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Budget transparency and accountability

IMF codes and manuals

The IMF’s Fiscal Transparency Code (the Code) is the international standard for disclosure of information about public finances. The Code comprises a set of principles built around four pillars: (i) fiscal reporting; (ii) fiscal forecasting and budgeting; (iii) fiscal risk analysis and management; and (iv) resource revenue management. For each transparency principle, the Code differentiates between basic, good, and advanced practices to provide countries with clear milestones toward full compliance with the Code and ensure its applicability to the broad range of IMF member countries.

The four pillars are:

  • Pillar I: Fiscal Reporting, in the form of fiscal statistics and accounts, which should offer relevant, comprehensive, timely, and reliable information on the government’s financial position and performance.
  • Pillar II: Fiscal Forecasting and Budgeting which should provide a clear statement of the government’s budgetary objectives and policy intentions, together with comprehensive, timely, and credible projections of the evolution of the public finances.
  • Pillar III: Fiscal Risk Analysis and Management which should ensure that the risks to the public finances are disclosed, analyzed and managed, and fiscal decision-making across the public sector is effectively coordinated.
  • Pillar IV: Resource Revenue Management which should provide a transparent framework for the ownership, contracting, taxation, and utilization of natural resource endowments. More information is available in the cluster on the extractives and resource sector.

In 2014 the IMF issued The Government Finance Statistics Manual 2014 (GFSM 2014), an internationally recognized statistical reporting framework, aimed at helping national authorities to strengthen their capacity to formulate fiscal policy and monitor fiscal developments.  The framework forms an integral part of the IMF's effort to promote international standards for transparency in fiscal reporting. 80 per cent of the countries complying with the GFSM 2014 standard are from developed countries (in particular from Europe and the Americas), and the outstanding 10 per cent of the countries are middle-income or least developed countries (predominantly from Oceania)

Open budgets in Africa

In Financing Development for Children in Africa, UNICEF and the International Budget Partnership carry out an in-depth examination of how budget practices are working for children across the continent. Between 2012 and 2015, the average Open Budget Index (OBI) score for the 30 African countries for which comparable data are available increased from 29 to 39. The least transparent countries made the greatest gains – the OBI scores of the 19 African countries considered weak performers in 2012 had more than doubled by 2015. The main finding is that the vast majority of children in Africa live in countries where governments do not provide sufficient budget information for the public to understand fully, or to monitor, how public funds are raised and spent. Information that is critical for ensuring accountability is too often kept from the public, published too late to be useful to civil society or simply not produced at all. There is also ample scope to improve public participation in budget processes and to strengthen budget oversight institutions, including Parliaments and Supreme Audit Institutions.

The report argues that with the ongoing demographic boom, major investments of domestic resources in key sectors for children are essential. In order to assess the impact of these investments and ensure that public resources are spent in the best interest of children, transparent and accountable budget systems are much needed. In addition to strengthening public financial management systems and generating more and better budget information, including on children, a good starting point for governments is to implement General Comment No. 19 on Public Budgeting for the Realization of Children’s Rights, which provides an overall framework for investing in children and in realizing their rights.