Fiscal Transparency Research Articles

Fiscal Transparency Management in Theory and Practice: the Case of Kosovo

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What’s the Problem with the Dutch? Andrew Marvell, the Trade Wars, Toleration, and the Dutch Republic

You could be excused for thinking that rather than an Englishman, Andrew Marvell might better have been born a Dutchman in the republic’s golden age – an era of religious toleration and commercial ascendance, of fiscal accountability and civic transparency, and of particular brilliance in the painterly arts of landscape and portraiture. There are moments in his career when Marvell seems in thrall to Dutch naval prowess, a strong advocate of confederacy with the States General against the universal monarchy threatened by the French crown, and admiring too of a religious toleration that characterized Dutch society. But that is not the whole story for his ‘The Character of Holland’ is filled with denial and excoriation, and the contradictions within Marvell’s attitude towards England’s mercantile rival and religious confederate call out for resolution. This paper explores the ways in which those inconsistencies and contradictions arise from Marvell’s apprehensions of sameness and otherness: that the proximity and distance of Britain and the States General is also the story of Marvell’s own sense of contradictory selfhood.

Accounting for government guarantees: perspectives on fiscal transparency from four modes of accounting

Government guarantees are increasingly important as a policy instrument in public infrastructure investment and to assist the banking and financial sectors following the global financial crisis. This paper analyses how different modes of accounting characterize such guarantees in the contexts of public sector financial reporting, statistical accounting, budgeting and long-term fiscal projections. Guarantees are difficult to specify for accounting treatment and consistent conceptualization of liabilities. These difficulties make it attractive for governments to treat obligations as off-budget and off-balance sheet contingent liabilities, rather than recognize them in financial statements and statistical accounts. Miller and Power’s territorializing, mediating, adjudicating and subjectivizing roles of accounting are utilized to analyse the reporting of UK government guarantees. Provisioning for guarantees is complex in financial reporting statements and often absent in national accounts, a deficiency which Eurostat has attempted to address by devising the concept of standardized guarantees and by securing more disclosure of contingent liabilities. There is potential for future research especially where there is greater mediation between the four modes of government accounting.

Tools Used by Countries to Counteract Aggressive Tax Planning in Light of Transparency

The aim of this article is twofold. The first aim is to provide a comparative overview of the domestic anti-avoidance rules with specific reference to Brazil, Colombia, South Africa and Uruguay to evaluate the application of these rules to tackle aggressive tax planning. The second aim is to assess whether or not the application of general anti-avoidance rules (GAARs) in these countries is consistent and clear (transparent) for the taxpayer. The main argument is that to tackle aggressive tax planning, countries should have GAARs in accordance with the standard of fiscal transparency as developed in this article (i.e. availability, clarity, simplicity and reliability). Furthermore, the relationship between the taxpayer and tax administration should be enhanced considering mutual trust, legitimate expectations and respect for the taxpayers’ rights. This article provides recommendations to enhance the relationship between tax administration and taxpayers to facilitate a coordinated relationship. Such a coordinated relationship means, on the one hand, that the governments (tax administrations) are provided access to the information regarding the activities of the taxpayer; and, on the other hand, that taxpayers voluntarily disclose the structure and nature of the economic activities or businesses in the country.

Fiscal Transparency, Borrowing Costs, and Foreign Holdings of Sovereign Debt

This paper explores the effects of fiscal transparency on the borrowing costs of 33 emerging and developing economies (EMs), and on foreign demand for their sovereign debt. Using multiple indicators, including a constructed one based on the published data in the IMF's Government Finance Statistics Yearbook, we measure the separate effects of the three dimensions of fiscal transparency: openness of the budget process, fiscal data transparency, and accountability of fiscal actors. The results suggest that higher fiscal transparency reduces sovereign interest rate spreads and increases foreign holdings of sovereign debt, with each dimension of fiscal transparency playing a different role. Availability of detailed cross-country comparable fiscal data, especially for balance sheet items, has shown to increase foreign investors' willingness in holding EM sovereign debt.

Threefold Policies for Bank Development: Do Independence and Transparency Matter?

A well-developed banking sector is crucial to achieve a sustained economic growth. To attain this goal, both central banks and government have embraced operational and institutional arrangements. In this paper, I offer an empirical lookup on how monetary independence and transparency of macroprudential and fiscal policies are linked to bank development. Drawing upon a panel dataset for the period 1998-2014, I find that both macroprudential transparency (proxied by central bank financial stability transparency) and fiscal transparency are positively related to the share of credit granted by banks to the private sector, implying that more transparency enhances bank development. More independence from central banks seems, however, to decrease the ratio of bank credit to GDP. By considering interactions, the marginal effect of central bank financial stability transparency on bank credit/GDP, conditional on the levels of independence, is positive but decreases under a particular range of independence values. If central bank independence interacts with fiscal transparency, the marginal effect of fiscal transparency is positive and significant over a specific range of the degree of central bank independence but there is no statistical support that the marginal effect decreases within the same range unless I use the independence index of Garriga (2016).

Fiscal Transparency, Borrowing Costs, and Foreign Holdings of Sovereign Debt

This paper explores the effects of fiscal transparency on the borrowing costs of 33 emerging and developing economies (EMs), and on foreign demand for their sovereign debt. Using multiple indicators, including a constructed one based on the published data in the IMF’s Government Finance Statistics Yearbook, we measure the separate effects of the three dimensions of fiscal transparency: openness of the budget process, fiscal data transparency, and accountability of fiscal actors. The results suggest that higher fiscal transparency reduces sovereign interest rate spreads and increases foreign holdings of sovereign debt, with each dimension of fiscal transparency playing a different role. Availability of detailed cross-country comparable fiscal data, especially for balance sheet items, has shown to increase foreign investors’ willingness in holding EM sovereign debt.

The Effect of Property Reassessments on Fiscal Transparency and Government Growth: Evidence from Virginia

An important concern to the efficiency of public finance systems is that voters suffer from various illusions that can politicians can exploit to expand the public sector. This paper contributes evidence of this effect on a public finance system through the revenue elasticity hypothesis, which is a form of fiscal illusion in which voters confuse tax rates with tax burdens in the approval of public spending. The applied empirical setting is Virginia cities and counties from 2001 to 2011, where the timing of mass property reappraisals is exogenous but known to local policymakers in setting the annual budget. The results indicate that mass reappraisals, which reduce tax rates, do cause property tax increases, as do reappraisals that will result in future tax rate increases. These revenue shocks are then smoothed into expenditures through the management of assets, indicating that policymakers prefer the spending to be drawn from future cash reserves rather than from immediate projects that might draw attention to the source of fiscal illusion.

FORMATION OF MODERN MODEL OF BUDGET MANAGEMENT BASED ON METHODS OF PUBLIC ADMINISTRATION

The review of scientific studies and publications confirms that in Ukraine, the interest of scientists in the theoretical and practical problems of budget management is growing. Domestic and foreign scientists have repeatedly drawn attention to the need for full and timely disclosure of the state of the formation and use of financial resources of society. The foreign experts studied foreign experience and grounded measures that could and should contribute to the achievement of the effectiveness of this process, the methods of ensuring transparency of the state budget and involving the public as the subject of control over the use of budgetary resources, in particular, public hearings, “e-government”, are an area public administration. Budget management is an important instrument of state regulation of the activity of authorities. According to the analysis, one can see that today it is necessary to distinguish the following types of budget support as: informational, organizational, methodical, and regulatory. The state implements a policy of budgetary management with the help of management bodies. There is a close interconnection between representative, national, and operational management bodies. The principle of transparency of the budget system (in conjunction with its publicity) is enshrined in Article 7 of the Budget Code of Ukraine. An attention is drawn to the fact that the budget system as a “totality of the state budget and local budgets” is transparent by definition. It is fair to note that insufficient transparency of the budget process is not only a domestic problem. The Board of Directors of the IMF approved one of twelve internationally recognized financial standards – the Code of Good Practices on Fiscal Transparency. An assessment of the state of implementation of the principle of publicity and transparency in the budget management of Ukraine makes it possible to draw the following conclusions: 1. The content of the principle of publicity and transparency in the text of the Budget Code of Ukraine should be amended by formulating it as a principle of the budget process, while it is necessary to specify the ways of its practical implementation. 2. The full implementation of the principle of publicity and transparency of the budget process will increase the level of trust of citizens to the authorities of different levels, which is one of the factors of successful implementation of the state social and economic policy, and will deepen the democratic principles of the formation and development of Ukrainian society. 3. The lack of transparency of budget information at the planning stage significantly impairs the ability to manage budget resources, primarily at the local level, exacerbating the problem of full budget financing, especially at the end of the budget period. 4. Budget information for an overwhelming majority of stakeholders remains inaccessible, inaccurate, untimely, and incomplete in Ukraine, which led to a deterioration of Ukraine’s position in the international rating by the Open Budget Index. 5. Improving the transparency of the budget process can be achieved through the use of the above measures. Their implementation will serve not only to improve the quality of the budget process and the effectiveness of budget management but also to establish harmonious social relations. At the same time, the task of developing further directions of increasing publicity and transparency of the mechanism of functioning of the entire system of public finances in Ukraine remains relevant.

Fiscal Transparency and Accountability: Research Note for the Fiscal Futures’ Scenario Planning Workshops

Fiscal Transparency and Accountability: Research Note for the Fiscal Futures’ Scenario Planning Workshops

Apuntes sobre el régimen de trasparencia fiscal internacional en el Perú

In this article the author develops the background of international fiscal transparency regime in Peru and then specifies the implications of it in our context. It also the prupose of this regulation and develops the theme of the agreements assigned to avoid double taxation. Finally other relevant factors are suggested to take into account as relevant to the Fiscal transparency aspects.

Mexico: Fiscal Transparency Evaluation

Mexico: Fiscal Transparency Evaluation

Former Yugoslav Republic of Macedonia: Fiscal Transparency Evaluation

Former Yugoslav Republic of Macedonia: Fiscal Transparency Evaluation

Przejrzystość fiskalna a stabilność polskiego systemu finansów publicznych

The aim of the article is to verify the impact of fiscal transparency on the quality and reliability of public finance sector data which in turn are the basis for formulating conclusions on the effectiveness of fiscal policy and the sustainability of public finance. The article identifies and provides examples of the primary areas that impair fiscal transparency in Poland, particularly: the scope of public finance sector, the extra-budgetary institutions and fiscal rules. In conclusion the author underlines that the findings based on published budgetary data can be subject to a significant error.

Tax Preferences, Fiscal Transparency, and the Meaning of Welfare: An Experimental Study

What is the effect of providing personally tailored budgetary information on public attitudes to tax and spending? We address this question with a survey experiment based on the annual tax summaries introduced by the UK tax authorities in 2014. By subtly manipulating the categories of state spending – in particular, the controversial category of ‘welfare’ – to invoke a sense of unfairness, we show how budget information in general and the United Kingdom’s annual tax summaries in particular impact support for state spending. Though the stated aim of providing personalised tax receipts to income taxpayers is to enhance fiscal transparency, doing so may also damage support for state spending if the information provides a sense that existing redistribution is unfair. The article contributes to political science debates about public attitudes to tax and spending, the character and trade-offs of fiscal transparency, and the framing effects of welfare.

The Influence of Fiscal Transparency on Enterprise Excess Capacity:From the Perspective of Subjective and Passive Investment Bias

This paper incorporates fiscal transparency of local governments into analytical system of enterprise micro behavior, and empirically tests two mechanisms of the effect of fiscal transparency on enterprise excess capacity, namely subjective and passive investment bias formation mechanisms, according to statistical information like a study of fiscal transparency of China's municipal governments in 2012 and the World Bank survey of Chinese enterprises in 2012. It comes to the results as follows: firstly, the increase in fiscal transparency results in the rise in enterprises' rational expectations of government behavior, the reduction in uncertainty judgment of external business environment, and the inhibition on low capacity utilization and excess capacity resulting from enterprise subjective investment bias; secondly, the increase in fiscal transparency leads to the rise in costs of government intervention on land factor market, then reduces enterprise passive investment bias resulting from government intervention on land factor market, and increases capacity utilization.

The Impact of Fiscal Transparency on Corruption: An Empirical Analysis Based on Longitudinal Data

Abstract 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.

The social condition of the New Zealand people: a pre-election review of social indicator information

ABSTRACTMany social commentators have considered that alongside the fiscal transparency enjoined by contemporary New Zealand governments, there should be a complementary social responsibility reporting. This task is usually assigned to social indicator frameworks. However, at present (as the 2017 election looms) there is a faltering in the provision of social indicators which have been in place in New Zealand for almost two decades, with the exception of the recent 2016 survey data from Statistics New Zealand and Ministry of Social Development that were made available within a month of writing this article. Having commented on the current status of the New Zealand social indicator system, we present data from the General Social Survey and the Quality of Life survey to at least convey recent trends in subjective social well-being and reported behaviours and experiences. References are also made to the accumulating literature on social well-being in New Zealand, followed by suggestions for more systematic indicator development and underpinning research.

Improving the fiscal policy of the state with the help of information technology

The theoretical aspects of fiscal policy are analyzed, its concept, goals, instruments and regulators are disclosed; A practical analysis of the fiscal policy carried out by the Russian Federation for the period 2008-2015 is carried out, its strengths and weaknesses are outlined; It is shown that it is necessary to increase the role of fiscal transparency in increasing the efficiency of public spending; Ways to increase fiscal transparency through information technology.

A Estrutura Orçamentária como Determinante do Nível de Transparência Fiscal

National and International research studies often relate fiscal transparency to political, socio-economic and fiscal variables. Therefore, this study seeks to analyze how budget execution (revenues and expenses) influence active fiscal transparency in municipalities in the state of Paraiba. Thus, Focco-PB (Forum on Fighting Corruption Paraiba) reports were analyzed, with a view to identifying the Active Fiscal Transparency Index in Paraiba’s municipalities in relation to this study’s dependent variable. Subsequently, independent variables were collected (intergovernmental transfer revenue, individual per capita revenue, spending on human resources, education and health) in the TCE / PB database. Initially, a Pearson correlation test was performed and later an analysis of panel data with a fixed effect. Furthermore, descriptive analyses of the dependent variables in relation to data for the years 2013, 2014 and 2015 were conducted. The results suggest that Income from Transfers and Health Expenditure reflected a negative relation with respect to the Active Fiscal Transparency Index whilst (ITFA) Individual Income Per Capita and Spending on Human Resources indicate a positive relation. As proposed in this study, it can be concluded that most of the variables studied and which make up budgetary structure impact on the Active Fiscal Transparency Index in Paraiba’s municipalities.