Advanced Search
MyIDEAS: Login to save this paper or follow this series

Fiscal Transparency, Fiscal Performance and Credit Ratings

Contents:

Author Info

  • Julio Escolano
  • Elif Arbatli

Abstract

This paper investigates the effect of fiscal transparency on market assessments of sovereign risk, as measured by credit ratings. It measures this effect through a direct channel (uncertainty reduction) and an indirect channel (better fiscal policies and outcomes), and it differentiates between advanced and developing economies. Fiscal transparency is measured by an index based on the IMF’s Reports on the Observance of Standards and Codes (ROSCs). We find that fiscal transparency has a positive and significant effect on ratings, but it works through different channels in advanced and developing economies. In advanced economies the indirect effect of transparency through better fiscal outcomes is more significant whereas for developing economies the direct uncertainty-reducing effect is more relevant. Our results suggest that a one standard deviation improvement in fiscal transparency index is associated with a significant increase in credit ratings: by 0.7 and 1 notches in advanced and developing economies respectively.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=25996
Download Restriction: no

Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 12/156.

as in new window
Length: 32
Date of creation: 01 Jun 2012
Date of revision:
Handle: RePEc:imf:imfwpa:12/156

Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Email:
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC

Order Information:
Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

Related research

Keywords: Fiscal transparency; Consumption; Developed countries; Developing countries; fiscal performance; public debt; budget process; budget documents; fiscal outcomes; fiscal policies; fiscal discipline; budget institutions; budget activities; budgetary institutions; budget execution; fiscal balance; fiscal institutions; fiscal risks; budget preparation; fiscal indicators; fiscal balances; budget proposal; contingent liabilities; primary fiscal balance; fiscal variables; budget projections; budget reporting; public finances; government finance statistics; budgetary operations; government finance; fiscal policy; budget transparency; budget formulation; external audit; fiscal deficits; internal audit; fiscal data; budget classification; fiscal risk; fiscal affairs department; fiscal performance indicators; fiscal illusion; budget statement; quasi-fiscal activity; fiscal affairs; cyclical fiscal policies; fiscal activities; budgetary accounting; quasi-fiscal activities; budgetary practices; fiscal system; national budget; fiscal forecasts; fiscal rules; open budget preparation; transparent fiscal system; fiscal activity;

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Murray Petrie, 2003. "Promoting Fiscal Transparency the Complementary Roles of the Imf, Financial Markets and Civil Society," IMF Working Papers, International Monetary Fund 03/199, International Monetary Fund.
  2. Ricardo Hausmann & Alberto Alesina & Rudolf Hommes & Ernesto H. Stein, 1998. "Budget Institutions and Fiscal Performance in Latin America," Research Department Publications, Inter-American Development Bank, Research Department 4160, Inter-American Development Bank, Research Department.
  3. Alt, James E. & Lassen, David Dreyer, 2006. "Fiscal transparency, political parties, and debt in OECD countries," European Economic Review, Elsevier, Elsevier, vol. 50(6), pages 1403-1439, August.
  4. International Monetary Fund, 2005. "Fiscal Transparency and Economic Outcomes," IMF Working Papers, International Monetary Fund 05/225, International Monetary Fund.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:12/156. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.