollwitzer, S., 2010, Budget institutions and fiscal performance in low-income countries. IMF Working Papers 10/80: 1–56.
  • Downloaded by [Northeastern University] at 12:33 06
    • J Seifert
    98 J. Seifert et al. Downloaded by [Northeastern University] at 12:33 06 October 2014
  • The 58 questions related to the Executive's Budget Proposal had an average score of 35 in 2008 Budget institutions and fiscal performance in Latin America
    • A Alesina
    • R Hausmann
    • R Hommes
    • E Stein
    The 58 questions related to the Executive's Budget Proposal had an average score of 35 in 2008. References Alesina, A., Hausmann, R., Hommes, R. and Stein, E., 1999, Budget institutions and fiscal performance in Latin America. Journal of Development Economics, 59(2), pp. 253–273.
  • Is the Open Budget Index an accurate measure of budget transparency? A research note investigating alternative aggregation methods
    • De Renzio
    • P Castro
    De Renzio, P. and Castro, M., 2011, Is the Open Budget Index an accurate measure of budget transparency? A research note investigating alternative aggregation methods. Unpublished manuscript.
  • Open Government Declaration
    • See
    See e.g. Open Government Declaration, http://www.opengovpartnership.org/open-government-declaration (accessed November 9, 2011).
  • Do more transparent governments govern better? World Bank Policy Research Working Paper
    • R Islam
    Islam, R., 2003, Do more transparent governments govern better? World Bank Policy Research Working Paper. Washington DC: IMF.
  • Article
    Full-text available
    Are democracies more transparent than other types of political regimes? The answer to this question is often assumed to be yes. Yet the logic and empirical implications behind this assertion have not been rigorously tested. In a larger project, we investigate theoretically the willingness of policymakers to provide credible announcements of intended inflation and unemployment rates, and show that the availability (or absence) of that data is correlated with regime type, even after controlling for level of development, participation in IMF programs, and country-specific effects. This paper is an empirical extension of the general project looking specifically at Latin America. Focusing on a single region at a time allows us to understand the pattern of data dissemination in greater detail and learn about specific cases. The investigation supports the finding of the larger project.
  • Article
    We investigate the effects of fiscal transparency and political polarization on the prevalence of electoral cycles in fiscal balance. While some recent political economy literature on electoral cycles identifies such cycles mainly in weak and recent democracies, in contrast we show, conditioning on a new index of institutional fiscal transparency, that electoral cycles in fiscal balance are a feature of many advanced industrialized economies. Using a sample of 19 OECD countries in the 1990s, we identify a persistent pattern of electoral cycles in low(er) transparency countries, while no such cycles can be observed in high(er) transparency countries. Furthermore, we find, in accordance with recent theory, that electoral cycles are larger in politically more polarized countries.
  • Article
    From an international perspective, a relationship between public sector transparency and better economic and social outcomes is something that is increasingly acknowledged. In terms of lack of transparency in budget reports both bureaucratic model and fiscal illusion theory have been argued as explanations. To assess transparency in budget practices we analyse to what extent a sample of 41 countries are meeting OECD requirements according to its Best Practices for Budget Transparency document (OBP). We find an average OBP fulfilment of 56.4 per cent. Transparency is negatively correlated with corruption and positively correlated with economic development. Countries receiving external financial and technical support meet fewer OBP recommendations than countries not receiving it. Considering the political framework, both progressive and conservative governments reach similar transparency levels. OECD members do not significantly fulfil more OBP suggestions than non-members. In respect of 4 variables: transparency, corruption, democracy and development, four clusters of countries arise: top-performing, low transparency-developed, low transparency-developing and worst-performing.
  • Article
    Full-text available
    This paper presents, for the first time, multi-dimensional indices of the quality of budget institutions in low-income countries. The indices allow for benchmarking against the performance of middle-income countries, across regions, and according to different institutional arrangements that deliver good fiscal performance. Using the constructed indices, the paper provides preliminary empirical support for the hypotheses that strong budget institutions help improve fiscal balances and public external debt outcomes; and countries with stronger fiscal institutions have better scope to conduct countercyclical policies.
  • Article
    We investigate the effects of fiscal transparency and political polarization on the prevalence of electoral cycles in fiscal balance. The recent political economy literature on electoral cycles identifies such cycles mainly in weak and recent democracies. In contrast, we show, conditioning on a new index of institutional fiscal transparency, that electoral cycles in fiscal balance are a feature also of advanced industrialized economies. Using a sample of nineteen OECD countries in the 1990’s, we identify a persistent pattern of electoral cycles in low(er) transparency countries, while no such cycles can be observed in high(er) transparency countries. Furthermore, we find, in accordance with recent theory, that electoral cycles are larger in more politically polarized countries.
  • Article
    This paper develops indices of fiscal transparency for a broad range of countries based on the IMF's Code of Good Practices on Fiscal Transparency, using data derived from published fiscal transparency modules of the Reports on the Observance of Standards and Codes (ROSCs). The indices covers four clusters of fiscal transparency practices: data assurances, medium-term budgeting, budget execution reporting, and fiscal risk disclosures. More transparent countries are shown to have better credit ratings, better fiscal discipline, and less corruption, after controlling for other socioeconomic variables.
  • Article
    Transparency in government operations is widely regarded as an important precondition for macroeconomic fiscal sustainability, good governance, and overall fiscal rectitude. Notably, the Interim Committee, at its April and September 1996 meetings, stressed the need for greater fiscal transparency. Prompted by these concerns, this paper represents a first attempt to address many of the aspects of transparency in government operations. It provides an overview of major issues in fiscal transparency and examines the IMF's role in promoting transparency in government operations.
  • Article
    In this paper we collect detailed information on the budget institutions of Latin American countries. We classify these institutions on a "hierarchical"/"collegial" scale, as a function of the existence of constraints on the deficit, and voting rules. We show that "hierarchical" and transparent procedures have been associated with more fiscal discipline in Latin America in the eighties and early nineties. JEL classification: H61, D70, E60. Keywords: Budget institutions, fiscal deficits. The authors gratefully acknowledge the invaluable research assistance of Cristina Garca Lpez, Sergio Schmukler and Luis Tineo. They would further like to thank Ricardo Caballero, Sebastian Edwards, Barry Eichengreen, Roberto Rigobn, Antonio Spilimbergo, Vito Tanzi and an anonymous referee for very useful suggestions. The research was conducted while Rudolf Hommes was a Consultant at the Office of the Chief Economist at the IDB. *Corresponding author: Ernesto Stein, Inter-American Development Bank; 1300 ...