Strengthening Incentives for Fiscal Transparency Through GIFT

Murray Petrie i-Scale Senior Steward for GIFT ICGFM Conference Washington DC 11 December 2012

The GIFT Theory of Change

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Current evidence on strength of incentives

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Solid evidence that more transparent countries have

higher bond ratings, lower spreads, lower deficits Fiscal data central to rating, but not clear extent to which rating agencies use FTPA assessments Limited evidence that fiscal transparency associated with better development outcomes IFI conditionality can increase FTPA OBI rankings appear to motivate transparency Deep RTAs (EC) can create strong incentives Little evidence yet of impacts on participation

What motivates governments to increase transparency?

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Democratic transitions; regime change Sovereign bond market pressures Fiscal crises Major public sector corruption scandals Political competition over public policy Motivated leaders A motivated legislature Assessment of countries against global norms A perceived need for legitimacy An independent and active media

GIFT Incentives Prioritization Matrix

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GIFT influence? Negative
Weak oversight institutions, civil society, media Gaming

Strength of incentive Weak/moderate

*Standards and norms *UNGA declaration/G20 *Legislative oversight *FTPA TA and ICT-take up *Evidence of FTPA impacts *Fiscal austerity (build credibility) *Donor conditionality *Business and other financial markets *Scope of FTPA Reforms (wide public impact v technocratic) *General PFM reform and capacity building *Prominence of FTPA norms

Strong
* OGP * Sovereign bond market *FTPA country league tables *Assessments of data quality *Concern over equity /rights *IFI conditionality *Media pressure *Prestige of individ. leaders *Internalization *Central governments impose FTPA on SNGs *Use of bond rating as regulatory mechanism *Regulation of sovereign bond market? *Environmental outcomes *Characteristics of elites *National context *Agenda-setting circs. *Political pluralism * Deep RTAs

Yes

*Fiscal austerity *Corruption *Under-funding of oversight institutions Maybe

No (but GIFT can be ready when opportunities arise)

*Autocratic regimes *Elite capture *Secrecy culture *Business/political networks

Open Government Partnership

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A self-selected group of 57 countries committed to

open government Civil society involved in design and monitoring of commitments 41 governments have committed to specific initiatives on FTPA
Procurement; participation; extractive resources; foreign aid; asset disclosure; info. portal/systems; publish budgets; SNGs

GIFT Lead Stewards are leaders in the OGP

Four Proposed Areas for GIFT Action on Incentives in 2013

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Open Government Partnership Work with to implement FTPA commitments, expand membership of GIFT Sovereign bond market channel Engage rating agencies, re-design standards and assessments Standards and norms agenda Global agenda setting; gaps, convergence; improved assessments

Communication and media