Ethicsworld is a weekly news resource. In its August newsletter asks the valuable question:
Does Greater Fiscal Transparency Reduce Corruption?
IMF Issues Code. International Budget Project Highlights Need for More Public Information.
The International Monetary Fund (IMF) recently published its “Fiscal Transparency – Revised IMF Code of Good Practices.” This comprehensive code not only covers a range of detailed areas where governments should provide public budget information, but it also stresses the need for governments to pursue good practices in this area. It states that:
* There should be sufficient time for consultation about proposed laws and regulatory changes and, where feasible, broader policy changes.
* Contractual arrangements between the government and public or private entities, including resource companies and operators of government concessions, should be clear and publicly accessible.
* Government liability and asset management, including the granting of rights to use or exploit public assets, should have an explicit legal basis.
* A budget calendar should be specified and adhered to. Adequate time should be allowed for the draft budget to be considered by the legislature.
The Fund’s new code fundamentally reflects a concern that too many governments are not being as transparent in their fiscal affairs as they should be. In the actual Code, for example, the Fund found it necessary to state bluntly: “The timely publication of fiscal information should be a legal obligation of the government.”
An increasing amount of analysis of governmental budget practices is being pursued by the International Budget Project, which publishes ratings on the fiscal transparency performance of 40 countries and plans to increase coverage to 80 countries. Warren Krafchik, Director of the International Budget Project, argues that greater transparency in national budgets enhances governmental accountability and provides vital information to the public. He agrees that it is also important for the public to obtain greater budget information at the sub-national level from local public entities that directly provide services.
In its most recent study of 40 countries in late 2006 the International Budget Project analyzed the responses to a 122 multiple-choice questions. It concluded: “Accurate, timely, and comprehensive information during each stage of the budget cycle is required to ensure the accountability of government to citizens. The Open Budget Index’s results suggest that 90 percent of the countries covered do not meet this standard.”