Central Government Budget Practices and Transparency: An International Comparison

Abstract

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 fi scal 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 fi nd an average OBP fulfi lment of 56.4 per cent. Transparency is negatively correlated with corruption and positively correlated with economic development. Countries receiving external fi nancial 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 signifi cantly fulfi l 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.Transparency sounds like a fi scal virtue, though its sudden elevation to prime virtue should not necessarily be taken at face value. research design and methodology and then a section that describes, practice by practice, to what extent countries are implementing OBP recommendations. There follows an examination of relationships among variables, and a discussion of the groups stemming from cluster analysis. We end on a section that summarizes conclusions, presents limitations and proposes further research.

Political determinants of fiscal transparency: a panel data empirical investigation

“…Others (Dabla-Norris et al, 2010) use multiple sources such as the International Budget Partnership (IBP), Public Expenditure and Financial Accountability (PEFA) reports and ROSC. Scholars also used measures calculated starting from countries' compliance with the Organization for Economic Co-operation and Development (OECD) requirements (Bastida & Benito, 2007) or from the OECD/World Bank survey of budget practices (Bernoth & Wolff, 2008). James E Alt and Lassen (2006b) index is also partially constructed on variables belonging to the OECD survey but, in order to derive an aggregate indicator they also rely on survey responses of a research specific questionnaire.…”

“…The investigation of the sources of such an heterogeneity, indeed, motivated a number of researches devoted to the identification of the determinants of fiscal transparency. Nevertheless, most of the existing empirical literature on this topic is based on cross-sectional (James E. Alt, Lassen, & Rose, 2006;Andreula & Chong, 2015;Bastida & Benito, 2007;Harrison & Sayogo, 2014;Ríos, Bastida, & Benito, 2014;Tejedo-Romero & de Araujo, 2015;Wehner & de Renzio, 2013) data and this definitely complicates the identification of determinants of fiscal transparency.…”

“…Although fiscal transparency is "more often invoked than defined" (Hood, 2006), p.3) a number of alternative definitions have been provided by scholars (James E Alt & Lassen, 2006a, 2006bBastida & Benito, 2007;Kopits & Craig, 1998;Poterba & Von Hagen, 1999), all basically sharing the idea that it consists in the timely and systematic disclosure of internationally comparable and reliable information concerning governments' budget data (Kopits & Craig, 1998).…”

“…Also some scholars provided their own measures by relying on available information about national budgetary practices and fiscal disclosure (Andreula & Chong, 2015;Arbatli & Escolano, 2015;Bastida & Benito, 2007;Bernoth & Wolff, 2008;Dabla-Norris et al, 2010;Hameed, 2005;Weber, 2012).…”

How Does Good Governance Relate to Quality of Life?

“…Some research has focused specifically on the relationship between transparency and governance, studying the role of information disclosure in shaping a better government, improving the design of public policy (help identifying goals), or reducing corruption [43][44][45][46][47].…”