Strengthening Fiscal Transparency and Accountability: IMF Underscores Need for Independent Oversight Institutions
SDG 16: Peace, Justice and Strong Institutions
Institutions: Ministry of Finance
The IMF emphasizes that the quality of public spending should be evaluated by outcomes, not just budget figures, especially amid rising fiscal pressures, defense outlays, and global economic uncertainty. It highlights three key governance challenges: limited independent institutions with analytical influence to scrutinize public finances; low engagement from citizens, media, and parliamentarians in evaluating expenditure quality and long-term priorities; and lack of credible, costed budget amendments. To address these gaps, the IMF points to the role of fiscal councils - found in 51 countries - that monitor fiscal rules, forecasts, budgeting, sustainability, transparency, and policy norms. It also highlights the βcomply-or-explainβ approach as a softer yet effective means of peer accountability.
For countries lacking formal fiscal councils, the IMF suggests creating lightweight yet independent institutions - such as civic research institutes akin to the European Tax Observatory - to produce rigorous analysis, stimulate public debate, advocate reform, and strengthen parliamentary scrutiny. Such institutions could pool research capacity, foster inclusive fiscal discourse, and support accountability in public finance management.
Relevant question for policy stakeholders: How can India institutionalize independent fiscal oversight mechanisms - such as a fiscal council or research-driven accountability body - to reinforce transparency, cultivate civic engagement, and enhance parliamentary and public oversight of budgetary governance?
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https://blog-pfm.imf.org/en/pfmblog/2025/07/the-continuous-need-for-improving-budgetary-governance