Front Matter

Front Matter

Author(s):
Sailendra Pattanayak
Published Date:
April 2018
Share
  • ShareShare
Show Summary Details

2018

THE FISCAL TRANSPARENCY HANDBOOK

© 2018 International Monetary Fund

Cataloging-in-Publication Data

Joint Bank-Fund Library

Names: International Monetary Fund. | International Monetary Fund. Fiscal Affairs Department.

Title: Fiscal transparency handbook.

Other titles:

Description: Washington, DC : International Monetary Fund, [2018] | “The Handbook has been a vast collaborative undertaking by the Fiscal Affairs Department staff.” | Includes bibliographical references.

Identifiers: ISBN 9781484331859 (paper)

Subjects: LCSH: Fiscal policy—Handbooks, manuals, etc. | Financial disclosure—Handbooks, manuals, etc.

Classification: LCC HJ192.5.F573 2018

ISBN 978-1-48433-185-9 (paper)

978-1-48434-859-8 (PDF)

978-1-48434-857-4 (ePub)

978-1-48434-860-4 (Mobi)

Disclaimer: The views expressed in this book are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its member countries.

Please send orders to:

International Monetary Fund, Publication Services

P.O. Box 92780, Washington, DC 20090, U.S.A.

Tel.: (202) 623–7430 Fax: (202) 623–7201

E-mail: publications@imf.org

Internet: www.elibrary.imf.org

www.bookstore.imf.org

Foreword

Fiscal transparency provides legislatures, markets, and citizens with the information they need to hold governments accountable for their fiscal performance and use of public resources. Since the IMF first adopted the Code of Good Practices in Fiscal Transparency in 1998, and introduced voluntary assessments of fiscal transparency practices in our member countries, research has shown the importance of fiscal transparency for the effective management of public finances, improving governance, and reducing corruption. In particular, a lack of fiscal transparency can undermine accountability and provide opportunities for the misappropriation of public funds. The growing distrust between citizens and governments on how public moneys are used, and how to tackle poverty and inequalities, also calls for greater transparency in public accounts.

For 20 years, the IMF has remained at the forefront of the fiscal transparency agenda, adapting the Code as needed. The current, 2014, version of the Code reflects lessons from the global financial crisis; it received much input from a broad-based global consultation process that involved, among others, governments, civil society, academia, and market participants. It was launched together with a new Fiscal Transparency Evaluation (FTE) tool to help assess actual country practices against the Code.

I am now pleased to introduce the 2018 Fiscal Transparency Handbook. The Handbook reflects on our experiences with FTEs, provides detailed guidance on implementing the Code’s principles and practices, and breaks new ground for enhancing countries’ fiscal transparency and accountability. Promoting greater fiscal transparency requires both clear reporting standards, as well as effective monitoring and enforcement of those standards. The Handbook offers examples and case studies from countries around the globe on how to achieve this. As a companion to the Code and the FTEs, the Handbook will help countries strengthen their economic institutions in the area of public financial management. Together they form an important part of IMF surveillance tools and efforts to encourage countries to improve fiscal governance, including accountability of governments for their delivery on policies related to reduction of poverty and gender inequality.

I recommend this Handbook to all those—officials, researchers, representatives of civil society organizations, and others—in the public or private sectors, who have an interest in promoting transparency and effective management of public finances. Together, we can push the transparency agenda and close the trust gap between citizens and their governments.

Christine Lagarde,

Managing Director

International Monetary Fund

Preface

The 2014 Fiscal Transparency Code and its companion, the Fiscal Transparency Handbook, mark important milestones in the IMF’s efforts to promote transparency and accountability in the use of public resources and support governments’ efforts to strengthen economic governance, policymaking, and economic institution building. The Code, which is one of the 12 standards under the IMF’s Standards and Codes Initiative that was launched in the late 1990s to strengthen the international financial architecture, has evolved into being the most widely recognized international standard for disclosure of information about public finances. The Fiscal Transparency Evaluation (FTE) is the IMF’s main diagnostic tool for a comprehensive assessment of country practices against the transparency standards set by the Code.

This Handbook explains the 2014 Code’s principles and practices and provides more detailed guidance on their implementation, including through country examples that derive from the FTEs. It covers the first three Pillars of the Code (i.e., fiscal reporting, fiscal forecasting and budgeting, and fiscal risk analysis and management); discusses key dimensions and principles under each pillar; provides guidance on the requirements for meeting the basic, good, and advanced practices for each principle; and includes practical examples from countries around the globe. The Handbook also notes relevant international standards and guidance material related to the Code’s principles. A subsequent version of the Handbook, planned for 2019, will incorporate the fourth Pillar of the Code on natural resource revenue management, which is currently being finalized.

The Handbook also aims to provide guidance on the application of the 2014 Code to a range of stakeholders: governments with an interest in promoting fiscal transparency; national oversight and accountability institutions, such as legislatures, supreme audit institutions, parliamentary budget offices, national statistics agencies, and independent fiscal agencies; representatives of civil society organizations; international organizations; investors; academia and researchers studying public finance and fiscal transparency; and others with an interest in further improving fiscal transparency practices around the globe.

The Handbook has been a vast collaborative undertaking by the Fiscal Affairs Department staff and in close cooperation with external stakeholders. We are grateful, in particular, to the governments who have undertaken fiscal transparency evaluations, IMF Executive Directors’ offices, and colleagues from other departments of the IMF who provided helpful comments on the draft. The Handbook also benefited from comments and suggestions from World Bank staff, the Global Initiative on Fiscal Transparency (GIFT), the International Budget Partnership (IBP), and the Public Expenditure and Financial Accountability (PEFA) secretariat.

Vitor Gaspar

Director

Fiscal Affairs Department

Acknowledgments

The Fiscal Transparency Handbook was produced by the Fiscal Affairs Department (FAD) staff under the supervision of Manal Fouad and Carolina Renteria (both Division Chiefs, Public Financial Management II and I divisions, respectively) and before them, by Marco Cangiano and Richard Hughes, and under the strategic guidance of Gerd Schwartz and Paolo Mauro (both Deputy Directors in FAD).

The drafting team was led by Sailendra Pattanayak (Deputy Division Chief of Public Financial Management Division II) and comprising the following current and former staff: Miguel Alves, Sophie Brown, Sagé de Clerck, Laura Doherty, Majdeline El Rayess, Lesley Fisher, David Gentry, Fabien Gonguet, Jason Harris, Tim Irwin, Delphine Moretti, Brian Olden, Eliko Pedastsaar, Xavier Rame, Sandeep Saxena, Amanda Sayegh, Johann Seiwald, and Ashni Singh. Inputs were received from Virginia Alonso, Racheeda Boukezia, Jacques Charaoui, Teresa Curristine, Avril Halstead, Guohua Huang, Yasemin Hurcan, Bruno Imbert, Fazeer Rahim, Gwenaelle Suc, Gerardo Una, Concha Verdugo, as well as Murray Petrie (FAD Expert). Richard Allen (FAD Visiting Scholar) and Torben Hansen (Deputy Division Chief of Public Financial Management Division I) reviewed the final manuscript and provided suggestions to improve the draft.

Nour Chamseddine and Rohini Roy provided excellent research assistance. The editorial team consisted of Gemma Diaz from the Communications Department, Jenny DiBiase (FAD editing consultant), Sasha Pitrof, and Thibault Vermeulen.

Abbreviations and Acronyms

BIS

Bank for International Settlements

CBA

Cost-benefit analysis

CEMAC

Central African Economic and Monetary Community

COA

Chart of accounts

Code

Fiscal Transparency Code

COFOG

Classification of the Functions of Government

CPAR

Country Procurement Assessment Report

DQAF

Data Quality Assessment Framework

DSA

Debt sustainability analysis

EAC

East African Community

ECCU

Eastern Caribbean Currency Union

EITI

Extractive Industries Transparency Initiative

ESA

European System of Accounts

EU

European Union

FARI

Fiscal Analysis of Resource Industries

FMIS

Financial management information system

FRS

Financial risk statement

FRTF

Fiscal Responsibility and Transparency Framework

FRTL

Fiscal Responsibility and Transparency Law

FSAP

Financial Sector Assessment Program

FTE

Fiscal Transparency Evaluation

GAAP

Generally Accepted Accounting Principles

GDDS

General Data Dissemination System

GDP

Gross domestic product

GFS

Government Finance Statistics

GFSM

Government Finance Statistics Manual

GIFT

Global Initiative for Fiscal Transparency

IASB

International Accounting Standards Board

IBP

International Budget Partnership

IFAC

International Federation of Accountants

IFRS

International Financial Reporting Standards

IIA

Institute of Internal Auditors

IMF

International Monetary Fund

INTOSAI

International Organization of Supreme Audit Institutions

IPSAS

International Public Sector Accounting Standards

IPSASB

International Public Sector Accounting Standards Board

ISSAI

International Standards of Supreme Audit Institutions

KONEPS

Korea On-Line E-Procurement System

MTBF

Medium-Term Budget Framework

MTDS

Medium-Term Debt Management Strategy

OBR

Office of Budget Responsibility

OBS

Open Budget Survey

OECD

Organisation for Economic Co-operation and Development

PBO

Parliamentary Budget Office

PEFA

Public Expenditure and Financial Accountability

PFM

Public financial management

PFRAM

Public-Private Partnerships Fiscal Risk Assessment Model

PFS

Preliminary feasibility study

PIMA

Public Investment Management Assessment

PIP

Public investment plan

PPP

Public-private partnership

PSDSG

Public Sector Debt Statistics: Guide for Compilers and Users

QFAs

Quasi-fiscal activities

RA-FIT

Revenue Administration Fiscal Information Tool

RA-GAP

Revenue Administration Gap Analysis Program

ROSC

Report on the Observance of Standards and Codes

SAI

Supreme audit institution

SDDS

Special Data Dissemination Standard

SDR

Special Drawing Right

SNA

System of National Accounts

SOE

State-owned enterprise

TADAT

Tax Administration Diagnostic Assessment Tool

TSA

Treasury Single Account

UK

United Kingdom

UN

United Nations

US

United States

WAEMU

West African Economic and Monetary Union

The Fiscal Transparency Code

    Other Resources Citing This Publication