Last updated: September 2006
Volume 53, Special Issue
IMF Staff Papers

The Causes of Fiscal Transparency: Evidence from the U.S. States

James E. Alt, David Dreyer Lassen, and Shanna Rose

Full Text of this Article (PDF 188K)

Abstract: We use unique panel data on the evolution of transparent budget procedures in the U.S. states over the past three decades to explore the political and economic determinants of fiscal transparency. Our case studies and quantitative analysis suggest that both politics and fiscal policy outcomes influence the level of transparency. More equal political competition and power sharing are associated with both greater levels of and increases in fiscal transparency during the sample period. Political polarization and past fiscal conditions, in particular state government debt and budget imbalances, also appear to affect the level of transparency.
[JEL D72, D78, H70]