Fiscal policies have critical impacts on economic, social and environmental outcomes in all countries at all levels of development.
The 1997 East Asian financial crisis first prompted the international community to set out a comprehensive codification of what is meant by fiscal transparency.
The IMF’s Code of Good Practices on Fiscal Transparency, adopted in 1998 (and revised in 2001 and 2007), comprised four pillars: clarity of roles and responsibilities; open budget processes; public availability of information; and assurances of integrity.
This produces a score between 0 and 100 on the OBI; (ii) Public participation, evaluated using 16 questions introduced in the 2012 survey that rate opportunities for direct public participation in budget preparation and implementation; (iii) the strength of oversight, using 15 questions on the strength of the legislature and the supreme audit institution.
To date thirteen Fiscal Transparency Evaluations have been conducted by the IMF and nine of the evaluation reports have been finalized and published on the IMF's web site: for Bolivia, Costa Rica, Finland, Ireland, Mozambique, the Philippines, Portugal, Romania, and Russia.
GIFT is a multi-stakeholder action network that aims to “Advance and institutionalize global norms and significant, continuous improvements on fiscal transparency, engagement, and accountability in countries around the world.” GIFT's Lead Stewards are the World Bank, the IMF, the International Budget Partnership, the International Federation of Accountants, the Federal Secretary of Budget & Planning of the Government of Brazil and the Philippines Department of Budget & Management.
GIFT connects important international actors with other networks, together with champion governments and civil society organizations: while facilitating dialogue and cooperation in a platform where relevant stakeholders and networks participate, GIFT strengthens norms and creates incentives for countries to engage in a dialogue with civil society organizations, to improve transparency and engagement on the source and use of public resources.
Increasing and Improving Peer-Learning and Technical Assistance GIFT continues to develop the Open Government Partnership-GIFT Fiscal Openness Working Group, with the goal of working with governments and CSOs to improve fiscal transparency in various countries, and bringing them together to support each other; by providing a forum to share experiences, GIFT intends to create incentives through peer pressure, as well as practical approaches and innovations.
Aligning Incentives Work with Greater Knowledge (Evidence based Research Agenda) GIFT is focusing on advancing research on evidence of incentives, development impacts, and practical approaches and innovations in fiscal transparency: country case studies on public participation, fiscal open data, fiscal transparency incentives and other research have been produced.
One of GIFT's first actions was the development of a new set of High Level Principles of Fiscal Transparency, Participation and Accountability, designed to sit above the existing set of international standards and norms, to promote increased coherence across those standards, and to promote the development of new norms where there are gaps.
This has subsequently been reflected in the incorporation of requirements for public participation in the 2014 IMF Fiscal Transparency Code, and in the Organization for Economic Cooperation and Development's Principles of Budgetary Governance 2014.
A large majority of the countries assessed – in which 68 percent of the world's population live – provide insufficient budget information.
Budget transparency could be significantly advanced if governments were to take the simple step of releasing these already-prepared documents.
Failing to publish information that is already being produced is clearly a question of political will, which donors and civil society can influence.
In addition, the forthcoming global development and climate change agreements should require public reporting of investments toward meeting these commitments, a key step toward opening budgets.
This can be an issue of a government's capacity, and so donors and civil society can support progress by providing technical assistance.
To disclose what government organizations do with financial recourses is not always easy; in fact, there is much resistance to fiscal transparency.