The Legal Foundations of Public Debt Transparency: Aligning the Law with Good Practices
IMF Working Papers, February 9, 2024
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- The Legal Foundations of Public Debt Transparency: Aligning the Law with Good Practices
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Bibliographic details
- Authors: Karla Vasquez, Alissa Ashcroft, Kikachukwu Alex-Okoh, Alessandro Gullo, Olya Kroytor, Yan Liu, Mia Pineda, Ron Snipeliski
- Published: February 9, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400267222.001
Overview
- Authors: Karla Vasquez, Alissa Ashcroft, Kikachukwu Alex-Okoh, Alessandro Gullo, Olya Kroytor, Yan Liu, Mia Pineda, Ron Snipeliski
- Publication date: February 9, 2024
- Type: IMF Working Paper
- Core message: Debt opacity burdens the public and can exacerbate debt vulnerabilities. Legal frameworks play a central role in entrenching practices and constraining the discretion of policy makers and debt managers; legal reform is necessary to address hidden debt, though it may be difficult and time intensive in many jurisdictions.
Main findings
- The paper surveys the legal frameworks of sixty jurisdictions and finds widespread critical weaknesses that hinder debt transparency.
- Implementation of international standards and guidelines on debt transparency has lagged across many countries, including both low-income and developing countries and emerging market economies.
- Debt opacity can increase public burden and exacerbate sovereign debt vulnerabilities.
Legal weaknesses identified
- Weak reporting obligations.
- Limited coverage of public debt.
- Inadequate monitoring.
- Unclear borrowing and delegation processes.
- Unfettered confidentiality arrangements.
- Weak accountability mechanisms.
Policy implications and recommendations
- Legal reform is necessary to align laws with good practices on public debt transparency because laws entrench practices and bind discretion of policy makers and debt managers, subjecting them to public scrutiny.
- Recognize that legal reform processes may be difficult and time intensive in many jurisdictions; reforms should account for political economy and operational constraints.
- Strengthen reporting obligations, expand coverage of public debt in legal definitions, enhance monitoring frameworks, clarify borrowing and delegation procedures, limit unjustified confidentiality provisions, and reinforce accountability mechanisms.
Keywords and subjects covered
- Subjects: Asset and liability management, Debt management, Financial institutions, Government debt management, Public debt, Public financial management (PFM), Securities
- Keywords: address debt vulnerability, Asia and Pacific, debt bulletin, Debt management, debt manager, debt opacity, debt Registry, debt transparency, disclosure, Global, Government debt management, legal institutions, Middle East and Central Asia, Securities, sovereign debt, statistics guide, transparency
IMF Working Paper — "The Legal Foundations of Public Debt Transparency: Aligning the Law with Good Practices" (February 9, 2024).
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- Working Paper