Fiscal transparency, government effectiveness and government spending efficiency: Some international evidence based on panel data approach

Gabriel Montes, Júlio Cesar Albuquerque Bastos and Ana Jordânia de Oliveira

Economic Modelling, 2019, vol. 79, issue C, 211-225

Abstract: The global financial crisis and the debt crisis of the EU countries revealed serious weaknesses in fiscal reporting. As a consequence, uncertainties regarding the real situation of the public accounts of the countries raised doubts in relation to the effectiveness of government policies. Since then, countries are undertaking reforms in order to improve fiscal transparency. This paper analyzes whether countries are making efforts to enhance fiscal transparency, and whether fiscal transparency affects government effectiveness and government spending efficiency. We consider two channels through which this effect occurs. The first channel is indirect and it works through public debt. The second channel is the direct effect that transparency has on government effectiveness and government spending efficiency once transparency enhances accountability and thus the task of resource allocation. We use a sample of 82 countries (68 developing and 14 developed) for the period 2006–2014, and panel data analysis. Comparing the scores of fiscal transparency between 2006 and 2014, we observe that approximately 80 per cent of the countries made efforts to improve fiscal transparency. The results suggest fiscal transparency is important to reduce public debt and to improve government effectiveness and government spending efficiency.

Keywords: Fiscal transparency; Government effectiveness; Public debt; Efficiency (search for similar items in EconPapers)
JEL-codes: E62 H11 H63 H83 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S026499931830693X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:79:y:2019:i:c:p:211-225

DOI: 10.1016/j.econmod.2018.10.013

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().