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At its fiftieth meeting in Washington, D.C., on April 16, 1998, the Interim Committee of the Board of Governors of the IMF adopted the Code of Good Practices on Fiscal Transparency-Declaration on Principles. It did so in response to a clear consensus that good governance is of central importance to achieving macroeconomic stability and high-quality growth, and that fiscal transparency is a key aspect of good governance. The Code was updated in 2007 with IMF Board approval.The Code is currently under review in line with the recent IMF Board paper on Fiscal Transparency, Accountability, and Risk, which proposed a set of revisions to existing international fiscal transparency standards and monitoring arrangements.

Fiscal transparency means being open to the public about the structure and functions of government, fiscal policy intentions, public sector accounts, and fiscal projections. The public is defined to include all those individuals and organizations with an interest in the design and implementation of fiscal policy. Fiscal transparency strengthens accountability and increases the political risk associated with maintaining unsustainable policies. It can therefore enhance credibility, the benefits of which will be reflected in lower borrowing costs and stronger support for sound macroeconomic policies by a well-informed public. In contrast, nontransparent fiscal management can be destabilizing, create inefficiency, and foster inequity. The potential for a fiscal crisis in one country to spill over to others underscores the value of efforts to anticipate and prevent these events. Improved fiscal transparency is a necessary part of such efforts, which must attract the strong support of member countries if they are to succeed.

The current version of the Code is based on four general principles: 

Clarity of roles and responsibilities

There should be a clear distinction between government and commercial activities, and there should be a clear legal and institutional framework governing fiscal administration and relations with the private sector. Policy and management roles within the public sector should be clear and publicly disclosed.

Open budget processes.

Budget information should be presented in a way that facilitates policy analysis and promotes accountability. Budget documentation should specify fiscal policy objectives, the macroeconomic assumptions used in formulating the budget, and major fiscal risks. Procedures for collecting revenue and for monitoring approved expenditures should be clearly specified.

Public availability of information

The public should be provided with complete information on the past, current, and projected fiscal activity of government and on major fiscal risks. This should be readily accessible. Countries should commit to the timely publication of fiscal information.

Assurances of integrity

Fiscal data and practices should meet accepted quality standards and should be subjected to independent scrutiny.

International Application As of November 2012, 94 countries from all regions and levels of economic development have been submitted to the assessment.

Assessment Methodology

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The Code has an assessment methodology, issued by the IMF in April 1998 ( updated in June 2007) which has been used to produce ROSCs. In particular, the Code is accompanied by The Manual on Fiscal Transparency, which provides guidance on the Code's implementation. It explains the Code's principles and practices in detail and draws on experiences in member countries to illustrate a range of practical approaches. It is also accompanied by The Guide on Resource Revenue Transparency, which applies the principles of the Code to the unique set of problems faced by countries that derive a significant share of revenues from oil or mineral resources.

The Code is also accompanied by (i) a questionnaire designed to gather basic information on fiscal institutions and practices, completed by country authorities as the first stage in undertaking a 'fiscal ROSC'; (ii) questionnaires on resource revenue, designed to gather information on transparency aspects of management of natural resource revenues. It is completed in countries with significant natural resource revenues during the first stage of a 'fiscal transparency ROSC'.