Transparency Pays: Emerging Markets Share More Data
IMF Blog, July 7, 2017
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- Authors: Sangyup Choi, Stephanie Medina Cas
- Published: July 7, 2017
Main findings on data transparency and borrowing costs
- Greater data transparency leads to a 15 percent reduction in the spreads on emerging market government bonds one year after the transparency improvements are made.
- Analysis uses data from 26 countries and finds a statistically significant effect of data transparency reforms on government bond spreads (the difference between the interest rate on a US government bond and that on a bond issued by another country).
- The government bond spread declines by 15 percent during the baseline horizon of one year, and this effect tends to increase over time.
Robustness and identification strategies
- Focus on a relatively short period (1-8 quarters) around the reforms to disentangle reforms’ effects from other factors.
- No sign of improvement in a country’s economic condition shortly before the reforms.
- Tests ensure that other important economic and political events—such as a crisis, a loan from the IMF, or the adoption of inflation targeting—do not mask the findings.
- Controls include additional economic factors that may impact spreads, such as the external debt-to-GDP ratio; the significant impact of adopting data standards on government borrowing costs still holds with these controls.
Data standards initiatives and implementation scope
- Countries use an IMF data standards initiative, the Special Data Dissemination Standard (SDDS), to compile and publish data on national websites.
- Less demanding alternative: the enhanced General Data Dissemination System (e-GDDS), intended for countries with lower statistical capacity.
- As of June 2017, all the IMF data standards initiatives covered 146 emerging market and developing countries.
- Since late 2015, 20 of these countries have implemented the enhanced General Data Dissemination Standard.
Regional adoption and examples
- Africa:
- 13 countries have implemented the enhanced General Data Dissemination Standard including Nigeria, Senegal, Sierra Leone, and Tanzania.
- More countries, including Cameroon, Ghana, Kenya, and Mozambique are expected to implement it this year.
- Asia-Pacific:
- Bhutan, Nepal, and Samoa have implemented the enhanced General Data Dissemination Standard.
- Micronesia is expected to by the end of July 2017.
- Bangladesh, Cambodia, Maldives, Mongolia, and Myanmar are all in the pipeline.
Benefits and mechanisms of transparency reforms
- Countries publish key economic data, such as real GDP growth and the consumer price index, through a National Summary Data Page to provide policymakers, investors, rating agencies, and the public with easy access to information critical for monitoring economic conditions.
- Plans to publish full Advance Release Calendars commit countries to discipline in data publication and reduce uncertainty for investors, further enhancing data transparency.
- Preliminary experience with the enhanced General Data Dissemination Standard suggests improved coordination between a country’s central bank, ministry of finance, and statistics institute — an enhancement in governance.
- Implementation of the enhanced General Data Dissemination Standard is viewed as a step toward adopting the Special Data Dissemination Standard, which can help lower future borrowing costs.
Policy implications
- Adopting data dissemination standards can materially lower government borrowing costs (15 percent reduction in spreads one year after reforms).
- Countries with limited statistical capacity can "walk before they run" by implementing the enhanced General Data Dissemination Standard as an intermediate step toward the Special Data Dissemination Standard.
- Publishing timely, reliable data and committing to release calendars helps reduce investor uncertainty and strengthens policy credibility.
- Enhanced coordination among central bank, ministry of finance, and statistics institute improves governance and the effectiveness of data dissemination.
Source: Transparency Pays: Emerging Markets Share More Data (Sangyup Choi, Stephanie Medina Cas, July 7, 2017).
Content in this bundle
- The Effects of Data Transparency Policy Reforms on Emerging Market Sovereign Bond Spreads
- 提高透明度不无回报：新兴市场公布更多数据; IMF博客; 2017年7月7日
- 透明性のすすめ:新興市場国の統計データ公表範囲が拡大; サンギュプ・チョイ 、 ステファニー・メディナ・カス, IMFブログ2017 年7月7日
- A transparência compensa: mercados emergentes publicam mais dados
- Прозрачность окупается: страны с формирующимся рынком раскрывают больше данных
