{
  "title": "Fiscal Transparency, Borrowing Costs, and Foreign Holdings of Sovereign Debt",
  "publication": "IMF Working Papers, August 24, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2018/08/24/fiscal-transparency-borrowing-costs-and-foreign-holdings-of-sovereign-debt-46180",
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  "summary": "This paper explores the effects of fiscal transparency on the borrowing costs of 33 emerging and developing economies (EMs), and on foreign demand for their sovereign debt.",
  "sections": [
    {
      "heading": "Summary and scope",
      "content": "- Paper explores effects of fiscal transparency on borrowing costs and on foreign demand for sovereign debt for 33 emerging and developing economies (EMs).\n- Measures separate effects of three dimensions of fiscal transparency:\n  - openness of the budget process,\n  - fiscal data transparency,\n  - accountability of fiscal actors.\n- Uses multiple indicators, including a constructed indicator based on published data in the IMF’s Government Finance Statistics Yearbook."
    },
    {
      "heading": "Methodology and data indicators",
      "content": "- Sample: 33 emerging and developing economies (EMs).\n- Indicators used:\n  - multiple fiscal transparency indicators,\n  - a constructed indicator based on data published in the IMF’s Government Finance Statistics Yearbook.\n- Outcome variables assessed:\n  - sovereign interest rate spreads (EMBI yield spread implied by keywords),\n  - foreign holdings of sovereign debt."
    },
    {
      "heading": "Key findings",
      "content": "- Higher fiscal transparency is associated with:\n  - reductions in sovereign interest rate spreads,\n  - increases in foreign holdings of sovereign debt.\n- Each dimension of fiscal transparency plays a different role in influencing borrowing costs and foreign demand.\n- Availability of detailed cross-country comparable fiscal data, especially for balance sheet items, increases foreign investors’ willingness to hold EM sovereign debt."
    },
    {
      "heading": "Subject areas and keywords (as listed)",
      "content": "- Subjects: Budget planning and preparation; Economic and financial statistics; Emerging and frontier financial markets; Financial markets; Fiscal transparency; Government finance statistics; Public debt; Public financial management (PFM).\n- Keywords: Borrowing costs; Budget planning and preparation; debt sustainability issue; EM debt; EMBI index; EMBI yield spread; Emerging and frontier financial markets; Emerging market economies; financial risk; Fiscal transparency; Global; Government finance statistics; influence investors decision making; interest rate; investor inflow; investors holding; risk appetite; WP.\n\n---\n\n Content in this bundle\n\n- Fiscal Transparency, Borrowing Costs, and Foreign Holdings of Sovereign Debt, WP/18/189, August 2018\n  - Fiscal Transparency, Borrowing Costs, and Foreign Holdings of Sovereign Debt, WP/18/189, August 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Fiscal Transparency, Borrowing Costs, and Foreign Holdings of Sovereign Debt, WP/18/189, August 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2018/08/24/fiscal-transparency-borrowing-costs-and-foreign-holdings-of-sovereign-debt-46180"
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    "Authors: Laurent Kemoe, Zaijin Zhan",
    "Published: August 24, 2018",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484373835.001",
    "Paper explores effects of fiscal transparency on borrowing costs and on foreign demand for sovereign debt for 33 emerging and developing economies (EMs).",
    "Measures separate effects of three dimensions of fiscal transparency:",
    "Uses multiple indicators, including a constructed indicator based on published data in the IMF’s Government Finance Statistics Yearbook.",
    "Sample: 33 emerging and developing economies (EMs).",
    "Indicators used:",
    "Outcome variables assessed:",
    "Higher fiscal transparency is associated with:",
    "Each dimension of fiscal transparency plays a different role in influencing borrowing costs and foreign demand.",
    "Availability of detailed cross-country comparable fiscal data, especially for balance sheet items, increases foreign investors’ willingness to hold EM sovereign debt.",
    "Subjects: Budget planning and preparation; Economic and financial statistics; Emerging and frontier financial markets; Financial markets; Fiscal transparency; Government finance statistics; Public debt; Public financial management (PFM).",
    "Keywords: Borrowing costs; Budget planning and preparation; debt sustainability issue; EM debt; EMBI index; EMBI yield spread; Emerging and frontier financial markets; Emerging market economies; financial risk; Fiscal transparency; Global; Government finance statistics; influence investors decision making; interest rate; investor inflow; investors holding; risk appetite; WP.",
    "**Fiscal Transparency, Borrowing Costs, and Foreign Holdings of Sovereign Debt, WP/18/189, August 2018**"
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