Citizens, legislators, and executive disclosure: the political determinants of fiscal transparency

Increased fiscal transparency is associated with improved budgetary outcomes, lower sovereign borrowing costs, decreased corruption, and less creative accounting by governments. Despite these benefits, hardly any effort has been invested in exploring the determinants of fiscal transparency. Using a new 85-country dataset, we focus on two important sources of domestic demand for open budgeting: citizens and legislators. Our results suggest that free and fair elections have a significant direct effect on budgetary disclosure, and that they dampen the adverse effect on fiscal transparency of dependence on natural resource revenues. We also find that partisan competition in democratically-elected legislatures is associated with higher levels of budgetary disclosure.