Fiscal Transparency, ROSCs
and Budget Execution
World Bank Seminar
Washington DC
January 17, 2003
TOPICS

Rationale for transparency

ROSC process

Key findings

Linkages with GFS and accounting
standards
Structure of the Code
The Code is based on four general principles:
• Roles and responsibilities of and within
government should be clear
• Comprehensive reliable information on fiscal
activities should be available to the public
• The processes of budget preparation, execution,
and reporting should be open
• Integrity of information should be assured
Why Transparency?
Improved transparency is seen as a necessary
basis for improving efficiency and
effectiveness of fiscal management:
• Better information will make government
more accountable and lead to better fiscal
policies
• Transparency will be reinforced by financial
markets—which will provide further
incentives for sound fiscal policies
Promotion depends on many
groups...

IFIs and bilateral support of
government

Financial analysts concern with
transparency

Civil society concern with public
information and participation
Build a dynamic partnership...
IMF/MDBs
Government
Civil
Society
Public
Financial
Investors
Analysts
IMF Objectives and tools

Promote principles and good practice
--Code and Manual

Integrate with Fund surveillance
--ROSCs*

Build incentives & improve practices
--technical assistance & outreach
* Reports on Observance of Standards and Codes
ROSC procedures

Questionnaire and self-assessment

Staff review and assessment

Country review

Publication

Article IV and ROSCs
ROSCs play a central role



Dialogue with member countries on
importance of transparency
Links with Fund programs and TA from
Fund and others
Publication signals a commitment to
improve transparency
But need to coordinate....


Many agencies assess standards or
related aspects
Duplication, inefficiency, high country
costs, information overload

Clarity of agency objectives

Sustained, focused efforts.
http://www.imf.org/external/
IMF at Work/Reports on the Observance of
Standards and Codes (ROSCs)

52 countries have completed
fiscal ROSCs

45 are published on the IMF
website

Some focus on emerging market
countries—but a wide range
covered
ROSC Program
Chart 1. ROSC Progress
Forecast
Completed
80
(72) +
70
Planned
Number of Countries
60
(52) +
50
( ) Cumulative
40
(37) +
Number completed
35
30
(25) +
20
(12) +
13
Proposed
12
9
10
5
+3
Experimental
0
1999
2nd Round
2000
2001
2002
Fiscal Years
2003
2004
Key findings to date….



Most ROSC participants are taking
some steps to improve transparency
Around 60 percent of market access
countries are participating
A range of common problems identified




Poor fiscal data quality
Off-budget activity
Tax expenditures and discretionary tax administration
Poor definition of intergovernmental relations
Addressing poor data quality...




Establish standard fiscal reporting
(GFS)
Getting basic reconciliation right
Move to accrual basis reporting (GFSM
2001)
Adoption of international accounting
standards (IPSAS) at an appropriate
pace
GFSM 2001




Synchronized with national accounts—
1993 SNA
Integrates flows and stocks—a balance
sheet approach
Cash plus reporting—initially cash, but
progressive move to accrual basis
reporting
Will link with international accounting
standards
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