IMF Strengthens Fiscal Transparency Code

Revised Code to help improve policymaking and accountability for use of public money

Consultation seeks public input into Code revisions

Pilot Fiscal Transparency Assessments initiated in several countries

Information on public finances is sometimes reported by governments in ways that do not provide a full and reliable picture of their financial position, outlook, and risks. Greater fiscal transparency helps to ensure governments make informed economic decisions and allows legislatures and citizens to hold governments accountable for their use of public resources.

The revised Code aims to strengthen fiscal reporting standards to reflect the lessons of the recent economic crisis, identify and eliminate gaps in published fiscal information, and promote greater fiscal transparency in countries at all income levels. The changes are designed to ensure that policymakers, legislators, citizens, and markets have a more complete picture of the state of public finances.

Over the past six months, the IMF consulted governments, civil society groups, academics, and financial market participants about how to strengthen fiscal transparency standards and evaluation tools. The comments from this first round of consultations are reflected in the draft revised Code released today. In this new round of consultations, the IMF asks for additional feedback that will go into the final version of the Code, which will be published before the end of 2013. A procedure is in place to field comments from the public.

The Fiscal Transparency Code over the years

Fiscal transparency—the comprehensiveness, clarity, reliability, timeliness, and relevance of published information about the past, present, and future states of public finances—is a critical element of effective fiscal policymaking. A growing body of empirical research has highlighted the positive relationship between fiscal transparency, fiscal performance, and perceptions of fiscal solvency.

Since they were first published in 1998 and last updated in 2007, the IMF’s Code of Good Practices on Fiscal Transparency and the accompanying Manual and Guide have been centerpieces of the global architecture of fiscal transparency standards. The Code also provided the framework for assessing adherence to the principles and practices in the Code across countries. Since 1999, the IMF has conducted 111 such assessments—called fiscal Reports on the Observance of Standards and Codes (Fiscal ROSCs)—in 94 countries.

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