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Is Transparency Good for You, and Can the IMF Help?


  • Yongseok Shin
  • Rachel Glennerster


This paper finds that reforms introduced by the IMF to promote transparency have created more informed markets and reduced borrowing costs for those emerging market countries that volunteered for them. Using a quarterly panel estimation with fixed country effects, we find that sovereign spreads fall following the adoption of three different transparency reforms. The effects are economically important, especially for those countries with low initial transparency. We use two-stage least squares to address any endogeneity in the timing of reforms exploiting internal IMF timetables that are unrelated to country events. Next, using a panel GARCH specification, we show that spreads move more than normal in the days immediately following publication of IMF country documents.

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  • Yongseok Shin & Rachel Glennerster, 2003. "Is Transparency Good for You, and Can the IMF Help?," IMF Working Papers 03/132, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:03/132

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    References listed on IDEAS

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    Cited by:

    1. Abbas Mirakhor & S. Nuri Erbas, 2007. "The Equity Premium Puzzle, Ambiguity Aversion, and Institutional Quality," IMF Working Papers 07/230, International Monetary Fund.
    2. Ramzi Mallat & Duc Khuong Nguyen, 2008. "Does Macroeconomic Transparency Help Governments Be Solvent?: Evidence From Recent Data," World Scientific Book Chapters,in: Risk Management And Value Valuation and Asset Pricing, chapter 25, pages 615-631 World Scientific Publishing Co. Pte. Ltd..
    3. Demirgüç-Kunt, AslI & Detragiache, Enrica & Tressel, Thierry, 2008. "Banking on the principles: Compliance with Basel Core Principles and bank soundness," Journal of Financial Intermediation, Elsevier, vol. 17(4), pages 511-542, October.
    4. Yelena, Kalyuzhnova, 2011. "The National Fund of the Republic of Kazakhstan (NFRK): From accumulation to stress-test to global future," Energy Policy, Elsevier, vol. 39(10), pages 6650-6657, October.
    5. John Cady & Anthony J. Pellechio, 2006. "Sovereign Borrowing Cost and the IMF’s Data Standards Initiatives," IMF Working Papers 06/78, International Monetary Fund.
    6. Tong, Hui, 2007. "Disclosure standards and market efficiency: Evidence from analysts' forecasts," Journal of International Economics, Elsevier, vol. 72(1), pages 222-241, May.
    7. Benu Schneider, 2005. "Do Global Standards And Codes Prevent Financial Crises? Some Proposals On Modifying The Standards-Based Approach," UNCTAD Discussion Papers 177, United Nations Conference on Trade and Development.
    8. Jonathan David Ostry & Jeronimo Zettelmeyer, 2005. "Strengthening IMF Crisis Prevention," IMF Working Papers 05/206, International Monetary Fund.
    9. Richard Podpiera, 2004. "Does Compliance with Basel Core Principles Bring Any Measurable Benefits?," IMF Working Papers 04/204, International Monetary Fund.
    10. Kaufmann, Daniel & Bellver, Ana, 2005. "Transparenting Transparency: Intial Empirics and Policy Applications," MPRA Paper 8188, University Library of Munich, Germany.
    11. Nicoló Andreula & Alberto Chong, 2016. "Do good institutions improve fiscal transparency?," Economics of Governance, Springer, vol. 17(3), pages 241-263, August.
    12. International Monetary Fund, 2005. "Fiscal Transparency and Economic Outcomes," IMF Working Papers 05/225, International Monetary Fund.
    13. Jesus R Gonzalez-Garcia & John Cady, 2006. "The IMF’s Reserves Template and Nominal Exchange Rate Volatility," IMF Working Papers 06/274, International Monetary Fund.
    14. John Cady, 2004. "Does Sdds Subscription Reduce Borrowing Costs for Emerging Market Economies," IMF Working Papers 04/58, International Monetary Fund.
    15. Yves M. Tehou TEKENG & Mesbah Fathy SHARAF, 2015. "Fiscal Transparency, Measurement and Determinants: Evidence from 27 Developing Countries," Journal of Economics and Political Economy, KSP Journals, vol. 2(1), pages 69-91, March.


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